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Baer v USAA

How does USAA repeatedly pull off its Houdini act to get out of the Federal Courts? USAA's Robert G. Davis has a "get out of jail card" given to him in Baer v. United Services Automobile Assn., 503 F.2d 393, 394-395 (CA2 1974).

A subscriber's legal action against the unincorproated reciprocal inter-insurance exchange United Services Automobile Exchange is deemed to be prosecuted by one subscriber against each of the 2.2 million other subscribers.

The residence of just one defendant subscriber in the state of the plaintiff is sufficient to bring about the dismissal of a Federal complaint.

However, if the defendant commences an action against the trustee for USAA, a different legal theory may apply.

If a court were to hold that USAA is a "trust", the residence of a "trust" is the residence of the trustee.

The trustee of USAA is Robert G. Davis: and before him Robert T. Herres, and before that Robert F. McDermott. It's almost bibical, isn't it: McDermott begat Herres and Herres begat Davis. Substitute "hatched" for "begat" and it becomes particularly poignant.

McDermott, Herres, and Davis all live in Texas.

Two conclusions of a legal nature emerge here:

If a lawyer for a USAA subscriber knew that his/her client's assets were on the line in any court in any state of the Union, the client would be firmly advised to purchase insurance elsewhere.

When considering a legal action against USAA for the conversion of the $5 billion which has been pried away from the member/owners, it may be that the legal action can and should be commenced in Federal Court on the basis of the residence of the trustee: Robert G. Davis lives in Texas.

That is a real eye-opener.

Third Party questions for Mr. Koenig

Mr. Koenig, I apologize for not finding your answer to the following questions on this page or in the archives. There is just so much information being submitted thru the discussion, that I can't be certain that I did not miss it. But, for clarity's sake, could you answer them here:

1) Under what charge(s) were you arrested?

2) In the discussion area titled "Proposed section titled "Is USAA a Trust?"", someone wrote, [Koenig was] "swept up by 4 Nassau County Sheriffs in the direct pay of Robert G. Davis." I'm a novice to editting of wikipedia entries [long-time reader, first-time poster], so forgive me for being unclear as to who was that statement's author. But, if it was you, what led you to believe the deputies were in the direct pay of Mr. Davis? Are you implying they were employed as off-duty officers at that time by Mr. Davis, or do you think it may have been USAA?

Thanks in advance for clarifying those areas for me. Doing so will help me better understand the issue of partiality (if it exists).

- Clip06

Response to Clip06

• remanded to to the Gulag

Regarding the Above Response

I appreciate the poster's linking to the blog, but I'm afraid its answered only one question (which leads to another).

So, to recap (and please bear with my questions: I'm trying to understand the controversy):

Q1) Under what charge(s) were you arrested?

A1.1) "thinking and writing truthfully about an important issue" [?] [this is ClipO6's rhetorical question].

A1.2) I relate the facts: I leave it to you to extract "the charges". I see no charges. All I see is a platoon of highly paid lawyers and a very compliant Texas judiciary trying to hushup the conversion of $5 billion. If you read Kafka, Satre, Camus, and even John Fowles: you will better understand the absurdity of the entire affair. Koenig asks a few questions about how McDermott, Herres, and Davis got $5 billion to stick to their hands - and Koenig goes promptly to jail. Davis has become so frightened of the dark cloud which hangs over the question of this missing $5 billion that he's beside himself. If there is some plausible explanation as to why this $5 billion wasn't returned to the members in the years it was generated, then let's hear that from McDermott, Herres, and Davis. How does putting Koenig in jail for a week help matters?

C1) That is an interesting charge. But, while I again appreciate the poster linking to the blog, I think -in reality- the answer needs to be answered by Mr. Koenig (rather than a fellow outside observer like myself) or documentation provided to indicate this is a real charge. I've never heard of any legal charge referred to as "thinking and writing truthfully about an important issue," so I'm doubtful Mr. Koenig would appreciate someone answering Q1 for him with that as the answer. So, I'll leave Q1 open for Mr. Koenig to answer.

