Facts

Farmers Insurance assessed a "service charge" on its policyholders who purchased automobile policies and chose to pay a six month premium on a monthly basis. This charge was in addition to the premium stated in the policy.

PLAINTIFF'S CONTENTIONS:
Assessing a charge in addition to the amount set for in the insurance contract is a breach of contract. Further, failing to specify all of the premium in the policy is a misdemeanor and a violation of Insurance Code Sect. 381. The charge constituted a premium.

DEFENDANT'S CONTENTIONS:
The charge did not constitute a premium, therefore it did not need to be stated in the insurance policy. Further, plaintiff and the class members were properly assessed the charge for the service of paying the premium on a monthly basis.

Settlement Discussions

The parties engaged in a one day mediation.

Result

Summary judgment was granted in favor of the class. Farmers' cross-motion for summary judgment was denied. Pre-judgement interest was awarded to the plaintiff and class on Oct. 27, 2006. Judgment of $115,556,827, plus prejudgment interest of $21,211,801.