Vous êtes sur la page 1sur 205

FILED

17-0062
2/27/2017 5:33:10 PM
tex-15558312
SUPREME COURT OF TEXAS
BLAKE A. HAWTHORNE, CLERK

Case No. 17-0062

IN THE SUPREME COURT OF TEXAS

JODY JAMES FARMS, JV,

PETITIONER,

v.

THE ALTMAN GROUP, INC. AND LAURIE DIAZ,

RESPONDENTS

On Petition for Review from the 110th District Court of Floyd County, Texas, No.
10,422; and the Amarillo Court of Appeals, Jody James Farms, JV v. The Altman
Grp., Inc. and Laurie Diaz, 2016 Tex. App. LEXIS 11243, (Tex. App.—Amarillo
Oct. 17, 2016, rehearing denied).

PETITION FOR REVIEW

JODY JENKINS
State Bar No. 24029634
Jenkins, Wagnon & Young, P.C.
P.O. Box 420
Lubbock, Texas 79408-0420
Ph: 806-796-7351
Fx: 806-771-8755
jjenkins@jwylaw.com

Attorneys for Petitioner


IDENTITY OF PARTIES AND COUNSEL

Judge Presiding at Trial:


The Honorable William P. Smith

Plaintiff/Appellant/Petitioner:
Jody James Farms, JV (“JJF”)

Plaintiff/Appellant/Petitioner’s Counsel at Trial:


Jody Jenkins
Jenkins, Wagnon & Young, P.C.
P.O. Box 420
Lubbock, Texas 79408-0420

Plaintiff/Appellant/Petitioner’s Counsel on Appeal:


Jody Jenkins
Jenkins, Wagnon & Young, P.C.
P.O. Box 420
Lubbock, Texas 79408-0420

Defendants/Appellees/Respondents:
The Altman Group, Inc. (“Altman”) and Laurie Diaz (“Diaz”)

Defendants/Appellees/Respondents Counsel at Trial:


J. Paul Manning
Anna McKim
Field, Manning, Stone, Hawthorne & Aycock, P.C.
2112 Indiana Ave.
Lubbock, TX 79410

Defendants/Appellees/Respondent’s Counsel on Appeal:


J. Paul Manning
Anna McKim
Field, Manning, Stone, Hawthorne & Aycock, P.C.
2112 Indiana Ave.
Lubbock, TX 79410

i
TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL ......................................................... i

TABLE OF CONTENTS ....................................................................................... ii

INDEX OF AUTHORITIES ..................................................................................iv

STATEMENT OF THE CASE ..............................................................................vi

STATEMENT OF JURISDICTION ................................................................... vii

ISSUES PRESENTED ......................................................................................... viii

1. Can a non-signatory third party invoke the proverbial guilty by

association doctrine and force arbitration when no agreement to do so

exist?

2. Whether the arbitration agreement can be enforced by Altman and

Diaz through estoppel (unbriefed).

3. Whether Altman and Diaz were third-party beneficiaries who can

enforce the arbitration agreement (unbriefed).

4. Whether a non-party to an arbitration agreement can compel

arbitration of claims that are not within the scope of the arbitration

agreement (unbriefed).

5. Whether the trial court abused its discretion in enforcing the

arbitration award that the arbitrator had no authority to enter

(unbriefed).

ii
STATEMENT OF FACTS ...................................................................................... 1

SUMMARY OF ARGUMENT ............................................................................... 3

ARGUMENT ............................................................................................................ 4

ISSUE NUMBER ONE ................................................................................ 4


ISSUE NUMBER TWO .......................................................................... 11
ISSUE NUMBER THREE ......................................................................... 11
ISSUE NUMBER FOUR ............................................................................ 11
ISSUE NUMBER FIVE ............................................................................. 11

CONCLUSION....................................................................................................... 11

PRAYER ................................................................................................................. 12

APPENDIX ............................................................................................................. 15

iii
INDEX OF AUTHORITIES

Texas Cases

1. Golden Age Senior Living of El Paso, LLC v. Atwood, 486 S.W.3d 44 (Tex.
App.—El Paso 2016, no pet.) .................................................................................. 10

2. In re Kellogg Brown & Root, Inc., 166 S.W.3d 732 (Tex. 2005)..................5, 6, 9

3. In re Rubiola, 334 S.W.3d 220 (Tex. 2011) ................................................6, 9, 10

4. In re Weekley Homes, L.P., 180 S.W.3d 127 (Tex. 2005)................................. 6, 7

5. Roe v. Ladymon, 318 S.W.3d 502 (Tex. App.—Dallas 2010, no pet.) ................. 6

Cases from other Jurisdictions

6. Baldwin v. Cavett, 502 F. App’x 350 (5th Cir. 2012) ......................................... 10

7. Chesapeake Appalachia, LLC v. Scout Petr., LLC, 809 F.3d 746 (3rd Cir.
2016).. .................................................................................................................... 7, 8

8. Contec Corp. v. Remote Solution Co., 398 F.3d 205 (2nd Cir. 2005) ................... 8

9. Fallo v. High-Tech Inst., 559 F.3d 874 (8th Cir. 2009) ......................................... 8

10. Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524 (5th Cir. 2000)… ..... 9

11. Marciano v. Mony Life Ins. Co., 470 F. Supp. 2d 518 (E.D. Pa. 2007) .............. 6

12. Oracle Am., Inc. v. Myriad Group, A.G., 724 F.3d 1069 (9th Cir. 2013) .......... 7

13. Petrofac, Inc. v. DynMcDermott Petr. Ops. Co., 687 F.3d 671 (5th Cir.
2012)… ...................................................................................................................... 8

14. Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366 (11th Cir. 2005) ........................ 8

15. Sherer v. Green Tree Servicing LLC, 548 F.3d 379 (5th Cir. 2008) ................... 6

16. Terminix Int’l Co., L.P. v. Palmer Ranch Ltd. P’ship, 432 F.3d 1327 (11th Cir.
2005)... ....................................................................................................................... 8

iv
Statutes

1. Texas Government Code Annotated §22.001(a)(2) (Vernon 2017) ................... vii

2. Texas Government Code Annotated §22.001(a)(6) (Vernon 2017) ................... vii

Law Review Articles/Secondary Materials

1. Carolyn Lamm, Defining The Party – Who is a Proper Party in an International


Arbitration Before the American Arbitration Association and Other International
Institutions, 34 Geo. Wash. Int’l Rev. 711,720 (2003)............................................9

v
STATEMENT OF THE CASE

Nature of the Case: JJF filed suit against Altman and Diaz in the 110 th Judicial
District Court of Floyd County, Texas on December 10,
2012, alleging that Altman and Diaz breached their fiduciary
duties owed to JJF and violated the Texas Deceptive Trade
Practices Act. The court granted Altman and Diaz’s Motion
to Compel Arbitration on June 27, 2013, over the objection
of JJF. JJF participated in the arbitration and followed its
result with a motion to set aside the arbitration award.
Altman and Diaz filed a petition to confirm and enforce the
arbitration award which was granted.

Trial Court: The Honorable William P. Smith of the 110th District Court
of Floyd County, Texas.

Trial Court’s The trial court granted Altman and Diaz’s Motion To
Disposition: Compel Arbitration and subsequently entered its Final
Judgment based upon on the arbitration award from the
proceeding.

Court of Appeals: Seventh Court of Appeals; Justice Campbell, joined by Chief


Justice Quinn and Justice Hancock.

Court of Appeals’ The court of appeals overruled JJF’s appellate issues and
Disposition: affirmed the trial court’s judgment. JJF’s Motion for
Rehearing was denied. Jody James Farms, JV v. The Altman
Grp., Inc. and Laurie Diaz, 2016 Tex. App. LEXIS 11243,
(Tex. App.—Amarillo Oct. 17, 2016, rehearing denied).

vi
STATEMENT OF JURISDICTION

This Court has jurisdiction over this matter under Texas Government Code

Annotated §22.001(a)(2) (Vernon 2017) because the Seventh Court of Appeals has

disregarded precedent from other Texas courts of appeals and this Court on a

question of law material to a decision of this case.

Further, this Court has jurisdiction over this matter under Texas Government

Code Annotated §22.001(a)(6) (Vernon 2017) because an error of law has been

committed by the Seventh Court of Appeals at Amarillo of such importance to the

jurisprudence of this State that a decision by this Court is necessary to affect a

correction.

vii
ISSUES PRESENTED
1. Can a non-signatory third party invoke the proverbial guilty by association

doctrine and force arbitration when no agreement to do so exists?

2. Whether the arbitration agreement can be enforced by Altman and Diaz

through estoppel (unbriefed).

3. Whether Altman and Diaz were third-party beneficiaries who can enforce

the arbitration agreement (unbriefed).

4. Whether a non-party to an arbitration agreement can compel arbitration of

claims that are not within the scope of the arbitration agreement (unbriefed).

5. Whether the trial court abused its discretion in enforcing the arbitration

award that the arbitrator had no authority to enter (unbriefed).

viii
TO THE HONORABLE SUPREME COURT OF TEXAS:

Petitioner JJF submits this Petition for Review of the decision from the

Seventh Court of Appeals at Amarillo challenging the decision allowing a non-

signatory third party to compel arbitration despite the fact that no agreement to

arbitrate exists. This decision is detrimental to the jurisprudence of this State and

should be corrected.1

STATEMENT OF FACTS

Altman is an independent insurance agency who markets for Rain and Hail;

Rain and Hail is owned and controlled by ACE Property and Casualty Insurance

Company; ACE Property and Casualty Insurance Company issues crop insurance

policies. CR Supp. 21, 56. Altman has been JJF’s agent for crop insurance since

approximately 2008. CR Supp. 51-58. Diaz is a registered insurance agent

employed by Altman where she also serves at Altman’s Operations Manager; she

was employed with Altman for the entire time that Altman has been JJF’s agent.

CR Supp. 52. At some point before JJF incurred a loss, Diaz became involved with

JJF’s 2010 crop insurance policy. CR Supp. 53. Sometime thereafter, JJF incurred

a loss on its insured crop during the policy period. CR Supp. 55.

1
Citations to evidence are contained in the Appendix attached to this Petition and are
divided according to its table of contents. Citations to the Clerk’s Record and Supplemental
Clerk’s Record will be denoted as CR ____ and CR Supp. _____.

1
JJF purchased a Crop Revenue Coverage Insurance Policy (the “Policy”)

from Rain and Hail via his agent Altman and Diaz to indemnify against loss on its

2010 milo crop. CR Supp. 21, 25-50. The Policy required Rain and Hail to

indemnify JJF for any loss that arose under the Policy. CR Supp. 25-50. Although

the Policy contained an arbitration clause, neither Altman nor Diaz are signatories

to the Policy. CR Supp. 44. In November of 2010, JJF incurred a loss on an insured

milo crop and notified Diaz by telephone of the loss. CR Supp. 23. After receiving

evidence of the loss, Diaz delayed in turning in the claim, giving rise to the

common law and statutory claims asserted by JJF against Altman and Diaz. CR

Supp. 56.

Eventually, Rain and Hail denied JJF’s claim alleging it, among other things,

was untimely submitted. CR Supp. 64-68. Rain and Hail explained that because the

claim was untimely filed, it was unable “to make the necessary and required loss

determinations.” CR Supp. 64. JJF, after exhausting other remedies, filed suit

against Altman and Diaz for their inaction in submitting the claim to Rain and

Hail. CR 3-6. The trial court compelled arbitration between JJF, Altman and Diaz

and later enforced the arbitration award against JJF. CR 27, 41.

2
SUMMARY OF ARGUMENT

Although courts favor arbitration, it is not the quintessential resolution to

every dispute. Litigants have enough hurdles in their path to resolution of disputes,

which are often life changing events, without the need for further complexities.

Love it or hate it, arbitration is commonplace in contract claims. Although the path

to resolution when settlement efforts fail can be through arbitration or trial, the

fork in the path still exists and the road signs leading a dispute down the correct

path are essential to the jurisprudence of this State. Not only has the Amarillo

Court of Appeals obscured the road signs, it has created a road block forcing

litigants to arbitration when they never agreed to do so. Without an enforceable

arbitration agreement, a litigant should not be compelled to have an arbitrator

prevent their access to trial. Without the assistance of this Court, litigants across

this State will lose their fundamental right to a trial by jury by merely being

associated with an arbitration agreement they once entered regardless of the

parties. Guilty by association theories should remain tools for parents in regards to

their children, not the courts of this State.

The road block in the case at bar was a non-existent arbitration clause

between JJF and Altman and Diaz. Despite existing law to the contrary, the

Amarillo Court erected an impermissible road block on the path to resolution,

3
effectively depriving JJF of its right to have its dispute adjudicated in court and

further weakening the strength and effect of contracts in this State.

Arbitration Trial

ARGUMENT

1. Can a non-signatory third party invoke the proverbial guilty by


association doctrine and force arbitration when no agreement to do so
exists?

Although existing law makes a distinction between parties seeking to

enforce arbitration who are signatories to an enforceable arbitration agreement and

those who are not, the Amarillo Court of Appeals has changed that precedent by

issuing the opinion in this case which compelled arbitration between litigants who

had no arbitration agreement. By its ruling, the Amarillo Court has created a new

road block in the path to resolution which drastically alters a party’s right to have

its disputes adjudicated in court. Without clarification of the distinction between

compelling those who are signatories to arbitration agreements and those who are

not, arbitrability of a dispute will become the only means of resolution with no fork

in the path leading to the courthouse. Although arbitration is favored, it is not


4
automatic and should not always result in a litigant losing its right to judicial

resolution. With a myriad of decisions increasingly diminishing a party’s right to

avoid arbitration, a distinction needs to be made by this Court when there is no

agreement to arbitrate between the parties.

The arbitration clause in the case at bar stated as follows:

If you and we fail to agree on any determination made by us except


those specified in Section 20(d), the disagreement may be resolved
through mediation in accordance with Section 20(g). If resolution
cannot be reached through mediation, or you and we do not agree to
mediation, the disagreement must be resolved through arbitration.

CR Supp. 44. The Policy expressly states that the words “you” and “your”

refer to the named insured, which is James; and the words “we,” “us,” and “our”

refer to the “insurance company providing insurance,” which is Rain and Hail. CR

Supp. 25.

Under Texas law, it is well established that a party seeking to compel

arbitration must establish that (1) a valid arbitration clause exists, and (2) the

claims in dispute fall within that agreement’s scope. In re Kellogg Brown & Root,

Inc., 166 S.W.3d 732, 737 (Tex. 2005). Although this Court has held that “whether

a non-signatory can compel arbitration pursuant to an arbitration clause questions

the existence of a valid arbitration clause between specific parties and is therefore a

gateway matter for the court to decide,” the law must be clarified to inform

litigants when such gateway matters will be taken out of the court’s hand and

5
delegated to an arbitrator in situations similar to the case at bar. In re Rubiola, 334

S.W.3d 220, 224 (Tex. 2011) (citing In re Weekley Homes, L.P., 180 S.W.3d 127,

130 (Tex. 2005); Sherer v. Green Tree Servicing LLC, 548 F.3d 379, 381 (5th Cir.

2008)). Despite the Amarillo Court’s ruling, non-signatory parties attempting to

compel arbitration are burdened with proving to the court, not the arbitrator, the

existence of a valid arbitration clause before the issue of the agreement’s scope can

even be addressed. Until this initial burden of proving that a valid arbitration

agreement exists, there is no presumption in favor of arbitration. See In re Kellogg

Brown & Root, Inc., 166 S.W.3d at 737. As noted in Roe v. Ladymon, 318 S.W.3d

502, 511 n.6 (Tex. App.—Dallas 2010, no pet.) and explained in Marciano v.

Mony Life Ins. Co., the presumption in favor of arbitration:

“applies only to the scope of an open-ended arbitration agreement,

never to the existence of such an agreement or to the identity [sic] the

parties who might be bound by such an agreement. If A and B have an

agreement to arbitrate any dispute that arises between them, there is a

presumption that, if a dispute arises between them, the dispute is

within the scope of the agreement. However, if a dispute arises

between A and C, even if B and C are closely related, there is no

"presumption" that A has agreed to arbitrate its dispute with C.”

470 F. Supp. 2d 518, 526, n.12 (E.D. Pa. 2007).

6
The Seventh Court of Appeals correctly stated that “under the FAA, absent

unmistakable evidence that the parties intended the contrary, it is the courts rather

than arbitrators that must decide ‘gateway matters’ such as whether a valid

arbitration agreement exists.” Jody James Farms, JV v. The Altman Grp., Inc. and

Laurie Diaz, 2016 Tex. App. LEXIS 11243, at *6 (Tex. App.—Amarillo Oct. 17,

2016, rehearing denied) (citing In re Weekley Homes, L.P., 180 S.W.3d 127 (Tex.

2005)). However instead of recognizing the correct analytical framework applied

by sister court of appeals and this Court in regards to whether a valid arbitration

agreement existed between the non-signatories and JJF, the Seventh Court of

Appeals simply held that “incorporation of the AAA rules . . . constitute[d] clear

and unmistakable evidence that the parties to the arbitration agreement agreed to

arbitrate arbitrability” and proceeded to the second prong of the analysis of the

agreement’s scope. Jody James Farms, JV, 2016 Tex. App. LEXIS 11243, at *9.

The Seventh Court of Appeals’ holding paid little attention to the critical

distinction of Altman and Diaz’s status as non-signatories. To wit, all of the cases

quoted by the Seventh Court of Appeals in support of their holding concern cases

where disputes arose between signatory parties. Id. See Oracle Am., Inc. v. Myriad

Group, A.G., 724 F.3d 1069 (9th Cir. 2013) (dispute arose between signatory

parties who had entered into two separate agreements with one another, with the

sued upon agreement containing an arbitration clause); Chesapeake Appalachia,

7
LLC v. Scout Petr., LLC, 809 F.3d 746 (3rd Cir. 2016) (dispute arose between a

signatory party and assignee of a signatory party concerning oil and gas leases with

arbitration clauses); Petrofac, Inc. v. DynMcDermott Petr. Ops. Co., 687 F.3d 671

(5th Cir. 2012) (dispute arose between signatory parties to a subcontract which

contained an arbitration clause); Fallo v. High-Tech Inst., 559 F.3d 874 (8th Cir.

2009) (dispute arose between signatory parties to enrollment agreements with

arbitration clauses); Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366 (11th Cir.

2005) (dispute arose between signatory parties to a Subscriber Unit and

Infrastructure Equipment License agreement which contained an arbitration

clause); Terminix Int’l Co., L.P. v. Palmer Ranch Ltd. P’ship, 432 F.3d 1327 (11th

Cir. 2005) (dispute arose between signatory parties to multiple service contracts,

each containing arbitration clauses); Contec Corp. v. Remote Solution Co., 398

F.3d 205 (2nd Cir. 2005) (dispute arose between signatory parties to an agreement

which contained an arbitration clause). This holding frustrates the theory and spirit

of Texas contract law and would allow anyone with a tangential connection to a

signatory party to lose its right to have a court decide whether an arbitration

agreement exists.

In regards to the first prong of the analysis that the trial court should have

engaged in, this Court has continuously held that “under the FAA, ordinary

principles of state contract law determine whether or not a valid agreement to

8
arbitrate exists.” In re Rubiola, 334 S.W.3d at 224 (Tex. 2011) (citing In re

Kellogg Brown & Root, Inc., 166 S.W.3d at 738). Additionally, being a creature of

state contract law, arbitration generally cannot be required for a matter involving a

third party who is not a signatory to an arbitration agreement. Grigson v. Creative

Artists Agency, L.L.C., 210 F.3d 524, 532 (5th Cir. 2000). Courts prohibit

enforcement by non-signatories “where (1) the contract does not expressly grant

third parties the ability to participate in the arbitration; (2) the parties have not

contemplated the idea; and (3) non-signatory involvement would constitute an

invasion of the consensual nature of arbitration.”. In re Rubiola, 334 S.W.3d at 225

(quoting Carolyn Lamm, Defining The Party – Who is a Proper Party in an

International Arbitration Before the American Arbitration Association and Other

International Institutions, 34 Geo. Wash. Int’l Rev. 711, 720 (2003)). Taking each

in turn: (1) the Crop Revenue Coverage Insurance Policy does not expressly grant

Altman and Diaz the right to participate in arbitration; (2) no evidence was

produced that JJF and Rain and Hail contemplated Altman and Diaz participating

in arbitration; and (3) compelling arbitration would infringe upon the consensual

nature of arbitration as it is a creature of contract and JJF never signed a contract

containing an arbitration clause with Altman or Diaz. CR Supp. 25-50; CR 7-17.

Therefore, the inquiry in this dispute should not surpass the first prong of the

analysis as Altman and Diaz, as non-signatory third parties, failed to carry their

9
heavy burden to establish that a valid arbitration clause exists as to them under

ordinary principles of Texas contract law.

In addition to this precedent, the Amarillo Court also disregarded the

opinion in Golden Age Senior Living of El Paso, LLC v. Atwood, which is factually

similar to the case at bar and instructive. Golden Age Senior Living of El Paso,

LLC v. Atwood, 486 S.W.3d 44 (Tex. App.—El Paso 2016, no pet.). In Atwood,

the appellants were not parties to the arbitration agreement under ordinary contract

principles like Altman and Diaz. Atwood, 486 S.W.3d at 47. The Atwood contract

never mentioned Golden Age Senior Living of El Paso or Sunridge at Cambria by

name; rather, there were only broad definitions of the parties in the agreement that

allowed for the possibility of non-signatories to the arbitration agreement to

enforce the arbitration clause. Id. at 48. Golden Age Senior Living of El Paso and

Sunridge at Cambria, as non-signatories, based their argument upon these broad

definitions, citing In re Rubiola for support. Id. See In re Rubiola, 334 S.W.3d at

220. However, the El Paso court distinguished In re Rubiola, holding that “the

underlying principle in In re Rubiola is that non-signatories may not rely on an

arbitration agreement to compel arbitration unless they were acting on behalf of a

signatory from which they derive their arbitration rights.” Id. See also Baldwin v.

Cavett, 502 F. App’x 350, 353-54 (5th Cir. 2012).

10
Despite this precedent, the Amarillo Court held that Altman and Diaz were

entitled to enforce the arbitration clause and specifically, its incorporation of the

AAA Rules allowing an arbitrator to decide this gateway issue. This error must be

corrected.

2. Whether the arbitration agreement can be enforced by Altman and Diaz


through estoppel (unbriefed).

This Issue will not be briefed unless the Court request otherwise.

3. Whether Altman and Diaz were third-party beneficiaries who can


enforce the arbitration agreement (unbriefed).

This Issue will not be briefed unless the Court request otherwise.

4. Whether a non-party to an arbitration agreement can compel


arbitration of claims that are not within the scope of the arbitration
agreement (unbriefed).

This Issue will not be briefed unless the Court request otherwise.

5. Whether the trial court abused its discretion in enforcing the arbitration
award that the arbitrator had no authority to enter (unbriefed).

This Issue will not be briefed unless the Court request otherwise.

CONCLUSION

Had the Amarillo Court engaged in the correct analytical framework

established by sister courts of appeals and this Court when reviewing JJF’s

arguments and evidence, it would have concluded as a matter of law that Altman

and Diaz, as non-signatory third parties, were not entitled to compel JJF to

arbitration. Instead, the Amarillo Court erroneously interpreted the jurisprudence


11
of this State and affirmed the trial court’s improper decision to allow an arbitrator

to decide the gateway issue of whether an arbitration agreement existed between

the parties to this dispute. If this decision is allowed to stand, the trend of depriving

litigants of their right to have disputes adjudicated in court will continue to

escalate, with state contractual law continuing to wither at the hands of arbitration.

When a dispute is on the path to resolution, the fork in the path leading to

the courthouse still exists. The road signs instructing the litigants down the path to

resolution should not be obscured by the Amarillo Court’s decision and road block.

A previously signed arbitration agreement with a non-signatory third party should

not become the “Go to Jail” card instructing litigants to go directly to arbitration

without passing go or having the ability to collect the proverbial $200 (proceeding

to trial on the merits).

PRAYER

Wherefore, Petitioner JJF, prays that this Court:

1. GRANT its Petition for Review;

2. REVERSE the Seventh Court of Appeals’ decision affirming the trial

court’s final judgment entering a final arbitration award in favor of

Respondents;

3. GRANT all other relief to which it has shown itself justly entitled.

12
Respectfully Submitted,

/s/ Jody Jenkins


JODY JENKINS
State Bar No. 24029634
JENKINS, WAGNON & YOUNG,
P.C.
P.O. Box 420
Lubbock, Texas 79408-0420
Ph: (806) 796-7351
Fx: (806) 771-8755
jjenkins@jwylaw.com
ATTORNEYS FOR PETITIONER

CERTIFICATE OF SERVICE

This is to certify that a true and correct copy of the above and foregoing
instrument has been served upon the following via the Court’s electronic filing
system, this 27th day of February, 2017.

J. Paul Manning
Anna McKim
Field, Manning, Stone, Hawthorne & Aycock, P.C.
2112 Indiana Ave.
Lubbock, TX 79410

/s/ Jody D. Jenkins


JODY JENKINS

13
CERTIFICATE OF COMPLIANCE
I hereby certify that the word count in this Brief is 4,126 when all sections are
included.

/s/ Jody D. Jenkins


Jody D. Jenkins

14
APPENDIX

Judgment from Trial Court ................................................................................ Tab 1

Seventh Court of Appeals Opinion .................................................................... Tab 2

Judgment from Seventh Court of Appeals ......................................................... Tab 3

Denial of Motion for Rehearing, Seventh Court of Appeals ............................. Tab 4

Excerpts from the Clerk’s Record...................................................................... Tab 5

Excerpts from the Supplemental Clerk’s Record .............................................. Tab 6

Baldwin v. Cavett, 502 F. App’x 350 (5th Cir. 2012) ....................................... Tab 7

Golden Age Senior Living of El Paso, LLC v. Atwood, 486 S.W.3d 44 (Tex.
App.—El Paso 2016, no pet.) ............................................................................ Tab 8

Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524 (5th Cir. 2000) ....... Tab 9

In re Kellogg Brown & Root, Inc., 166 S.W.3d 732 (Tex. 2005).................... Tab 10

In re Rubiola, 334 S.W.3d 220 (Tex. 2011) .................................................... Tab 11

In re Weekley Homes, L.P., 180 S.W.3d 127 (Tex. 2005) ............................... Tab 12

Marciano v. Mony Life Ins. Co., 470 F. Supp. 2d 518 (E.D. Pa. 2007) .......... Tab 13

Roe v. Ladymon, 318 S.W.3d 502 (Tex. App.—Dallas 2010, no pet.) ........... Tab 14

Sherer v. Green Tree Servicing LLC, 548 F.3d 379 (5th Cir. 2008) ............... Tab 15

Texas Government Code Annotated §22.001(a)(2) (West 2017).................... Tab 16

Texas Government Code Annotated §22.001(a)(6) (West 2017).................... Tab 17

15
8067921048 12:38:02 p.m. 01-16-2015 2/3

No. 10,422

JODY JAMES FARMS, N


JV § IN THE
THE llOTH
110' DISTRICT
DISTRICTCOURT
COURT
§
v. § OF
§
THE ALTMAN GROUP, INC. AND §
LAURIE DIAZ
LAURIEDIAZ § FLOYD COUNTY, TEXAS

FINAL JUDGMENT

On this day came on to


to be
be heard
heard the
the above-entitled
above-entitled and
and numbered
numbered cause wherein JODY
cause wherein
JAMES FARMS, JV is Plaintiff ALTMANGROUP,
Plaintiff and THE ALTMAN GROUP,INC. andLAURIE
INC.and LAURIE DIAZ,
DIAZ, are the
Defendants in the above entitled and numbered cause. The
numbered cause. The Court
Court has read the pleadings
pleadings and the
papers on file,
papers on file, has
has considered
considered the
the announcement of the
announcement of the parties
parties and determined that it had
determined that ·had
jurisdiction over the subject matter and the parties to
to this
this proceeding.
proceeding. The Court is of
of the opinion
that upon consideration of
of Defendants' Petition
Petition to
to Confirm
Confirm and Enforce Final
Final Arbitration
Arbitration Award
and Plaintiff,
Plaintiff, JODY
JODY JAMES FARMS, JV.'s, Motion
JAMES FARMS, to Vacate
Motion to Vacate Arbitration
Arbitration Award and all
Award and all
responses, briefs in
responses, briefs in support,
support, exhibits and replies,
exhibits and replies, if any,
any, respectively thereto, itit is
respectively thereto, is hereby
hereby
ORDERED and DECREED that Defendants' Petition
Petition to
to Confirm
Confirm and Enforce Final Arbitration
Award is GRANTED and the clerk is ordered
Award ordered to enter
enter aa judgment
judgment in
in favor
favor of
ofDefendants
Defendants and
Plaintiff, JODY JAMES FARMS, JV take
against Plaintiff, JODY JAMES FARMS, JV and that Plaintiff,
nothing and all court costs are assessed against Plaintiff, JODY JAMES FARMS, JV. The judgment
is to accrue interest at the rate of
of 5.00%
5.00% per annum from the date of
of judgment until paid, plus all
costs of
of court.