Q2) What led you to believe the deputies were in the direct pay of Mr. Davis? Are you implying they were employed as off-duty officers at that time by Mr. Davis, or do you think it may have been USAA?

A2.1) The Sheriffs of Nassau County do not lift a finger to do anything without being paid. There is nothing presumptively illegal about their acting as Robert G. Davis' private police force: but with the Nassau County Sheriff, you "pay to play". Trust me: find an instance, just one instance, where the Nassau County Sheriff has tracked down and arrested a woman/child abuser on the request of a person protected bya court order: come on, give me a break. Robert G. Davis paid these guys: and if he didn't, let him say so on these pages.

A2.2) You ask if there is a distinction beween USAA, qua USAA and Robert G. Davis. There is. It was actually the 2.2 individual natural person subscribers to USAA who jailed Koenig: Davis did it "for them" as their "attorney in fact". The law suit against each of the 2.2 million members, individually and personally, who participated in this 42 U.S.C. 1983 violation of US Constitutional rights, under color of law, is going to be very very interesting. The members of the Board of Directors of USAA and the employees of USAA who are simultaneously subscribers to the unincorporated reciprocal inter-insurance exchange are going to have a chance to find out if USAA's E&O insurer will inedmnify much less defend them. What is important to appreciate here is that USAA is unincorporated: Baer v. United Services Automobile Assn., 503 F.2d 393, 394-395 (CA2 1974) tells us that each of the 2.2 million members is personally and individually exposed to unlimited personal liability in any state court anywhere in this country. It may be, as USAA insures overseas as well, that an action against the each of the 2.2 million members could also be commenced in anothe country: wouldn't that be a hoot. But equally important to understand is that Robert G. Davis, as a trustee for the assets of the 2.2 million members, is a resident of Texas. And the residence of a trust is the residence of thr trustee. This means that the members of USAA, who speak through the USAA board of directors, might find a proper jurisdiction in the Federal Courts for the action they should be commencing against Davis, and McDermott and Herres before him. All I can say at this point it that this is going to be very interesting.

C2) But there is a broader question here: and that is the clearly exhibited historical pattern of USAA to use its connections with law enforcement agencies to silence critics and overly insistent policyholders through intimidation abd the threat of converting ordinary claims to criminal proceedings. There is going to be a lot more on this subject - especially as to the extraordinarily close relationship between USAA and the FBI: so close, that FBI agents are allowed to become full members of USAA.

Again, thanks to the respondent and thanks (ahead of time) to Mr. Koenig for directly answering the questions.

You're welcome.

Edit: the above post is one part Clip06 and one part someone else's editting of Clip06's post. Please understand that the post by Clip06 was not intended to be so disjointed.

--Clip06 22:30, 15 February 2006 (UTC)

Regarding the Above Response 2

First off, I will presume the person who altered my post is Mr. Koenig. If that is not the case, please identify yourself as someone other than Koenig. If the respondent was Koenig, please consider creating your own post, instead of editting mine, so that the content has clarity. I will address the following to Koenig, under that assumption.

As for the first question's answer , 'what were the charges,' the quote is not rhetorical. It was taken from that blog, which I presume was written by you. As such, it appears that was not the charge on your booking papers. What were those charges?

You state (in your above response): "I relate the facts: I leave it to you to extract "the charges"."

I'd rather not 'extract the charges.' The answer should be very clear, unless you say there were no actual charges filed. If your intent is to get the truth out regarding USAA, you must demonstrate it by not withholding it yourself. As all I'm trying to do is decipher partiality/impartiality (as a first step), its important for me to know how much your information is weighted by bias. In other words, I don't want to 'play games,' I'd just prefer the facts. If the facts must be as to pulling teeth, and from both sides, then I'll lose interest. Please, if you're interested in informing people, let me know now, so that I can move on. Otherwise, this'll be my last post on the subject and I'll remove it from my watchlist. If they are not relevant to the case, then stating the charges will be obvious. If they are relevant, then they need to be known. I'm hired to make decisions, and I require the facts in order to make sound decisions. If they aren't provided, then it occurs to me that the story is not as the hiding party(ies) paint it.

