Jon Talbot Cox and LauraJean Cox v. CSAA Insurance Exchange; CSAA Fire and Casualty Insurance Company d/b/a AAA Fire and Casualty Insurance Company; AAA Club Alliance, Inc. d/b/a AAA Oklahoma; and ACA Club Insurance Agency, Inc.

IN THE DISTRICT COURT OF OKLAHOMA COUNTY STATE OF OKLAHOMA (1) JON TALBOT COX and (2) LAURAJEAN COX, Plaintiffs, v. (1) CSAA INSURANCE EXCHANGE; (2) CSAA FIRE AND CASUALTY INSURANCE COMPANY d/b/a AAA FIRE AND CASUALTY INSURANCE COMPANY; (3) AAA CLUB ALLIANCE, INC. d/b/a AAA OKLAHOMA; and (4) ACA CLUB INSURANCE AGENCY, INC., Defendants. FILED IN DISTRICT COURT OKLAHOMA COUNTY FEB 27 2026 RICK WARREN COURT CLERK Case No.: 109-2026-1515 Jury Trial Demanded Attorney Lien Claimed PETITION COME NOW Plaintiffs Jon Talbot Cox and LauraJean Cox ("Plaintiffs") and for their claims against Defendants CSAA Insurance Exchange ("CSAA"), CSAA Fire and Casualty Insurance Company d/b/a AAA Fire and Casualty Insurance Company ("AAAFCIC"), AAA Club Alliance, Inc. d/b/a AAA Oklahoma ("AAA OKLA"), and ACA Club Insurance Agency, Inc. ("ACA Agency"), allege and state as follows: I. PARTIES 1. Plaintiffs are residents of Oklahoma City, located in Oklahoma County, Oklahoma. 2. Defendant CSAA is an unincorporated association under California law and is a reciprocal insurance exchange. As a reciprocal inter-insurance exchange, Defendant CSAA is owned by its policyholders/members and is a citizen of every state in which it has policyholders, which includes Oklahoma. CSAA may be served through its registered service agent, CT Corporation System, 120 N. Robinson, 735 National Building, Oklahoma City, OK 73102. 3. Defendant AAAFCIC is an Indiana corporation with its principal place of business in the State of California. AAAFCIC may be served through its registered service agent, The Corporation Company, 120 N. Robinson, Suite 735, Oklahoma City, OK 73102. 4. Defendants CSAA and AAAFCIC are all part of a reciprocal inter-insurance exchange in which they pool their business among other insureds and “exchange policies” within the CSAA Insurance Group of companies and share all premiums, expenses and losses. By and through this inter-insurance exchange, Defendant CSAA directly or through its subsidiaries, issues policies, collects premiums, pays commissions to agents, and handles every aspect of the AAAFCIC property claims handling. 5. AAA Club Alliance, Inc., d/b/a AAA Oklahoma ("AAA OKLA") is a Delaware corporation with its principal place of business in Delaware. In order for homeowners in Oklahoma to purchase insurance for their homes through AAA, each must first become a member of AAA OKLA, which is the trade name for Automobile Club of Oklahoma. AAA OKLA is by definition a local AAA club. Plaintiffs are members of AAA OKLA. That said, AAA OKLA may be vicariously liable for the actions or inactions of its corporate affiliates and partners in this case. AAA OKLA may be served with process through its service agent, Corporation Service Company, 10300 Greenbriar Place, Oklahoma City, OK 73159. 6. Based on information and belief, Defendant CSAA is the parent company of AAA OKLA. Further, CSAA, AAAFCIC, and AAA OKLA all operate and are part of a reciprocal insurance exchange, wherein they pool and partner their businesses under a regime of control such that all of its subsidiaries and affiliated companies can be held liable for bad faith and breach of contract. Reference to CSAA, AAAFCIC and AAA OKLA collectively shall mean "AAA DEFENDANTS." 7. Defendant the ACA Agency is an Oklahoma corporation with its principal place of business in Oklahoma City, Oklahoma. Plaintiffs purchased their homeowner's replacement cost policy of insurance through the offices of the ACA Agency who, at all relevant times, was an agent and/or ostensible agent of the AAA Defendants. The ACA Agency may be served through its registered service agent, Corporation Service Company, 10300 Greenbriar Place, Oklahoma City, OK 73159. 8. Venue is proper in Oklahoma County as a substantial part of the events or commissions giving rise to Plaintiffs’ claims occurred in Oklahoma County, including but not limited to: the delivery of the subject insurance policy; the water leak that damaged Plaintiffs’ property; the claims adjustment; and entry onto Plaintiffs’ property for inspections. See 12 O.S. §§ 137 and 143. II. FACTUAL ALLEGATIONS A. Plaintiffs’ AAA agent represented Plaintiffs’ home lacked pre-existing damage and that the policy would provide the water-damage coverage Plaintiffs requested. 