Toyota Town, Inc. - Page 5




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          * * * BETWEEN THE DEALER [i.e., each petitioner] AND YOU [the               
          vehicle purchaser]” and is “NOT AN INSURANCE POLICY".  An EWA               
          further provides that “Dealer in regards to this contract is                
          acting as a Principal and not as an Agent on behalf of any                  
          insurer.”  An EWA also states:  “Issuing Dealer has insurance               
          with Western General Insurance Co., * * * – a Licensed Insurer.”            
          Finally, an EWA provides:                                                   
                    NOTICE: If a Breakdown Claim has been filed with                  
               the Issuing Dealer who has failed to pay the claim                     
               within sixty (60) days after proof of loss has been                    
               filed with the Issuing Dealer, you the Service Contract                
               Purchaser shall also be entitled to make a Direct Claim                
               against the Issuing Dealer’s insurance company, Western                
               General Insurance Company * * *                                        
               During the years in issue, each petitioner sold EWA’s                  
          pursuant to an agreement (Western General Agreement) with the               
          Western General Insurance Co. of Encino, California (Western                
          General), under which Western General assumed petitioners’                  
          liabilities under the EWA’s in exchange for a single lump-sum               
          payment with respect to each EWA, referred to in the agreements             
          as an “insurance premium and policy fee”.  Under the Western                
          General Agreement, Western General agreed “to issue and maintain            
          individual insurance policy coverage at DEALER’S [i.e., each                
          petitioner’s] expense which shall insure the DEALER for covered             
          costs of repairs and/or replacements incurred by the DEALER and             
          covered under the * * * EWA”.  Each petitioner agreed to sell               
          EWA’s only through the forms provided by Western General and to             






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Last modified: May 25, 2011