Case 7:05-cv-00331 Document 114 Filed in TXSD on 10/27/06 Page 1 of 44

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS
McALLEN DIVISION

ARACELY ZAMORA-GARCIA,

)

JUANA ZAMORA,

)

MANUEL SANDOVAL-HERRERA,

)

IRMA SANDOVAL IBARRA VALENCIA,

)

JORGE LUIS ECHAVARRIA,

)

ADRIANA ECHAVARRIA,

)

MARIA FRANCISCA ARCE CEDENO,

)

PETRA CARRANZA DE SALINAS,

)

MIGUEL RUBIO-FLORES,

)

ALBERTA RUBIO, NORMA PENA DE

)

HERRERA, ISIDRO HERRERA,

)

LUIS ALVARADO-NARVAEZ, and

)

JUAN LARIN-ULLOA

)

in their own name and right, and on

)

behalf of all others similarly situated,

)

Petitioners/Plaintiffs,

)

)

v.

)

)

MARC MOORE, DISTRICT

)

DIRECTOR FOR INTERIOR

)

ENFORCEMENT, DEPARTMENT OF

)

HOMELAND SECURITY.

)

ALBERTO GONZALES, U.S. ATTORNEY

)

GENERAL,THE UNITED STATES OF

)

AMERICA,

)

MICHAEL W. PADILLA, in his capacity as

)

Independent Administrator with Will Annexed )

of the ESTATE OF DON VANNERSON,

)

d/b/a AARON FEDERAL BONDING

)

AGENCY

)

FAIRMONT SPECIALTY INSURANCE

)

COMPANY (f/k/a RANGER INSURANCE

)

COMPANY), and

)

STONINGTON INSURANCE COMPANY

)

(f/k/a NOBEL INSURANCE COMPANY), )

Respondents/Defendants.

)

)

C.A. No. M-05-331 JURY DEMAND
SIXTH AMENDED PETITION FOR WRIT OF HABEAS CORPUS AND CLASS ACTION COMPLAINT

Aracely Zamora-Garcia, Juana Zamora, Manuel Sandoval-Herrera, Irma Sandoval Ibarra Valencia,