9. In March of 2025, Plaintiffs contacted the ACA Agency to procure a replacement cost coverage policy to insure their home, personal property and other structures. Plaintiffs specifically sought, and ACA Agency represented it procured, a policy endorsement for “Fungi, Wet or Dry Rot, or Bacteria” coverage. Plaintiffs specifically sought out this coverage because of past incidents Mr. Cox’s brother-in-law and family had experienced with mold damage in their home. Plaintiffs wanted to be sure their Policy provided the mold and water damage coverage they needed. The ACA Agency specifically assured them that it did. 10. As part and parcel to procuring the subject homeowner’s replacement cost policy, the ACA Agency represented to Plaintiffs that membership with AAA OKLA was required prior to the issuance of the policy and that such membership provided real benefits and cost savings incentives. Membership with AAA OKLA requires a separate payment of annual dues and an admission fee for new members. AAA personal lines insurance is provided to qualified Auto Club members by the interinsurance exchange, CSAA. 11. In reliance on these representations and having qualified as members (subscribers) with AAA OKLA, Plaintiffs entered into a contract of insurance with the AAA DEFENDANTS to provide coverage for their residence, household contents, and personal property, which is located in Oklahoma County, Oklahoma. 12. The ACA Agency is the first line of underwriting for the AAA Defendants and is required to conduct an inspection of the property. Among other things, the ACA Agency was to independently verify the condition of the Plaintiffs’ property to ensure said property met all of the underwriting requirements. In so doing, the ACA Agency was required to independently verify the condition of the property, accurately take measurements of the dwelling and obtain information pertaining the amenities, construction quality of the dwelling and condition of the property. This necessarily included the condition of the chimney. 13. AAA Defendants further independently established, calculated and set the replacement cost policy limits in the policy. The value and replacement cost, as determined by the ACA Agency, was obtained utilizing the AAA Defendants’ valuation software. The ACA Agency asked general questions about the dwelling, and other than answering the questions that were asked, Plaintiffs had no other input into the amount of coverage independently selected and calculated, by the ACA Agency. 14. Neither the ACA Agency nor the AAA Defendants advised Plaintiffs at any time that their home had any “preexisting” damage or that their home did not meet the underwriting guidelines of the AAA Defendants. Rather, the Plaintiffs became members with AAA OKLA. The ACA Agency procured—and the AAA Defendants issued—a homeowners’ replacement cost policy (Policy No. OKH3236595835) (the “Policy”) to Plaintiffs. 15. Plaintiffs purchased said replacement cost coverage based upon the ACA Agency’s representations that they met all of the underwriting requirements with the AAA Defendants—and representations that the water damage coverage would provide the protection requested. Significantly, the ACA Agency further represented the Policy was for full replacement and there were no preexisting issues with the property that would limit or restrict coverage in the event of either a partial or total loss. Rather, the ACA Agency represented the policy procured for Plaintiffs would provide coverage for full replacement, the dwelling was in good condition, and there were no exclusions, limitations or defects in the dwelling that would in any way limit or exclude coverage. Plaintiffs relied on these representations. B. AAA denied Plaintiffs’ claim on the basis of pre-existing damage and a policy amendment that rendered the water-damage coverage illusory. 16. On or about June 21, 2025, Plaintiffs’ property was severely damaged as the direct result of water damage. 17. Specifically, on that day, Mrs. Cox attempted to power on the wall-mounted television in the living room, but it would not power on. Mr. Cox looked behind the television and noticed the power unit (mounted into the wall) was wet. When he pressed the drywall in the same area, it gave way, crumbling from the saturation. 