So, what were the charges?

As for the 2nd, regarding the deputies, you must acknowledge that most of us following this discussion probably have no knowledge of that county's law enforcement. As such, it is not an automatic given that the deputies are corrupt (is that an accurate portrayal of your view of them)? With that said, will you provide evidence that they were in their off-duty employ of USAA? Do you trust them to back that statement (if they are questioned)?

Regarding the Above Response 3

Stepping in for a second, not as a proxy for Koenig, but to hopefully and helpfully clarify the situation.

The very premise of the Clip06's question may be faulty: civil matters are prosecuted with "a complaint". This is not a criminal matter, and was thus likely never reduced to "a charge". Koenig clearly never violated any criminal statute.

Clip06's approach stops short of the old saw about "when did you stop beating your mother": but Clip06 is a little too insistant that "there must have been a charge": this may betray a law enforcement background in Clip06's case.

Clip06 also suggests that the Nassau County Sheriff's Deputies were corrupt: or at least that Koenig says "they were corrupt". Koenig has never said that the 4 sheriff's deputies were corrupt: rather, he clearly and unambiguously stated they were carrying out the order of Nassau County Supreme Court Judge Robert Roberto.

Clip06 has the complete capacity to enquire of the sheriff deputies themselves (he has the phone numbers), Judge Robert Roberto, and Fulbright & Jaworsjki lawyers Newman and O'Donnell, and the entire Bexar County Judiciary as to "what the charges were".

Clearly Koenig believes there were no charges: that is what Kafka and the existentialist school was writing about. There were no charges. Evidently, the sole purpose of the entire exercise was to terrorize Koenig, extort him and his family, and to then pummel him into silence. It is my understanding that Judge Robert Roberto extorted $25,000 from Koenig in order to let him out of jail. Ah . . . such is America these days.

What is heart-warming is that Koenig, right or wrong, was neither successfully extorted nor effectively silenced. And Clip06 is just one more actor in a long parade of proxies for USAA's Robert G. Davis.

What is most notable about all of this that it is becoming abundantly clear that Robert G. Davis used a local private court in Texas to abuse Koenig who was thousands of miles away. There is no charge: not even a real complaint. All we have here is Robert G. Davis with his hand in the cookie jar with $5 billion sticking to his fingers.

Why doesn't Robert G. Davis tell us why Koenig was arrested: and what exactly were the charges?

Clip06 says: While the premise about me being in law enforcement is false (and flimsy), I must have mis-read then about there having been an actual arrest. Now, it is not clear to me whether or not he had ever been in custody, or -if he had- if there had been actual charges against him. It would appear he's saying the four deputies illegally kidnapped him.

In any count, the case is far too muddled with non-specific statements, and I'll remove myself from interest in any pro bono on this. Its clear that this isn't an issue regarding legal issues at all, but perceptions between the various accusers. Also, as Mr. Koenig has removed himself from participation in this discussion (evidently), then there really is no interested parties in play.

close out

Clip06: you travel incognito, and your ostensible "pro bono" motivations are at best murky.

The arrest is described here: there was no "illegal kidnapping"- so stop being a churlish wiki.

• remanded to to the Gulag

You wanted to better understand "the charges": your choice of vernacular suggested that you had a law enforcement background. That's regrettable - and should not have been so blandly assumed. But you should remember that never once have the many friends of USAA who have appeared on these pages ever identified themselves: even Robert G. Davis' lieutenants shit in their pants in fear.

What is your background? And what is your interest in the matter? Koenig's arrest is only an artifact of a far larger issue. And that is that USAA and Robert G. Davis (and Herres and McDermott before him) have a systematic history of using law enforcement agencies to put down "members" who raise inconvenient questions.