ORDERED, ADJUDGED AND DECREED that Plaintiff's Motion


IT IS FURTHER ORDERED,
to Vacate the Arbitration Award is DENIED.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendants request


for attorney's fees is DENIED.

Final Judgment Page 1

125
•. 8067921048 12:38:26 p.m. 01-16-2015 3 /3
3/3

THEREFORE, ORDERED,
IT IS, THEREFORE, ORDERED, ADJUDGED,
ADJUDGED, AND
AND DECREED
DECREED that
that Defendants,
THE ALTMANGROUP,
THE ALTMAN GROUP,INC.
INC.and
and LAURIE
LAURIE DIAZ have
have judgment against
against Plaintiff,
Plaintiff, JODY
JAMES FARMS, JV, as follows:
follows:

1.
1. Plaintiff take nothing;
Plaintiff
2.
2. costs of
All costs ofcourt
courtare
aretaxed
taxedagainst
againstPlaintiff,
Plaintiff,JODY
JODYJAMES
JAMES
FARMS,JV;and
FARMS, JV; and
3. Post judgment interest on
judgment interest on all costs
costs and
and fees
fees incurred
incurred at five
percent (5%) per year from the date of this judgment.

IT IS, FURTHER
FURTHER ORDERED,
ORDERED, ADJUDGED,
ADJUDGED, AND DECREED that Defendant shall
to enforce this Judgment.
have all writs and processes as may be necessary to

expressly granted herein is denied.


All relief not expressly denied. This judgment is final,
final, disposes
disposes of all
claims and all parties, and is appealable.

The court orders execution to issue for this judgment.


z-) /L
SIGNED on this diJ- of January, 2015.
— day of

Final Judgment Page 2

126
In The
Court of Appeals
Seventh District of Texas at Amarillo

No. 07-15-00060-CV

JODY JAMES FARMS, JV, APPELLANT

V.

THE ALTMAN GROUP, INC. AND LAURIE DIAZ, APPELLEES

On Appeal from the 110th District Court


Floyd County, Texas
Trial Court No. 10,422, Honorable William P. Smith, Presiding

October 17, 2016

OPINION
Before QUINN, C.J., and CAMPBELL and PIRTLE, JJ.

Appellant Jody James Farms, JV (“JJF”) appeals the trial court’s order confirming

an arbitration award in favor of appellees The Altman Group, Inc. and Laurie Diaz

(“Altman and Diaz” or “appellees”). We will affirm the court’s order.

Background

In 2010, JJF purchased a Crop Revenue Coverage Insurance Policy from Rain &

Hail, L.L.C. JJF purchased the insurance through The Altman Group, an insurance

agency. Diaz is a registered insurance agent employed by The Altman Group.


The policy was one issued for the 2010 crop year under the authority of section

508(h) of the Federal Crop Insurance Act,1 and reinsured by the Federal Crop

Insurance Corporation (FCIC).2 The policy contains, within its “basic provisions,” a

section 20, entitled “Mediation, Arbitration, Appeal, Reconsideration, and Administrative

and Judicial Review.” Section 20 is lengthy, and provides for resolution, by various

means, of various categories of disputes. Some disputes are narrowly described, such

as that given in section 20(d) for reconsideration of determinations made by the insurer

or FCIC regarding whether the insured has “used a good farming practice . . . .” Others,

like the provision the parties in this case discuss, are described in broad terms.3

Section 20(a) of the policy reads in part:

If [the insured] and [the insurer] fail to agree on any determination made
by [the insurer] except those specified in Section 20(d), the disagreement
may be resolved through mediation in accordance with Section 20(g). If
resolution cannot be reached through mediation, or [the insured] and [the
insurer] do not agree to mediation, the disagreement must be resolved
through arbitration in accordance with the rules of the American Arbitration
Association . . . .4

Subsection 20(a)(1) reads in part:

1
7 U.S.C. § 1508(h); see generally Olsen v. United States, 546 F.Supp.2d 1122
(E.D. Wash. 2008), aff’d, 334 Fed. Appx. 834 (9th Cir. 2009); Greenwood v. Rural Cmty.
Ins. Servs., No. 2:02CV00047, 2005 U.S. Dist. LEXIS 29331 (E.D. Mo. Nov. 22, 2005);
7 C.F.R. § 457.2 (2004). See Wiley v. Glickman, No. A3-99-32, 1999 U.S. Dist. LEXIS
20278 (D. N.D. Sept. 3, 1999) (reciting history of crop revenue coverage policies).
2
The FCIC is managed by the United States Department of Agriculture’s Risk
Management Agency. See 7 U.S.C. § 6933 (creating USDA’s Office of Risk
Management).
3
The policy’s section 20 is much like, though not identical to, the section 20 (for
reinsured policies) contained in the policy form set out in 7 C.F.R. § 457.8.
4
Section 20(g) describes the requirements and procedures for mediation.
2
All disputes involving determinations made by [the insurer], except those
specified in section 20(d), are subject to mediation or arbitration.5

In November of 2010, JJF incurred a loss on an insured grain sorghum crop.

According to JJF, it notified Diaz of the loss in a telephone conversation. The claim was

not formally submitted to Rain & Hail until some time later. Rain & Hail eventually

denied the claim, in part because it was not timely submitted.6

After Rain & Hail denied JJF’s claim, their disagreement over its determination

was arbitrated under the policy. The arbitrator upheld Rain & Hail’s denial of the claim.7

Thereafter, JJF filed suit against Altman and Diaz asserting they breached a

fiduciary duty and violated the Texas Deceptive Trade Practices Act when they failed to

submit the claim in a timely fashion. Altman and Diaz sought an order compelling

5
Subsection 20(a)(1) continues with language requiring, however, that if a
dispute “in any way involves a policy or procedure interpretation, regarding whether a
specific policy provision or procedure is applicable to the situation, how it is applicable,
or the meaning of any policy provision or procedure,” parties must obtain “an
interpretation from FCIC in accordance with 7 C.F.R. part 400, subpart X or such other
procedure as established by FCIC.” The FCIC interpretation procedure was not initiated
in this case. JJF’s brief cites the provision in its argument that the policy’s arbitration
provisions are not suited to its claims against Altman and Diaz, but the parties do not
otherwise discuss its potential application.
6
JJF’s brief contends Rain & Hail denied JJF’s claim because it determined the
claim was untimely submitted. The statement is true, but not complete. Rain & Hail’s
letter explaining its denial of the claim detailed three reasons. It cited JJF’s failure to
submit a timely notice of loss, but it said also JJF’s manner of storing the harvested
grain sorghum precluded adjustment of the loss. The letter quoted from FCIC’s loss
adjustment manual and concluded, “Based on the claim adjustment procedures spelled
out above, your grain sorghum claim must be denied because without our
measurements of the farm-stored production, you do not have the required verifiable
records for the stored grain.” The letter also stated Rain & Hail’s belief that JJF
“intentionally misrepresented” the planting dates of its grain sorghum crop. Citing the
policy’s “concealment, misrepresentation or fraud” provisions, Rain & Hail declared the
policy coverage for grain sorghum for the 2010 crop year to be void.
7
The arbitration award recited the arbitrator’s agreement with Rain & Hail on the
claim notice issue and on its contention that JJF’s commingling of stored grain
precluded a “presentable loss.”
3
arbitration under the Federal Arbitration Act8 and, over JJF’s objection, the trial court

compelled arbitration of its causes of action. The arbitrator found in favor of Altman and

Diaz and the trial court entered an order confirming and enforcing that finding, thus

ordering that JJF take nothing. From that order, JJF now appeals.

Analysis

An arbitration award under the FAA must be confirmed unless it is vacated,

modified or corrected as prescribed in sections 10 and 11 of the FAA. 9 U.S.C. §§ 9 –

11; Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 128 S. Ct. 1396, 170 L. Ed. 2d

254 (2008); Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84, 90 (Tex. 2011). One of the

grounds on which an award may be vacated is that the arbitrator exceeded the

arbitrator’s powers. 9 U.S.C. § 10(a)(4). A party moving to vacate an award has the

burden of proof. Lummus Global Amazonas, S.A. v. Aguaytia Energy Del Peru, S.R.

Ltda., 256 F. Supp. 2d 594, 604 (S.D. Tex. 2002); Petrobras Am., Inc. v. Astra Oil

Trading NV, No. 01-11-00073-CV, 2012 Tex. App. LEXIS 2458 at *46 (Tex. App.—

Houston [1st Dist.] March 29, 2012, no pet.) (mem. op.).

JJF contends on appeal the trial court erred by enforcing the arbitrator’s award

because the arbitrator exceeded his authority. It argues there was no agreement to

arbitrate between JJF and Altman and Diaz; and in any event its claims are outside the

scope of the policy’s arbitration agreement. See In re Rubiola, 334 S.W.3d 220, 223

(Tex. 2011) (orig. proceeding) (party seeking to compel arbitration under FAA must

establish there is a valid arbitration clause and claims in dispute fall within that

8
See 9 U.S.C. § 1 et seq.
4
agreement’s scope) (citing In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex.

2005)).9

In cases in which a party resists arbitration, “it matters whether the party resisting

arbitration is a signatory or not.” Merrill Lynch Investment Mgrs. v. Optibase, Ltd., 337

F.3d 125, 131 (2nd Cir. 2003); see Roe v. Ladymon, 318 S.W.3d 502, 515 (Tex. App.—

Dallas 2010, no pet.); see also DK Joint Venture 1 v. Weyand, 649 F.3d 310, 316-17

(5th Cir. 2011); Elgohary v. Herrera, 405 S.W.3d 785, 791 (Tex. App.—Houston [1st

Dist.] 2013, no pet.). Here JJF, the party resisting arbitration, was a party to the policy

containing the broad requirement that “[a]ll disputes involving determinations made by

[Rain & Hail],” with an exception not relevant here, were subject to arbitration. Altman

and Diaz, though not parties to the policy, sought to enforce JJF’s agreement to

arbitrate.10

After the trial court referred JJF’s claims against Altman and Diaz to arbitration,

JJF filed with the arbitrator a motion to dismiss the arbitration. Among other

contentions, the motion argued the claims were not arbitrable because appellees were

not parties to the policy, and because JJF’s claims against them were entirely separate

from its claim against Rain & Hail under the policy and in fact did not even arise until

JJF’s claim against Rain & Hail was finally resolved against JJF. The arbitrator denied

JJF’s motion to dismiss by written order.

9
By its over-arching sole appellate issue, JJF questions “whether a non-party to
an arbitration agreement can compel arbitration of claims that are not within the scope
of the arbitration agreement.” JJF’s argument encompasses both the existence of an
arbitration agreement between these parties and the scope of the policy’s arbitration
provision.
10
“A person who has agreed to arbitrate disputes with one party may in some
cases be required to arbitrate related disputes with others.” Meyer v. WMCO-GP, LLC,
211 S.W.3d 302, 304 (Tex. 2006)

5
In the trial court, JJF’s response to appellees’ petition to confirm the arbitration

award also addressed the arbitrator’s authority, noting that under American Arbitration

Association rules, “it is the arbitrator’s responsibility to ‘rule on his . . . jurisdiction,

including any objections with respect to the existence . . . of the arbitration agreement or

to the arbitrability of any claim.’”11

“Under the FAA, absent unmistakable evidence that the parties intended the

contrary, it is the courts rather than arbitrators that must decide ‘gateway matters’ such

as whether a valid arbitration agreement exists.” In re Weekley Homes, L.P., 180

S.W.3d 127 (Tex. 2005) (orig. proceeding). We review the issue in the manner set out

in First Options. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943, 115 S. Ct.

1920, 131 L. Ed. 2d 985 (1995) (“Just as the arbitrability of the merits of a dispute

depends upon whether the parties agreed to arbitrate that dispute . . . , so the question

‘who has the primary power to decide arbitrability’ turns upon what the parties agreed

about that matter”) (internal citation omitted; italics in original); see In re Weekley

Homes, 180 S.W.3d at 130-31 (determining whether nonparty must arbitrate, Texas

courts “apply state law while endeavoring to keep it as consistent as possible with

federal law”). In this instance, the contract is one promulgated by the FCIC pursuant to

its statutory authorization. See 7 U.S.C. § 1508(h) (providing for review and approval of

policies by FCIC).

11
JJF’s response to appellees’ motion to confirm the award also constituted its
motion to vacate the award. JJF cited rule R-7 of the AAA’s Commercial Arbitration
Rules (2010), available at https://www.adr.org. JJF also quoted from rule R-8 of the
same rules, stating in its response, “The arbitrator has the power ‘to determine the
existence or validity of a contract of which an arbitration clause forms a part.’”
Commercial Arbitration Rules (2010), available at https://www.adr.org. JJF went on to
argue the merits of its contention its claims against Altman and Diaz were not arbitrable.
6
Federal courts are largely in agreement that incorporation of the AAA rules

containing language like that JJF quoted to the trial court constitutes clear and

unmistakable evidence that the parties to the arbitration agreement “agreed to arbitrate

arbitrability.” See Oracle Am., Inc. v. Myriad Group, A.G., 724 F.3d 1069, 1074 (9th Cir.

2013) (“virtually every circuit to have considered the issue” has so held); see also

Chesapeake Appalachia, LLC v. Scout Petr., LLC, 809 F.3d 746 (3rd Cir. 2016) (quoting

“virtually every circuit” language); Petrofac, Inc. v. DynMcDermott Petr. Ops. Co., 687

F.3d 671, 675 (5th Cir. 2012) (agreeing with “most of our sister circuits that the express

adoption of [AAA] rules presents clear and unmistakable evidence that the parties

agreed to arbitrate arbitrability”); Fallo v. High-Tech Inst., 559 F.3d 874, 878 (8th Cir.

2009); Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366, 1372-73 (Fed. Cir. 2006);

Terminix Int'l Co., L.P. v. Palmer Ranch Ltd. P'ship, 432 F.3d 1327, 1332-33 (11th Cir.

2005); Contec Corp. v. Remote Solution Co., 398 F.3d 205, 208 (2nd Cir. 2005).

In Haddock v. Quinn, 287 S.W.3d 158, 172 (Tex. App.—Fort Worth 2009, orig.

proceeding),12 the court recognized the “majority view,” consistent with the holdings of

the federal circuit courts, but found that a “general reference” to the AAA rules in the

arbitration agreement did not clearly and unmistakably indicate the parties’ intent to

submit issues of arbitrability to the arbitrator in that case. See also Burlington Res. Oil

& Gas Co. L.P. v. San Juan Basin Royalty Trust, 249 S.W.3d 34, 40 (Tex. App.—

Houston [1st Dist.] 2007, pet. denied) (also finding agreement’s reference to AAA rules

did not provide clear and unmistakable evidence of intention to submit arbitrability

issues to arbitrator).

12
In its opinion, the court addressed a consolidated interlocutory appeal and
mandamus proceeding.
7
We find Haddock distinguishable from our present case. The arbitrability issue

there concerned the waiver of the right to arbitration through inconsistent litigation

conduct, 287 S.W.3d at 170, and the court appropriately relied primarily on waiver

cases. Id. at 173-74. And the court noted that rule 7(a) of the AAA rules, on which the

party urging arbitration relied, did not exist at the time the arbitration agreement was

added to the parties’ contract. Id. at 175. Similarly, the court in Burlington Resources

found the agreement there limited arbitration to specifically identified audit disputes, and

did not contain “a clear and unmistakable indication that the parties authorized an

arbitrator to decide the arbitrability of claims or amounts not specifically identified” in the

agreement, notwithstanding its reference to the AAA rules. 249 S.W.3d at 41.13

We will apply the majority view to this federal crop insurance policy, 14 and thus

find its incorporation of the AAA rules15 constitutes clear and unmistakable evidence the

parties to the policy intended the arbitrator to decide whether JJF’s agreement to

arbitrate is binding on it as against its effort to litigate its claims against Altman and Diaz

13
The courts in Haddock, 287 S.W.3d at 174-75, and Burlington Resources, 249
S.W.3d at 41, also considered language in each arbitration agreement stating that its
terms controlled over any inconsistent provision of the AAA rules as indicating the
parties did not clearly and unmistakably agree to allow the arbitrator to determine
questions of arbitrability. Similar language is present in section 20(f) of JJF’s crop
insurance policy, but we do not consider its presence determinative of the parties’
intention regarding arbitrability.
14
Among the policy’s basic provisions also is its section 36, entitled “Applicability
of State and Local Statutes.” That section provides:

If the provisions of this policy conflict with statutes of the State or locality in
which this policy is issued, the policy provisions will prevail. State and
local laws and regulations in conflict with federal statutes, this policy, and
the applicable regulations do not apply to this policy.
15
See Risk Management Agency Final Agency Determination FAD-126, Nov. 2,
2010, available at http://www.rma.usda.gov/regs/533/2010.html. (2008 crop year;
generally addressing application of AAA rules incorporated by reference into policy).
8
in court. Petrofac, 687 F.3d at 675; In re Weekley Homes, 180 S.W.3d at 130-31.16 In

its motion to dismiss the arbitration, JJF contended both that it had no agreement to

arbitrate with Altman and Diaz, and that its claims against them were outside the scope

of the policy’s arbitration agreement. As noted, the arbitrator denied JJF’s motion by

written order.

JJF’s brief on appeal contends the arbitrator exceeded his authority “by entering

an award where no agreement to arbitrate existed and the scope of the arbitration

agreement did not cover the disputes.” JJF gives no other reason for its assertion the

arbitrator exceeded his authority. Because we conclude JJF agreed in the policy that

an arbitrator would have authority to determine the question of arbitrability, the arbitrator

did not exceed his authority by resolving the question contrary to JJF’s position. And,

under the narrow and deferential review standard applied to arbitration awards, JJF’s

arguments give us no basis to conclude the arbitrator acted outside his powers in his

resolution of the merits of the issues presented to him, whether issues of arbitrability or

those relating to appellees’ asserted liability to JJF. See Forsythe Int’l, S.A. v. Gibbs Oil

Co., 915 F.2d 1017, 1020 (5th Cir. 1990); Petrobras, 2012 Tex. App. LEXIS 2458 at

*30-31, *46 (standard of review of awards under FAA). The trial court did not err by

affirming the arbitration award over JJF’s contrary argument.

For the reasons discussed, we overrule JJF’s appellate issue and affirm the trial

court’s judgment.

James T. Campbell
Justice

16
We do not suggest that JJF’s act of filing its motion to dismiss with the
arbitrator and thus obtaining the arbitrator’s ruling was itself an indication of its
willingness to arbitrate the question. See First Options, 514 U.S. at 946.
9
FILE COPY

No. 07-15-00060-CV

Jody James Farms, JV § From the 110th District Court


Appellant of Floyd County
§
v. October 17, 2016
§
The Altman Group, Inc. and Laurie Opinion by Justice Campbell
Diaz §
Appellees

J U D G M E N T

Pursuant to the opinion of the Court dated October 17, 2016, it is ordered,

adjudged and decreed that the judgment of the trial court be affirmed.

It is further ordered that appellant pay all costs in this behalf expended for which

let execution issue.

It is further ordered that this decision be certified below for observance.

oOo
FILE COPY

BRIAN QUINN
Chief Justice
Court of Appeals VIVIAN LONG
Clerk

JAMES T. CAMPBELL
Justice
Seventh District of Texas MAILING ADDRESS:
MACKEY K. HANCOCK
Justice
Potter County Courts Building P. O. Box 9540
79105-9540
501 S. Fillmore, Suite 2-A
PATRICK A. PIRTLE
Justice Amarillo, Texas 79101-2449 (806) 342-2650

www.txcourts.gov/7thcoa.aspx

December 13, 2016

Anna McKim Jody D. Jenkins


J. Paul Manning JENKINS, WAGNON & YOUNG, P.C.
FIELD, MANNING, STONE P. O. Box 420
HAWTHORNE & AYCOCK, P.C. Lubbock, TX 79408
2112 Indiana Avenue * DELIVERED VIA E-MAIL *
Lubbock, TX 79410
* DELIVERED VIA E-MAIL *

RE: Case Number: 07-15-00060-CV


Trial Court Case Number: 10,422

Style: Jody James Farms, JV v. The Altman Group, Inc. and Laurie Diaz

Dear Counsel:

By Order of the Court, Appellant’s Motion for Rehearing is this day overruled.

The Court’s Opinion issued on October 17, 2016 mistakenly included an


incomplete citation for First Options of Chicago, Inc. v. Kaplan on page 6. A citation to a
website has been added to footnote 15 on page 8. Attached is the corrected opinion.

Very truly yours,


Vivian Long
VIVIAN LONG, CLERK

xc: Honorable William P. Smith (DELIVERED VIA E-MAIL)


Patty Davenport (DELIVERED VIA E-MAIL)
THE CLERK’S RECORD

No. 07-15-00060-CV
Trial Court No. 10,422

JODY JAMES FARMS, JV


VS FILED IN
7th COURT OF APPEALS
THE ALTMAN GROUP, INC. AMARILLO, TEXAS
AND LAURIE DIAZ 3/3/2015 11:18:57 AM
VIVIAN LONG
Transcript from the 110TH District Court of Floyd County, Texas
CLERK

Hon. William P. Smith, Judge Presiding

Jodie Jenkins, Attorney for Appellant


Address: P.O. Box 420
Lubbock, Texas 79408
State Bar No. 24029634

J. Paul Manning, Attorney for Appellee


Address: 2112 Indiana Avenue
Lubbock, Texas 79410
State Bar No. 24002521

Applied for by the Appellant


Date uploaded: March 3, 2015

Patty Davenport, District Clerk


Floyd County
Address: 105 S. Main Room 207
Floydada, Texas 79235
dcfloyd@suddenlinkmail.com
phone: 806-983-4923

Transcript fee: $ 129.00 paid: Jodie Jenkins

Appellate Court Cause No. ______________

Filed in the 7th Court of Appeals, at Amarillo, Texas this the ___ day of _________20___

___________________________Clerk by______________________Deputy

1
No. 10,422

JODY JAMES FARMS, JV § IN THE 110TH DISTRICT

VS. § COURT OF

THE ALTMAN GROUP, INC. § FLOYD COUNTY, TEXAS


AND LAURIE DIAZ

INDEX

Plaintiff’s Original Petition - - - - - - - - - - - - - - 3


Defendant’s Original Answer and Request for Disclosure - 7
Defendant’s Motion to Compel Arbitration - - - - - - - - 9
Defendant’s First Amended Answer - - - - - - - - - - - - 18
Order Setting Hearing - - - - - - - - - - - - - - - - - 24
Notice Setting Hearing - - - - - - - - - - - - - - - - - 25
Letter - - - - - - - - - - - - - - - - - - - - - - - - - 26
Order Granting Motion to Arbitrate - - - - - - - - - - - 27
Plaintiff’s Motion to Reconsider or for Clarification of the
Court’s Order to Compel Arbitration - - - - - - - - - 28
Notice of Hearing - - - - - - - - - - - - - - - - - - - 37
Defendant’s Response to Motion for Rehearing - - - - - - 38
Order on Plaintiff’s Motion to Reconsider - - - - - - - - 41
Petition to Confirm and Enforce Final Arbitration Award and for
Attorney Fees and Costs - - - - - - - - - - - - - - - 42
Order Setting Hearing - - - - - - - - - - - - - - - - - - 55
Notice Setting Hearing - - - - - - - - - - - - - - - - - 56
Jody James Farms, JV’s response to the Altman Group, Inc. and
Laurie Diaz’s Petition to Confirm and Enforce Final
Arbitration Award and for Costs and Attorney Fees and Motion
to Vacate and to Set Aside Arbitration Award - - - - - 57
Notice Setting Hearing - - - - - - - - - - - - - - - - - 74
Brief in Support of the Altman Group, Inc. and Laurie Diaz’s
Petition to Confirm and Enforce the Final Arbitration Award
and Response to Motion to Vacate Award - - - - - - - - 75
Letter - - - - - - - - - - - - - - - - - - - - - - - - 124
Final Judgment - - - - - - - - - - - - - - - - - - - - - 125
Notice of Appeal - - - - - - - - - - - - - - - - - - - - - 128
Bill of Costs - - - - - - - - - - - - - - - - - - - - - - 129
Docket Sheet - - - - - - - - - - - - - - - - - - - - - - 130
Clerk’s Certificate - - - - - - - - - - - - - - - - - - - 131

2
411

CAUSE NO.
CAUSE NO. ( 'D, 4J~
i2LOA_

§ IN THE
IN THE 110 TH JUDICIAL
I lOTH
JODY JAMES FARMS, JV §
§ DISTRICT COURT OF
v.
V. §
THE ALTMAN GROUP, INC. and LAURIE §
§ FLOYD COUNTY, TEXAS
DIAZ
PLAINTIFF'S ORIGINAL PETITION

Plaintiff, Jody James Farms, JV files this Original Petition against The Altman Group, Inc.,

Court~s
and Lauren Diaz Defendants, and in support thereof would show the Court ~~l~o.ws:
as follows:

I.
DISCOVERY

Discovery in this
this matter
matter shall
shall be
be conducted
conductedunder
underDiscovery
DiscoveryControl
ControlPlan
PlanLevel
LevelII.II. Tex.

190.2.
R. Civ. P. 190.2.

II.
PARTIES

Plaintiff Jody
Jody James
James Farms,
Farms, JV
JV is aa joint
joint venture
venture doing
doing business
business in
in Crosby
Crosby and
and Floyd
Floyd

County, Texas.

Defendants are The Altman Group,


Defendants are Group, Inc.
Inc. who
who may be served with process by serving
serving its

registered agent Barry Altman at 7005


registered agent 7005 Salem
Salem Park Drive, Suite
Suite B, Lubbock,
Lubbock, Texas 79424,
79424, and

- Laurie Diaz--·who is an individual


"' ~-"-- .--·-' -· --
who may be served with process at 5805 64th Street, Lubbock,
--
.. ___.....-.- ~ --~--
j
-)
Texas 79424.