18. Mr. Cox then removed the television and cut open a section of drywall to investigate further. The damage he found was severe: soaked insulation, rotted wood framing, and microbial growth all present behind the living room wall. This was the first time Plaintiffs had ever discovered—or had reasonable opportunity to discover—the water damage to their home. Mr. Cox quickly taped and sealed the affected area out of primary concern for Mrs. Cox, who was four months pregnant at the time. Two days later, Plaintiffs moved in with Mr. Cox’s family to avoid potential mold exposure. 19. Plaintiffs felt secure in their AAA policy. This was, after all, what homeowners insurance was for. But then Plaintiffs filed a claim. 20. The same day they discovered the damage, Plaintiffs filed a claim with the AAA Defendants (Claim No. 1006-29-5429). 21. The AAA Defendants inspected the loss (via a third-party claims inspection firm) on June 24, 2025. The adjuster conducted the inspection in a hurried and brusque manner. At the conclusion, the adjuster noted his belief that water had entered behind the living room wall from the chimney area. 22. A few days later, Plaintiffs received their denial letter from the AAA Defendants. Therein, the AAA Defendants concluded: (1) the water entered Plaintiffs’ home because of pre-existing “wear and tear” to the home’s chimney, (2) the water damage could not be covered because it was the result of “constant or repeated seepage over a period of 14 days or more” and (3) the television was not covered as there was no physical direct force of wind or hail damage that caused an opening for rain to enter. Integral to the AAA Defendants’ denial letter was the fact Plaintiff had completed brick repairs on the chimney a couple of months ago. 23. Plaintiffs were shocked. The following day, Mr. Cox politely asked the AAA Defendants to reconsider their denial and to escalate the claim for further review to AAA Defendants’ management. Specifically, Mr. Cox noted the water damage was not reasonably visible or discoverable to him (having occurred behind the living room wall) and he reported the damage immediately upon discovering it. This was the exact scenario (hidden damage) that Plaintiffs believed their Policy—including its endorsements—was intended to cover. Indeed, the language in the Policy addresses coverage for water damage where the “condition and resulting damage and unknown to all insureds and hidden within the walls or ceilings or beneath the floors or above the ceilings of a structure.” This provision squarely addressed Plaintiffs’ situation. Mr. Cox also noted that the aforementioned brick repairs were completed on June 3, 2025 as a proactive fix for a small crack, not as any response to a known leak, and no leak was evident at that time. 24. However, on June 27, 2025, the AAA Defendants doubled-down on their denial. Mr. Cox spoke on the phone with AAA Defendant manager Robert Sample, who reiterated the AAA Defendants’ belief that because they believed the leak had existed for more than fourteen (14) days, it was immaterial when or how Plaintiffs discovered the damage. C. Plaintiffs’ AAA agent admitted the “back-doored” policy amendment functionally nullified the water-damage coverage as a tactic for AAA to pay less on claims. 25. The rationale behind the AAA Defendants’ denial was not based on the terms of the copy of the Policy Plaintiffs received at the time they purchased the Policy, but rather on a separate, buried, and obscure endorsement that purported to modify the original Policy’s language. 26. Plaintiffs were frustrated. With a new baby on the way, they did not feel safe in their own home and their insurer was refusing the provide the coverage that had been a comfort to them. Moreover, the AAA Defendants were relying on a policy endorsement that contradicted what Plaintiffs believed their Policy covered (based on conversations with their ACA Agent) and rendered the water damage coverage illusory. 27. Plaintiffs were entitled to rely upon their agent’s statements and representations about the Policy. Yet, at no time did the ACA Agency advise Plaintiffs of any 14-day limitation applicable to water damage claims, nor of any other language modifying the Policy’s stated coverage for water damage hidden behind walls. Had the ACA Agency made such an exclusion known, Plaintiffs would have sought a policy from a different insurance carrier. 