Judge Robert Roberto's order to arrest Koenig and to detain him in solitary confinement under bright 24-hour lights with a half-bar of soap finds its origins in "contempt of court": Koenig evidently failed to produce himself to be deposed as to the location of his assets so the 2.2 million [natural person] members of USAA, acting through their [stakeholder] [attorney in fact] Robert G. Davis, could latch onto $40,000 of Koenig's family assets to pay Robert G. Davis' $40,000 legal bills incurred with Fulbright & Jaworski and Akin Gump.

Now, let's be grown up.

The distant origins of Koenig's concerns flow from his wondering why Robert F. McDermott summarily (like an Article 15) denied a perfect ordinary routine 1989 claim for the destruction of his NYC cooperative apartment. The New York City Housing Court held that USAA was absolutely 100% responsible to indemnify Koenig as to his absolute obligation to repair all the damage caused by the explosion of steam pipes outside and next to his apartment.

That McDermott simply wanted to take Koenig's money away and give it to the other subscribers, as Spock would say, was illogical.

Koenig evidently surmised that there had to be another explanation for McDermott's criminal act.

And Koenig found the explanation - which is:

McDermott was the self-styled messianic "CEO" of a financial behemoth that had no capital: [unincorporated reciprocal inter-insurance exchange]s have no capital except as the float afforded by the unearned premiums provides short-term cash and except as the [URIE]s [attorney in fact] brings capital to the situation.

Every other large [URIE] has a [corporate attorney in fact] with none of USAA hoopla (subscriber savings accounts and criminally misleading claims that USAA is owned by its members, etc]. Farmers and the California Automobile Club are both [URIE]s of the same order of magnitude as USAA: and both have a meaningfully capitalized [corporate attorney in fact].

McDermott didn't have any capital, being a shanty Irishman from the wrong side of Boston. But as a Boston Latin Public High School student, trust me when I tell you that McDermott was far smarter and craftier than his preppy counterparts who went to Harvard Business School and got the jobs McDermott would be denied in the Boston Brahmin financial community.

In order to accrete capital, starting in about 1967, McDermott simply helped himself to the subscriber's funds. This is all documented in USAA: a Tradition of Service and Life Story of a Business Cooperative (these are both huge and long downloads). Why McDermott lays out his crime, chapter by chapter, in these two books, is beyond belief.

And one of the ways McDermott succeeded was by hiding subscriber owned funds in the first line of USAA's [statutory insurance balance sheet] which is deceptively called "losses". "Losses" is normally an [income statement] or [profit and loss statement] term: in the case of an insurer, "losses" on the Balance Sheet means "litigation reserves".

"Losses", at USAA, is the label for USAA's "Litigation Portfolio".

While the litigation portfolio is owned by the current subscribers, this elemental fact has been hidden from the members over the years. As it is "too hard"" to track down the former subscribers who had the "litigation reserves" held back from their [Subscriber Savings Accounts], the funds produced by the successful resolution of litigation were placed in "unallocated unassigned surplus".

The fervor with which Robert G. Davis and his lawyers take after Koenig rises in direct proportion to how close Koenig gets to the accounting answer to this question:

How did USAA amass $5 billion when it never had any capital to start with?

The plain and simply matter as to the Judge Robert Roberto's court order is that the good Judge, himself, didn't activate the order: USAA General Counsel Neil Kanzer and lawyer James O. Drucker asked for the order, got it, and then activated it by submitting an affidavit to the Nassau County Sheriff. That is how it is done - Clip06.

The order having been activated by lawyer James O. Drucker's affidavit, Drucker then paid the Sheriff to act on the information obtained by Drucker's private investigators as to Koenig's location. If any of this is wrong, lawyer Kanzer (the USAA General Counsel in New York State) and lawyer Drucker can offer the corrected version.

So Clip06: are you still in the game? Are you starting to get this? There never was any charge. Now ask some more questions.

Bat Masterson - from good old Las Vegas.