III.
III.
JURISDICTION AND
JURISDICTION AND VENUE
VENUE

This Court has jurisdiction


jurisdiction over this matter because the amount in controversy is within the

jurisdictional limits
jmisdictional limits of
of this
this Court.
Court. Further,
Further, venue
venue isis proper
proper in
in Floyd
Floyd County,
CoUJJ.ty, Texas
Texas because
because

Defendants sold insurance


Defendants sold to Plaintiff that covered
insurance to covered real
real property located
located in Crosby
Crosby and
and Floyd
Floyd

3
substantially all
County, Texas; and, all or substantially all of
of the events giving rise to this cause of
of action occurred

in Floyd County, Texas.

IV.
FACTS

In 2010, Plaintiff received


received damages
damages to
to his
his grain
grain sorghum
sorghumcrops. Plaintiff contacted
crops. Plaintiff contacted his

of The Altman Group, Inc., to submit a claim for


insurance agent Laurie Diaz who is an employee of

damages to
damages to his
his crops.
crops. Although Plaintiffsubmitted
AlthoughPlaintiff submitted his
his claim
claim for
for loss
loss in
in accordance
accordance with
with the

customary practicesJn
customary practices in the industry and as required by the Insurance Policy sold by Defendants, his
i
&
claim was not forwarded by The Altman Group, Inc. to the underlying, insurance carrier, Rain &

Hail.~ On
Hail; OnJune
June20,
20,2011,
2011,Plaintiff
Plaintifffiled
filedan
anArbitration
ArbitrationDemand
Demand against
against Rain
Rain and
and Hail,
Hail, LLC
LLC with
with
:.
the American
the American Arbitration
Arbitration Association
Associationfor
fordenial
denialof
ofcrop
cropinsurance.
insurance. On April 10,
On April 10, 2012,
2012, the
the

American Arbitration
American Arbitration Association
Association rendered
rendered its
its decision
decision and
and found that Plaintiffs
found that Plaintiff's claim was not

timely submitted to Rain &


& Hail, LLC.

v.
V.
CAUSES OF ACTION

1. Fiduciary Duty

Defendants breached their fiduciary


fiduciary duty
duty to Plaintiff by failing to timely submit the crop

claim to
loss claim to Rain & LLC. As
& Hail, LLC. AsPlaintiff's
Plaintiffsinsurance
insuranceagents,
agents, Defendants
Defendants owed
owed aa fiduciary
fiduciary

-·duty to-their insured:~ -Defendants breached their


dutytb-theirinstited:—Defendants their fiduciary
fiduciary dutywhen-Plaintiffnotified,themofhis
duty•when-Ptaintiffnotified,themofhis .~

loss in accordance with industry custom and practice.

2. Deceptive Trade Practices Act

The Deceptive
The Deceptive Trade
Trade Practices
Practices Consumer
Consumer Protection
Protection Act (DTPA), Tex.
Act (DTPA), Tex. Bus.
Bus. & Com.
& Com.

Code Ann. §§ 17.41


17.41 et
et seq. ( 1987), prohibits false, misleading, or deceptive acts or practices in the
seq. (1987),

of trade
conduct of trade or commerce.
commerce. The elements
elements of
of a DTPA cause of action are: (l)
(1) the plaintiff is a

4
the defendant engaged in false,
consumer; (2) the false, misleading,
misleading, or deceptive
deceptive acts;
acts; and
and (3) these acts

constituted a producing
constituted cause of the
producing cause the consumer's
consumer's damages.
damages. Rove First Am.
Rove v. First Am. Title
Title Ins.
Ins. Co.,
Co.,

1.998 Tex.
1998 App LEXIS
Tex. App. LEXIS 6242,
6242, 11 (Tex.
(Tex. App.
App. Dallas Oct. 8,
Dallas Oct. 8, 11998).
998). In
Inthe
thecase
case atat bar,
bar, Plaintiff
Plaintiff

qualifies as
qualifies consumer under
as a consumer under the DTPA. Defendant
the DTPA. Defendantengaged
engaged in
in misleading
misleading and
and false
false acts by

failing to submit Plaintiff's


failing Plaintiff's claim
claim for
for coverage
coverage of
of lost
lost crops
crops and
and representing
representing that
that the
the insurance

policy had
policy had benefits
benefits that
that itit did
did not. Defendants'conduct
not. Defendants' conduct violated
violated several of the
several of the "laundry
"laundry list"

17.41 et.
items set forth in § 17.41 et. seq.

v.
V.
ATTORNEY'S FEES

of the
As a result of the Defendants'
Defendants' conduct,
conduct, Plaintiff
Plaintiff has
has been
been forced
forced to
to hire
hire the
the undersigned
undersigned

attorney to pursue
pursue collection of
of this
this matter.
matter. AAreasonable
reasonable and
and necessary
necessary attorney's
attorney's fee
fee through the

of this matter is estimated to be at least $25,000.00 with additional contingent amounts in the
trial of

event of a an
an unsuccessful
unsuccessful appeal to a Texas
Texas Court
Court of
of Appeals
Appeals or
or the
the Texas
Texas Supreme
Supreme Court by

Defendants.

VI.
CONCLUSION

· · Plaintiff
Plaintiff requests that Defendants be cited to appear and answer herein and that upon final

judgment Plaintiff
Plaintiff does have and recover:

—.-
- ·· 1.
1.-- - $68;000.00
$68;000.00 as the amount due•and
due·and owing to-Plaintiff;-"
to-Plaintiff; - . -= --o ~- ~, -· ~ ,.. . __ "'

2.
2. least $25,000.00
At least $25,000.00 as
as reasonable
reasonable and
and necessary
necessary attorney's
attorney's fees
fees with
with additional
additional

contingent amounts
contingent amounts in
in the
the event
event of an unsuccessful
unsuccessful appeal
appeal to
to a Texas
Texas Court of Appeals
Appeals or the

Texas Supreme Court by Defendants;

3.
3. Pre-judgment interest;

4.
4. Post-judgment interest at the highest rate allowed by law; and

5
5. relief to which Plaintiff
All such other and further relief itself to be justly entitled.
Plaintiff shows itself

Respectfully submitted,

ODY D. JENKINS, SB #24029634


JENKINS, WAGNON & & YOUNG, P.C.
P.O. Box 420
Texas79408
'Lubbock, Texas
796-73 51
(806) 796-7351
79408
;
Fax: (806) 771-8755 I
ATTORNEYS FOR PLAINTIFF

FILED
ialvveopPidi-
Pl
(District C rk, Floyd County, Texas

3 6
No. 10,422
I0,422

JODY JAMES
JAMES FARMS, JV § IN THE 110Th
II OTH DISTRICT COURT
§
v.
V.
§ OF
§
THE ALTMAN GROUP, INC.
INC. AND §
LAURIEDIAZ
LAURIE DIAZ § FLOYD COUNTY, TEXAS

DEFENDANTS'
DEFENDANTS' ORIGINAL
ORIGINAL ANSWER
AND REQUEST FOR DISCLOSURE
~ : : ... ~. . . . --. ----~-~- p ~ _ . ••

TO THE HONORABLE JUDGE OF SAID COURT:

NOW COMES,
NOW COMES, THE ALTMAN
ALTMAN GROUP,
GROUP, INC.
INC. AND DIAZ, (hereinafter
AND LAURIE DIAZ,

file this Original


"Defendants") Defendants herein and file Original Answer, and would respectfully show the

Court as follows:
follows:

I.

GENERAL DENIAL

1.01. Defendants
.1.01. Defendantsdeny
denyeach
eachand
andevery,
every,all
alland
andsingular,
singular, the
the allegations
allegations contained in the

Plaintiff's
Plaintiff's pleadings
pleadings and
and exercises
exercises their
their rights
rights under
under TEX. R. CIV.
TEx. R. Qv. 92 to generally
generally deny
deny each
each of the

allegations contained in such pleadings.


pleadings .
...:;-,...-~~ . -- ~ . - .. -·-· ..... ~~ -~---:_-~ ;.:~ ---.--- ~

II.

REQUEST FOR DISCLOSURES

6. 0 1. Under
6.01. UnderTexas
TexasRule
Ruleofof
Civil
CivilProcedure
Procedure194,
194,Plaintiffs
Plaintiffsrequest
requestthat
that Defendants
Defendants disclose,

within fifty (50) days of the service of


fifty (50) of this request, the information or material described in Rule

194.2.

Original Answer
Original Page 1I
LAActive Cases\Miscellaneous I JPaul
L:\Active Cases\Miscellaneous. Paul\CLIENTS\A\Aitman
\CLIENTS \A \ Altman Group\Jody James Farms,
GrouplIody James Fanns,IV
JVv.v.Altman
Altman\Pieadings\Answer.wpd
\Pleadings \Answer.wpd

7
I

WHEREFORE, PREMISES CONSIDERED, Defendants


Defendants pray that Plaintiff
Plaintiff take nothing

by this suit herein and that Defendants go hence


hence without
without day
day and
and recover
recover all
all costs
costs in
in this behalf

expended.

Respectfully submitt

J. PAUL MA
STATE BAR N I • "" ~· _. ·.,., '

FIELD, MA
FIELD, MA ING,lNG,STONE,
STONE,HAWTHORNE
HAWTHORNE &
&
AYCOCK, .C.
AYCOCK, .C.
A Professional Corporation
2112 Indiana Avenue
A venue
Lubbock, Texas 79410-1499
Lubbock,Texas79410-1499
806/792-0810 (Telephone)
806/792-9148 (Facsimile)

ATTORNEYS FOR DEFENDANTS

CERTIFICATE OF SERVICE

A
A true
true and correct 2~Y
and correct day ofofthe
theabove
aboveand foregoing DEFENDANTS'
andforegoing DEFENDANTS' ORIGINALORIGINAL
ANSWER was on this ___!ljj_
/2/9 day ofof December , 2012, served on Plaintiff
Plaintiff by forwarding same to
Plaintiffs attorney
attorney of
of record as follows:
follows:

Via Fax: 771-8755 and/or


E-Mail jjenkins@jwylaw.com
~JODY-JENKINS--o---~=· ... - ·
JENKINS, WAGNON &
-·- -·
& YOUNG, P.C.
---· -- J
P.O. Box 420
Lubbock, TX 79408

J. PAUL MA
PAULMA

FILED Page 2
Original
Original Answer .

p~~
Cases\Miscellaneous
L:\Active Cases 'Miscellaneous -I
- J Paul\CLJENTSIA\Aitman
Paul \CLIENTS \ A \Altman Group\lody
Group \Jody lames
JamesFarms,
Farms,IV
JVv.v. Altman\Pleadmgs\Answer.wpd
Altman \Pleadings\Answer.wpd

Clerk, Floyd County, Texas


District Clerk, T~

By 1 -a -9tp ·dfJ.JCJ. lo~ 20 """8


No. 10,422
10,422

JODY JAMES FARMS, JV § ININ


§ THE
THE110TH
110m DISTRICT COURT
§
v. § OF
§
THE ALTMAN GROUP, INC. AND §
LAURIE DIAZ
LAURIEDIAZ § FLOYD COUNTY, TEXAS

DEFENDANTS' MOTION TO COMPEL ARBITRATION

TO THE HONORABLE JUDGE OF SAID COURT:

COMES NOW, the Defendants, THE ALTMAN GROUP, INC. AND LAURIE DIAZ,

(collectively referred
(collectively referred to Defendants herein)
to as Defendants herein) and files this Motion
Motion to
to Compel
Compel Arbitration
Arbitration and
and

would show the Court as follows:


follows:

I. Introduction and Procedural Posture

1.
1. brought this lawsuit after initiating an arbitration proceeding styled In the
Plaintiffbrought
Plaintiff

Matter
Matter of Arbitration between:
of the Arbitration between: Jody
Jody James
James Farm,
Farm, JV
JV vs. Rain and Hail,
vs. Rain LLC, Case No.
Hail, LLC,

71430E003911 before the American Arbitration Association.


71430E003911

2.
2. Subsequently, Plaintiffinitiated
Subsequently, Plaintiff initiatedthe
theinstant
instantsuit
suit despite
despite the
the clear
clear terms
terms of the

of the original arbitration and the


arbitration clause in the crop insurance policy that is the subject of

fact
fact that Plaintiff had
had an arbitration
arbitration finding that Plaintiff was
finding that was not entitled to recover
recover under the

policy of insurance regardless of whether or not Plaintiffs claims against


Plaintiff's claims against Defendants
Defendants have merit

or not.

3.
3. The arbitration precludes Plaintiffs
arbitration precludes Plaintiff's recovery.
recovery. Defendants
Defendants have
have all
all answered
answered and

intended to seek Pleas in Abatement regarding this litigation be abated,


intended to abated, if
if not adjudicated
adjudicated in the

above-referenced arbitration pursuant to the requirements of the DTPA.


ofthe

Mntinn to Cnmnpl Arbitration Pa e 1


Page
4.
4. First, Defendant files
files this Motion to Compel the parties to Arbitration pursuant to

their agreement.

II. Arbitrability of the Claim

5.
5. called upon
A court called upon to,
to. determine
determine if arbitration should be compelled under either
either

federal law (the Federal


federal Federal Arbitration
Arbitration Act) must determine
Act) or Texas law must determine (1) whether
whether the
the parties
parties

agreed to arbitrate,
agreed if so,
arbitrate, and if so, (2)
(2) whether
whether the
the scope
scope of
ofthe
the agreement
agreement encompasses
encompasses the
the asserted
asserted

claims. See Chelsea


Chelsea Square
Square Textiles
Textiles Inc. v. Bombay Dyeing and Manufacturing Co., 189 F.3d
Inc. v.

289, 294 (2nd Cir. 1999)(FAA);


1999)(FAA); Leander Cut Stone Co.
Co. v.
v. Brazos Masonry,
Masonry, Inc. 987 S.W.2d 638,

640 (Tex.App.
(Tex.App.-—Waco
Waco 1999,
1999, no
no pet.)(FAA); In re Oakwood
Oakwood Mobile Homes,
Homes, Inc., 987 S.W.2d
S.W.2d

571, 573 (Tex.1999)(state law); Henry v.


v. Gonzalez, 18 S.W.3d 684, 688 (Tex.App.--San Antonio

2000, pet. dism'd by agmt.)(state law).

6.
6. the first
As to the first prong,
prong, the
the fact
fact that
that Plaintiff's
Plaintiffs arbitrated
arbitrated the
the underlying
underlying coverage
coverage

issue with the insurer in arbitration establishes this burden conclusively.

7.
7. second prong requires that
The second that Defendants
Defendants prove that
that the
the arbitration
arbitration provision
provision

encompasses the
encompasses the claims
claims asserted.
asserted. Defendants
Defendantswould
would show
show that
that arbitration
arbitration of
of this matter is
this matter

mandatory under federal govemi~g the


federal law governing specific policy
the specific policy at issue, that Plaintiff's
at issue, Plaintiffs attempts
attempts to

recast its policy coverage


recast coverage claims as State
State law
law finding
finding or
or false,
false, deceptive
deceptive or
or misleading
misleading claims
claims

of this matter.
should be ignored, and that strong federal policy requires arbitration of

a. Mandatory Arbitration

8.
8. The insurance policy at issue is a Federal
Federal Crop
Crop Insurance policy regulated by the

Federal Crop
Federal Crop Insurance
Insurance Act
Act ("FCIA"). The Federal
("FCIA"). The Federal Crop
Crop Insurance
Insurance Corporation
Corporation ("FCIC") was

created 1938 by the Federal


created in 1938 Federal Crop
Crop Insurance
Insurance Act
Act 7 U.S.C.
U.S.C. §1501-20. The FCIC
§1501-20. The FCIC was
was created
created

10

Mntinn to r.omnel Arbitration


Comnel Arbitration Page 2
for the purpose of
of providing national welfare "by improving the economic stability of
national'welfare of agriculture

of crop insurance.
through a sound system of insurance ...
. ."" 7 U.S.C.
U.S. C. §1502.
§ 1502.

9.
9. of the FCIA authorizes the Secretary of
Section 1516 of of Agriculture and the FCIC to

issue such
issue such regulations
regulations as necessary to carry out the
as may be necessary the provisions
provisions of
of the
the Chapter.
Chapter. These
These

regulations are binding on the insureds and all parties, Federal Crop Insurance Corp.
Corp. v.
v. Merrill,

332 U.S. 383, at 384


384-- 385. The
Theregulations
regulations which
which are
are found
found in
in the
the Code
Code of
ofFederal
Federal Regulations
Regulations

specifically set forth


specifically set forth the
the terms
terms of these
these insurance
insurance policies.
policies. The
The actual
actual provisions
provisions and
and terms
terms of

the policies are standardized and approved


approved by the FCIC.
FCIC. The terms and conditions
conditions preempt any

contrary state laws


contrary state laws that would
would apply
apply to
to other
other insurance
insurance contracts
contracts normally
normally issued
issued by private
private

insurance companies. See 7 U.S.C. §1506(1);


§1506(1); 77 C.F.R.
C.F.R. §400.352.
§400.352. Congress specifically provided

shall not apply to contracts


that "state and local laws or rules shall contracts or agreements of
of the [FCIC] or the

parties thereto
parties thereto to extent that
to the extent that such
sue? contracts
contracts or agreements
agreements provide
provide that such laws
that such laws or rules
,"

shall
shall not apply,
apply, or to the
the extent
extent that,such
tha\,such laws
laws or
or rules
rules are
are inconsistent
inconsistent with
with such
such contracts
contracts or

agreements." 77 U.S.C.
agreements." U.S.C. §§ 1506(k).
1506(k).

10.
10. of the mandated
One of mandated provisions of
of the FCIC insurance
insurance policies is the
the arbitration
arbitration

provision.
provisiOn. The
The terms
terms of
of the
the Policy
Policy ;,are
:are set
set forth
forth in the
the regulations
regulations promulgated by the Risk
promulgated by Risk

Management Agency ("RMA"),


Management Agency ("RMA"), which
which administers
administers the
the federal
federal crop
crop insurance program and
insurance program and is

regulated, reinsured, and


regulated, reinsured, and subsidized
subsidized by
by the
the FCIC.
FCIC. The
The arbitration
arbitration requirement
requirement was added to the

policy provisions by Final Rule of the


the FCI
FCIC dated August
C dated August 19,
19, 1994.
1994. In
In summarizing
summarizing the changes

to the Common Crop Insurance Regulations, the FCIC noted:

The arbitration provisions are amended to apply to all disagreements on factual


determinations and be in accordance with the Rules ofof the American
American Arbitration
Association.

Common
Common Crop Insurance Regulations;
Regulations; Regulations for the 1994 and Subsequent Crop Years, 59
Regulations for

Motion to Compel
Compel Arbitration
Arbitration Page 3
11
42751 (1994)
FR 42751 (1994) (emphasis
(emphasis added). Thus, the
added). Thus, the language
language calling
calling for
for arbitration
arbitration when "you and
and

we fail to agree on any determination made by us" is a reflection of federal


federal policy expanding the

scope of
of the arbitration provision in this case.

11.
11. In Nobles v. Rural Community
Nobles v. Community Insurance Services,
Services, 122 F. Supp.
Supp. 2d
2d 1290
1290 (M.D.
(M.D.

2000) 1 in
Ala. 2000)1
Ala. in an
an Alabama
Alabama federal
federal district
district court
court analyzed
analyzed the provisions
provisions of the FCIA
FCIA and the

Code of
of Federal Regulations determined that
Regulations and det,ermined that as
as a matter of
of law an
an aggrieved
aggrieved insured
insured must
must

submit
submit all
all disputes
disputes arising
arising from
from factual
factual determinations to binding
determinations to binding arbitration and that
arbitration and that the
the

completion of
completion arbitration proceedings
of arbitration proceedings isis a condition
condition precedent
precedent to bringing any legal
to bringing legal action
action

against the insurance company. Id, at 1296.


1296. The
The court
court in Nobles relied in part on the
the provision

of the FCIA that the insured can only bring aa legal


under the rules and regulations of legal action
action against
against

disputes to binding arbitration citing 7 C.F.R.


the insurance company after submitting disputes C.F.R. §457.8
§457.8 ~

Thelanguage
20(a). The language in
in the
the current
current regulations
regulations applicable
applicable to
to this suit
suit are
are even
even stronger
stronger than those

at issue in Nobles. §407.9 ¶~ 16(b)(2)


Nobles. 7 C.F.R. §407.9 16(b)(2) expressly
expressly provides that "if you fail
fail to
to initiate
initiate

arbitration in accordance
arbitration in with §16(b)(l)
accordance with §16(b)(1) and
and complete
complete the
the process,
process, you
you will not be able to

resolve the dispute


resolve dispute through
through judicial review." (emphasis
judicial review." (emphasis added).
added). The
The Nobles court further
further

observed that,
observed that, pursuant
pursuant to arbitration provision,
to the arbitration provision, "the insured may
"the insured bring legal
may not bring legal action
action

against the
against insurer 'unless [the
the insurer [the insured
insured has]
has] complied
complied with
with all of the
all of the policy
policy provisions.'
provisions.' This
This

command would be meaningless


command would meaningless if it allowed Plaintiffs to file suit without first
first complying
complying with

factual disputes." Nobles, 122 F. Supp. 2d at 1296.


the provision requiring arbitration of factual

12.
12. Notably, the Nobles suit,
Notably, suit, like
like the
the instant
instant suit,
suit, involved
involved farmers'
farmers' actions
actions for
for

alleged misrepresentations
alleged misrepresentationsand
andactions
actionsofofananagent. The causes
agent. The causes of action
action asserted
asserted by the
the
;j
plaintiffs in Nobles are strikingly similar to those claims asserted by Plaintiff
Plaintiff herein, e.g., breach

1
of this authority is attached for the
A copy of the Court's convenience.
convenience.

Motion to Compel Arbitration


Compel Arbitration Page 4
12
contract, misrepresentation,
of contract, misrepresentation, suppressiOn,
suppression,bad
bad faith, negligent and
faith, negligent wanton distribution
and wanton distribution of

information via
information via the
the agency,
agency, and
and negligent
negligent and
and wanton
wanton supervision
supervisionof
ofthe
the agents. Even faced
agents. Even faced

of the claims were not subject to arbitration, the Nobles court stayed
with the argument that some of

the federal
federal court proceedings and held that the completion of
of the arbitration
arbitration was mandatory and

arbitrator's findings
that the arbitrator's findings and
and conclusions
conclusions would given preclusive
would be given preclusive effect in any subsequent
subsequent

court proceedings. This isis precisely


proceedings. This precisely the
'the result
result required by the
required by the FCIA
FCIA and
and the
the Federal
Federal Arbitration
Arbitration

1296. Applying
Act. Id, at 1296. Applyingthis
this reasoning,
reasoning, the Nobles court found that the arbitration provisions

of the federal crop insurance policy were mandatory and that the Plaintiff must submit to binding
of

of whether the loss was covered by the policy.


arbitration the factual question of

13.
13. This Court should reach a similar result.
result. The crux
crux of Plaintiff's complaint is that it

did not receive an indemnity


indemnity payment because of some alleged failure of Defendants
Defendants to make a

claim under
claim under the
the policy
policy for
for Plaintiff. Ataaminimum,
Plaintiff At minimum, the
theinstant
instantlitigation
litigation should
should be
be abated
abated and
and

submitted to
submitted binding arbitration
to binding on :'the
arbitration on of whether
the issue of whether coverage
coverage existed
existed under
under the policy at
!:
!I

issue regardless of e~isted or not.


of whether a claim existed
I!

b. The Court Should Ignore Plaintiff's Efforts to Recast Claims

14.
14. Plaintiff may
Plaintiff may argue
argue that
that itit "is not
not bringing
bringing any claim
claim under
under the
the any
any terms
terms or
or

language of the contract,


language contract, i.e.
i.e. the underlying agreement". However,
However, use
use of artful
artful pleadings
pleadings to

recast claims
recast claims to avoid certain
to avoid certain legal consequences
consequences isis a familiar
familiar tactic and one
tactic and one that
that the
the Court
Court

should ignore.
should ignore. The
The essence
essence of Plaintiff's claims herein
Plaintiff's claims herein is it materially
is not that it materially relied
relied upon
upon a

representation or relied
representation or relied upon
upon actions
actions made
made or
or not
not made
made by Defendants. Rather, itit is purely a
Defendants. Rather,

disagreement with
disagreement with the denial of certain
denial of certain indemnity payments under the subject
subject insurance policy

for which
for which even if
if Plaintiff
Plaintiff were
were correct
correct on his
his assertions
assertions have
have already
already been determined
determined to
to be

denied.

Motion to Compel
Compel Arbitration
Arbitration Page
135
15.
15. Co~rts have often been confronted with Plaintiffs
Texas and Federal Courts Plaintiffs who attempt
attempt

to creatively recast their claims to avoid


avoid certain
certain legal
legal consequences.
consequences. For example, Texas Courts

have long held that aa party


have party cannot
cannot avoid
avoid the
the requirements of the
requirements of the medical
medical liability
liability act
act through
through

artful
artful pleading
pleading or recasting
recasting of
of claims.
claims. See
See e.g.
e.g. Diversicare
Diversicare Gen.
Gen. Partner,
Partner, Inc.
Inc. v.
v. Rubio,
Rubio, 185

(Tex.2005). The Texas Supreme Court addressed


S.W.3d 842, 847 (Tex.2005). addressed a similar attempt to avoid an

arbitration clause in In
arbitration clause re Kaplan
In re Kaplan Higher
Higher Educ.
Educ. Corp,
Corp, 235 S.W. 3d
235 S.W. 3d 206,
206, 209
209 (Tex.2007).
(Tex.2007). In

Kaplan, a group of
of students sought to avoid
avoid the terms of
of an
an arbitration
arbitration clause
clause by asserting
asserting their

claims against Kaplan as "fraudulent inducement." The Texas Supreme


Supreme Court
Court correctly
correctly observed

that "almost
that "almost every
every contract
contract claim
claim against
against aa corporation
corporation could
could be
be recast
recast as
as aafraudulent
fraudulent

inducement claim
inducement claim against
against the agents
agents or employees
employees who took part in
in the
the negotiations
negotiations preceding
preceding

it." In
In re
re Kaplan,
Kaplan, 235
235 S.W.
S.W. 3d
3d at
at 209.
209. Other
Other Federal
Federal Circuit
Circuit Courts
Courts have
have reached
reached aa similar
similar

conclusion: "a party cannot avoid arbitration simply by renaming


conclusion: renaming its claims so that they
they appear
appear

facially outside the scope of


facially outside of the arbitration
arbitration agreement."
agreement." See Simon v.
v. Pfizer,
Pfizer, Inc.
Inc. 398 F.3d 765,
765,

(6 1h Cir.
776 (6th Cir. 2005).
2005). InInall
allofofthese
thesecases,
cases,the
thecourts
courtslook
looktotothe
theunderlying
underlying facts
facts to
to determine
determine

whether the essence of the Plaintiff's <;:laims fall


Plaintiff's claims fall within the scope of
of the arbitration clause. !d.
Id.

16.
16. As in Kaplan, virtually
virtually all disputes relating
all disputes relating to
to the denial
denial of
of coverage
coverage under the

subject insurance
subject insurance policy
policy could
could be recast
recast or
or renamed
renamed as
as aa"misrepresentation",
"misrepresentation", negligence
negligence or

deceptive practices.
deceptive Any aggrieved
practices. Any aggrievedi,policyholder
policyholder disagreeing
disagreeing with
with denial
denial of
of coverage
coverage could
could
,,

simply
simply claim
claim that
that the terms
tenns of
of the
the policy
p?licy were
were misrepresented
misrepresented or not properly
properly presented
presented in an
an

effort to
effort avoid arbitration.
to avoid arbitration. The
The Court
Court. should,
should, therefore,
therefore, ignore Plaintiff's attempts
attempts to recast its
lj
li
claims to avoid
avoid the
the arbitration
arbitration clause
clause and
and examine
examine the
the essence
essenceof
ofthe
thePlaintiff's
Plaintiffs claims.