28. Mr. Cox accordingly reached out to his ACA Agency agent, Thomas Baste, for help. Baste was shocked to learn of the Policy’s supposed exclusion of any water damage that the AAA Defendants believed had occurred for more than fourteen days. Baste candidly admitted he believed the AAA Defendants’ conduct was a wrongful and intentional effort to pay less on claims. 29. Baste further explained the entire intent of the originally-provided mold/water damage coverage provision is to provide coverage for hidden damages. In essence, he explained how the supposed 14-day limitation had rendered the Policy illusory in this instance because the Policy only “pretended” to offer coverage. Baste no longer had confidence in the actual protection the Policy supposedly offered for water damage claims. Plaintiffs did not receive the coverage they requested and that Baste had promised. 30. Baste himself felt blindsided by the limitation. Baste felt this limitation had been “back-doored” into the Policy to avoid paying valid claims. Baste admitted he was not aware of the AAA Defendants’ 14-day limitation at the time he issued Plaintiffs’ Policy. Instead, he learned of the limitation for the first time when he looked into the circumstances of Plaintiffs’ claim denial. He admitted it was his fault for not realizing this limitation had taken effect and communicating the same to Plaintiffs. 31. Defendants collectively placed Plaintiffs in an impossible situation. First, they attributed water damage to pre-existing “wear and tear” issues—despite the fact that Plaintiffs could not have qualified for their Policy if such issues existed when the Policy issued. And second, Defendants applied a previously-undisclosed policy amendment to render Plaintiffs’ coverage illusory. III. CAUSES OF ACTION COUNT ONE: BREACH OF CONTRACT Plaintiffs fully incorporate each and every allegation in the preceding paragraphs of this Petition as if each were fully iterated verbatim herein, and for their additional claims against the AAA Defendants do hereby and further allege as follows: 32. As members/subscribers with AAA OKLA, Plaintiffs entered into a contract of insurance with the AAA Defendants to provide replacement cost coverage for their dwelling, personal property and other structures. Plaintiffs’ membership and replacement cost homeowners’ policy with the AAA Defendants was in full force and effect at all material times hereto. 33. Plaintiffs provided proper and timely notice to the AAA Defendants of their claims arising from the water loss that damaged the insured property. 34. Plaintiffs have in all material ways, complied with the terms and conditions of the Policy. 35. The AAA Defendants operate as part of reciprocal insurance exchange, therefore, the AAA Defendants each have breached their contractual obligations under the terms and conditions of the insurance contract with Plaintiffs by wrongfully denying the claim and failing to pay Plaintiffs all benefits to which they were entitled under the terms and conditions of the Policy. 36. As a result of the AAA Defendants’ breach of contract and other wrongful conduct, Plaintiffs have sustained financial losses, mental and emotional distress and have been damaged in an amount in excess of $250,000, exclusive of attorneys’ fees, costs and interest. COUNT TWO: BREACH OF THE DUTY OF GOOD FAITH AND FAIR DEALING Plaintiffs fully incorporate each and every allegation in the preceding paragraphs of this Petition as if each were fully iterated verbatim herein, and for their additional claims against the AAA Defendants do hereby and further allege as follows: 37. The AAA Defendants owed a duty to Plaintiffs to deal fairly and in good faith. 38. The AAA Defendants breached their duty to deal fairly and in good faith by engaging in the following acts and omissions: a. failing to pay the full and fair amount for the property damage sustained by Plaintiffs from the water loss on or about June 21 , 2025, in accordance with the terms and conditions of their insurance policy; b. wrongfully denying Plaintiffs’ claim; c. failing to perform a proper investigation in regard to Plaintiffs’ claims made under their Policy, and thereby unfairly and without valid basis denying Plaintiffs’ claim; d. purposefully, wrongfully and repeatedly withholding pertinent benefits, coverages and other provisions due Plaintiffs under the terms and conditions of their insurance policy, in violation of the Unfair Claims Settlement Practices Act, 36 O.S. §§1250.1-1250.16; e. purposefully, wrongfully