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Adriana Echavarria, Jorge Luis Echavarria, Petra Carranza de Salinas, Miguel Rubio-Flores, Alberta Rubio, Norma Pena De Herrera, Isidro Herrera, Maria Francisca Arce Cedeno, Luis Alvarado-Narvaez, and Juan Larin-Ulloa (collectively, “Plaintiffs”), in their own names, and on behalf of all others similarly situated, file their Sixth Amended Petition for Writ of Habeas Corpus and Class Action Complaint.
INTRODUCTION AND SUMMARY OF CASE 1. Defendants Stonington Insurance Company (f/k/a Nobel Insurance Company) and Fairmont Specialty Insurance Company (f/k/a Ranger Insurance Company) (collectively the “Insurance Companies”), through their agent, Aaron Federal Bonding Company (sometimes known as U.S. Immigration Bonds and Services), the business name for Don Vannerson, (“Aaron Bonding”) enter and systematically breach contracts for the posting of surety immigration bonds. The conduct of the Insurance Companies and Aaron Bonding (collectivey referred to herein as the “Bonding Defendants,” with respect to surety bonds posted by Aaron Bonding pursuant to its agency relationship with the Insurance Companies) breaches the contract rights of the indemnitors on those contracts (the “Indemnitors”) with whom they contract and third-party contract rights of the bonded immigrants (the “Bonded Immigrants”) whose release from detention the surety bonds secure. Their misconduct causes the Indemnitors and the Bonded Immigrants to forfeit collectively millions of dollars and compromises the Bonded Immigrants’ immigration rights. 2. The Bonding Defendants enter bond contracts with the Indemnitors (usually friends or relatives of an immigrant facing Removal Proceedings), wherein the Bonding Defendants agree to post surety bonds for the Bonded Immigrants with the Department of Homeland Security (or its predecessor entity in relevant respects, the Immigration and Naturalization Service, both referred to collectively herein as the “DHS”) so that the Bonded Immigrants may leave confinement while their Removal Proceedings are pending. The Bonding Defendants also contractually agree to provide notice to both the Indemnitors and the Bonded Immigrants of all appearances scheduled by the DHS of which the Bonding Defendants receive notice. For
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these services the Indemnitors pay exorbitant, up-front, non-refundable fees equal to approximately half of the total bond, and they agree to indemnify the Bonding Defendants for the full amount of the bond, should the bond be breached for failure to attend a DHS-scheduled appearance. Moreover, the Bonding Defendants require the Indemnitors to pay, or guarantee the payment of, roughly half the amount of the bond in monthly installments into a “Build-Up Fund” or collateral account that the Bonding Defendants may draw from in paying on the bond to the DHS in the event the bond is breached.
3. The Bonding Defendants’ promise and contractual assurance to give to the Indemnitors and the Bonded Immigrants notice of upcoming DHS-scheduled appearances is critical because the DHS only provides notice of such scheduled appearances to the Bonding Defendants – not the Immigrants or the Indemnitors. Should an Immigrant miss a DHS appearance, the DHS may breach his bond. Once a bond is breached, several negative economic consequences automatically follow:
• The Bonding Defendants are liable to the DHS for the full amount of the bond, although the Bonding Defendants may reduce their exposure depending on when and if they produce the Bonded Immigrant to the DHS;
• The Indemnitor is liable to the Bonding Defendants for the full amount of the bond, less the amount of the Build-Up Fund, plus fees and expenses incurred by the Bonding Defendants; and
• Any collateral paid into the Build-Up Fund or collateral account is forfeited. In addition, a breach of the bond negatively impacts the personal liberty and immigration rights of the Bonded Immigrant:
• The Bonded Immigrant faces detention for missing the DHS appearance, regardless of the status of his or her Removal Proceedings;
• If the Bonded Immigrant is under an order of removal, he or she faces immediate deportation for missing the DHS appearance, regardless of any further administrative or legal proceedings that may be available to challenge the removal order; and
• If the Bonded Immigrant is removed from the United States but has pending administrative
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proceedings challenging that order, such as a motion to reopen or reconsider the removal order or an appeal from that order, the administrative proceedings are nullified, and the opportunity to pursue them is lost forever. Similarly, if the Bonded Immigrant has not filed such proceedings, but anticipated doing so, the opportunity to do so is forever lost. 4. The importance of the contractually required notice by the Bonding Defendants is clear: absent notice, the Bonded Immigrant does not know whether the DHS has scheduled an appearance for him, much less when to appear. Likewise, absent notice, the Indemnitor is robbed of the ability to take steps to ensure that the Bonded Immigrant timely appears. Notice is important to both Indemnitors and Immigrants because the Indemnitors risk economic harm (loss of their bond and/or collateral), while they both risk the loss of the Bonded Immigrant’s ability to remain in the United States. 