17.
17. by::the
The pleadings filed by the Plaintiff herein make it clear that essence of its claims

relates not to any alleged conduct or representation,


relates representation, but rather,
rather, to
to whether or not it should
should have

Motion to Compel
Compel Arbitration
Arbitration Page
146
received payment
received payment under the policy as previously denied
denied by an arbitration for issue unrelated to

any of
of Defendants' actions
actions or
or inactions.
inactions. In
In short,
short, Plaintiff
Plaintiff disagrees with the determination
determination made
made

to deny coverage during the disputed


disputed; interval and the
the determination
determination by the arbitrator
arbitrator upholding

the denial.
denial. Therefore, this matter clearly
Therefore, this clearly falls
falls within
within the terms of
of the
the arbitration
arbitration agreement
agreement at

issue and thus, the Court should compel this matter to arbitration.

c. The Federal Arbitration Act Requires Arbitration

18.
18. Even
Even if the FCIA
FCIA did
did not
not require
require arbitration,
arbitration, the
the enforcement
enforcement of
of the
the arbitration
arbitration

clause in
clause the policies
in the policies herein
herein at iss~e is
at issue is mandated
mandated pursuant
pursuant to
to the
the Federal
Federal Arbitration
Arbitration Act
Act

("FAA''), which provides, in pertinent part, that:


("FAA"),

[a] written
[a] written provision
provision inin . . .. a. contract
a contractevidencing
evidencinga atransaction
transaction involving
involving
commerce to
commerce settle by arbitration
to settle arbitration a controversy
controversy thereafter
thereafter arising
arising out such
out of such
contract or transaction . . . shall
transaction ... shall be valid,
valid, irrevocable
irrevocable and
and enforceable,
enforceable, save upon
such grounds as exist at law or in equity for the revocation of of any contract.

U.S.C. § 2.
9 U.S.C. 2. Thus,
Thus,the
theFAA
FAArequires
requiresenforcement
enforcement of
ofan
an arbitration
arbitration agreement
agreement upon proof: (1)

that a written agreement to arbitrate exists and (2) that the written agreement is contained within

contract evidencing
a contract evidencing a transaction
transaction involving
involving "commerce." is well-established
It is
"commerce." It well-established that the
the FAA
FAA

establishes
establishes "a federal
federal policy
policy favoring.
favoring: arbitration." Shearson/American
Shearson/American Exp.,
Exp., Inc. McMahon,
Inc. v. McMahon,

482 U.S. 220, 226 (1987).


(1987). Courts must rigorously enforce argeements to arbitrate, even doing so

means
means piecemeal
piecemeal litigation. See Dean
litigation. See Dean Witter
Witter Reynolds,
Reynolds, Inc. v. Byrd,
Inc. v. Byrd, 470
470 U.S.
U.S. 213,
213, 218-21
218-21

(1985).

III. Altman
III. Altman
andand Diaz
Diaz May
May Enforcethe
Enforce theArbitration
Arbitration Agreement
Agreement

19.
19. Defendants anticipate that
Defendants anticipate ,,that Plaintiff
Plaintiff will
will argue
argue that
that because
because they
they are not
not parties
parties
II

and/or signatories
signatories to the arbitration
arbitration agreement that Defendants,
Defendants, Altman and Diaz, lack standing

to enforce
enforce it, and
and thus,
thus, the
the instant
instant litigation
litigation against
against Altman
Altman and Diaz should
should continue.
continue. This
This is

Motion to Compel Arbitration


Compel Arbitration Page157
clearly not the
clearly not the case.
case. Under
Under ordinary
ordinary contract
contract and
and agency
agency principles,
principles, nonsignatories
nonsignatories of an
an

arbitration agreement may


arbitration agreement may be
be bound
bound by the agreement and entitled
agreement and entitled to enforce
enforce it. In re Merrill
In re Merrill

Lynch Trust
Lynch Trust Co.
Co. FSB,
FSB, 123
123 S.W.
S.W. 3d
3d 549,
549, 557
557 (Tex.App-San
(Tex.App-San Antonio
Antonio 2003,
2003, orig.
orig. proceeding.)
proceeding.)

When
When the
the principal
principal is bound
bound by
by aavalid
validarbitration
arbitration agreement,
agreement, "its
"its agents,
agents, employees,
employees, and
and

representatives are covered


representatives are covered by that
that agreement."
agreement." McMillan
McMillan v. Computer Tranlation
v. Computer Tranlation Sys. &
Sys. &
Support,
Support, Inc.,
Inc., 66 S.W.3d
S.W.3d 447, 481
481 (Tex.App-Dallas
(Tex.App-Dallas 2001, orig. proceeding).
2001, orig. proceeding). In short, there
In short, there is

ample authority
ample authority under
under which
which Defendants,
Defendants, Altman
Altman and
and Diaz,
Diaz, as agents of the insurer,
as agents insurer, Rain
Rain &
&

of the subject arbitration agreement.


Hail, LLC, can enforce the terms of

Prayer

WHEREFORE, Defendants pray as follows:


follows:

a.
a. That Defendants'
That Defendants' Motion
Motion to Compel Arbitration
to Compel Arbitration be granted and
be granted this case
and this case

dismissed or otherwise abated;

b. That all claims of Plaintiff be denied and that all costs be borne by Plaintiff;
ofPlaintiffbe

c.
c. That the Court
That Court compel
compel arbitration
arbitration of this dispute
dispute under rules
rules of
of the
the American
American

Arbitration Association;

d.
d. For such other relief
relief as the Court deems proper.

Compel Arbitration
Motion to Compel Arbitration Page16
8
...
:

Respectfully

J. PAUL M G
STATE B NO. 24002

FIELD,
FIELD, ANNING,
ANNING,STONE,
STONE,HAWTHORNE
HAWTHORNE &
&
AYCOCK, P.C.
A Professional Corporation
2112 Indiana A
Avenue
venue
Lubbock, Texas 79410-1499
806/792-0810 (Telephone)
806/792-9148 (Facsimile)

ATTORNEYS FOR DEFENDANTS

CERTIFICATE OF SERVICE ---~

A true and correct copy of


of the above and foregoing document was on this (1 ) day of
-- day A
February, 2013, served on Plaintiffbyforwarding
Plaintiff by forwarding same
same to
to Plaintiffs of record as
Plaintiffs attorney of
follows:
follows:

Via Fax: 771-8755


Via 771-8755 and/or
E-Mail iienkinsAiwylaw.com
jjenkins@jwvlaw.com"
JODY JENKINS
JENKINS, WAGNON & & YOUNG, P.C.
P.O.
P.O. Box 420
Lubbock, TX 79408

J. PAUL MA

FILED
~~
P Oskiti.e_opArd"
District Clerk, Floyd County, T-exas
Texas
By ;-Q-11\0C>I~ . 11 :..t{ ~

Motion to Compel
Compel Arbitration
Arbitration Page17
9
806-792-1048
10:38:35 a.m.
10:38:35a.m. 06-27-2013 3/3

No. 10,422
No.l0,422

JODY JAMES FARMS, JV § ININTHE II om DISTRICT COURT


THE110T11
§
v. § OFOF
§
THE ALTMAN GROUP, INC. AND §
LAURIEDIAZ
LAURIE DIAZ FLOYDCOUNTY,
§ FLOYD COUNTY,TEXAS
TEXAS

ORDER
ORDER GRANTING
GRANTING MOTION TO ARBITRATE

ON TIDS 20'11 day ofMay,


THIS the 20th of May, 2013, the Court considered the Motion of
of Defendants, THE

ALTMAN GROUP, INC. AND LAURIE DIAZ, to Compel Arbitration and, after considering the

pleadings, the argument


pleadings, affidavit, evidence, and the argument of
of counsel, the Court hereby grants said motion.

IT IS THEREFORE of Defendants, THE ALTMAN GROUP,


THEREFORE ORDERED that the Motion of

all things GRANTED.


INC. AND LAURIE DIAZ to arbitrate this matter is hereby in all

SIGNED thi this..$-yy of c,LY~-t · .


, June, 2013. . ·

.. ~:~
FILED JUDGE PRESIDING
Pcdfg~
District Clerk,
District ClerK,Floyd County,'f.9xa8
FloydCo1.1nty, Texas

By '-22-WE . L;/~
-.

27
From: JWY Law
From:JWY Law 8066871994 09/11/2013 16:03
09/11/2013 16:03 #776 P.003/003
#776 P.003/003

CAUSE NO. 10,422

JODY JAMES FARMS, JV § ININTHE


THE110TH
llOTH DISTRICT COURT
§
v. §
§ OF
OF
§
THE ALTMAN GROUP, INC. AND §
LAURIE DIAZ
LAURIEDIAZ § FLOYD
FLOYDCOUNTY,
COUNTY,TEXAS
TEXAS

ORDER ON PLAINTIFF'S MOTION TO RECONSIDER

~Qn_August.26,_2Q]1,-th~~CoJ.Jrt,.heard_Plaintiff,.Jody_James Fanns,~JV!.s-Motion-to~--·
On, August_ 26,_2013, _the _Court _heard _Plaintiff, -Jody_ James..-Farms, s—Moti on -to ------- ~
--- -~-
- ---~-.....,.--

Reconsider its Order


Reconsider its Order referring
referring this
this case
case to Arbitration.
Arbitration. After
Afterconsidering
considering the
the evidence
evidence and
and

arguments of
of counsel, the Court finds as follows:
follows:

IT IS ORDERED that Plaintiff, Jody James Farms, JV's Motion


Motion to Reconsider is hereby

denied,
denied.

IT IS
IS THEREFORE ORDERED that the above
THEREFORE ORDERED above styled
styled matter
matter is abated
abated until
until further
further

order of
of this Court.

IT IS FURTHER ORDERED that either party may request


request reinstatement of
of this case by

filing a motion to reinstate and


and giving
giving the
the other
other side
side a 30a
30 day
day notice
notice of
of such motion.

thi~yof
SIGNED this Ey of , ~ , ,'2013.
2013.

401,10:
· - - - - - - - - - - - : - - -. ~:.o---..---=:::::--- 4:7_.!.1111PMfais
JUDGE SIDING

AGREED:

Jody Jenkins
Attorney for Plaintiff

F LED
P()~~~ DAAHIPP17fr
District Cler:~.
District CleCA, Floyd Coo*, Texas
Floyd eourl(y, T-ax

By
0,~-1-=? ·~'11)(~
_21:23_,Lc96
By~_::.
_13.„4 . j.d~

41

'

I IJiaJ[JAS
'*'I IIP-11516308-014111.S
Otobqd 1a
11101100MUDZIONg 1" ni
Ul 41
oil
1.1'~ J.llft CASUALTY IUC:IIDUII'~ l'na.ttu ltv
l'J.C:IIJ.I TV INSURANCE
ACE PROPERTY ARO COMPANY hr aria imimmicres I
Swelesel by PAN ANS NUL 1J-C.
SCIINs 20100014 631160000132 6 2010
, , II LI i, ' ' 1 . Ai.: .1Z-:•-1;-=-1.1 116 .GIs.'.._-OE i..v...*..1111 .01 ....E.';' . EEE. za
141110:411161114 istradas i ORO Cap PM . . Opha aim,r-7
..
immeL..
oio Au",....,...,
.1.1;v - . ir, 43103T MAT at
!1'411. BIAl 115 IA I. • 5,42
'0 it. l it 712354791 l' I , • . r 4410 C11111 at IA )1 I. AM

_ .... •ttu•Idladitheiltheura.cat
=.:-
WW2 Ula*llult. . . ,.c• Nue ani 1.11

-
II I
..... NW VA A I. 7.11 r
~=~
Mar NW EN/haigari Tip di Ealty Pula hPaziellak
"!-H.
iii-iii .113 i •1",1151 ;ma 105-713.5575 141 1 -PI We 11 13 AIJI
I' 1.23
'Con* IA I 0040
Cai!IJ IIJ Clllff Led nesiblea PM* IV '' LIM/
..., lfl ~ ' talratal
Qo
·~
Tddasidet Ill
lab Naha
Fast/ baba
I Mani

l~i~-a~~2~i·;J....
India 0
~

1.01
PS
100

.
oira
"'* ~ ~-­
iadha

001Aadma
Firm Nadas
1I
Varlaiatch :ns
AS
tstara

3411 ,3..a l
%a
10N
AmplartsAatialtai lianselahe

1'11: letwe
o' RC PIIIIIIJ'I Lao Nat eel Mimi
VAIII NIES FAIN AV 712 a WI
-my AIM DM AT MT CI 05 11111
BTU MC theleart
1 mod leareaat both,
..,-ge.sep IN ei. ears-_______
flor idle Cap? II
c.
Nat
reagatems -
aa ',Fara,MIN
4.41.111
CI Xi 11.751 4110f ass ow a ma as our wad awn aim 44ambly Moe=
Meant bawd be cape re artalblaAsale 0apae
Oblepasoaigmby la hemp Nwpareratiamp is heath ParthecriNtle I taionald hal ha v
moo p it olla le I a •a J1
PM Snail 14111:11111 NIT ' osa bib. wags 11/11/11 II i
14•111.l111E
. , SmemeesieiemE ' ,
theworothwieTen al biome vibe tokeytewal Ian. m.
WA SUMO re lade, sras hdrit OEN Wird 1:tho, Taao $0„ Made, Ina 'Walla oba Im'-
51111 b b e at he 11,/ a ma peinbm ard antra% artrorbtolkiwaft piggy carat.
abithlmhe has, d ea eibMitylos Pm thiedrd won bp"meggihsAelgolibil _,..
lbtlIkebblem LettilmoipieE la siebeembEcuefolielebESEE te MA apahnrases dm LA dm . "1.1.6111 EWE Cy leo
ads. pis await* each alandca adahem Yea d ea dared 0 datemsetat la lama Papal
,....,
57UCE1•111.57
Roam emee //afieseartion doe
/NEI
Pexamar maga Moine a vim/ alter
hyleheardpallh7 CFR 40101ashoneedet he baCarkIshel:bi 0 Cuselt, baripaem et Cleatiger 0 Ma
adwatallte IlaheibadAIrmem Osil•Prk•Arwl
MO
EZ:312:1
.u....
- Ill; tam_ ma-
50:-.{.4- hlllll
ertd.arr Actor ara PPM Year rm
metreekdaread demos aweitaeleaela
,
dab; wad" Imam Wm./ lo yee
asydwmpake, ,
Ilitehet% lama War leandlat '-

.......
Yii!MI - ,..,..._ Ab Capdheadiateparea • 1100ELME JAHES
MN Z'V .U artiol Atayesear b: onfteadttaddeopat
iurammer. bt= min
kthai Nith Ille, t00
4: 1
, 70
4.01 111
, ,~,,... ~
zrm.a
22711.9 1:1 ir A MN. 101.0 351.0 hernia* trekt ha Meld Dv breartatka 011010.11A T1 79235-57a1
-'RP a
111A.0
Jill. MA 35.1 03 A • •
45.0 imo II :a:
or
t• lad hie yeadelea
Iowa della/mg
teedeed ado bezel tv4 MI Na5Famo 13
i IMI TIM ttr
Til fltH It A
A SOMA
I IH•I 119.0 211 .0 WS NI A A 15369. 41.0 317.0
lli.I IIIP
171. 13 P 1 1114
lft.l.1 114.0 ELT ,„.0 In Is A moo. 41,A1 leaD1311 he pilma Imilionos moo le a a el earbaarei llod Ilt Climalkel INMEEIE
he Fideratemp leassaaldiadrabi train et hi 0 No e.t.a 'amoral fet atream pity
11 11110 Ill'
"'~1• 14 6. MJ,I
I4105. 131.0 454.6 Yr fief Ill 1 pm 57 .0 014 3 boas el 6. mi." iradillaaM I r kr Ma WO/ f Mr al spew hobo El operime sEi aorta