and repeatedly failing to communicate all coverages and benefits applicable to Plaintiffs’ claims; f. forcing Plaintiffs to retain counsel to recover insurance benefits to which they are entitled under the terms and conditions of the insurance contract; g. failing to perform a fair and objective investigation of Plaintiffs’ damages and engaging in an outcome-oriented investigation on Plaintiffs’ claim designed to deny and/or wrongfully reduce the amount of money paid to Plaintiffs for their claims; h. denying, without proper cause, Plaintiffs’ claim and denying them all benefits they are owed under the insurance contract and pursuant to Oklahoma law; i. having no reasonable basis in their refusal to recognize and pay Plaintiffs their benefits owed under the Policy; j. knowingly and intentionally failing to engage in proper claims handling practices and failing to compensate insured losses covered under the homeowners’ insurance policy; k. engaging in these improper claims practices knowing that their insureds would suffer financial harm; and l. putting their interest in maximizing financial gains and limiting disbursements above the interests of Plaintiffs. 39. The AAA Defendants’ obligations arise from both the express written terms of the Policy and the Oklahoma Insurance Code. The AAA Defendants’ failure to implement and/or follow Oklahoma’s statutory Insurance Code constitutes bad faith. 40. The conduct of the AAA Defendants, as described above, constitutes bad faith and is a material breach of the terms and conditions of the insurance contract between the parties. 41. As a direct result of the AAA Defendants’ bad faith, Plaintiffs’ claim was unnecessarily delayed, inadequately investigated, and wrongly denied. Said actions resulted in additional profits and financial windfall for the AAA Defendants. 42. As a result of the AAA Defendants’ conduct, Plaintiffs have sustained damages, including deprivation of monies rightfully belonging to them, anger, stress, worry, physical and emotional suffering, and have been damaged in an amount in excess of $250,000, exclusive of attorneys’ fees, costs and interest. 43. The AAA Defendants’ conduct was intentional, willful, malicious and in reckless disregard of Plaintiffs’ rights and consistent with an overall collective corporate goal of increasing profits through the systematic reduction or avoidance of claims, and is sufficiently egregious in nature so as to warrant the imposition of punitive damages. 44. Plaintiffs further allege the AAA Defendants enjoyed increased financial benefits and ill-gotten gains as a direct result of the wrongful conduct described above, which resulted in the injury to Plaintiffs. COUNT THREE: NEGLIGENCE PROCUREMENT OF INSURANCE Plaintiffs fully incorporate each and every allegation in the preceding paragraphs of this Petition as if each were fully iterated verbatim herein, and for their additional claims against the ACA Agency and the AAA Defendants do hereby and further allege as follows: 45. Plaintiffs engaged the ACA Agency to procure insurance for their home, personal property and other structures. Plaintiffs informed Defendant ACA Agency of the specific property to be insured and provided all details that the ACA Agency requested about the property and asked the ACA Agency if it could procure (a) a full replacement cost policy for their home, personal property and other structures and (b) a policy that would provide protection in the event Plaintiffs suffered a loss relating to water damage and microbial growth. The ACA Agency advised that Plaintiffs would need to become members with AAA OKLA, and then represented that it could obtain the insurance coverage requested, and agreed to procure such coverage that would provide replacement cost coverage to repair and/or replace the property back to its pre-loss condition in the event of damage and/or loss. 46. At all material times hereto, ACA Agency acted as the agent, employee or ostensible agent of the AAA Defendants, and the AAA Defendants are vicariously liable for their agent’s conduct. 47. Under Oklahoma law, ACA Agency owes a duty to perform its functions as an insurance agent with reasonable care, skill, and diligence. This requires more than merely issuing a policy and includes a duty to: a. accurately inform Plaintiffs of all coverages; b. accurately advise Plaintiffs of the benefits, risks, limitations and exclusions thereof; c. take affirmative actions to ensure the Insured Property met the requirements of the AAA Defendants’ underwriting guidelines and to ensure the Insured Property continued to satisfy those guidelines through the lifetime of the Policy. 