5. Despite entering uniform contracts requiring them to provide the critical notice to both the Bonded Immigrant and the Indemnitor, the Bonding Defendants never provide advance notice of DHSscheduled appearances to both the Bonded Immigrant and the Indemnitor. The moment the Bonding Defendants receive notice of a DHS appearance yet fail to provide this notice to both the Bonded Immigrant and the Indemnitor, they materially breach the contract. 6. Rather than provide notice, the Bonding Defendants often attempt to apprehend the Bonded Immigrant shortly before a DHS-scheduled appearance – through their stable of bounty hunters. In most cases these unannounced abductions are unsuccessful, leaving the Bonded Immigrant unable to appear at the DHSscheduled appearance and the Indemnitors unable to protect their interests. 7. The Federal Defendants, of course, are well aware of this problem. Yet the Federal Defendants do nothing to alleviate it. They could attempt to provide notice to the Bonded Immigrant, but they choose not to. Prior to the litigation culminating in the “Amwest Settlement,” it was the Federal Defendants’ practice to provide notice to both the surety on the contract (the Bonding Defendants) and the Bonded Immigrant of any demands made on the bond (a demand that the Bonding Defendant produce the alien). As part of the Amwest
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Settlement, the Federal Defendants agreed that in the future they would provide such notice to the Bonded Immigrant, if at all, not less than three days after the notice had been given to the surety. Shortly after entering into this Agreement, the Federal Defendants ceased sending notice of such appearances/demands to the Bonded Immigrants.
8. In addition, the Bonding Defendants, as a matter of policy, do not return the Indemnitors’ collateral to the Bonding Defendants after the Federal Defendants cancel a bond. Although their own bonding contracts specifically require the Bonding Defendants to return collateral after a bond cancellation, their policy is to just silently retain the collateral and hope that the Indemnitors will never seek a return of their collateral. The Bonding Defendants have millions of dollars of collateral that they are obligated to return to Indemnitors.
PARTIES 9. Plaintiffs IRMA IBARRA SANDOVAL VALENCIA (“IRMA SANDOVAL”) and ADRIANA ECHAVARRIA are U.S. citizens. ALBERTA RUBIO is a citizen of Mexico and lawful permanent resident (“LPR”) of the United States. JUANA ZAMORA is legally in the United States as either a LPR or an U.S. citizen. 10. Plaintiffs ARACELY ZAMORA-GARCIA (“ZAMORA-GARCIA”), MANUEL SANDOVAL-HERRERA (“MANUEL SANDOVAL”), PETRA CARRANZA DE SALINAS (“SALINAS”), MIGUEL RUBIO-FLORES (“MIGUEL RUBIO”), MARIA FRANCISCA ARCE CEDENO (“CEDENO”), NORMA PENA DE HERRERA, ISIDRO HERRERA, and LUIS ALVARADO-NARVEZ (“ALVARADO-NARVAEZ”) are all citizens of Mexico, and are, or within the five years immediately preceding the filing of the instant action, have been under removal proceedings conducted in the State of Texas. 11. JUAN LARIN-ULLOA is a citizen of El Salvador residing in Kansas and is currently under removal proceedings.
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12. All Plaintiffs, except Juan Larin-Ulloa, reside in the Rio Grande Valley, Texas. 13. Respondent/Defendant MARC MOORE is the District Director for Interior Enforcement, Department of Homeland Security, and is sued in his official capacity only. 14. Respondent/Defendant ALBERTO GONZALES is the United States Attorney General, and is also sued in his official capacity only. 15. Marc Moore and Alberto Gonzales are collectively referred to herein as the FEDERAL DEFENDANTS. Also, where appropriate, “Federal Defendants” refers to the DHS and/or one of its precursor agencies, the INS. 16. Defendant STONINGTON INSURANCE COMPANY (f/k/a NOBEL INSURANCE COMPANY) is an insurance company that does business in the State of Texas and has its home office in Addison, Texas. On information and belief, Nobel Insurance Company (“Nobel”) was previously incorporated in Texas, but Stonington Insurance Company is not incorporated in Texas. Stonington Insurance Company’s principal place of business may be in Texas. 17. Defendant FAIRMONT SPECIALTY INSURANCE COMPANY (f/k/a RANGER INSURANCE COMPANY) is an insurance company that does business in the State of Texas, lists its home city and state as Wilmington, Delaware with the Texas Department of Insurance, and was incorporated in Delaware. Fairmont Specialty Insurance Company’s principal place of business is in Delaware. Fairmont Specialty Insurance Company now manages the immigration bonds issued by Nobel through Aaron Bonding. 18. Defendant MICHAEL W. PADILLA was appointed by the Harris County, Texas, Probate Court to serve as the “Independent Administrator with Will Annexed of the Estate of Don Vannerson” on April 7, 2006. Mr. Padilla resides in Houston, Texas, and is an employee of Fairmont Specialty Insurance Company. The ESTATE OF DON VANNERSON has conducted business as AARON FEDERAL BONDING