!-··•••.
Air a 1 122.1 279.0 UT 11 A 1:Ekleedese7 wieerege ts is weet lernaice
~~~··
4E1.0 31145. ISA /11.i\ wszie
Ata takifad of ilelsomed beile be Foinal Ciell Polka dais= la
_ , t Its* macs ,
twins. a r l NINA I 15. 0 17.0 tat .11/ be imulnuel ale Fer,er be uszali ...audi. a at imp woos la a
ail
IJI It I 324 .0 8 ti I mg.. 101,CM.1 lam pi emr mows timpani IFIN.Nre Oa an FOC es m.. sed mew a team sr ha Theial. "
.IDIIftAI
VW A IWO 50.2 die Depraved *Ueda ad vat add NMI ha 1 Mkeie bet I th ha, h ed al
a r t . oar
~ .~~ 11.I.1 111.1 111 I 1913. 311.1 no.8 bNoting mit lb Wm* of he Faisal hog ar obeeleebDIE fel imam pm bled tt_
01 15.0 SOLO IP A 06513. 4.6 411/. Mad halipaeloatie ea shelLe7 be amadihn anew= wad emplelANA ,i
Dalasban he Imam on eta, Ohl thawreacht? Istosiadahe ad Is seepler1 baby ,..
i lama 11W -1 Ila1 Twill 114X Neyedes Veil %J 'Ada lied him balm 11 ma dike? tarots yael &El hreadaa lama
1 aohdlad 1 2414.0 + a .- 144.1 AdialLeal 11_17.i + Pi •• a1.1 I tat ha Idantlen iedman al la wales a Rae rtr"4 1"4112 th " Wall i
rt 011116r 0 iwyrii.'Ileg 171.1 11 atitam hpsond Tleld 132.1 Iv av ma tem hi mum. wpm b *dal 10 b I/ lamnim P* 1 b 1111"1 40°M i
Redd
Area 1 Ike* 1 Dr beetlearee 11.1beeplmEd Ion les WA alb or 11111•
.
sze
1°16116/1"Inimilld "orc'Pan
la net ..01010 goal hree
il -
urd hal l ea mate rird rdmited ha
kno /55.0 rim 1:11 ✓ _ hats tarlatfai d rd We Odea zitir Vea ctth ild
ee Weis
abmgc2 :" " ilielldmi flij til
New rabble tik cplaism, i peroisummed eelboreedenimove am przakeby
b •,,t
Pill I4Thi _ 5
Ode 54-- ',fowl bionamcs to soialwartma imam
"%way
01a=keithei trAirm P

Todd AdJustned
Hai
awl i WM I= P:71.

Nei Alatslia$
(,4:
IT ,..-
4eta
IZTP RAW Whig ,
rarigair

.00
- ,:-.7.: ••

1....-.,= 'L
IT
Age / 3

dir "
e4°P;111.1
Paha
0 Rohm My

-Ajorie. - /LI
theday

NI 'a 19p4 .011111.12VILE1-04.11F17.1 _135 vii. rittAll-In NTT-Iii


•1117 4411 tact asp 1a see ha Tom®losrrebyYsionataneeudoa eMdiV p0wo Mmr al Rai-50311-

PLAINTIFF'S
EXHIBIT
3
21
cO: 1 AMERICAN ARBITRATION
AMERICAN ARBITRATION ASSOCIATION
ASSOCIATION
2 In
2 In the Matter
Matter of the
the )
Arbitrationbetween:
Arbitration between : )
3 )
)
JODYJAMES
4 JODY JAMES FARMS,
FARMS, JV
JV )
)
5 Claimant, ) Case
Case 71
71 430 E 00391
430 E 00391 11
11
)
6 vs.
6 VS. )
)
RAIN AND
77 RAIN AND HAIL,
HAIL, LLC,
LLC , )
)
8 Respondent. )
)
9 CASE
CASE MANAGER:
MANAGER: Valerie
Valerie )
Bagsby )
10

11
11

12
ORAL DEPOSITION
ORAL DEPOSITION OF
OF
13
JODY JAMES
JODY JAMES
14
JANUARY 10,
JANUARY 10, 2012
15

16

17

18

19

20 ORAL DEPOSITION
ORAL DEPOSITIONOF OF JODY
JODYJAMES,
JAMES,produced
produced as as a
witness at
witness at the
theinstance
instanceof of
thethe DEFENDANT, and
DEFENDANT, and duly
duly
21 sworn,
21 sworn, was
was taken
taken ininthe
the above-styled
above-styled andandnumbered
numbered cause
cause
on January
on January10,10, 2012, from 1:45
2012, from 1:45 p . m. to
p.m. 3 : 45p.m
to 3:45 ., before
p.m., before
22 Elaine
22 Elaine Fowler,
Fowler, CSR
CSR in and for the
in and the State
State ofof Texas,
Texas,
reported by
reported by machine
machine shorthand,
shorthand,atatthethelaw
lawoffices
offices of
23 Jenkins,
23 Jenkins,Wagnon
Wagnon & &Young,
Young, Lubbock,
Lubbock, Texas
Texas pursuant
pursuant to the
to the
Texas Rules of Civil Procedure and the provisions
Texas Rules of Civil Procedure and the provisions stated stated
24 on the
24 on the record
record oror attached
attached hereto.
hereto.
PLAINTIFFS
PLAINTIFF'S
25
c EXHIBIT

~
CATHY SOSEBEE&&ASSOCIATES
CATHY SOSEBEE ASSOCIATES* *LUBBOCK,
LUBBOCK,TEXAS*
TEXAS 806 . 763 .0036
* 806.763.0036
22
· Deposition of JODY JAMES,
JAMES, taken January 10,
10, 2012
9 11
11

MaybeitItisIsburied
2. Maybe
1 burled in
In the
the back
back here and II just
here and just didn't 1 and
andI start
I start talkingover
talking overone
oneanother
anotheritItisIs going to be
going to be
2 notice
2 It Is
noticeit.it.It is in In the
the back andI Ididn't
backand didn'tpay
pay any
any 2
2 real
realhard
hard --
--
3 attention to lt.
attention it. 3 Sheis
A. She Isgood.
good.
4
4 MR. CARTHEL:
MR. CARTHEL:Okay.
Okay. That Is
is fine. 4
4 Q. She Is
is pretty good, yeah.
pretty good, So ifIf you would
yeah, So would let
let
5 (BY MR.
Q. (BY MR. CARTHEL)
CARTHEL) And
And we
we requested
requested aa number of mefinish
5 me finishthe
thequestion
question and
and I will try to do the
try to the same
documentsand
6 documents andasked
asked you
you to
to produce
produce those. And I am not
those. And 6 whenyou
11 when youare
areanswering
answeringso
sowe
we don't
don'ttalk
talkover
overeach
each other.
7 goingtotogo
7 going gothrough
through that
that list
list right
right now
now -- 77 But you talked about this notebook that
But that she
a Whatwere
A. What were they?
they? No.
No. II don't
don't remember.
remember. I am
am a
s Have you
has. Have you seen it
It in
In connection
connection with anything
9 not
t not aware
aware whatI was
ofofwhat I wassupposed to bring
supposed to bring today.
today. t9 related
relatedtotothis casetotosee
thiscase seeifIfsomething
something is
Is In
in there
10 MR. JENKINS: It
MR. JENKINS: Is all this production
It is 10 that
10 that is
Is --
stuff
11 stuff hehewould
wouldhave
havebeen
been talking
talking about. 11
11 A. I Iam
A. amnot
notsure.
sure.
12 THE WITNESS:
THE WITNESS: II would
would have
have thought
thought that 12 Butthat
Q. Okay. But thatisIssomething
something you
you can
can get
get aa copy
copy
13 they would
would have
have brought
brought that. 13 ofof
and giveIt Ittotoyour
andgive yourattorney
attorneyand
andwe
wecan takeaa look
can take look
14 MR. CARTHEL: can
MR. CARTHEL: Can we
we go
go off
off the
the record? 14 atatit?
It?
15 MR. JENKINS: Sure. 15 Yes.
A. Yes.
16 (Break
(Break taken from 1:51
taken from 1:51 p.m. to 1:52
p.m. to 1:52 p.m.) 16 Q. Okay. Do you
Okay. Do you have
have any
any written
writtencorrespondence
correspondence
17 Q. (BY MR.
MR. CARTHEL) Mr.James,
CARTHEL) Mr. James,off
off the
the record we 17 to
17 to anyone other than Rain and Hall where you ·
Hail or Altman where
is discusseda alittle
18discussed littlebitbit
ofof confusionIn
confusion Inwhether
whether or not -- 11areare
Is communicating
communicating oror dlswsslngany
discussing anycomplaints
complaintsyou
you have
19 in got sent to
In how this document got to you
you or didn't get sent 19 about your 2010 crop
your 2010 crop Insurance
Insurance claims or
or policies?
policies?
20 to you, and I think In a different format it was sent to
It was 20 Written?No,
A. Written? No,sir,
sir,not that II am
notthat am aware of.
aware of.
21
21 you in
In connection
connection with requests for production of 21
21 Q. Okay. One of
Okay. One of the
the questions that we talked
22 documents. And I am not
documents. not going to go through all of about
22 about offoff
thethe recordwas
record wasthe
theexistence
existenceof
ofphone
phone records.
records.
these,but
2.3 these,
23 butlet
letme
meask
askyou
youaafew
fewquestions to see
questions to see If
If you 23 Are you aware of any
any phone
phone records
records that
that you
24 of these types of
have any of of documents or records. 24 have that would
would support your
your contentions that
that you
you made
made
25 Do you have any
Do any records
records that
that would
would consist of
of zs
25 calls on
phone calfs on certain dates to
certain dates to the Altman Agency or
CATHY SOSEBEE
CATHY SOSEBEE ASSOCIATe;
&& * t.U8BOCK,
ASSOCIATES TECAS
* LUBBOCK, * 806.763.0036
TEXAS 806.763.0036 CATHY SOSEBEE &
&ASSOCIATES * LUBBOCK.
' TEXAS• *806.763.00~
t.UBBOCK, TEXAS 806.763.00:
10 12
I
1 communications you
notes, your notes, about any communications you had
had with 1 Hall?
to Rain and Hail?
Rainand
22 Rain andHail orAltman
Hallor Altmanor
oranybody
anybody assodated
assodated with the 2 A. Well,
Well,we
wehave
haveaaland
landline
linethat
thatis
Isnot
nottong
tong
2010grain
3 2010 grainsorghum
sorghum claim?
claim? 3 distance, so
so II don't think there is
Is a record
record of It
it that
4
4 A. The
A. Theonly
onlything
thing that
thatII would
wouldhave
have would
would be
be my 4
4 I/ am
am aware of.
5 secretary's notes. don'thave
notes. II don't haveany
any personal
personal notes,
notes, no. 5 Q. One of the issues
Issues In
in this case Is
is when and
6
6 Q. Okay. And when
Okay. And when you say "secretary's notes•,
notes", t
6 whether or not
not you
you gave a notice of loss --
7 what
7 what secretaryare
secretary areyou
you referring
referring to?
to? 7 A. Yes,
A. Yes, sir.
sir.
8 MaryAnn
A. Mary Ann Thurman.
Thurman. a
1 Q. --
Q. -- to Altman. You
You understand
understand that is
Is a --
9 How long
Q. Okay. How long has
has Mary
Mary Ann
Ann been--
been -- 9 A. Yes,
A. Yes, sir.
sir.
10 Theywould
A. They wouldonly
onlybe notes that
benotes that—
- what
what do
do you
you 10 Q. Do you have any documents
Do documents or
or written evidence
written evidence
callit It
11 call whenyou
when youhave
haveaabook
booklike
like—
- aa message
message when 11 that you contend supports your position that you
that you gave
12 people call
people call you.
you. That would be the
the only thing II would
only thing 12
12 that notice in
that notice In November
November of 2010?
of 2010?
13
13 have. 13 A. Yes.
A. Yes.
14 Q. And
And you
you say
say It
it Is
is a book
book that keeps that
that she keeps Is
that is 14 Q. Okay. Tell me what that Is.
Okay. Tell is.
15 like aa message
like message book about phone calls coming In and 15 A. Well,
A. Well,itItisIsaalong
long story.
story. But
But the day that
that II
16
16 going
going--
-- 14i
16 told her about the
the loss
losswas
wasthe
theday
dayafter
after II had a burr
17 Yes,that
A. Yes, thatwould
wouldbe
bethe
theonly
only thing
thing I could
could 17 .fire. And II have
fire. And havegot
gotthat
thatdate
dateby
by going
going back to get the
11 think
18 think thatmight
ofofthat mighthave
havesomething
something on I~ like when
on it, 11
18 - the
record of the — fire department records.
the fire
19 Kevincalled
19 Kevin calledor
orsomething
something or
or we
we tried
tried to
to call
call Kevin,
Kevin, 19 Q. And you said
said burr fire --
--
20 goingtotocall
20 going callback
backor
orsomething.
something. 20 A. Yes, sir.
21 Q. And
And let me --
-- 21 Q. --
Q. -- as In
in cotton burr?
22 A. That
A. ThatisIsthe
theonly
only thing
thing I can
can think of that 2Z
22 A. AtAtthe
A. thecotton
cotton gin,
gin, yes,
yes, sir.
23
2.3 would be -—that
that would pertain to
would pertain to this.
this. 23 is my
Q. Okay.
A.
24
Z4 Q. Okay, And 1
Okay. And am real
I am real bad
bad about this,
this, but let me 24 A. That Is my recollection, the day that
that II told
25 telltell
youyouwhen
whenElaine
ElaineisIstrying
tryingto
totake
takethis
this down,
down, as
as you Z5
25 her.
CATHY SOSEBEE
CATHY SOSEBEE&&ASSOCJATES
ASSOCIATES• "LUBBOCK,
LUBBOCK,TEXAS • 806.763.0036
TEXAS * 806.763.0036 CATHY SOSEBEE
SOSEBEE & ASSOCIATES
ASSOCIATeS • •LUBBOCK,
LUBBOCK,TEXAS • 806.763.0036
TEXAS 806.763.0036

CATHY SOSEBEE && ASSOCIATES


CATHY SOSEBEE Page23
Page 99 to
to 12
12 of
of -IT
10~
.. CROP REVENUE
CROP REVENUE COVERAGE
COVERAGE (CRC)
(CRC) INSURANCE
INSURANCEPOLICYPOUCY 2005-NCIS 700B-CRC
2005-NCIS 7008-CRC
is a continuous policy. Refer to section 3.)
(This Is

Insurance policy is
This insurance Is reinsured
reinsured byby the
the Federal
FederalCrop
CropInsurance
Insurance Corporation
Corporation (FCIC)
(FCIC) under
under the
the authority
authority of
of section
section 508(h)
50B(h) ofof the
the
ederal Crop
)9deral Crop insurance
Insurance Act
Act (Act),
(Act), as
as amended
amended (7 (7U.S.C.
U.S.C.1508(h)).
1508(h)). Ali
Allprovisions
provisions of
ofthe
thepolicy
policyand
andrights
rightsand
andresponsibilities
responsibUities of of the
sarties
,...arties are
are specifically
specifically subject to the Act.
Act. The
The provisions
provisions of of the
the policy
policy may
maynot
notbe
bewaived
waivedororvaried
varied ininany
anyway
wayby byus,
us,ourourinsurance
Insurance
agent or or any
any other
other contractor
contractor oror employee
employee of of ours
ours or
orany
anyemployee
employeeofofUSDAUSDAunless
unlessthe
thepolicy
policyspecifically
specificaHy authorizes
authorizes aa waiver
waiver or
agreement. We will
modification by written agreement. will use
usethetheprocedures
procedures(handbooks,
(handbooks,manuals,
manuals,memoranda
memoranda and and bulletins),
bulletins), as
as issued
Issued byby FCIC
FCIC
and published on the RMA RMA website
website atat http://rma.usda.gov/ successor website, in the administration
htto:l/nna.usda.gov/ or aa successor administration of this policy,
policy, including
including the
adjustment
adjustment of any loss loss or
or claim
claim submitted
submitted hereunder.
hereunder. In In the
the event
event that
that we
we cannot
cannot pay
payyour
yourloss
lossbecause
because we we are
are insolvent
Insolvent oror are
are
perfonn our duties
otherwise unable to perform duties under
under our
ourreinsurance
reinsurance agreement
agreement with
with FCIC,
FCIC. your
yourclaim
claim will
will be
be settled
settled in
Inaccordance
accordance with with the
provisions of responsible for
of this policy and FCIC will be responsible for any
any amounts
amounts owed.
owed. No
No state
state guarantee
guarantee fund
fund will be liable for your loss.

Throughout the policy,


Throughout policy, "you"
"you" and "your"
"your" refer
refer to
to the
the named
namedinsured
insuredshown
shownononthe
theaccepted
acceptedapplication
applicationand
and"we,"
"we," "us,"
•us; and
and "our"
•our" refer
refer to
the insurance
insurance company providing insurance. Unless
providing insurance. Unless the context indicates
Indicates otherwise,
otherwise, use plural form
use of the plural fonn of
of aa word
word includes
includes the
singular and use of the singular form of
singular of the word includes the plural.

AGREEMENT TO INSURE:INSURE: In return for the paymentpayment of the premium,


of the premium, andand subject
subject toto all
allofofthe
theprovisions
provisions of
ofthis
this policy,
policy, we
we agree
agree with
insurance as stated in
you to provide the insurance In this
this policy.
policy. ifIfthere
thereisIsaaconflict
conflictbetween
betweenthe theAct, theregulations
Act,the regulationspublished
pubHshed at at77 CFR
CFR chapter
chapter
IV, and the
the procedures
procedures as as issued
Issued by
by FCIC,
FCIC, thethe order
orderof ofpriority
priorityisIsas
asfollows:
follows:(1)
{1)the
theAct;
Act:(2)(2)the
theregulations;
regulations:and
and(3)
(3)the
theprocedures
procedures as
Issued by FCIC,
issued FCIC, with
with (1)
(1) controlling
controlling (2),
(2), etc.
etc.IfIfthere
thereisisa aconflict
conflictbetween
betweenthe thepolicy
policyprovisions
provisionsand andthe
theadministrative
administrativeregulations
regulations
at 77 CFR
published at CFR part
part 400,
400, the
the policy
policy provisions
provisionscontrol.
control.IfIfaaconflict
conflictexists
existsamong
amongthe thepolicy provisions,the
policyprovisions, the order
orderof
ofpriority
priority is:
is: (1)
(1) the
Catastrophic Risk Protection
Catastrophic Protection Endorsement,
Endorsement, as applicable; (2) the Special
as applicable; Special Provisions;
Provisions: (3) the Crop
(3) the Crop Provisions;
Provisions; and
and (4)
(4} these
these Basic
Basic
Provisions, with (1) controlling (2), etc.

BASIC PROVISIONS
Terms and Conditions

Definitions
1. Definitions at 100
at 100 percent
percent of of the Base Price,
the Base Price, or aacomparable
comparable
Abandon
Abandon - FailureFailure to to continue
continue to care care for
for the
the crop.
crop, coverage.
providing care so insignificant
Insignificant as
as to
to provide
provide no
no benefit
benefit to Administrative fee
Administrative fee -• An
An amount
amount you you mustmust pay pay for
for
the crop, oror failure
failure toto harvest
harvest in timely manner, unless
In a timely additional coverage
coverage for for each
each crop yearyear as as specified
specified in
Insured cause of
an insured of loss prevents you from property
properly caring section 8.B.
for or harvesting
harvesting the the crop
crop oror causes
causes damage
damage to to It
it to the Agricultural commodity - Any crop or
Agricultural or other
other commodity
commodity
extent that
extent producers of
that most producers of the crop on acreage
the crop acreage with produced, regardless
regardless of of whether not itit is insurable.
whether or not Insurable.
similar characteristics
similar characteristicsInin the the area would not
area would not normally
normally Agricultural experts - Persons who are employed by the
Agricultural experts
further care for oror harvest
harvest it.
it Cooperative
Cooperative State Research,
Research, Education
Education and and Extension
Extension
report - A report required
Acreage report required by section
section 7 ofof these
these Service or or the
the agricultural
agricultural departments
departments of of universities,
universities, or
Basic Provisions
Basic Provisions that that contains,
contains, In in addition
addition to otherother other persons
other persons approved
approved by FCIC, FCIC, whose
whose research
research or
required Information,
required information,your yourreport
reportofof your
your share
share of of all
an occupation
occupation is related
related to the specific
specific crop or or practice
practice forfor
acreage of
acreage of anan insured
insured cropcrop inIn the
thecounty,
county, whether
whether which such expertise is sought.
Insurable or
insurable or not insurable.
Insurable. Annual crop
Annual crop -• An agricultural
agricultural commodity
commodity that that normally
normally
Acreage reporting date
Acreage reporting date -- The date contained
The date contained In in the
the must be planted each year.
must
Special Provisions
Special Provisions or as provided
provided In in section 7 byby which
which Application - The form required
Application required to bebe completed
completed by you
you are required to submit your acreage report.
acreage report. and
and accepted
accepted by by usus before
before insurance
insurance coverage
coverage will will
The Federal
Act - The Federal CropCrop Insurance
Insurance Act (7 U.S.C. 1501
Act (7 1501 et et commence. This form must be completed and filed in your
form must
seq.).
seq.). agent's office
offiCe not later than the sales sales closing date of the
Actual Production
Actual Production History
History (APH)
(APH) - A process
process usedused to initial insurance
initial Insurance year for for each
each crop
crop for
for which
which insurance
Insurance
determine production guarantees
determine production guaranteesIn in accordance
accordance with with 7 coverage is
coverage Is requested.
requested. If cancellation
cancellation or termination
termination of
CFR part 400, subpart
subpart (G).
(6). insurance
insurance coverage occurs for any
coverage occurs any reason,
reason, including
Including but
Yield - The
Actual Yield
Actual The yield per acre
yield per acre for
for aa crop
crop year
year limited totoIndebtedness,
not limited Indebtedness, suspension,
suspension, debarment,
debarment,
calculated from
calculated from the production records
the production records or claims for
or claims for disqualification,
disqualification, cancellation
cancellationby byyou
you oror us,
us, or violation
violation of
indemnities.
indemnities. The The actual
actual yield
yield Is
is determined
determined by by dividing
dividing the controlled substance
substance provisions of the the Food
Food Security
Security
total production (which includes
Includes harvested and appraised
appraised Act of 1985,
1985, aa new
new application
application must be filed ffled for thethe crop.
production) byby planted acres.
acres. Insurance
Insurance coveragecoveragewill willnot
not be
be provided
provided ifif you you areare
Actuarial documents
Actuarial documents - The The material
material for crop year
for the crop year ineligible
ineligible under the contract or or under
under anyany Federal
Federal statute
statute
which Is
which is available
available for public
public inspection
Inspection in In your
your agent's
agent's or regulation.
offiCe and
office and published
published on
on AMA'sRMA's websitewebsite at at Approved yield
Approved yield - The actual production
The actual production history
history (APH)
(APH)
htio://www.rma.usda.govi
htto:/fwww.rma.uscla.gov/ ororaa successor
successor website,
website, andand yield, calculated
yield, calculated and and approved
approved by by the verifier, used
the verifier, used to
which shows
which shows available
available coverage
coverage levels,
levels, information
Information determine the
determine Final Guarantee
the Final Guarantee by summing
summing the the yearly
needed
needed to to determine
determine amounts
amounts of of insurance,
insurance, premium
premium actual, assigned, adjusted or unadjusted transitional yields
actual,
rates, premium
rates, premium adjustment
adjustment percentages,
percentages, practices,
practices, dividing the sum by the number of yields contained in
and dividing
particular
particular types oror varieties of the Insurable
insurable crop, insurable
Insurable the database,
the database, whichwhich will
will always
always contain
contain at least four
at least four
~creage, and
acreage, other related
and other related information
information regarding
regarding crop
crop yields. The
yields. The database may contain contain upup to 10 10 consecutive
consecutive
insurance
Insurance in In the county. crop years of
crop of actual
actual oror assigned
assigned yields.
yields. TheThe approved
approved
Additional coverage
Additional coverage - A levellevel of
of coverage
coverage equal
equal to or yield may have
yield have yield
yield adjustments
adjustments elected under under section
section
percent of the approved yield indemnified
greater than 50 percent Indemnified 35, revisions sectl~o~l.iiW·~~~~~~
according to sectio
revisions according
PLAINTIFF'S
C 2004
0 2004National
National Crop
Crop Insurance
Insurance Services, Inc. Page 1 of
of26
26
EXHIBIT
I 25
s
.. according to FCIC
according FCIC approved
approved procedures
procedures applied applied when
when full text of the
full text the CFRCFR isisavailable
availableininelectronic
electronic formatfonnat a
calculating the approved yield. yield. This
This yield is established for hHo:/fwww.access.Qoo.gov/or
htto://www.accessmo.gov/ oraasuccessor
successor website.
basic or optional units. The approved yield for each each basic
basic Consent
Consent --Approval
Approval in in writing
writing by us allowing you to take ft
or optional
optional unit comprising
comprising an an enterprise
enterprise unit is Is retained
retained specific action.
" for
for premium
premium and Final Anal Guarantee
Guarantee purposes purposes under under an an Contract-
Contract (see"Policy".)
- (see •Polley".)
1 enterprise unit. unit Contract
Contract change change date date -- TheThe calendar date date by which
by whict
Area - Land
Area Land surrounding
surrounding the insured acreage
the insured acreage with with changes
changes to to the
the policy,
policy, if any,
any, will
wiU bebe made
made available
available ir lr
geographic characteristics,
geographic characteristics,topography,
topography,soil soil types
types and accordance with section 5 of these these Basic
Basic Provisions.
Provisions.
climatic conditions similar to the Insured insured acreage. Conventionalfarming
Conventional farmingpractice
practice- -AAsystemsystemororprocess
process foi fo1
Assignment of Indemnity
Assignment Indemnity -- AAtransfer transfer of of policy
policy rights,
rights, producing agricultural commodity,
producing an agricultural commodity, excluding
excluding organicorganic
made on our form, and effective effective when when approved
approved by by us.
us, It farming practices, that is
farming practices, Is necessary
necessary to produce the the crop
crop
is
Is the
the arrangement
arrangement whereby whereby you you assign
assign youryour right
right to
to an that may
that may be, be, butbut isisnot notrequired
required totobe, be,generally
generally
Indemnity payment to any party of your choice for the crop
indemnity recognized by agricultural experts for for the
the area
area to to conserve
year. or enhance natural resources and the environment.
Average yield
Average yield -• The The yield,
yield, calculated
calculated by summing summing the County
County--Any Anycounty,
county,parish,
parish,ororother
otherpolitical
politicalsubdivision
subdivision
yearly actual, assigned, adjusted or unadjusted transitional state shown
of a state shown on on your
your accepted appUcatlon, Including
application, including
yields and
yields and dividing
dividing the the sum
sum by by the the number
number of of yields
yields acreage In in a field
field that
that extends
extends Into Into an
an adjoining
adjoining county If if
contained
contained In in the
the database,
database, prior to to any
anyadjustments,
adjustments, the county boundary Is is not readily discernible.
Including those
including elected under
those elected under sectionsection 35, 35, revisions
revisions Coverage--The
Coverage Theinsurance
insurance provided
provided by by this policy, against
according to
according section 4, or
to section or other
other limitations
limitations according
according to insured
insured loss loss of of revenue
revenue by by unit
unit asas shown
shown on on your
your
FCIC approved procedures. summary of coverage.
Base premium
premium rate rate -- AApremium
premium rate rate used to calculate
calculate Cover
Cover cropcrop- -AAcrop cropgenerally
generallyrecognized
recognizedby byagricultural
agricultural
the risk associated with yield. experts as agronomically
experts agronomically sound sound for for the
the area for erosion erosion
Base Price - The The initial
Initial price determined
determined in in accordance
accordance control or other
control other purposes
purposes relatedrelated to conservation
conservation or soil
with the Commodity Exchange Exchange Endorsement and used to improvement.
Improvement. AA cover cover crop
crop maymay be considered
considered to to be
be a
calculate youryour premium and Minimum Guarantee. second crop (see the definition of •second crop•).
"second crop").
Buffer
Buffer zone zone - A A parcel
parcel of land,land, as as designated
designated in In your
your Coverage begins,
Coverage begins, date -- The The calendar
calendar date insuranceInsurance
organic
organic plan, plan, thatthat separates
separates agricultural
agricultural commodities
commodities begins on
begins on the the Insured
Insured crop, crop, as contained
contained in In the Crop
the Crop
grown under
grown under organicorganic practices
practices from from agricultural
agricultural Provisions, or
Provisions, or the planting begins
the date planting begins on the the unit
unit (see
commodities grown under non-organic practices, and used section 12 of of these Basic Basic Provisions
Provisions for for specific
specific provisions
minimize the
to minimize the possibility
possibility of of unintended
unintended contact contact by by relating to prevented planting).
prohibited substances or organisms. Crop Provisions - The part of the policy policy that
that contains the
Certified
CertJffed organic
organic acreage
acreage - Acreage Acreage in In thethecertified
certified specific provisions of insurance for each insured Insured crop.
organic
organic farming
farming operation
operation that that has been certified
has been certified by a Crop
Crop year - The period within within which the insured Insured crop crop is Is
certifying agent
certifying agent as as conforming
conforming to organic organic standards
standards in normally grown, regardless regardless of of whether or not itIt is Is actually
actually
accordance with 7 CFR part 205. grown, designated by the calendar year in
grown, and designated In which
whlch the
Certifying agent
Certifying agent -- AAprivate privateororgovernmental
governmental entity entity insured
Insured crop crop isIs normally
normally harvested,
harvested, unless unless otherwise
otherwise
accredited by
accredited by the
the USDA
USDA Secretary
Secretary of Agriculture
Agriculture for the specified In in the Crop Provisions.
purpose of of certifying
certifying a production, processing or handling handling Damage - Injury, InJury, deterioration,
deterioration, or loss of revenue revenue of the
operation as organic. Insured crop due to Insured insured or uninsured causes.
CRC base base rate
rate- Thepremium
- The premium rate rate used
usedto tocalculate
calculate the Calendar days.
Days - Calendar
risk associated with revenue. Deductible
Deductible - The amount determined by subtracting subtracting the
CRC high price factor factor·- A premium factor, as set forth In in coverage level percentage you choose from 100 percent. percent.
actuarial documents,
the actuarial documents, used used to to calculate
calculate the the risk
risk example, if
For example, If you
you elected
elected a 65 65 percent
percent coverage
coverage level, level,
associated with an increase Increase In in the Harvest Price relative to your deductible would be 35 percent (100% (1 00% - 65% = 35%). =
the Base Price. Delinquent debt - Any administrative
Delinquent administrative fees or or premiums
premiums
CRC low price price factor - A premium factor, factor, as set forth in for insurance issued under the authority of of the Act, and the
the actuarial
the actuarial documents,
documents, used used to calculate the
to calculate the risk
risk Interest on
interest those amounts,
on those amounts, If applicable, that
if applicable, that areare notnot
associated with a decrease In in the Harvest Price relative to postmarked
postmarked or or received
received by by us
us or our agentagent on on oror before
before
the Base Price. the termination
the termination date date unless
unless you you have enteredentered into into an
Calculated
Calculated Revenue Revenue -- The Theproduction
production to count count for for the
the agreement acceptable to us to pay such amounts amounts or have
insured crop multiplied
multiplied by bythe
the Harvest
Harvest Price. filed for bankruptcy on or before the termination date; any
Cancellation
Cancellation date -• The calendar date
Thecalendar date specified
specified in the
In the other
other amounts
amounts due due us for for insurance
Insurance issuedissued underunder the the
Crop Provisions
Crop Provisions on on which
which coverage
coverage for for the crop will
the crop will authority of
authority the Act
of the Act (including,
(Including, but but not not limited
limited to, to,
automatically
automatically renew renew unless
unless canceled
canceled in in writing
writing by either
either Indemnities, prevented
indemnities, prevented planting
planting payments replanting
payments or replanting
you
you or or us,
us, or orterminated
terminated in In accordance
accordance with with the
the policy
policy payments
payments found found not not toto have
have been earned or that that were
were
terms. overpaid), and the interest Interest on such amounts, ifIf applicable,applicable,
Claim for for indemnity
Indemnity--AAclaim claim mademadeon onour
ourformform byby you
you which are not not postmarked
postmarked or received by us or or our
our agent
for damage or or loss to an insured crop and and submitted
submitted to us us by
by thethe duedue datedate specified
specified In in the
the notice
notice to to you
you of the the
not later than 60 days days after
after the Harvest
Harvest PricePrice is released
released amount
amount due; due; or any any amounts
amounts due due under
under an an agreement
agreement
(see section 15). with you
with you to pay pay the the debt,
debt, which
which are are not
not postmarked
postmarked or
Code of
Code of Federal
Federal Regulations
Regulations(CFR) (CFR)- -The Thecodification
codification of of received by us or our agent agent by the due due dates
dates specified
specified In in
general
general and and permanent
permanent rules rules published
published In in the
the Federal
Federal such agreement.
Register by by the
the Executive
Executive departments
departments and and agencies
agencies of Disinterested third third party
party --AAperson
person thatthat does
does notnot have
Federal Government.
the Federal Government. Rules Rules published
published In Federal
in the Federal any familial
any familial relationship
relationship (parents,
(parents, brothers,
brothers, sisters,sisters,
) children, spouse,
children, spouse, grandchildren,
grandchildren, aunts, uncles, nieces,
aunts, uncles, nieces,
Register by FCIC are contained contained in 7 CFR chapter IV. The
nephews, first cousins, or grandparents, related by blood,

C
© 2004 National Crop Insurance Services, Inc. Page2of26
Page 2 of 26

26
.. adoption or marriage,
adoption marriage, are are considered
considered to famHial
to have a familial contained In
or contained organic plan. We may,
in the organic may, or or you rna~
you ma'
relationship) with
relationship) with you or who who will not not benefit
benefit financially
financially request us to, to, contact
contact FCICFCIC to to determine
determine whetherwhether or no
from the
from the sale
sale of
of the
the insured
Insured crop. crop. Persons
Persons who who are are production methods will be
production methods be considered
considered to to be
be 'good farmln~
"goodfarrnira
authorized to conduct quality analysis in In accordance
accordance with practices.·
practices.'
the Crop
Crop Provisions
Provisions are are considered
considered disinterested
disinterested third third Harvest Price - The final final price
price determined
determinedinInaccordance accordancE
parties unless there Is a familial relationship. with the Commodity
Commodity ExchangeExchange Endorsement
Endorsement and and usedused a t<
Double crop - Producing two or more crops for harvest on calculate your
calculate your Calculated
Calculated Revenue Revenue and and the Harves
the Harves
the same acreage in In the same crop year. Guarantee.
Earliest planting date - The initial planting date contained Household - A domestic