48. The ACA Agency violated its duty to act with reasonable care, skill, and diligence in at least the following ways: a. Procuring a policy that did not provide the scope of coverage requested and instead provided illusory coverage; b. Failing to communicate to Plaintiffs material limitations in the Policy that limited coverage; c. Procuring a policy that did not provide coverage to fully restore Plaintiffs’ Insured Property to its pre-loss condition; d. Failing to abide by the AAA Defendants’ underwriting guidelines and procedures, including its training of captive agents; e. Failing to confirm whether the Insured Property (including the chimney) met all underwriting guidelines, particularly with regard to the condition of the property and pre-existing damage; f. Failing to confirm the accuracy of the pre-filled data provided by the AAA Defendants’ replacement cost value software in relation to Plaintiffs’ property, and therefore using that software in a way that was knowingly inaccurate. 49. At no relevant time did the ACA Agency or the AAA Defendants ever advise Plaintiffs that their home had any “wear or tear,” “construction defects” and/or any “pre-existing” damage or that their home did not meet any of the underwriting guidelines of the AAA Defendants. Instead, the ACA Agency procured the Policy based upon the inspection, measurements and valuation calculations it independently calculated. 50. Based upon the ACA Agency’s representations, Plaintiffs became members with AAA OKLA, and the ACA Agency procured and the AAA Defendants issued the replacement cost policy and issued annual membership dues and premium statements, and Plaintiffs paid such statements in a timely manner. At all times material hereto, Plaintiffs have maintained their membership with AAA OKLA and the subject policy remained in full force and effect, and Plaintiffs complied with the terms and conditions of the Policy. 51. Contrary to the ACA Agency’s representations, membership with AAA OKLA did not confer any special benefits or perks, and the significant damage sustained to their property after the water loss was denied purportedly for “preexisting” damage that were never raised by the ACA Agency when the Policy was issued or renewed. Plaintiffs had no means to discover that their property purportedly did not meet the AAA Defendants’ underwriting guidelines until after the water loss and ensuing claim. 52. Plaintiffs trusted and believed the ACA Agency had the requisite insurance agent skills and expertise to properly procure the insurance coverage Plaintiffs requested. 53. At all material times hereto, the ACA Agency acted as the agent, employee or ostensible agent of the AAA Defendants, and the AAA Defendants are vicariously liable for the conduct of the ACA Agency. 54. The ACA Agency owed Plaintiffs a duty to act in good faith and to exercise reasonable care, skill and diligence in the procurement, maintenance and renewal of such insurance for Plaintiffs. 55. The ACA Agency had a duty to perform a reasonable inspection of the property prior to procuring the replacement cost coverage and before each and every renewal of said policy to ensure no changes to the policy were necessary or required. Significantly, the ACA Agency had a duty to disclose to Plaintiffs any purported construction defects and/or preexisting issue affecting their property or if their property did not meet the AAA Defendants’ underwriting guidelines. 56. The ACA Agency breached its duty owed to Plaintiffs by: a. Procuring and renewing the replacement cost coverage and a water-damage coverage endorsement that was in reality illusory; b. Admittedly failing to advise Plaintiffs of pertinent provisions of the Policy which negated and reduced coverage available; c. Procuring and renewing a policy that as written, does not provide coverage to fully repair and/or replace the Plaintiffs’ property back to its pre-loss condition, in contradiction what they were promised; d. Procuring and renewing a policy which contained inaccurate information and which it knew would not actually serve to return their property to its pre-loss condition; e. Failing to follow and abide by the AAA Defendants’ underwriting policies/guidelines and failing to perform all necessary inspections of the property; f. Failing or ignoring the underwriting guidelines of the AAA Defendants; f. Utilizing valuation software to calculate the replacement cost of Plaintiffs’ dwelling, knowing such software was inaccurate and systematically and methodically designed to overinflate premiums to maximize Defendants’ financial gains. 