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Insurance Co., State Farm Fire & Casualty Co., and State Farm
General Insurance Co.
Petitioner conducted his business as the Warren L. Baker
Insurance Agency (the agency). He sold policies exclusively for
State Farm. When he began his relationship with State Farm, he
was not assigned customers. Instead, he developed a customer
base. He selected the location of his office with State Farm’s
approval. He also hired and paid employees. He was responsible
for paying the expenses of an office such as rent, utilities,
telephones, and other equipment. He was obligated to establish a
trust fund into which he deposited premiums collected on behalf
of State Farm.
Petitioner entered into a series of contracts with State
Farm known as agent’s agreements. The agent’s agreement at issue
was executed on March 1, 1977. While the agreement contains
approximately 6 pages, there are numerous attachments including
schedules of payments, amendments, addenda, and memoranda that
total 61 pages. The agreement was prepared by State Farm.
Petitioner did not have the ability to change the terms of the
agreement, but he had the option to refuse a new or revised
agreement.
The preamble to the agreement reads, in part, as follows:
“The Companies believe that agents operating as independent
contractors are best able to provide the creative selling,
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Last modified: May 25, 2011