Household domestic establishment
establishment including Including the thE
In the
in the Special
Special Provisions,
Provisions, which earliest date you
which is the earliest you members of aa family family (parents,
(parents, brothers,
brothers, sisters,
sisters, children
children
plant an
may plant an Insured
Insured agricultural
agricultural commodity
commodity and qualify qualify spouse,grandchildren,
spouse, grandchildren, aunts, aunts, uncles,
uncles, nieces, nephews nephews
for a replanting
replanting payment ifIf such such payments
payments are are authorized
authorized first cousins, or
first or grandparents,
grandparents, related related by byblood,
blood,adoptioradoptior
by the Crop Provisions. marriage, are considered
or marriage, considered to to be family
family members) anc anc
End
End of Insurance
insurance period,
period, date date of - The date upon which others who live live under the the same roof. roof.
Insurance coverage
your crop insurance coverage ceases ceases for for the crop year year Insurable
Insurable loss loss - Damage for which coverage coverage is providec
is provider
(see
(see Crop Provisions and section 12). under the terms terms of your policy, and for for which
which you you accep
FCIC - TheThe Federal
Federal Crop
Crop Insurance
Insurance Corporation,
Corporation, a wholly wholly an indemnity
Indemnity payment.
owned government corporation within USDA.
owned Insured
Insured - The The named person shown on
named person on the
the applicatior
applicatlor
Field
Field - AU acreage of
All acreage liftable land
of tillable land within
within a natural
natural or accepted by us. This term
accepted term does does notnot extend
extend to to any
any otheothe
boundary (e.g., roads,
artificial boundary roads, waterways,
waterways, fences, etc.). person having a share share or or interest
interest in In the
the crop
crop (for
(forexample
example
Different planting patterns or planting different
planting patterns different crops
crops do partnership, landlord,
a partnership, landlord, or or anyanyotherotherperson)
person)Ladess unle~
not create separate fields.
not specifically indicated on the accepted application.
specifically
Final Guarantee - The number of dollars dollars guaranteed
guaranteed per Insured crop - The crop in in the
the county
countyfor forwhich
whichcoverage
coverage
acre determined toto be
acre determined be the the higher
higher of of the
theMinimum
Minimum is available underunder youryour policy
policy as as shown
shown on on the
the applicatior
applicatior
Guarantee or
Guarantee or the Harvest Guarantee, where: accepted by us.
Minimum Guarantee
(1) Minimum Guarantee -- The approved yield
The approved yield per acre acre lnterplanted - Acreage
Interplanted Acreage on which two two or or more
more crops crops are are
multiplied by
multiplied by the
the BaseBase Price Price multiplied
multiplied by by the the planted In
planted in aa manner
manner that that doesdoes not not permit
permit separate
coverage level percentage you elect. agronomic maintenance or or harvest
harvest of of the
the insured
Insured crop.
Harvest Guarantee
(2) Harvest Guarantee - The approved approved yield yield per acre acre Irrigated
Irrigated practice
practice - A method method of of producing
producing aa crop crop by b}
multiplied
multiplied by the Harvest Harvest Price,Price, multiplied
multiplied by by thethe which water
which water is Is artificially
artificially applied
applied during during the growin~
thegrowina
coverage level percentage you elect. season by by appropriate
appropriate systems and at the proper proper times times
you elect
If you elect enterprise
enterprise unit coverage,
coverage, the the basic units or with the intention
with Intention of of providing the the quantity
quantity of ofwater
waterneedec needec
optional units
optional units comprising
comprising the enteJprise unit
the enterprise retain
unit will retain produce at least the
to produce the yield
yield usedused to to establish
establish the the Fina
Rna
separate FinalAnal Guarantees. Guarantee on the irrigated acreage planted to to the insurer
lnsurec
Final planting
Final planting date - The The date contained
contained in the the Special
Special crop.
Provisions for
Provisions for the Insured crop
the insured crop by which
which the crop crop mustmust Late planted - Acreage initially initially planted
planted to to the
the insured
insured crop CI'OJ=
Initially be planted
initially planted in order to be insured Insured for the full Final Anal after the final planting date.
after
Guarantee. Late
Late planting period - The
planting period The period that that begins
begins the da~
the day
First Insured
insured crop -With respect to a single crop year and after the final
final planting
planting datedate for for the
the insured
insured crop crop and and endeends
any specific
any crop acreage,
speclfic crop acreage, the the first Instance
Instance that that an an 25 daysdays after
after the
the final
finalplanting
plantingdate, date,unless
unlessotherwise
otherwise
agricultural commodity Is is planted for harvest or or prevented
prevented specified in the Crop Crop Provisions or or Special Provisions.
from being planted
from being planted and
and is insured
insured under
under the authority
authority of Liability - The dollar amount of of insurance
insurance coverage
coverage usec use<J
the Act. For For example, if winter wheat that Is is not insured is in
In thethe premium
premium computation
computation for for the
theinsured
insured agriculture
agricultura
acreage that is
planted on acreage Is later planted to soybeans
soybeans that commodity.
Insured, the first insured
are insured, insured crop would be soybeans. soybeans. If Limited resource
resource farmerfanner - A person with:
the winter wheat was insured, insured, it would be the first first insured Direct or indirect
(1) Direct indirect gross
gross farm farm sales
sales not not moremore than than
crop. $100,000.00 in in each of of the previous two years (to be
FSA-- The Farm Service Agency,
FSA Agency, an agency of the USDA, increased starting
increased starting in fiscal year 2004
in fiscal 2004 to to adjust
adjust for for
or a successor agency.
or inflation using
inflation using Prices
Prices Paid Paid by Farmer Farmer Index Index as as
FSA farm
FSA serial number - The number
farm aerial number assigned
assigned to the the complied by National
compiled National Agricultural
Agricultural Statistical
Statistical Service
Service
farm by by the local FSA office. (NASS)); and
(MASS));
Generally recognized
Generally recognized - When agricultural experts or the (2) A total
(2) total household
household incomeincome at or or below
below the the national
national
organic agricultural industry, as
agricultural industry, as applicable,
applicable, are aware of
are aware poverty level
poverty level for family of four,
for aa family four, or or less
less than than 50 50
the production method or practice and there is Is no
no genuine
genuine county median
percent of county median household
household income income in each
dispute regarding whether
dispute regarding whether the production method
the production method or or previous two
of the previous two years
years (to (to be
bedetermined
determined annually annuaUy
practice allows the crop to make make normal
normal progress
progress toward
toward using Commerce Department Data).
maturity and produce at least the yield used used to to determine
determine MPCI - Multiple peril crop insurance
MPCI insurance program,
program, a program program
the Final
Anal Guarantee. of insurance
Insurance offered under the Act Act andand implemented
Implemented in 7
Good fanning
Good fanning practices
practices -- The The production
production methodsmethods CFR chapter IV.
utilized to produce
produce the insured
insured crop and allow It to make make Negligence - The failure to use such care care as as a reasonably
reasonably
normal progress toward maturity maturity and and produce at least the prudent and
prudent and careful
careful person
person would would use use under
under similarsimilar
yield used to determine the Final Anal Guarantee, including
Including any circumstances.
adjustments for
adjustments for late planted acreage,
late planted acreage, which
which are: are: (1) for Non-contiguous - Acreage
Non-contiguous Acreage of Insured crop
of an insured crop that that is
conventional or
conventional sustainable farming
or sustainable farming practices,
practices, those those separated from other other acreage of of the same
same insured
insured crop by
generally recognized
recognized by by agricultural
agricultural experts
experts for the area; area; land that is is neither
neither owned
owned by you nor nor rented
rented by you you forfor
or (2)(2) for
fororganic
organicfarming
farming practices,
practices, thosethose generally
generally cash or a crop share. However, acreage separated separated by only
recognized by the organic agricultural industry for for the area

0 2004 National Crop Insurance Services, Inc. Page3of26


Page 3 of 26 c

27
.. a public oror private
private right-of-way,
right-of-way, waterway,
waterway, or an irrigation irrigation crop due to to an
an insured
insured cause of of loss
loss that
that is Is general
general in in the
be considered as contiguous.
canal will be surrounding area and that that prevents
prevents other other producers
producers from
Offset
Offset - The
The act of deducting
deducting one amount from from another
another planting acreage
acreage with similar characteristics.
amount. Production report
Production report-•AAwrittenwritten record showing your your annual
annual
Organic
Organic agricultural
agricultural Industryindustry -• Persons Persons who who are are production and
production and used
used by us to to determine
determine your your yield
yield forfor
employed by the
employed the following
following organizations:
organizations: Appropriate Appropriate insurance purposes (see
insurance purposes section 4). The
(see section The report
report contains
contains
Technology
Technology TransferTransfer for for Rural
Rural Areas,Areas, Sustainable
Sustainable yield
yield information
information for for previous
previous years, years, including
including planted planted
Agriculture Research
Agriculture Research and Education or the
and Education the Cooperative
Cooperative acreage and harvested
acreage harvested production.
production. This This report must must be
State Research, Education
State Research, Education and Extension Service,
and Extension SeiVice, the supported
supported by by written
written verifiable
verifiable records records from from a a
agricultural departments of
agricultural departments of universities,
universities, or other persons persons warehouseman ororbuyer
warehouseman buyerofof the Insured crop,
the insured crop, by by
approved by
approved FCIC, whose
by FCIC, whose research
research or occupation occupation is Is measurement
measurement of of farm-stored
farm-stored production,production,or or by other other
related to the specific
related specific organic
organic crop practice for which
crop or practice which records
records of production
production approvedapproved by by us on on an an Individual
Individual
such expertise is Is sought. case basis.
Organic farming practice -• A system of plant plant production
production substance -• Any
Prohibited substance Any biological, chemical, or or other
practices approved
practices approved by certifying agent
by a certifying agent in In accordance
accordance agent that is is prohibited
prohibited from from use or Is Is not
not included
Included in In the
with 7 CFR part 205. organic standards for
organic standards for useuse on on any anycertified
certified organic,
organic,
Organic plan
Organic plan - A writtenwritten plan, in In accordance
accordance with the the transitionalor
transitional or buffer
buffer zone acreage. Usts
zone acreage. Lists of of such such
National Organic
National Organic Program published In
Program published in 77 CFA
CFR part 205, substances are contained at 7 CFR part part 205.
that describes the organic farming practices that you and a Replanted
Replanted crop crop - -The The same same agricultural
agriculturalcommodity commodity
certifying agent agree
certifying agent agree uponupon annually
annually or or at suchsuch otherother replanted on the same same acreage
acreageas asthethefirst
first insured
insured crop crop for
times as prescribed by the certifying agent. harvest
harvest In in the
the samesame crop crop year year ifIf the thereplanting
replanting is is
Organic
Organic standards
standards - Standards
Standards in accordance with
in accordance with thethe specifically made
specifically made optional
optional by by thethe policy
policy and you elect elect to
Production Act
Organic Foods Production of 1990 (7 U.S.C.
Act of U.S.C. 6501 6501 et et replant the cropcrop andand insure
Insure itit under
under the the policy
policy covering the
seq.) and 7 CFR part 205. first Insured
insured crop, or replanting is required by by the
the policy.
policy.
Perennial
Perennial cropcrop- - AAplant, bush, tree,
plant. bush, tree, or or vine
vine cropcrop that has Replanting - -Performing
Replanting Performingthe thecultural
cultural practices
practices necessary
a life span of of more than one year. to prepare
prepare the land to replace replace the seed or plants plants of the
Person
Person -• An An individual,
Individual, partnership,
partnership, association,association, damaged or destroyed insured Insured crop and then replacing the
corporation,
corporation, estate,estate,trust,trust,or or other
other legal legal entity,
entity, and and seed or plants
seed plants of of thethe same
same crop crop in In thethe samesameinsuredinsured
wherever applicable,
wherever applicable, aa StateState or political subdivision
or a political subdivision or acreage. The same
acreage. same cropcrop doesdoes not not necessarily
necessarily mean the the
agency of a State.
agency State. "Person"
MPerson• does not include Include the the United
United same type type oror variety
variety of of the
the crop
crop unless
unless different
different types or
States Government or any agency thereof. varieties constitute
varieties constituteseparate separatecrops crops or or it is Isotherwise
otherwise
Planted acreage
Planted acreage - Land land in In which
which seed,
seed, plants,
plants, or trees trees specified in the policy.
have
have been
been placed
placed appropriate
appropriate for for the
the insured
Insured crop crop and and Representative sample •- Portions of the insured insured crop that
planting method, at the correct correct depth,
depth, into a seedbed that must remain in the field for for examination and review review by our
has been properly
properly prepared
prepared for the planting method and loss adjuster when making a crop appraisal, appraisal, as as specified
specified
production practice. Crop Provisions.
in the Crop Provisions. In In certain
certain instances
instances we may may allowallow
Polley - The
Policy The agreement
agreement between
between you you andand us to Insure insure an you to harvest the crop crop and require only that samples samples of
agricultural commodity and
agricultural commodity and consisting
consisting of of thethe accepted
accepted the crop residue be be left
left in the field.
field.
application, these
application, these Basic
Basic Provisions,
Provisions, the Crop Provisions, Provisions, Sales
Sales closing
closing date date --AAdate datecontained
contained in In the
the Special
Special
Provisions, other applicable endorsements
the Special Provisions, endorsements or Provisions by
Provisions by which
which an application
application must must be filed. The last
be filed.
options,
options, the the actuarial
actuarial documents
documents for for the the insured
Insured date by
date by which
which you you may maychangechange your yourcrop cropinsurance
insurance
agricultural commodity,
agricultural commodity, and and the
the appficable
applicable regulations
regulations coverage for a crop year.
published
publishedin In 7 CFA chapter
7 CFR chapter IV. IV. Insurance
Insurance for for each
each Second
Second crop crop-With-Withrespect
respectto to aa single
single crop crop year,
year, thethe next
next
agricultural commodityinin each
agricultural commodity each county
county wiD will constitute
constitute a occurrence
occurrence of planting planting any any agricultural
agricultural commoditycommodity for for
separate policy. following a first
harvest following first insured
insuredcrop cropon on the the same
same acreage.
Practical to
Practical replant -• Our determination,
to replant detennination, after after loss
loss or The second
The second crop crop may may be be the the samesame or or aadifferent
different
damage to
damage the insured
to the Insured crop,crop, based
based on on all ali factors,
factors, agricultural commodity as as the first Insuredinsured crop, except the
including, but not not limited to moisture availability, marketing term
term does not not Include
Include a replanted
replanted crop. crop. A A cover
cover crop,crop,
window, condition of
window, condftion of the
the field,
field, and time
time to crop crop maturity,
maturity, planted after
planted after a firstfirst insured
insured crop crop and and planted
planted for for thethe
that replanting the insured crop crop will
will allow the crop to attain purpose of haying,haying, grazing
grazing or otherwise harvesting in
or otherwise In any
maturity prior to
maturity prior to the
the calendar
calendar date date for for thethe endend of the manner or
manner or that
that Is hayed or or grazed during the crop year, or
Insurance
insurance period.
period. ItIt will
will be considered
considered to practical to
to be practical that is Is otherwise
otherwise harvested
harvested is considered to be aa second
is considered second
regardless of
replant regardless of availability
availability of of seed
seed or or plants,
plants, or the crop.
crop. A cover crop that is is covered
covered by by FSA's
FSA's noninsured
noninsured
input costs necessary to produce the insured crop such as crop disaster assistance
assistance programprogram (NAP) (NAP) or receivesreceives otherother
those that would be Incurred Incurred for seed or plants, irrigation Irrigation USDA
USDA benefitsbenefits associated
associated with with forage
forage crops crops will will be be
water, etc. considered as planted
considered planted for the purpose of of haying,
haying, grazing,
Premium billing date -• The earliest date upon which you or otherwise
otherwise harvesting.
harvesting. A crop crop meeting
meeting the theconditions
concfltions
will
will bebe billed
billed forfor insurance
insurance coverage
coverage based based on on youryour stated herein will
stated herein wilt be
be considered
considered to to be be aa second
second crop crop
acreage report.
acreage report. The The premium
premium billing date Is
billing date contained in
is contained In regardless of of whether
whether or ornotnot itIt is
Is insured.
Insured. Notwithstanding
Notwithstanding
the Special Provisions. the references
the references to to haying
haying and and grazing
grazing as harvesting harvesting In
Prevented
Prevented planting -• Failure Failure toto plant
plant the the insured
insured crop crop these Basic Provisions, for the purpose of of determining the
with proper
with proper equipment
equipment by by the
the finalfinal planting
planting date date insurance period, harvest of the crop will be as
end of the insurance
designated
designated in the Special Provisions Provisions for the Insured Insured crop defined in the applicable Crop Provisions.
in thethe county.
county. You may eligible for
may also be eligible for aa prevented
prevented Section (for the the purposes
purposes of of unit
unit structure)
structure) -- AA unit unit of
planting payment ifif you
planting payment you failed
failed to plant the the insured
insured crop crop measure under under aa rectangular
rectangular survey survey systemsystem describing
describing a
• with
with the proper equipment
equipment withinwithin the
the late planting period. tract
tract of of land
land usually
usually one one mile mtle square square and and usually
usually
You must have have beenbeen prevented from from planting the insured insured containing approximately 640
containing 640 acres.

© 2004 National Crop Insurance Services, Inc.


C Page 4 of 26
Page4of26

28
... ..
Share-- Your percentage
Share percentage of of Interest
interest in in the Insured
insured crop as Void - When the the policy is Is considered
considered not to have have existe
existet
an owner,
an owner, operator,
operator, or tenant at the
or tenant the time
time insurance
insurance for aa crop
crop yearyear as asaaresult resultofofconcealment,
concealment, fraud, fraud, o o
attaches. However, only for the purpose of determining the misrepresentation (see section 27).
amount of indemnity,
amount Indemnity, your your share
share will will not exceed
exceed youryour Written Agreement - A document document that alters alters designate
designate1
share at the earlier of the time of loss, or the beginning of terms of aapolicy
terms policy asasauthorizedauthorized under under these these Basi Bash
harvest. Provisions (see section 34).
Provisions - The part of the
Special Provisions the policy that that contains
contains UnitStructure
2. Unit Structure
specific provisions of insurance
insurance for for each
each insured crop that Basicunit
(a) Basic unit- -All
Allinsurable
Insurableacreage acreageofofthe theinsured
Insuredcrop cro1
may vary by geographic area.
may In the
in the county
county on on the thedate datecoverage
coveragebegins beginsfor forthe
thecrop
cro1
State - The state shown on your accepted application. year:
beneficial Interest
Substantial beneficial interest - An interestInterest held by any (1) In which you have have 100 1 00 percent
percent crop share; share; or
person of at least
person least 1010 percent
percent in you. The spouse spouse of any (2) Which Is Is owned by by oneone person
person and and operated
operated b! b~
Individual applicant or individual Insured
individual insured will be considered another person on aa share share basis.
basis. (Example:
(Example: If, ir
if, it
to have a substantial beneficial Interest
substantial beneficial Interest in in the applicant or addition to the land land you you own,
own, you you rentrent land
land Ironfron
Insured unless
insured unless the spouses can
the spouses can prove
prove they are are legally
legally landlords, three on
five landlords, on aa cropcrop share
share basisbasis anc am
separated or otherwise
separated otheJWise legally
legally separate
separate under state law. two on aa cash basis, basis, you you would
would be entitled to fou
Any child of of an
an individual
Individual applicant Individual insured
applicant or individual insured units; oneone forfor each
each crop crop share
share lease
lease and and one one tha
will not
will not bebe considered
considered to to have
have aasubstantial
substantial beneficial
beneficial combines the two cash leases leases and the land land yot
Interest in
interest In the applicant
applicant or insured
Insured unless
unless the the child has a own.) LandLand rented rented for for cash,
cash, aafixed fixedcommodit3
commodil)
separate legal interest In in such person. For example, there payment, or or aa consideration other other than a share share lr it
are two partnerships that each each have a 50 percent interest Interest Insured crop,
the insured crop, or or proceeds
proceeds from from the thesale
sale ofofthethE
in you and each partnership
In partnership is is made up of two Individuals,
individuals, Insured crop, on
insured on such
such landland will
will bebe considered
considered a! a:
each with
each with a 50 50 percent
percent share share in the the partnership.
partnership. In this owned by the
owned the lessee
lessee (see (see definition
definition of of "share'
•share'
case, each individual
case, Individual would would be be considered
considered to to have
have a 25 above).
percent interest in you, you, and both the partnerships and the Optionalunit
(b) Optional unit- Unlesslimited
- Unless limited by bythe
the CropCrop Provision:
Provisiom
Individuals would
individuals would havehave a substantial
substantial beneficial Interest In
beneficial interest in Special Provisions,
or Special Provisions, aa basic basic unit unit as defined defined ir it
you (The
you (The spouses
spouses of of thethe individuals
Individuals would would not not be be section 2(a) may be be divided
divided into into optional
optional units if, if, fo1
fo
considered to have a substantial beneficial Interest interest unless each optional unit:
spouse was
the spouse was one one of the individuals
individuals that that made
made up the (1) YouYoumeetmeetthe the following:
following:
partnership). However, Ifif each
partnership). However, each partnership
partnership Is is made
made up up of (i) You have records, that are acceptable to us
Individuals with
six individuals equal interests,
with equal Interests, then then each
each would only for atat least
least the the previous
previous crop crop yearyear for for al
have an 8.33
have 8.33 percent
percent interest
Interest in you and
in you and although
although the the optional units
optional units that that you you willwill report
report in In the
the
partnership would
partnership would still have aa substantial
still have substantial beneficial
beneficial current crop
current crop year (You may may be be required
required tc tc
Interest in
interest In you, the individuals would would not for the purposes purposes produce the records records for for all
all optional
optional units units for for
of reporting in In section 3. the previous crop year);
Summary of coverage
Summary coverage - Our statement statement to you, you, based
based You must plant the crop
(ii) You crop in In aa manner
manner that that
upon your acreage report, report, specifying
specifying the Insuredinsured crop and results In
results in aa clear
clear andand discernable
dlscemable break break in In
the Final Guarantee provided by unit. the planting
the planting pattern pattern at the the boundaries
boundaries of ol
Sustainable farmingfarming practice - A system system or process
process for each optional unit;
producing an agricultural
producing agricultural commodity,
commodity, excludingexcluding organic
organic (Iii) All optional units you select
(iii) select for for the cropcrop year
farming practices,
farming practices, that that is is necessary
necessary to to produce
produce the crop Identified on the acreage
are identified acreage report report for for that
generally recognized
and is generally recognized by agricultural
agricultural experts for the year (Units will
crop year will be
be determined
determined when the
area to conserve
area conserve or or enhance
enhance naturalnatural resources
resources and the the acreage is Is reported
reported but may be be adjusted
adjusted or
environment. combined to reflect
combined reftect the actualactual unit unit structure
structure
Tenant - A person who rents land from another person for when adjusting
when adjusting aa loss. loss. No No further
further unit unit
a share of of the crop or a share of the proceeds of the crop division may
division may be made made after after the acreage
the acreage
(see the definition of "shareR above).
of ''share" reporting date for any reason); and
Termination date
Termination date - The The calendar
calendar date contained In
dale contained the
in the You have
(iv) You have records records of of marketed
marketed or or stored
stored
Crop Provisions upon which which your insurance
insurance ceases to be be production from
production from each each optional optional unit unit
effect because
in effect because of nonpayment
nonpayment of of any
any amount
amount due us maintained in In such a manner manner that permits us
under the policy, including
under Including premium. verify the
to verify the production
production from from each each optional
optional
planted - Planted
Timely planted Planted on on or before
before the final final planting
planting unit, or
unit, or the the production
production from from each each optional
optional
designated In
date designated Provisions for the insured
in the Special Provisions unit is Is kept
kept separate
separate until until loss
loss adjustment
adjustment is
crop In in the county. completed by us.
Transitional acreage - Acreage on which organic farming (2) ItItmeets
meets one one or ormore
more ofofthe thefollowing,
following, unless unless
practices are being followed followed that that does not yet qualify to be otherwise specified
otherwise specified In the Crop
in the Crop Provisions
Provisions or or
designated as organic acreage. allowed by written
allowed written agreement
agreement (Note: (Note: No No written
written
Unlt--
Unit agreement Is
agreement allowed for optional
is allowed optional unitsunits created
created
Basic unit
(a) Basic unH - A unit unit established
established in In accordance
accordance with with across section lines or or in
In oversized sections if the
section 2(a). acreage is Is located in In a high risk area):
(b) Optional unit •- A unit established from from basic units in Optional units
(i) Optional units may may be beestablished
established ifif each each
accordance with section 2(b). optional unit is located in a separate separate section.
(c) Enterprise unit - A unit established established from basic units In the absence
absence of of sections, we may consider
or optional units
or units inIn accordance with section 2(c). parcels of land
parcels land legally
legally identified
Identified by by other
USDA - United States Department of Agriculture.
United States methods of
methods measure such
of measure such as as Spanish
Spanish
grants, as the equivalents of sections for unit
purposes. In
purposes. areas which
In areas which have have not not beenbeen

~ 2004 National Crop insurance


Insurance Services, Inc. Page 5 of
of26
26

29
surveyed using sections, section equivalents
surveyed are located in two or more more separate
separate sections.
sections,
or in
In areas where boundaries are not readily section
section equivalents,
equivalents, FSA FSA farm farm serialserial
discernible,each
discernible, each optional
optionalunit unit mustmust be be numbers,
numbers, or or units
unlts established
established by by written
written
located In
located in aa separate
separate FSA FSA farm farm serial
serial agreement,
agreement, with with atat least
least some
some planted
planted
number; acreage In
acreage in two or or more
more separate
separate sections,
sections,
(li) In addition
(ii) addition to, or orinstead
Instead of, of,establishing
establishing section equivalents,
section equivalents, FSA FSA farm farm serialserial
optional units by
optional by section,
section, section
section equivalent
equivalent numbers,
numbers, or or two or more more separate
separate unitsunits as
or FSA
FSA farm farm serial
serial number,
number, optional
optional units units established by written agreement; or
may be based on irrigated Irrigated and and non-irrigated
non-Irrigated (li)
(II) For two or more more optional units units of
of the
the same
same
acreage. To qualify as separate Irrigated irrigated and insured crop
insured crop established
established by by separate
separate
non-irrigated optional units, the non-irrigated sections, section equivalents,
sections, section equivalents, FSA FSA farm farm
acreage
acreage may may not continue
continue into into the inigated
Irrigated serial numbers, or as established
serial numbers, established by by written
wriUen
acreage in
acreage the same
in the same rows rows or or planting
planting agreement, with
agreement, with at least two
at least two optional
optional units
units
pattern. The
paUem. The irrigated
irrigated acreage
acreage may may not not containing some planted acreage, as defined
as defined
extend
extend beyond beyondthe the point
point at at which
which the the in section 2(b)(2)(1).
In 2(b)(2)(i).
Irrigation system
irrigation system can can deliver the quantity of (3) These basic units or or optional
optional units
units that
thatcomprise
comprise
water needed
needed to to produce the yield on which the enterprise
the enterprise unitunit must
must eacheach havehave insurable
Insurable
the
the Final
Anal Guarantee
Guarantee is based, based, exceptexcept the planted acreage of
planted acreage of the
the same
same crop crop inIn the
the crop
crop
corners
comers of of a field
field in In which
which aacenter-pivot
center-pivot Insured;
year insured;
Irrigation
irrigation system Is used may be considered (4) You must comply with all all reporting
reporting requirements
requirements
Irrigated acreage
as irrigated acreage If if the corners
corners of a field field for
for the the enterprise
enterprise unit (You must
unit (You must maintain
in
In which
which aa center-pivot
center-pivot irrigation
Irrigation system
system is required productionrecords
required production recordsononaa basic basic or
used do
used do not not qualify
qualify as as aa separate
separate non- non- optional unit basis If if you wish to to change
change your your unit
Irrigated optional
irrigated optionalunit. unit. In this case,
In this case, structure for any subsequent crop year);
production
production from from both
both practices
practices will will be used qualifying basic
(5) The qualifying
(5) basic units or or optional
optional units
units maymay
to determine your approved yield; and not be combined
combined Into into an enterprise
enterprise unit on on any
(Iii) In addition
(iii) addition to, or orinstead
instead of, of,establishing
establishing basis other than as described herein; and
optional units by section,
optional section, section
section equivalent
equivalent (6) At any any time we discover
discover you do do not
not comply
comply with