57. The scope of coverage promised that was supposedly procured by the ACA Agency was illusory. Contrary to what the ACA Agency promised, the Policy failed to: a. provide the comprehensive full replacement cost coverage that would cover all accidental losses (no matter the severity) without any hidden limitations, exclusions, or conditions to meet Plaintiffs’ specific disclosed insurance needs; b. provide coverage for hidden water damage behind walls/under floors when Plaintiffs could not reasonably have identified the same; c. indemnify Plaintiffs to their pre-loss condition; d. comply with Plaintiffs’ requests; and e. comply with the ACA Agency’s representations. 58. Plaintiffs relied on the ACA Agency’s actions and representations to their detriment. Further, it was foreseeable that failure to procure coverage as Plaintiffs requested and ACA Agency promised could unnecessarily expose Plaintiffs to significant harm, losses, and damages. 59. As a result of Defendants’ conduct, Plaintiffs sustained damages, including deprivation of monies rightfully belonging to Plaintiffs, and ordinary or garden variety harm of anger, stress, worry, physical and emotional suffering, and have been damaged in an amount in excess of $250,000, exclusive of attorneys’ fees, costs and interest. 60. Defendants’ conduct was intentional, willful, malicious and in reckless disregard of Plaintiffs’ rights and is sufficiently egregious in nature so as to warrant the imposition of punitive damages. COUNT FOUR: CONSTRUCTIVE FRAUD AND NEGLIGENT MISREPRESENTATION Plaintiffs fully incorporate each and every allegation in the preceding paragraphs of this Petition as if each were fully iterated verbatim herein, and for their additional claims against the ACA Agency and the AAA Defendants do hereby and further allege as follows: 61. The ACA Agency made material representations to Plaintiffs, including but not limited to the following: a. The Policy provided the comprehensive full replacement cost coverage that would cover all accidental losses (no matter the severity) without any hidden limitations, exclusions, or conditions to meet Plaintiffs’ specific disclosed insurance needs; b. ACA Agency procured and AAA Defendants provided the comprehensive coverage Plaintiffs specifically requested; c. Plaintiffs’ property was in good condition and qualified for the coverage bound; d. There were no pre-existing issues with the property that would either prevent issuance of the replacement cost coverage or in any way limit or restrict coverage for any sustained damage; e. The property met all of the AAA Defendants’ underwriting guidelines and qualified for the requested replacement coverage; f. The policy that the ACA Agency procured provided comprehensive replacement coverage that had been specifically requested. 62. The ACA Agency misrepresented the nature and character of the Policy procured for Plaintiffs. Specifically, the ACA Agency misrepresented the Policy as providing comprehensive replacement cost coverage that would protect the property without exclusion, limitation or conditions from all fortuitous losses, that said coverage in no way differentiates between cosmetic or functional damage, but rather that all weather-related damage, regardless of severity, was covered. 63. One does not have to suffer a total loss to be induced to purchase an illusory policy and/or be defrauded by an agent's false averments and solicitations. Logic dictates that the condition of Plaintiffs' property—as represented by the ACA Agency when issuing the Policy (i.e., in good condition and wear, eligible for full replacement coverage and satisfying the AAA Defendants' guidelines and underwriting requirements)—did not transform to be dilapidated, worn out, deteriorated, and uninsurable as soon as a Plaintiffs filed their claim. Equally, where the Policy admittedly failed to provide the water-damage coverage requested, the Policy is illusory. 