MEDFORD MAIL TRIBUNE. MEDFORD. OREGON
Confidence Expressed That Insurance Claims Will Be Paid
TUESDAY. JUNE 25. HIS -
insurance atnt nf iu ki .--.,. tju.i u
record for Mcdford School ' Branchfield, were consulted ' with was a representative of
District 549C expressed con- Dy school officials at the time National Scholastic Agency,
lidence Monday that au I the student accident and med- which has maintained offices
school district claims against a' lnsurance policy was tak- in Portland for several years.
California Lite Insi,ran.- ' e" out. i Further, he said, the com-
companv
tually.""
'will be paid even-
Not Unusual
The speaker explained it
In a talk before the Med-! was not unusual that he
ford Chamber of Commerce ! should not have been consult
Roundtable the agent, Fred ed, however, since no public
Brennan of the Medford In-1 'ax money was involved in
surance Agency, reviewed the i 'he transaction. Premium on
circumstances s u r rounding
the more than $6,000 of Med
ford accident claims against
the Calfornia firm which
have not been settled.
Brennan noted that neith
er he nor the attorney for
the insurance plan was paid
for by parents of the indi
vidual students involved.
brennan added that school
officials who negotiated the
policy "had no reason to
doubt the wisdom of their
Dennis the Menace
We oontuke the way you drive i
pany involved. California Life
insurance, has been licensed
to do business in both Ore
gon and California for some
time and had a record of
prompt payment of claims in
the past.
What could not be antici
pated, Brennan said, was the
action of the agent in mak
ing modifications in the pol
icy "beyond the scope of her
authority."
Displays Copy
At that point, . Brennan dis
played a photostatic copy of
the original insurance con
tract. Pointing to ink lines
drawn across two of the pages
of the policy, Brennan said
they represented where cer
tain endorsements had been
cut from the policy and the
pieces had been taped back
together.
This is standard operating
procedure in the insurance
business, the speaker said, in
qrder to hold down printing
costs. But it is precisely this.
he said, which California Life
insists "constitutes a fore
gery" of their contract.
Brennan explained that
a standard contract form is
frequently changed or alter
ed by an agent to "tailor" ii
to the particular needs of an
individual school.
Does Not Have Right
California Life contends,
Brennan said, that an agent
does not have the right to
alter the contract in such a
manner, but the speaker
pointed out that the "en
dorsements carried the fac
simile signatures, of the sec
retary and general counsel
and the president of the company."
"In each case, the National
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Scholastic Agency after con
ferences with the school in
volved, produced signed en
dorsements which were modi
fied by insertion of special
wordings to tailor-make the
contract," Brennan said, "or
they cut and pasted to elim
inate unwanted exclusions in
the original contract or forms
attached thereto."
The agency has written pol
icies for 27 other Oregon
schools besides Medford,
Brennan pointed out.
To Hit Attention
Brennan said the matter
first came to his attention in
December last year when he
was called one day by Dr.
Elliott Becken, assistant su
perintendent of schools for
549C, to discuss the non-payment
of claims bv California
Life.
"I suggested that I letter
threatening action by sent to
the company," Brennan said.
and the next day I called
the Insurance Department in
Salem and asked their sup
port in the matter."
The speaker said he was
called the next day by Ed
ward Zorn, chief deputy com
missioner wno said he had
Beryl Stolphel of California
Life in his office at the time.
Brennan said he was assured
over the telephone by Stolp
hel that his office was work
ing on the case and hoped
the Medford people would be
"patient."
Several days later, Bren
nan said, he was called by
school officials who said they
had two representatives from
Georgia International Life
Insurance company in their
offices "who wanted to talk
to me."
Reinsures Company
The Georgia firm, Bren
nan explained, had "reinsur
ed California Life, who, the
agents said, was not set up
properly to handle the
claims," Georgia Internation
al was taking over the pro
cessing of the claims, Bren
nan said he was told.
The speaker said he spent
part of that afternoon taking
the two Georgia a g e n ts
around Medford to visit the
various doctors who had
treated injured Medford stu
dents, but who had never
been paid for their services
by California Life.
During the next month,
Brennan said, the Georgia
firm paid off about $6,000 in
claims by Medford residents.
But then suddenly the pay
ment of claims stopped. A
long-distance telephone call
to officials of Georgia Inter
national revealed that pay
ments had been stopped be
cause they had been advised
by California Life that the
contract was "illegal"' claim
ing the contracting agent had
made several unauthorized
modifications in the policy.
Starts Filt on Subject
Brennan said he collected
a file of all material on the
matter, including newspaper
clippings, and went to Salem
to discuss the matter with
Oregon Insurance Commis
sioner Walter G. Korlann,
Branchfield and Zorn.
The speaker said he also
talked that day with Glen
McCarty; representative of
National Scholastic Agency,
who assured Brennan that
California Life "would honor
the claims," but counseled
patience pending the outcome
of a "friendly suit" which the
firm was instituting against
David Douglas High school
in Portland over a similar
situation.