or FSAFSA farmfarm serial number,number, or irrigated
Irrigated and reporting provisions
the reporting provisions for the the enterprise
enterprise unit,unit,
non-Irrigated acreage,
non-irrigated acreage, separate separate optionaloptional your yield
your yield for
for the
the enterprise
enterprise unit unit willwill bebe
established for acreage
units may be established acreage of the determined In in accordance with section 4.
insured
Insured crop crop grown
grown and and insured
Insured under an (d) Selection
Selectionofofunit unitstructure
structure- - Basic
Basic ororoptional
optional units
units will
organic farming
organic farming practice.
practice. Certified
Certified organic,
organic, be determined when the acreage is Is reported
reported but may
transitional and
transitional and buffer zone acreages do not adjusted, combined,
be adjusted, combined, or separated to reflect
or separated reflect the
individually
Individually qualify qualify as as separate
separate units. (See (See actual
actual unitunit structure when adjusting
structure when adjusting aa loss.loss. If you you
) section 37 for additional provisions regarding select
select an enterprise
enterprise unit structure,
structure, you you must
must make
make
acreage Insured
acreage Insured underunder an organic organic farming
farming such election by the sales closing date for for the insured
Insured
practice). crops and report report such
such unit structure to us us in
in writing.
writing.
(3) IfIfyou
youdo donot
notcomply
complyfully fully with
with the
the provisions
provisions in In enterprise unit structure selection will remain
Your enterprise remain in In
this section, we will combine all optional units that effect from year to year unless you notify us in writing
are not in in compliance
compliance with these these provisions
provisions into Into the sales
by the sales closing
closing date
date for for the cropcrop and
and year
year for
the basic unit from which they they were
were formed.
formed. We which you
which you wish
wish to change this election.election. Eligibility
Eligibility for
will combine the
will combine the optional
optional units units atat any time time we we enterprise units will be determined when the
units will the acreage
acreage
discover that
discover that you you have
have tailedfailed to to comply
comply with with Is reported. At any time we discover
is discover you do do not
not qualify
these provisions.
these provisions. IfIf failure comply with these
failure to comply these for an enterprise
enterprise unit,
unit, we wm assign
we will assign the basic unit
the basic unit
provisions is determined by us to be be inadvertent,
Inadvertent, structure.
and the optionaloptional units are combined Into into a basic
basic All
All applicable
applicable unit unit structures
structures must must be be stated
stated on on thethe
portion of the
unit, that portion the additional
additional premium
premium paid acreage report for each crop year.
for the optional
optional units that that havehave been
been combined
combined 3. Life
LifeofofPolicy,
Polley,Cancellation,
Cancellation,and
andTermination
Tennlnatfon
will be refunded to you for the units combined.
wUI (a)
(a) This isIs a continuous poUcypolicy and will
wiH remain in effect for
Enterprise unit
(c) Enterprise unit -- AA unit
unitthat
thatconsists
consists of of all
aUinsurable
insurable each
each crop
crop year
year following
foRowlng the acceptance
acceptance of of the
the
planted acreage
planted acreage of of the
the insured
insured crop crop Inin the county in In original applicationuntil
original application untilcanceled
canceledby by youyou in In
which you have a share on the the date
date coverage begins begins accordance with the terms of the policy
with the policy or
or terminated
terminated
the crop
for the crop year.year. If you you select
select and and qualify
qualify for an by operation of the terms of the policy, or by us.
enterprise unit, you will qualify for a premium discount (b) Your
Your application
application for for insurance
Insurance must must contain
contain your your
based on the insured Insured crop and number of acres In in the security number
social security (SSN) Ifif you are an
number (SSN) an individual
Individual
enterprise unit.
enterprise unit. The discount contained
The discount contained In the
in the or employer identification number
employer Identification number (EIN)
(EIN) ifif you
you are
are a
actuarial documents
documents will will only
only apply to acreage acreage In in the person other
person other than
than an an individual,
Individual, and SSNs and
and all SSNs
enterprise unit
enterprise unit that has been planted. planted. The The following
following EINs, as applicable,
applicable, of all persons with with aa substantial
substantial
requirements must be
requirements be met to qualify for an enterprise beneficial interest
beneficial interest In you, the coverage
in you, coverage level,
level, crop,
crop,
unit: type,
type, variety,
variety, or class,
class, plan
plan of
of insurance,
Insurance, and and any
(1) The enterprise
( 1) The enterprise unit unit must
must contain
contain 50 50 or or more
more other material information
information required on the application
application
acres; to insure
to Insure thethe crop.
crop. if If you
you or orsomeone
someone with with a a
(2) TheTheacreage
acreage that that comprises
comprises the the enterprise
enterprise unit unit substantial beneficlallnterest
beneficial Interest Is is not legally required
required to
must also qualify: have a SSN or EIN, you must request and receive receive an
) (I) For
(I) Fortwo twoorormore more basicbasic unitsunits ofof thethe same
same identification number for
Identification number for the
the purposes
purposes of this this policy
policy
insured crop
insured crop as defined in section section 2(a) that lntemal Revenue Service (IRS) if such
from us or the Internal

C 2004 National
National Crop Insurance Services, Inc,
Inc. Page
Page&6 of 26
of26

30
Identification number
identification numberisisavailable
availablefrom fromthethe IRS.
IRS. If any planting
planting payment
payment due due you you for thisthis or
or any
any other
other crorcro1=
of the
of the information
information regarding regarding persons persons with with a a insured with
insured with us under the authority of the Act.
substantial beneficial
beneficial interest changes during the crop (1) Even ifif your your claim
claim has not not yet
yet been
been paid,paid, you you
year, you must
year, must reviserevise youryour application
application by by the next next must stillstili pay the premiumpremium and and administrative
administrative fee
' sales closing
sales closing date applicable under
date applicable under your
your policypolicy to to on or or before
before the the termination
termination date date for for you you tc tc
I the correct
reflect the correct information. remain eligible for Insurance. insurance.
(1) Applications
Applications that that dodo not contain
contain youryour SSN,
SSN, EIN or (2) If we we offset
offset any any amount
amount due dueus usfrom
from an anindemnity
indemnity
Identification number,
identification number, ororany any ofof thethe otherother prevented planting
or prevented planting payment owed owed to to you,
you, the
Information required
information requiredininsection section3(b) 3(b) are are not not date of of payment
payment for for the
thepurpose
purposeof ofdetermining
determining
acceptable
acceptable and and insurance
Insurance will will not be be provided
provided whether you
whether you have a delinquent delinquent debtdebt willwill bebe the
the
(Except If
(Except if you
you fall
fail to report the
to report the SSNs,
SSNs, ElNs EINs or date that that youyou submit
submit the the claim
claim for
forindemnity
Indemnity in
identification
Identification numbers numbers ofof persons
persons with with a accordance with section section 15(c)15(c) (Your Duties).
substantial beneficial
substantial beneficialinterest interestinin you, you, the the (f) AAdelinquent
(f) delinquent debt debt for for anyany policy
policy will
will make
make you you
provisions in in section
section 3(b)(2)
3(b)(2) will apply); ineligible to obtain
ineligible obtain crop crop insurance
insurance authorized
authorized under under
(2) IfIfthetheapplication
application does does not not contain
contain the SSNs, SSNs, the Act
Act for for anyany subsequent
subsequent crop year and and result
result in In
EINs,
EINs, ororidentification
Identification numbers of all persons with termination of all
termination all policies
policies in in accordance
accordance with with section
section
a substantial beneficial interest in
substantial beneficial in you, you fail fall to 3(f)(2).
3(0(2).
application in accordance with section
revise your application (1) With
(1) Withrespect
respecttotoineligibility:
ineligibility:
3(b), oror the
the reported
reported SSNs,SSNs, EINs, EINs,ororidentification
identification (I) ineligibility
(i) Ineligibilityfor forcrop
cropinsurance
Insurancewill will be
beeffective
effective
numbers
numbers are are incorrect
incorrect and and the the Incorrect
incorrect SSN, SSN, on:
EIN, or
EIN, or identification
identification number number has has not not been been (A) The date
(A) date that that aa policy
policy was
was terminated
terminated in
corrected by the acreage reporting reporting date, and: accordance with
accordance with section
section 3(f)(2)
3(0(2) for for the
the
(I) Such persons
(i) persons are eligible eligible forfor insurance,
insurance, the crop for
crop for which
which you you failed
failed to to paypay
amount of coverage for all all crops included on premium, an administrative
premium, administrative fee, fee, or or any
this
this application
application will be
will be reduced reduced related interest owed, as as applicable;
applicable;
proportionately by
proportionately by the
the percentage interest in (B) The payment
(B) payment due due date
date contained
contained in in any
you
you of such such persons,
persons, you you must
must repayrepay the the notification of
notification indebtedness for
of indebtedness for any any
amount of
amount of indemnity,
indemnity, preventedprevented plantingplanting overpaid indemnity, prevented
overpaid prevented planting
planting
payment or
payment replanting payment
or replanting payment that that is is payment or replanting
payment replanting payment,
payment, if you you
proportionate to
proportionate to the
the interest
interest of the persons persons fail
fall to pay pay thethe amount
amountowed, owed,including
including
whose
whose SSN, EIN, EIN, ororidentification
identification number number any related interest owed, as as applicable,
applicable,
was unreported
unreported or incorrect incorrect for such such crops,
crops, by such due date;
and your
and your premium premium will will be be reducedreduced (C) The termination
termination date date for the crop crop year year
commensurately; or prior to
prior to thethe cropcrop yearyear in in which
which a a
(ii) Such persons
(ii) persons are not not eligible
eligible for
for insurance,
insurance, scheduled payment
scheduled payment is is due under under a
except as
except provided in
as provided section 3(b)(3),
in section 3(b)(3), the the payment agreement
agreement ifif you you fail
fail to
to pay
pay the
policy
policy is is void
void and no no indemnity,
indemnity, prevented
prevented amount owed
amount owed by payment date
by any payment date in
planting payment or replanting
planting replanting payment
payment will will any agreement to to pay
pay the
the debt;
debt or
be owed
be owed for for anyany cropcrop included
included on on thisthis termination date the policy
(D) The termination policy was was or
application,
application, and andyou you mustmust repay repay any any would have
would have been been terminated
terminated under under
indemnity, prevented
indemnity, prevented planting planting payment
payment or sections 3(f)(2)(i)(A), (B),
sections 3(f)(2)(i)(A), (B), or
or (C) ifif your
your
replanting payment
replanting payment that that may have been paid bankruptcy petition
bankruptcy dismissed before
petition is dismissed before
for
for such
such crops.crops. IfIf previously
previously paid, paid, the the discharge.
balance of
balance of any any premiumpremium and and any any (ii) IfIfyou
(ii) youare areineligible
ineligible and and aapolicy
policy hashas beenbeen
administrative
administrative fees fees will
will bebe returned
returned to you, you, terminated In
terminated accordance with
in accordance with section
section
less twenty
less twenty percentpercent of the premium
of the premium that that 3(f)(2), you you will will not
not receive
receive any anyindemnity,
Indemnity,
would otherwise
would otherwisebe be due from you
due from you for for such
such prevented planting
prevented planting payment
payment or or replanting
replanting
crops.
crops. If not previously
previously paid, paid, no premium or payment, ifif applicable,
applicable, and andsuch
suchineligibility
ineligibility
administrative fees
administrative feeswill willbe be due
due for for such
such termination of the policy may affect your
and termination
crops. eligibility for
eligibility for benefits
benefits under under other
other USDA USDA
(3) The
Theconsequences
consequencesdescribed describedin in section
section 3(b)(2)(ii) programs. Any indemnity, Indemnity, prevented
prevented planting
planting
will not
will not apply
apply if If you
you havehave included
included an an ineligible
ineligible payment or replanting payment that may be
replanting payment
person's
person's SSN, SSN, EIN, EIN, or oridentification
identification number on owed for
owed for the the policy
policy before
before it has been
it has been
your application
application and and do not include include thethe ineligible
ineligible terminated will
terminated will remain
remain owed to you, but may
person's share on the the acreage report. be offset
offset in in accordance
accordance with with section
section 3(e),
(c) After
(C) After acceptance
acceptance of the application,
of the application, you you may may not not unless your
unless your policy policy was was terminated
terminated in in
cancel this policy
policy for for the
the initial crop year. Thereafter,
initial crop accordance with with sections
sections 3(f)(2)(i)(D)
3(f)(2)(i)(D) or (E).
policy will
the policy will continue
continue in force for
in force for each
each succeeding
succeeding (2) With
Withrespect
respecttototermination:
termination:
year unless
crop year unless canceled or terminated terminated as as provided
provided Terminationwill
(I) Termination willbebeeffective
effective on:
on:
below. (A) For aa policy
(A) policy with with unpaid
unpaidadministrative
administrative
Eitheryou
(d) Either youororwewemay maycancel
cancelthis thispolicy
policy after
afterthe the initial
initial fees or or premiums,
premiums, the the termination
termination date
year by
crop year by providing
providing written
written notice to the other on or immediately subsequent
immediately subsequent to the billing
to the billing
before
before the the cancellation
cancellation date date shown
shown in in the
the CropCrop date for the crop year;
Provisions. (B) For a policy
(B) policy with other amounts due, the
I (e) Any Anyamount
amountdue duetotous usforforanyanypolicy
policy authorized
authorized under termination
termination date immediately immediately following
following
the Act will be offsetoffset from
from any indemnity or prevented the date you you have
have aa delinquent
delinquent debt;
debt;

C 2004
CO 2004National
NationalCrop
Crop Insurance
Insurance Services,
Services, Inc. Page T of 26
Page7of26

31
.. .. (C) For each policy for which insurance has closing
closing date. date. If if you
you fail
fail to
to make
make aa payment
payment that
attached before you become
attached become ineligible,
Ineligible, was scheduled to be made made on April April 1,1, 2005,
2005, your
the termination
the termination date date immediately
immediately policy will terminate
tennlnate as of of October
October 31, 31, 2004,
2004, for
following the date you become ineftgible; ineligible; crop A, and and March 15, 2005, for crop B, 8, and
and no
execution of
(D) For execution agreement to pay
of an agreement pay Indemnity, prevented
Indemnity, prevented planting planting paymentpayment or
any amounts
amounts owed and and failure
failure to make
make replanting payment will be due for that crop year
that crop
any scheduled payment, the termination for either crop. You will not not be eligible to apply for for
date for the
date the crop year prior to the crop crop crop Insurance for
crop insurance for any
any cropcrop untiluntil after
after thethe
year
year In which you
in which you failed
failed to to make
make the the amounts
amounts owed are paid paid inIn full or
or you
you file
file aa petition
petition
scheduled payment; or to discharge the debt In bankruptcy.
dismissal of aa bankruptcy
(E) For dismissal bankruptcy petition
petition (6) IfIfyou
(6) youare aredetermined
determined to be ineligible ineligible underunder
before discharge,
before discharge, the termination
termination date date section 3(f), persons with a substantial substantial beneficial
beneficial
the
the policy
policy was was or or would
would have have beenbeen Interest In
interest in you may may alsoalso be be ineligible
Ineligible untiluntil you
terminated
terminated under under sections 3{f)(2XI)(A),
sections 3(f)(2)(1)(A), become eligible again.
become
(B) or (C).
or(C). (g) If you
(g) you die, die,disappear,
disappear, or orare judiciallydeclared
arejudicially declared
(ii)
(il) For all all policies
policies terminated
terminated under under sections
sections Incompetent, or
incompetent, or Ifif you
you areare an entityentity other
other thanthan an
3(f)(2)(i)(D) and
3(f)(2)(i)(D) and (E), (E), any anyindemnities,
indemnities, individual and such entity is Is dissolved,
dissolved, the policy policy will
prevented
prevented plantingplanting payments
payments or replantingreplanting terminate
tennlnate as of of the
the date
date of of death,
death, judicial
judicial declaration,
declaration,
payments paid subsequent to the termination or dissolution.
dissolution. If such such eventevent occurs
occurs afterafter coverage
coverage
date must be repaid. begins for any any crop
crop year,year, the
the policy
policy willwill continue
continue in In
Once the policy
(iii) Once policy is Is terminated,
terminated, it It cannot
cannot be force through the crop year and terminate terminate at the end
reinstated
reinstated for for the
the current
current crop year year unless
unless of
of the insurance
insurance period and any indemnity Indemnity will be paid
the termination
termination was in error. Failure to timely person or
to the person or persons
persons determined
determined to be beneficially
pay because of illness, bad weather, or other entitled to
entitled to the the indemnity.
Indemnity. The The premium
premium will will bebe
such
such extenuating
extenuating circumstances
circumstances Isis not not deducted from
deducted from the the indemnity
indemnity or collected
collected from from the
grounds for
grounds reinstatement in
for reinstatement the current
in the current estate. Death
estate. Death of of a a partner
partner in In aapartnership
partnership will will
year. dissolve
dissolve the the partnership
partnership unless unless the the partnership
partnership
(3) To
Toregain
regaineligibility,
eligibility, youyou must: agreement
agreement provides otherwise. IfIf two or or more persons
(i) Repay the delinquent debt in full; having a joint
having joint interest
Interest are insured jointly, death of one
(ii)
(ii) Execute
Execute an an agreement
agreement to pay any any amounts
amounts of the persons will dissolve the joint entity.
of
owed
owed and and make make payments
payments in in accordance
accordance (h) We may may cancel your policy if if no
no premium
premium is is earned
earned
with the agreement (We will not enter Into into an for 3 consecutive years.
agreement
agreement with with you you to pay pay the the amounts
amounts (I) The cancellation
cancellation and termination dates dates are contained
contained
owed if if you have previously failed to make a In the Crop
in Crop Provisions.
Provisions.
scheduled
scheduled paymentpayment under under thethe terms
terms of any any 0) When
(j) When obtaining
obtaining coverage, coverage, you you must must provideprovide
) agreement to
other agreement to pay withwith us or any other regarding crop insurance
information regarding Insurance coverage on any
Insurance provider); or crop previously obtained obtained from an an approved
approved insurance
insurance
(iii) File a petition to have your your debts
debts discharged provider, Including
provider, including the the date
date such such insurance
insurance was was
in bankruptcy
bankruptcy (Dismissal
(Dismissal of the the bankruptcy
bankruptcy obtained
obtained and and the amount of the administrative fee.
petition before
petition discharge will
before discharge terminate all
will terminate (k) Any person
person may may signsign any any document
document relativerelative to to crop
crop
policies in In effect retroactive
retroactive to the date date your insurance
insurance coveragecoverage on on behalf
behalf of any any other
other person
person
policy
policy would would have have been been terminated
terminated In In covered by such
covered such a policy,
policy, provided
provided that that the
the person
person
accordance with section 3(f)(2)(i)); has aa properly
properly executed
executed power of attorney attorney or such such
(4) After you
(4) After become eligible
you become eligible for for crop
crop insurance,
Insurance, if If other legally
legaHy sufficient
sufficient document authorizing authorizing such such a
you want to obtain obtain coverage for your crops, you person
person to to sign.
sign. YouYou are are still
still responsible
responsible for for the
the
must submit a new application application on before the
on or before accuracy
accuracy of all all information
information provided
provided on your your behalf
behalf
sales closing date for the crop (Since applications and may may be be subject
subject to to the
the consequences
consequences In In section
section
for crop insurance
insurance cannot be accepted accepted after the 7(g),
7(g), and and any any applicable
applicable consequences,
consequences, ifif any any
sales closing date, if you make any payment after Information
information has been misreported.
the sales closing
the sales closing date, date, you you cannot
cannot apply apply forfor (I)
(I) You
You are are not noteligible
eligible to toparticipate
participate in In thethe CropCrop
insurance until the next crop year); Revenue Coverage Coverage program program If if you have elected elected the the
(5) For
Forexample,
example, for for thethe 2003
2003 crop crop year,
year, if crop
crop A, MPCI
MPCI Catastrophic
Catastrophic Risk Risk Protection
Protection Endorsement
Endorsement
with a termination
termination date date of October 31, 2003, and except if you
except you execute
execute aa High High RiskRisk Land
Land Exclusion
Exclusion
crop
crop B, 8, with
with aa termination
termination date date of of March
March 15, 15, Option for for a CropCrop Revenue
Revenue Coverage Policy, you may
2004, are
2004, are insured
Insured and and you you do do notnot paypay thethe elect to insureinsure the "high "high risk
risk land"
lancr under
under an an MPCI
MPCI
premium
premium for crop A by the termination termination date, you Catastrophic Risk Risk Protection
Protection Endorsement,
Endorsement, provided provided
are ineligible for crop Insurance insurance as of October 31, the Catastrophic Risk
the Catastrophic Risk Protection
Protection Endorsement
Endorsement is Is
2003, and crop A's As policy is is terminated
terminated as of that that obtained from
obtained from us. us. If bothboth policies
policies are are in force,
force, thethe
date. Crop
date. Crop B's policy policy does does not not terminate
terminate until until acreage of of the
the crop covered under the Crop Revenue
March
March 15, 2004, 2004, and an Indemnity Indemnity for the 2003 2003 Coverage policy
Coverage policy and the acreage acreage covered
covered under an
crop year
crop year may may stillstill bebe owed.
owed. If you you enter
enter an an MPCI Catastrophic
Catastrophic Risk Protection Protection Endorsement
Endorsement will
agreement toto repay
agreement repay amounts amounts owed owed on on be considered
be considered as as separate
separate crops crops for for insurance
Insurance
September
September 25, 25, 2004,
2004, the the earliest date by which which purposes,
purposes, includingIncluding the the payment
payment of of administrative
administrative
you
you can obtain obtain crop crop insurance
insurancefor for crop
crop AA Is is to fees.
apply for crop insurance by the October 31, 2004,
) sales closing
sales closing date
dale and and for crop 8B Is
for crop apply for
is to apply
crop insurance
crop insurance by by thethe March
March 15, 1S, 2005,
2005, sales
sales

0 2004 National Crop Insurance Services, Inc. Page 8 of


of26
26

32
4. Coverage
CoverageLevel,
Level,and
andApproved
Approved Yield
Yield For
ForDetermining
Detennlnlng because the incorrect
because incorrect information
information was was It tt
Final Guarantee and indemnity Indemnity result
result of our our error
error or or the
the error
errorof ofsomeor
someor
Unless adjusted
(a) Unless adjusted or or limited
fimited in in accordance
accordance with with your
your from USDA.
policy,
policy, the Final Anal Guarantee,
Guarantee, coverage coverage level, level, andand (f) InInaddition
additiontotoany anyconsequences
consequencesininsection section 4(e),4(e),
approved
approved yields yieldsat at which
which an an indemnity
Indemnity will will bebe any timetime the thecircumstances
circumstances described described below below a
) determinedfor
determined foreach
eachunit unit willwill bebe those
those used used to to discovered, your your approved
approved yield yield willwill bebe adjusted:
adjusted:
calculate
calculate your your summary
summary of of coverage
coverage for for each crop crop (1) ByByincluding
including an anassigned
assignedyield yielddetermined
determined
year. accordance with section 4(d)(1) and 7 CFR
accordance CFR pe pe
Youmay
(b) You mayselect
selectonly onlyone onecoverage
coverage level level fromfrom among 400, subpart
400, subpart G, G, ifIfthe
the actual
actualyield yield reported
reported In in ttit
those offered
those offered by by us for all acreage
acreage of the the cropcrop inIn the database is
database excessive for any
is excessive any cropcrop year,year, ~
county. You may change change the coveragecoverage level level for the determined by
determined by FCIC under under its procedures,
procedures, ar
following
following crop crop yearyear by giving
giving written
written notice
notice to us not you do do not
not provide
provide verifiable
verifiable records records to to suppc
suppc
later than the sales closing date for the insured Insured crop. the yield in In the database
database (If there are are verifiab
verifiab
If you
you do do notnotchange
change the the coverage
coverage level level for the the records for the yield yield in In your
your database,
database, the the yield
succeeding crop
succeeding crop year
year you will will be assigned
assigned the same significantly different
significantly different from from the other yields yields in tl- tt
coverage level
coverage level that
that was effect the
was in effect the previous
previous crop crop county
county or your other yields for for the crop crop and and yc
year. cannot prove there is Is aa valid
valid basis
basis to to support
support th
(c) This policyisIsan
Thispolicy analternative
alternativeto the MPCI
to the MPCI program
program and differencesIn
differences In the
the yields,
yields, the the yield
yield will
win be be th th
satisfies the requirements
requirements of of section 508 (b)(7) of the average of
average of the yields for
the yields for the the cropcrop or or th th
Act. applicable county transitionaltransitional yield yield ifif you
you havehave n
(d) YouYoumust mustreport
reportproduction
production to to us
usforfor the
the previous
previous crop other yields for the the crop,
crop, and and you you may may be be subjei
subjec
year by by the earlier of the acreage reporting date or 45 to provisions of section 27);
days after the
days after the cancellation
cancellation date date unless
unless otherwise
otherwise (2) By Byreducing
reducing itIttotoan anamount
amountconsistent
consistent with with th
stated in the Special Provisions. average of
average of the the approved
approved yields yields for for otheothE
(1) If you you do do not notprovide
provide the therequired
required production
production databases
databases for for your farming farming operation
operation with with th
report, we will assign a yield for the previous crop same
same crop, crop, type,type, and and practice
practice or or thethe count
count
year. The
year_ The yield assigned by us will not be
yield assigned be more
more transitional yield, as applicable, if:
than 75
than 75 percent
percent of of thethe yield
yield usedused by by us
us to to (i) The approved APH yield is is greater
greater than 11 11
determine your
determine your coverage
coverage for previous crop
for the previous crop percent of
percent of thethe average
average of of the
the approve
approve
year. The production
production report or assigned yield will yields of all
yields all applicable
applicable databasesdatabases for for yot
yoi
used to compute your Approved
be used Approved Yield Yield for the farming
farming operation
operation that have have actual
actual yields
yields i
determining your Final
purpose of determining Final Guarantee
Guarantee for them or itit is Is greater
greaterthan than 115 percent of
115percent ttl-
of th•
the current crop year. county
county transitional
transitional yield yield if no no appiicabl
applicabl
(2) If
(2) If you
you have
have filed
filed a a claim
claim for for any
any crop
crop year,year, the databases exist for comparison; and
) documents signed by by you which state the amount (II) The
(ii) The currentcurrent year's year's insured Insuredacreage acreagt
production used
of production used to to complete
complete the the claimclaim forfor (Including applicable prevented
(Including applicable prevented plantin! plantin!
Indemnity wUI
indemnity will be production report
be the production report for that that acreage) is greater than 400
acreage) percent of thi
400 percent th1
year unless otherwise specified by FCIC. average number of of acres
acres in the database
in the database o
Production and
(3) Production and acreage
acreage for for the
the prior crop year year the acres
acres contained
contained in in two
two or ormore ind'IVldua
moreindividue
must be reported for each proposed optional unit years in In the database
database are are eacheach less
less thanthan 11 11
production reporting
by the production reporting date. date. IfIf you
you do not percent
percent of the the current
currentyear's year'sinsurabir
insurabl•
provide the information stated above, the optional acreage in
acreage In the theunit unit(including
(Includingapplicably
applicabh
units will be combined into Into the basic unit. prevented planting acreage); or
Appraisals obtained
(4) Appraisals obtainedfrom fromonly only aa portion
portion of the (3) ToToananamount amountconsistent
consistentwith withthe theproductioi
productior
acreage
acreage in in the
the field
field that
that remains
remains unharvested
unharvested methods actually
methods actually carriedcarried out out forfor the cropcrop year iI
remainder of the
after the remainder the crop
crop within
within a field has you
you use a different
different production method than we! wa!
been destroyed or put put to another use wilt will not be previously used
previously used and and the theproduction
production methoc metho(
used to
used to establish
establish your your actualactual yield yield unless
unless actually carried out
actually carried out is Is likely
likely to to result
result in in aayielc
yielt
representative samples
representative samples are are required
required to to be left by lower than the the average
average of of your
yourprevious
previous actua actua
you In in accordance with the Crop Provisions. yields. The yield yield will will bebe adjusted
adjusted based based on you
(e) ItIt isIsyour
(e) yourresponsibility
responsibility to to accurately
accurately report report all all units where
other units where such suchproduction
production methods methods were werE
Information that
information that is usedused to to determine
determine your your approved
approved carried out out oror toto the
the applicable
applicable county county transitiona
transitions
yield. You
yield. You must must certify
certify to the accuracy
to the accuracy of this this yield
yield for the the production
production methods methods if other other sect suet
information on your production report. units do not not exist.
exist. You You mustmustnotify notifyus usofofchanges
change!
(1) If you you dodo not not have
have written
written verifiable
verifiable recordsrecords to in youryour production
production methods methods by by thetheacreage
acteagE
support the information
Information on your production report, reporting
reporting date. date. If you fail fall toto notify
notify us, us, inin additior
additlor
you will receive
receive an assigned
assigned yield yield in in accordance
accordance reduction of
to the reduction of your
yourapproved
approved yield describec
yield describes
with section 4(d)(1) and 77 CFR part 400, subpart
with herein, you will will be be considered
considered to to havehave
G for those crop years for which you do not have misreported information
misreported information and and you you will will be
be subject
subject Ic tc