64. The ACA Agency further misrepresented the property was in good condition and met all underwriting requirements and that the replacement cost values it calculated were accurate and commensurate with reconstruction costs such that the coverage would fully restore, replace and/or repair Plaintiffs' property in the event of a loss by a covered event. 65. This places the Plaintiffs in an untenable situation: the AAA Defendants weaponize the very same conditions and purported defects that would have precluded coverage at inception or renewal against the insured upon a loss to deny the claim. While Defendants happily take their insureds' premiums at inception and substantially increase them at each renewal (thereby representing to the insureds that the insured property meets the AAA Defendants' underwriting guidelines), they change their position self-servingly when the time comes to actually provide coverage and indemnity to the insured upon a valid loss claim. 66. The ACA Agency breached this duty by misrepresenting and/or concealing pertinent material facts from Plaintiffs as follows: a. Selling and renewing illusory replacement cost insurance for water damage and representing to Plaintiffs at the time the Policy was issued and with each renewal that Plaintiffs’ home met all underwriting guidelines and that any damage (regardless of the severity) sustained to the property (including interior water damage) would be fully replaced knowing such statement was untrue; b. Misrepresenting that Plaintiffs’ property was in good condition at the time the Policy was issued and with each renewal, satisfying the AAA Defendants’ underwriting guidelines; c. Misrepresenting to Plaintiffs at the time the Policy was procured and with each renewal that their property met all underwriting requirements; d. Misrepresenting at the time the Policy was issued and with each renewal that the ACA Agency applied accurate information about the property, specific amenities, construction qualities, age, and condition of the Insured Property to calculate the replacement cost values using the AAA Defendants’ valuation software; e. Failing to disclose the 14-day limitation on water-damage coverage, irrespective of whether the damage was hidden under floors or behind walls. 67. The conduct of Defendants was intentional, willful, malicious and in reckless disregard of Plaintiffs’ rights, and/or was grossly negligent, and is sufficiently egregious in nature so as to warrant the imposition of punitive damages. 68. Plaintiffs were induced to accept, purchase, and renew the Policy (including the Fungi, Wet Or Dry Rot, Or Bacteria coverage endorsement) by ACA Agency’s misrepresentations and constructive fraud. 69. Plaintiffs were misled by the ACA Agency’s misrepresentations and constructive fraud. Plaintiffs relied on the ACA Agency’s misrepresentations to their detriment. 70. As a result of the Defendants’ constructive fraud and misrepresentation, Plaintiffs sustained damages, including deprivation of monies rightfully belonging to Plaintiffs, and ordinary or garden variety harm of anger, stress, worry, physical and emotional suffering, and have been damaged in an amount exceeding $250,000. 71. Plaintiffs are further entitled to reformation of the insurance contract to provide coverage consistent with the ACA Agency’s misrepresentations. 72. Defendants’ conduct was intentional, willful, malicious, and in reckless disregard of Plaintiffs’ rights, and/or was grossly negligent, and is sufficiently egregious in nature so as to warrant the imposition of punitive damages. PRAYER FOR RELIEF WHEREFORE, premises considered, Plaintiffs pray for judgment in their favor and against Defendants, CSAA Insurance Exchange, CSAA Fire and Casualty Insurance Company d/b/a AAA Fire and Casualty Insurance Company, AAA Oklahoma, Automobile Club of Oklahoma, and ACA Club Insurance Agency, Inc. for: (a) Actual and punitive damages each in an amount in excess of $250,000.00; (b) Disgorgement of the increased financial benefits derived by any and/or all of the Defendants as a direct result of the Defendants’ wrongful conduct; (c) Prejudgment interests, costs and attorneys’ fees. Respectfully submitted, Bradley E. Beckworth, OBA No. 19982 Trey Duck, OBA No. 33347 James E. Warner III, OBA No. 19593 Ryan Hering (pro hac vice motion pending) NIX PATTERSON, LLP 512 N. Broadway Ave., Suite 200 Oklahoma City, OK 73102 Telephone: (405) 516-7800 Facsimile: (405) 516-7859 [email protected] [email protected] [email protected] [email protected] ATTORNEYS FOR PLAINTIFFS