On June 12, the matter still
having been unresolved, Bren
nan accompanied Branch
field, Becken and Lee Rags
dale, physical education di
rector at Medford High, to
Oakland. Calif., to talk with
officers of California Life.
Prepared To Fight Case
Brennan said the delega
tion was advised during the
conversation with Stolphel,
general counsel for the firm,
that California Life would
not pay the claims and was
prepared to fight the case all
the way to the U.S. Supreme
Court if necessary.
Later that day, the Med
ford delegation talked with
a deputy in the Insurance
Commission office in San
Francisco, who asked Branch
field to put all the pertinent
information in the case in
letter form so that his office
could study the situation.
Medford School Superin
tendent Dr. Leonard B. May
field, who was at the Round
table luncheon, stated at the
end of Brennan's talk that
up to this year the firm had
paid promptly on claims
against it. "Coos Bay has
carried its policy with the
firm for years." Mayfield
said, "and had never had any
trouble."
The superintendent stress
ed that public tax money was
not used to pay the premium
on the policy, but rather it
was paid with funds from
parents of students covered
by the policy.
As of last week, Brennan
said, the Oregon Insurance
Department had asked Med
ford school officials to with
hold legal action against Cal
fornia Life until after the
the David Douglas suit is decided.
1 W -tmn, T 1
WAREHOUSE IN FLAMES Billowing smoke encircles tall
buildings as firemen battle a fire in warehouse on the south
bank of the Chicago river in downtown Chicago. Fire boats
and snorkel devices were called into action and firemen
were able to confine the fire to the warehouse. Traffic on
busy Michigan ave. was suspended due to the heavy smoke
which settled over the city. (UP1)
IKE FLIES AT LAST
Kansas City, Mo. -(UPll- A
bird that has not flown for
14 years is traveling at last
- on a transatlantic trip. The
bird, a cardinal named Ike,
has only one wing. Miss Mar
garet Herkrath, a local hos
pital worker who found the
wounded bird 14 years ago
and has cared for him since,
decided to retire In Cologne
Germany. She obtained a spe
cinl permit from the U.S.
Fish and Wildlife Service to
get Ike out of the country.
Hoffa To Ponder
Driver Pay Hike;-
Washington JlTD Team
sters' president James R. Hof
fa said Monday he would
weigh tax angles carefully be
fore presenting . wage de
mands to trucking firms this
fall because union drivers
are moving into higher tax
brackets.
Hoffa said in an interview
that he might await congres
sional action on President
Kennedy's tax cut proposals
before deciding how much of:
a pay increase to seek at the
opening of negotiations in
October.
If taxes are lowered, he in
dicated he might seek more
pay and fewer fringe benefits
in forthcoming bargaining.
The head of the nation's
largest union said a nation
wide minimum for truck dri
vers of $3.03 an hour has now
been established. Many road
drivers could earn $200 by
working longer than 40
hours. Overtime is common
in the trucking industry.
Local Cadet Completes
Phase of Program
Provo Cadet Howard E.
Lantz of Medford has com
pleted the first year curricu
lum in Air Science of a four
year program at Brigham
Young university, Provo,
Utah. -
Lantz has been accepted in
the sophomore phase of air
science and upon completion
of this second phase will be
eligible for acceptance in tha
advanced AFROTC program.
Recreation Program
Under Way in City
The Medford park and rec
reation department's summer
program is now under way.
featuring a broad variety of
activities again this year, ac
cording to a department
spokesman.
Activities include games
and sports, arts and crafts,
music and drama, nature lore
and a number of special
events.
The program is being con
ducted simultaneously at five
city schools and at Hawthorne
park. Recreation leaders in
clude Micke Noble, Jackson
school; Mary Ann Robinson,
Jefferson school; Sue Bren
nan, Hawthorne park; Janet
Pfaff, Howard school; Peggy
Kicth, Washington school;
and Jerilyn Smith, Wilson
school.
The program with its vari
ous acitivitics Is designed
specifically for youngsters be
tween 6 and 12, but younger
children may enroll if they
are accompanied by an old
er brother or sister.
Activities are conducted
Monday through Thursday
from 9 a.m. to 4 p.m, at each
of the various locations. Spe
cific information about class
es or activities may be ob
tained by calling the depart
ment office in Medford city
hall.
Counsel Committee
Budget Approved
Salem-(IP1)-The Legislative
Counsel Committee has ap
proved a $228,829 budget for
its staff for the 1963-65 bien
nium. The legislature appropriat
ed $235,000, but the commit
tee decided to leave some staff
positions vacant temporarily.
Committee Chairman Rep.
C. R. Hoyt (R-Corvallis) said
if the legislative counsel's
staff needed additional help
in the future, additional funds
could be provided at that
time.
The committee reaffirmed
its policy of not furnishing
any staff members to legisla
tive interim committees for
use as executive secretaries.
In addition to the approved
Budget, the committee was
given $2,000 by the legislature
for law revision work during
the biennium.
Court Records
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