such records: the consequences in section 7(g). 7(g). For For example
example
(2) If you misreport any material information
you misreport Information used to non-Irrigated unit, your
for a non-Irrigated your yieldyield is Is based
based upon upon
determine your approved yield: acreage of the crop that that is is watered
watered once once prior tc
(i) WeWe will will correct
correct the the unit unit structure,
structure, if if planting, and
planting, and the crop is
the crop Is not
not watered
watered prior prior Ic tc
necessary; and planting for for the current
current crop crop year.
year. Your Your approved
approved
) (ii)
(il) You
You will will be be subject
subject to to the theprovisions
provisions APH
APH yield yield will will be be reduced
reduced to to an anamountamounl
regarding misreporting
regarding mlsreporting contained
contained in section section consistent with
consistent with the actual actual production
production history history of
7(g), unless
7(g), unless we we correct
correct the theInformation
information your other non-irrigated
non-Irrigated units where the crop has

C 2004
ID 2004 National Crop Insurance Services, Inc. Page9
Page 9 of 26
of26

33
... not been
been watered
watered prior prior to planting
planting or limited
limited to before August 15, you you mustmust submit
submit an anacreage
acreage
the non-Irrigated transitional
the non-irrigated transitionalyield yieldfor
for the
the unit
unit if report for all such such crops
crops on on or orbefore
before the the latest
latest
other
other such unitsunits do not not exist. applicable acreageacreage reporting
reporting date date for for such
such crops.
crops.
Unlessyou
(g) Unless youmeet
meetthe thedouble
doublecropping
cropping requirements
requirements (3) Notwithstanding the provisions
(3) provisions In in sections
sections 7(a)(1)
7(a){1)
contained In
contained in section
section 18{f){4),
16(t)(4),ifif youyou elect
elect to to plant a and (2):
) second crop on acreage acreage where where the first insured
insured crop (I) IfIf the
(i) the Special
Special Provisions
Provisions designate
designate separate
separate
was prevented from being planted, planted, you will receive a planting periods for a crop, crop, you you must
must submit
submit
yield equal to 60 percent of of the approved yield for the acreage report
an acreage report for for each
each planting
planting periodperiod
first insured crop crop to calculate
calculate your averageaverage yield for on or
on or before
before the theacreage
acreage reporting
reporting date date
subsequent crop crop years
years {Not(Not applicable
applicable to to crops
crops If if the contained
contained In in the Special
Special Provisions
Provisions for the
APH is not
APH not the
the basis
basis for for the
the insurance
Insurance guarantee).
guarantee). If planting period; and
the unit
unit contains both prevented planting and planted (II) IfIf planting of
(ii) of the insured
Insured crop crop continues after
acreage of the same crop, the yield for the unit will be planting date or
the final planting or you
you are are prevented
prevented
determined by: from planting during the late late planting
planting period,
period,
Multiplying the
(1) Multiplying number of
the number of insured
Insured prevented
prevented the acreage
acreage reporting
reporting date date wtn will be the the later
planting
planting acres acres by by 60 percent
percent of the the approved
approved of:
Insured crop;
yield for the first insured (A) The acreage reporting date date contained
contained In in
(2) Adding
(2) Adding the totals from
the totals from section
section 4(g)(1)
4(g)(1) to to thethe the Special Provisions;
amount of appraised or harvested production production for (B) The date determined in In accordance
accordance with
of the insured planted acreage; and
all of sections 7(a)(1) or (2); or
(3) Dividing
Dividing the totals section 4(g)(2}
totals in section 4(g)(2) by the total total (C) Five
(C) FIVe (5)(5) days after the end end of the late
of the late
number of
number of acres in the unit. planting period
planting period for for the insured
Insured crop, crop, if
{h) The
(h) Theapplicable
applicable premium
premium rate, rate, oror formula
formula to to calculate
calculate applicable.
the premium rate, rate, and transitional
transitional yieldyield will be thosethose (b) IfIfyou
youdo donotnothave have aashare
share in In an
an insured
Insured crop crop in in the
contained in the actuarial
contained actuarial documents except, In
documents except, the
in the county for the crop crop year, you must must submit
submit an an acreage
acreage
case of high high risk
risk land,
land, aa written
written agreement
agreement may may be report
report on on or or before
before the the acreage
acreage reporting
reporting dale, date, so
requested
requested to to change
change such such transitional
transitional yield yield or or indicating.
Indicating.
premium rate. (c) Your
(c) Your acreage
acreage report report mustmust Include
Include the the following
following
5. Contract Changes
5, Information, ifIf applicable:
information,
(a) We may may change
change the terms of of your
your coverage
coverage under under (1) All acreage
(1) acreage of the the crop
crop in In the
thecounty
county(Insurable
(Insurable
this policy from year to year. and notnot insurable)
Insurable) in which you have a share;
(b)
(b) Any changes in In policy provisions, premium rates, and (2) Your share at the time coverage begins;
(2) Your
program
program dates dates (except
(except as as allowed herein or
allowed herein or as as (3)
{3) The practice;
specified
specified In in section
section 4) 4) can
can be viewed
viewed on the the RMA RMA (4)
(4) The type; and
website
website at http;//www.rma.usda.gov/
hHD;/(Www.rma.ussfa.QOV/ or or a successor
successor (5)
(5) The date the insured crop was planted.
) website not
website later than
not later than the the contract
contract change
change date date Regarding the
(d) Regarding the ability torevise
ability to revise an an acreage
acreage reportreport you
contained in In the Crop Provisions. We may only revise have submitted to us:
this information
this Information after after the the contract
contract change
change date date to (1) For planted
(1) planted acreage,
acreage, you cannot revise
you cannot revise any any
correct clear errors
correct errors (For example,
example, the the price for corn com information pertaining to
Information pertaining to the
the planted
planted acreage
acreage
was announced at $25.00 per bushel instead of $2.50 after the
after the acreage
acreage reporting
reporting date date without
without our our
per bushel or or the final planting date should be May 1 100 consent (Consent may only be provided provided when when no
but thethe final
final planting
planting date date in In the
the Special
Special Provisions
Provisions cause
cause of loss loss has
has occurred;
occurred; our our appraisal
appraisal has has
states August 10). determined that
determined Insured crop will produce
that the insured produce at
(c) After the contract change date, all changes specified
(c) specified least 90 percent
percent of the yield
of the yield used
used to todetermine
determine
In section
in section 5(b)5(b) will
will also
also be be available
available uponupon request
request your Final
your Fmal Guarantee
Guarantee for for thethe unit ('mctuding
unit(including
from your crop insurance agent. You will be provided, provided, reported and unreported
unreported acreage), except except when when
in writing,
writing, a copy copy of of thethe changes
changes to to thethe Basic
Basic there are are unreported
unreported units (see section section 7(f));
7(f)); the
Provisions
Provisions and and Crop
Crop Provisions
Provisionsand andaa copy
copy of the the information
Information on on the
the acreage
acreage report report is Is clearly
clearly
Provisions not
Special Provisions not later than 30 days
later than days prior to the transposed;
transposed; you provide adequate evidence evidence that
cancellation date for the insured
cancellation Insured crop. Acceptance of we or or someone
someone from USDA USDA have have committed
committed an
the changes
the changes will win bebe conclusively
conclusively presumed
presumed In in thethe regarding the information
error regarding lnfonnation on your your acreage
acreage
absence of notice from you to change or cancel your report; or or ifIf expressly permitted by the policy);
insurance coverage. (2) For prevented
(2) prevented planting acreage acreage reported reported on the
6. [Reserved] acreage
acreage report, report, you you cannotcannot revise revise any any
Report of
7. Report of Acreage Information pertaining
information pertaining to the the prevented
prevented planting planting
(a) AnAnannual
annualacreage
acreagereport
report must must bebe submitted
submitted to us on acreage after the report Is is initially
lnltlafty submitted to us
form for each
our form Insured crop
each insured crop in the county
county on or or without our
without our consent
consent (Consent
(Consent may may only only be be
before
before the acreage acreage reporting
reporting date date contained
contained in the the provided when information on the acreage acreage report
Special Provisions, except as follows: clearly transposed
is clearly transposed or or youyou provide
provide adequate
adequate
(1) If If you
you insure
Insure multiple crops with us that have final evidence that we
evidence we or someone
someone from from USDAUSDA have
planting
planting datesdates on on or after after August
August 15 15 butbut before
before committed an error regarding the information
committed information on
December
December 31, 31, youyou must must submit
submit an an acreage
acreage your acreage report);
report
report for all such such crops on or before before thethe latest
latest {3) For prevented
(3) prevented planting
planting acreage
acreage not reported reported on
applicable acreage reporting date for such crops; the acreage report,
the acreage report, you you cannot
cannot revise revise your your
and acreage report
acreage report to to addadd prevented
prevented planting planting
(2) If you insure multiple crops with us that have final
(2) acreage;
planting dates
planting dates on on or afterafter December
December 31 31 but but

C 2004 National Crop Insurance Services, Inc. Page10of26


Page 10 of 26

34
. .,.
(4) IfIfyou
yourequest
requestan anacreage
acreage measurement
measurement prior to (2) InInaddition
additiontotothe theotherotheradjustments
adjustments specifiedspecified iih
the acreage
the acreage reporting reporting date date and and submit submit section 7(g)(1), ifIf you you misreport
misreport any any informatioi
lnformatiot
documentation of
documentation of such request and an acreage acreage that results
results in liability
liabl&ty greater than than 11 0.0 percen
110.0 carter
report
report with estimated
estimated acreage acreage by the the acreage
acreage lower than 90.0 percent of the
or lower the actual fiabilit
actual liabilit
reporting
reportingdate, date, you you must must provide provide the the determined
determined for for thethe unit,
unit,any
anyindemnity,
Indemnity,prevented
preventet
measurement
measurement to us, we will revise revise youryour acreage
acreage payment, or
planting payment, or replanting
replanting paymentpayment will will bdbt
report
report ifif there is Is aa discrepancy, and no indemnity, Indemnity, based
based on the the amount
amount of of liability
liability determined
detennlned ii11
prevented planting
prevented planting payment
payment or replant replant payment
payment accordance with
accordance with section
section 7(g){1
7(g)(1)(i) (II) and
)(I) or (ii) and wi
will bebe paid
paid until
until the the acreage
acreage measurement
measurement has be reduced
reduced in In ananamount
amountproportionate
proportionatewith with thetht
been
been received
received by by us
us (Failure
(Failure to provide provide the the amount of
amount of liability
liabilitythat thatisIsmisreported
misreportedinInexcess excessdo o
measurement to us will result in In the application of the
the tolerances
tolerances stated stated In in this
this section
section (Fo (Fo
section 7(g)
section 7(g) if the the estimated
estimated acreage acreage Is not
is not example, ifIf the actual actual liability
liability isIs determined
determined to b( bt
estimated acreage under this section
correct and estimated $100.00, but you reported reported liability
liability ofof $120.00, an~ an'
will nono longer
longer be be accepted
accepted for for any
any subsequent
subsequent Indemnity, prevented
indemnity, prevented planting planting payment payment o
acreage report); replanting payment
replanting paymentwill will be reduced by
be reduced by 10e10.(
(5) IfIfthere
thereisIsan anirreconcilable
Irreconcilabledifference
difference between: percent ($120.00 I/ $100.00
percent ($120.00 $100.00 = 1.20, 1.20, andand 1.20 1.20 -
(I) The
(i) acreage measured
The acreage measuredbybyFSA FSA or or a a 1.10 =
1.10 = 0.10)).
0.10}).
measuring
measuring service service and and our our on-farm
on-farm (h) If we we discover
discover you you have haveincorrectly
Incorrectly reported
reported am anl
measurement, our on-farm measurement will Information
Information on the acreage report for for any
any cropcrop year
year
be used; or you
you may may be be required
required totoprovide providedocumentation
documentation Irlr
(U}
(ii) The The acreage
acreage measured
measured by by aa measuring
measuring subsequent
subsequent crop crop years substantiating
substantiating your report report o
service, other
service, other than than our our on-farmon-farm acreage
acreage for for those
those crop crop years,
years, including,
including, but but no
measurement,
measurement, and andFSA, FSA, the the FSA FSA limited to, an an acreage
acreage measurement
measurement service at you
measurement will be used; and own expense.
expense. If If the
the correction
correction of ofanyanymisreporter
misreportec
(6) IfIf the
(6) the acreage
acreage report report hashas been been revised
revised in In information would
information would affect affect an an indemnity,
Indemnity, preventecpreventec
accordance with
accordance with section
section 7(d)(1),
7(d)(1), (2), (4), or (5),
(2), (4), planting payment
payment or replant payment that was paid paid ir it
the information
Information on on the initial
initial acreage
acreage report will a prior
prior crop
crop year,
year, suchsuch claim claim will
will be
beadjusted
adjustedand and yor.
yol
not be be considered
considered misreported
mlsreported for the purposes purposes will be required
required to repay any overpaid amounts.
of section 7(g). (I) Errors
Errors in in reporting
reporting units units may may be be corrected
corrected by byus usat at the
thE
(e) We
(e) We may may elect elect to to determine
determine all all premiums
premiums and and time of of adjusting
adjusting a loss loss to to reduce
reduce our our liability
liability and
and tc tc
indemnities based
indemnities based on information you
on the information you submit on conform to to applicable
applicable unit division guidelines.
the acreage report or upon the the factual
factual circumstances
circumstances Premium and Administrative Fees
8. Annual Premium
we determine
we determine to to have have existed,
existed, subjectsubject to to thethe (a) The annual annual premium
premium is earned eamed and and payable
payable at the
at the
provisions contained In in section 7(g). time coverage
time coverage begins. begins. You You will
will be billedbilled for for thethe
(f) IfIf you do
(f) do notnot submit an acreage report by the acreage administrative fee not earlier
premium and administrative earlier thanthan the the
reporting date, or If if you fall to report all units, we may premium
premium bWing billing date date specified
specified in in thethe Specie
Specia
elect to determine by unit the insurable crop acreage, Provisions.
share,
share, type and practice, practice, or to deny liability on such such administrative fees
(b) Premium or administrative fees owed by you you willwill bebE
units. If If we deny
deny liability
JiabUity for the unreported units, your offset
offset from from an an indemnity
Indemnity ororprevented prevented plantinc plantin~
share of of any production from the unreported units will payment due
payment due you in In accordance with with section 3(e). 3(e).
allocated, for loss
be allocated, loss purposes only, as production to (c) Your annual premium amount is Is determined by:
count to the reportedreported units in In proportion to the liability (1) Multiplying
Multiplying the the Approved
Approved Yield Yield times times the the
each reported
on each reported unit. However,However, such production production will Coverage Level, times the Base
Coverage Base Premium
Premium Rate Rate,
not be be allocated
allocated to to prevented
prevented planting
planting acreage
acreage or and
and timestimes the the Base Base PricePrice as as defined
defined in in the
the
otherwise affect any prevented planting payment. Commodity Exchange Endorsement;
(g) You
(g) You must must provide
provide all requiredrequired reports
reports and and you you areare Multiplying the
(2) Multiplying Approved Yield
the Approved Yield times times the the
responsible for
responsible for the accuracy of all
the accuracy all information
Information Coverage Level, times the CRC CRC Base Base Rate,
Rate, and
contained
contained In those reports.
in those reports. You You shouldshould verify
verify thethe times the CRC Low Price Price Factor
Factor specified
specified in the
information
information on on all
all suchsuch reports
reports priorprior to to submitting
submitting actuarial documents;
them to us. Multiplying the
(3) Multiplying Approved Yield
the Approved Yield times times the the
(1} ifIfyou
(1) yousubmit
submitinformation
information on any report report thatthat is Coverage
Coverage Level, Level, times limes the Base Base Premium
Premium Rate, Rate,
different than
different than what
what is determined
determined to be be correct
correct and times the CRC High Price Factor Factor specified
specified in
and such Information results in: In: the actuarial documents;
(I) AAlower
(I) lowerliability
liability thanthan the theactual
actual liability
liability (4) Adding sections 8(c)(1), (2), and (3);
determined,
determined, the the Final Guarantee
Guarantee on on the unit (5) Multiplying the result of section
(5) section 8(c)(4)
8(c)(4) times
times the
will be reduced to an amount consistent with Acres
Acres Insured,
insured, times times your Share at the
your Share the time
time
the reported Information
the reported information (In (In the event the
the event the coverage begins,
coverage begins, and as applicable, applicable, times times any any
Insurable
insurable acreage
acreage Is under-reported for any
is under-reported CRC
CRC Unit Unit Option
Option Factor; Factor; YieldY~eldAdjustment
Adjustment
unit, all production
unit, production or or value
value from from Insurable
Insurable Surcharge; and/or and/or CRC Enterprise Option Factor, Factor;
acreage in
acreage that unit
in that unit will will be beconsidered
considered (6) Multiplying the result result of section 8(c)(5) 8(c)(5) times the
production
production or or value
value to count
count in In determining
determining applicable producer
applicable producer subsidy subsidy percentage
percentage to to
the Indemnity);
indemnity); or calculate the appropriate amount of subsidy. subsidy. The
(II) AA higher
(ii) higher liability
liability than
than the the actual
actual liability
liability producer subsidy percentage percentage is based upon upon the
determined, the information contained
determined, contained In in the coverage
coverage level level and is contained contained in in the
the actuarial
actuarial
) acreage
acreage report report will will be be revised to to be be documents; and
consistent with the correct Information. information. (7) Subtracting section 8(c)(6)
(7) B(c)(6) from section 8(c)(5). B(c)(5).

C 2004 National Crop Insurance Services, Inc.


(9 Page 11 of 26

35
- (d) The information
information needed needed to determine determine the the premium
premium grain sorghum
if grain sorghum had already already been been planted
planted ano ano
rate andand any premiumpremium adjustmentadjustment percentages that that harvested on the same
harvested same acreageacreage during
during the the crop
crop
may apply are are contained
contained in In the
theactuarial
actuarial documents
documents year);
year):
or an approved written written agreement.
agreement. (5) That
(5) That isis planted for for the
the development
developmentor orproduction
production
(e) inInaddition
additionto tothe
the premium
premium charged: charged: of hybrid
hybrid seed seed or orfor forexperimental
experimentalpurposes, purposes,
(1) You,You,unless
unless otherwise
otherwise authorized authorized In in 77 CFR part part pennitted by the Crop Provisions; or
unless permitted
400, mustmust pay pay an an administrative
administrative fee each each crop crop (6) ThatThat Is Is used
used solely
solely for forwildlife
wildlife protection
protection or or
year of $30 per per crop per per county. management. If the the lease
lease states
statesthat thatspecific
specific
(2) TheTheadministrative
administrative fee feemustmust be be paid
paid no no later
later than acreage
acreage must must remain
remain unharvested,
unharvested, only only that
that
the time that premium is due. acreage is Is uninsurable. If If the
the lease specifies that
leasespecifies
(3) Payment
Payment of of an an administrative
administrative fee fee will
will not
not be be a
a percentage
percentage of of the the crop crop must must be be leftleft
required
required ifif you you file file a bona bona fide fide zero
zero acreage
acreage unharvested, your share will be reduced
unharvested. reduced by by such
such
report on or before the acreage reporting reporting date dale for percentage.
the crop.
crop. If you falsely file file a zero acreage
acreage report,
report, Although certain
(c) Although certain policy documents may
pollcy documents may state that that a
you may be be subject
subject to to criminal and and administrative
administrative crop type, class, variety or or practice
practice is Is not
not insurable,
Insurable, it It
sanctions. does not mean mean all all other
other crop types, classes,
crop types, classes, varieties
varieties
(4) The
(4) The administrative
administrative fee fee willwill be waived if
be waived If you
you or practices
practices are insurable..
Insurable. To To be insurable
insurable the crop crop
request itIt and:
request type, class,
type, class, variety
variety or practice must
or practice must meet meet all all the
the
(i)
(I) You qualify as a limited resource farmer; farmer, or conditions in In this section.
(II) You were Insured
(ii) insured prior to to the
the 2005
2005 crop year 10. Insurable
Insurable Acreage
Acreage
or for
or for the the 2005 2005 crop crop year year and and your your Acreage planted
(a) Acreage planted to to the
the insured
Insured crop crop in In which
which you you
administrative
administrative fee feewas was waived
waived for for oneone or or have
have aa share
share is Is insurable except acreage:
more of those
more those crop crop years
years because
because you you (1) Thal
That has hasnot notbeenbeenplantedplanted and andharvested
harvested or or
qualified
qualified as as a limited
limited resource
resource farmer under under insured (including
insured (Including Insured insured acreageacreage that that was was
a policy
policy definition
definition previously
previously In in effect,
effect, and and prevented
prevented from from being
being planted)
planted) In in at least one of
you remain qualified
you remain qualified as aa limited limited resource
resource the three
the three previous
previous crop crop years unless unless you you cancan
farmer under the definition definition thatthat was in In effect show that:
at thethe time time the theadministrative
administrative fee fee was was Suchacreage
(I) Such acreagewas wasnot notplanted:
planted:
waived. (A) In at least least two
two of of the
the previous
previous three three crop
Failureto
(5) Failure topay paythe theadministrative
administrative fees when when due years to comply
years comply with with any other other USDA USDA
may make make you you ineligible
ineligible for for certain
certain other USDA program;
benefits. Because of
(B) Because
(B) of crop rotation (e.g., corn,
crop rotation com,
(f) IfIfthe
(f) theamountamountofofpremium premium(gross (grosspremium
premium less less soybeans,
soybeans, alfalfa; alfalfa; and and the the alfalfaalfalfa
premium subsidy
premium subsidypaid paidon on youryour behalf
behalf by by FCIC)
FCIC) and and remained
remained for for four four years before before the the
administrative fee
administrative feeyou you are required to
are required to pay
pay for any any acreage was
acreage was planted
planted to to corn
com again);
again); or
acreage
acreage exceeds exceeds the the liability
liability for for the the acreage,
acreage, (C) Because a perennial perennial tree, tree, vine,
vine, or or bush
bush
coverage for
coverage for those
those acres acres will will not be be provided
provided (no (no crop was grown on on the acreage;
premium or
premium administrative fee
or administrative feewiUwillbe be due
due and and no no (il) The Crop
(II) Crop Provisions
Provisions or a written written agreement
agreement
indemnity
Indemnity will will be
be paid
paid for for such
such acreage).
acreage). specifically allow
specifically Insurance for
allow insurance for such such
9. Insured
InsuredCrop Crop acreage; or
(a) TheTheinsured
insuredcrop cropwill will bebethat thatshown
shown on on your
your accepted
accepted (iii)
(Iii) Such
Suchacreage
acreageconstitutes
constitutesfive five percent
percent or or less
less
application and as specified in the Crop Provisions
application Provisions or of the Insured
insured planted acreage acreage in In the
the unit;
unit;
Special
Special Provisions
Provisions and and must must be grown grown on on insurable
insurable Thathas
(2) That hasbeen beenstrip-mined,
strip-mined,unless unlessotherwise otherwise
acreage. approved by
approved written agreement,
by written agreement, or unless unless an an
(b) AAcropcropwhichwhichwillwill NOT
NOTbe beinsured
Insuredwill willinclude,
include, but but will
will agricultural
agricultural commodity
commodity other other than
than aa cover, hay, or
not be limited
limited to, any crop: forage crop
forage crop (except
(except corn com silage),
silage), has has been been
(1) That is is not grown
grown on on planted acreage (except for harvested from from the acreage for for atat least
least five five crop
crop
the purposes of prevented planting coverage), or years after strip·mlned land was reclaimed;
after the strip-mined reclaimed;
that Is
that is aa type,
type, classclass or or variety
variety or or where
where the (3) ForForwhich
whichthe theactuarial
actuarialdocuments
documentsdo donot notprovide
provide
conditions under which which the crop is planted
the crop planted are are the
the information
Information necessary
necessary to to determine
determine the the
not
not generally
generally recognizedrecognizedfor for thethe area
area (For (For premium rate,
premium insurance is
unless Insurance
rate, unless allowed by
is allowed by a
example,
example, where where agricultural
agricultural experts experts determine
determine written agreement;
written
that planting
that planting a non-irrigated
non-Irrigated com corn crop crop after
after a (4) OnOnwhichwhichthe theinsured
insured crop crop is Is damaged
damaged and and itIt is
Is
failed
failed small grain crop
small grain crop on on thethe same
same acreage in In practical to
practical replant the
to replant Insured crop,
the insured crop, but but the
the
the same crop
the same crop yearyear is Is not
notappropriate
appropriate for for the
the Insured crop Is
insured is not replanted;
area); (5 ) That
(5) Thatisisinterplanted,
lnterplanted, unless unless allowed
allowed by by the the Crop
Crop
(2) ForFor which which the the information
Information necessary necessary for for Provisions;
Insurance
Insurance (premium(premium rate, rate, etc.) is Is not
not Included
included in In (6) That
(6) That is Is otherwise
otherwise restrictedrestricted by by the the Crop Crop
the actuarial
actuarial documents,
documents, unless unless suchsuch information
Information Provisions or Special Provisions;
is provided by a written written agreement;
agreement; (7)) That
(7 That IsIsplanted
planted in In any
any mannermanner other other than than as as
(3) That
That is Is aa volunteer
volunteer crop; specified in In the policy provisions for the crop;
(4) Planted following the
Planted following the samesame crop crop on on the same same (8) OfOfaasecond
secondcrop, crop,ififyouyouelect electnotnotto insure such
to insure
acreage and
acreage and the first planting of
first planting of the cropcrop has has acreage when
acreage when an indemnity for
an indemnity for a firstfirst insured
Insured
been
been harvested
harvested in in the
the same same crop crop yearyear unless
unless crop may be be subject
subject to to reduction
reduction in in accordance
accordance
specifically permitted by
specifically permitted by thethe Crop Provisions
Provisions or with
with the provisions
provisions of of section
section 16 and you you intend
intend
the Special Provisions
Provisions (For (For example, the second second collect an indemnity
to collect Indemnity paymentpayment that that Is equal to
is equal
planting of grain sorghum would
grain sorghum would not be Insurable 100 percent
100 percent of the the insurable
insurable loss loss for for the first
the first

tO 2004 National Crop


2004 National Crop Insurance
Insurance Services, Inc. 12 of
Page 12 of26
26

36
Insured
Insured crop crop acreage.
acreage. This This election
election must must be be the reasonable
reasonable expectation
expectation of ofreceiving
recetvmgadequate adequate
made on
made on a first first insured
Insured crop crop unitunit basis.
basis. For For water at the time
at the time coverage
coverage begins,
begins,to tocarry
carryout outaa gooc
example,
example, if the first insured ctop crop unit contains 40 irrigation practice. If you knew or or hadhad reason
reason to knov. knox
planted
planted acres acresthat that may may be be subject
subject to to an an that your
that your water
water may may be bereduced
reducedbefore beforecoveragecoverage
indemnity reduction,
reduction, then then no second crop can be begins, no no reasonable expectation exists.
insured
Insured on any of the 40 acres. In this case: (c) Notwithstanding
(c) Notwithstanding the the provisions
provisions in in section 9{b)(2), ri
section 9(b)(2),
(i) If
(i) If the
the first
first insured
insured crop is is insured
Insured under under this acreage is is irrigated
Irrigated and and wewe do do not provide aa premium
notprovide premlurr
policy, you must provide written notice to us rate for for an
an irrigated
irrigated practice,
practice, you you may mayeither either report
repon
of your
your election
election not to insure Insure acreage
acreage of a and insure the the irrigated
irrigated acreage
acreage as "non-irrigated.~ of
as 'non-irrigated," ot
second crop at the time the first insured Insured crop report the irrigated
report Irrigated acreage as not insured. Insured.
acreage
acreage Is is released
released by by us {if (if no acreage
acreage in In (d) We may restrict restrict the amount amount of of acreage
acreage that that we we will
wil
the first insured
the Insured crop crop unit is Is released,
released, this this insure
Insure to the amount
to the amount allowedallowed under under any anyacreage
acreage
election must be made by
election by the earlier
earlier of the limitation program
limitation program established
established by by thethe USDA USDA If we
if we
acreage reporting date
acreage reporting date for the second second crop crop notify you of of that
that restriction
restriction prior
prfor to to the
the sales
sales closing
closing
or
or when you sign the claim for indemnity Indemnity for date.
the first insured
Insured crop) crop) or, or, if the first insured
the first Insured Share Insured
11. Share Insured
crop
crop is Is insured
Insured under under the the Group Group Risk Risk (a) Insurance
Insurancewill will attach
attach onlyonly toto the
theshare
share of ofthethe person
person
Protection
Protection Plan Plan of Insurance (7
of Insurance (7 CFR
CFR part part appfteation and will
completing the application wUI not not extend
extend to to any
any
407), this election
407), election must be made before the other person
person havinghaving a share share In in the
the crop crop unless
unless the the
second
second crop crop insured
insured under under this this policy
policy is Is application clearly states that:
planted,
planted,and and ifif you
you fail fail toto provide
provide such such (1) The insurance
insurance Is is requested for for an an entity
entity such
such as
notice,
notice, the second crop
the second acreage will
crop acreage will bebe a partnership or a joint venture; or
Insured in
insured In accordance
accordance with with the the applicable
applicable (2) You as as landlord will insure insure youryourtenant's
tenanrs share, share, or
policy provisions
policy provisions and and you you must repay repay any you as tenant will insure insure youryour landlord's
landlord's share. share. In in
overpaid Indemnity
indemnity for the the first Insured
insured crop; this event,
this event, you you mustmust provide
provide evidenceevidence of the the
(ii)
(li) In the the event
event a a second
second crop crop is is planted
planted and and other party's approvalapproval (lease,
(lease, power power of of attorney,
attorney,
insured
insured with with aa different
different insurance
Insurance provider,
provider, etc.). Such evidence
evidence will be retained retained by us. us. Y