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AGENCY since the death of Don Vannerson in March of 2004. Don Vannerson was a citizen of Texas, and the Estate of Don Vannerson is located in Texas. Aaron Federal Bonding Agency was an assumed business name for Don Vannerson. Except where indicated otherwise, Don Vannerson, d/b/a Aaron Federal Bonding Agency, the Estate of Don Vannerson, d/b/a Aaron Federal Bonding Agency, Michael Padilla, in his capacity as Independent Administrator of the Estate of Don Vannerson, d/b/a Aaron Federal Bonding Agency, and Aaron Federal Bonding Agency, are herein referred to as “Aaron Bonding.” Aaron Bonding has done significant business at the Los Fresnos Processing Center, within the Court's jurisdiction, and has acted as an agent for both Nobel and Ranger Insurance Company (“Ranger”). Aaron Bonding regularly serves and/or served as the agent of both Nobel and Ranger in entering the Surety Bond contracts at issue in this litigation. Indeed, Nobel’s and Ranger’s names and addresses appear on the bonding contracts between Aaron Bonding and the Indemnitors.
19. Defendant SANTIAGO SOL (“SOL”) is a bounty hunter, who, on behalf of the non-federal Defendants, and within the jurisdiction of this Court, attempted to arrest and secure the removal of, and who otherwise injured, Plaintiffs Zamora and Manuel Sandoval, during which attempt, he also caused emotional injury and/or financial loss to Plaintiff Irma Sandoval. On information and belief, it is alleged that Defendant Sol was an employee of Aaron Bonding at the time of this alleged misconduct. It is believed this relationship was later modified in an attempt to shield Aaron Bonding from liability for actions taken on its behalf. On information and belief, Sol is a citizen of Texas.
CLASS DEFINITIONS 20. Plaintiffs seek to represent the following classes and subclasses. 21. The Indemnitor Notice Class: Plaintiffs Irma Sandoval and Alberta Rubio seek to represent a class of the following Indemnitors in bringing claims for money damages against the Bonding Defendants:
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(a) those who served or are serving as Indemnitors on a surety bond posted by a Bonding Defendant to secure the release of a Bonded Immigrant detained by the Federal Defendants, and (b) who have fully paid their up-front, non-reimbursable fees to the Bonding Defendants pursuant to the terms of the bonding contracts, and (c) where the Bonding Defendant received notice that the DHS has scheduled an appearance for the Bonded Immigrant before it, on or after April 16, 1998, under circumstances where the Bonding Defendant failed to provide notification of the scheduled appearance to either the Indemnitor or the Bonded Immigrant. 22. The Indemnitor Collateral Class: Plaintiff Alberta Rubio seeks to represent a class of the following Indemnitors in bringing claims for money damages against the Bonding Defendants: (a) those who have served as Indemnitors on a surety bond posted by a Bonding Defendant to secure the release of a Bonded Immigrant detained by the Federal Defendants, and (b) where the Bonded Immigrant’s bond has been cancelled by the Federal Defendants, and (c) where the Bonding Defendants have failed to return any collateral, net of fees validly charged under the bonding contracts, deposited with the Bonding Defendants to either the Indemnitor or the Bonded Immigrant on the bonding contract. 23. The Bonded Immigrant Class: Plaintiff Petra Carranza de Salinas seeks to represent a class of the following Bonded Immigrants in bringing claims for injunctive and declaratory relief against the Bonding Defendants: (a) those who have been released from custody of the Federal Defendants pursuant to surety bonds posted by the Bonding Defendants, and (b) where the bond is still outstanding. 24. The Supervision Class: Plaintiffs Zamora-Garcia, Manuel Sandoval, Salinas, Cedeno, Norma Pena de Herrera, Isidro Herrera, and Alvarado-Narvaez seek to represent the class of persons who are or will be under removal proceedings, who are not physically detained by the Federal Defendants, and who have been or will be under a final order of deportation, exclusion, or removal, which has not been or will not be executed for three months or more after its issuance, notwithstanding that there was no judicially ordered stay of deportation,
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exclusion or removal during that three month period, and to whom the Federal Respondents have not issued Orders of Supervision, or have subsequently revoked or refused to renew previously issued Orders of Supervision.
25. Obligor Cash Bond Class: Plaintiff Adriana Echavarria seeks to represent, as the Obligor Cash Bond Class
(a) all Obligors who posted an immigration Cash Bond, (b) which bond was breached on or after July 28, 1998, following a demand made on the Obligor which was returned undelivered to the Federal Defendants, and (c) where the Immigrant appeared at all hearings and other required appearances of which s/he received appropriate notice, and (c) where the Federal Defendants did not make additional efforts to provide actual notice of the demand to the Obligors, as would be required by Jones v. Flowers, 126 S. Ct. 1708 (2006). Plaintiff Adrianna Echavarris seeks injunctive and declaratory relief on behalf of herself and the Obligor Cash Bond Class, requiring the Federal Defendants to reinstate reinstate the breached bonds, (if proceedings are ongoing), or reinstate and cancel the breached bonds (if proceedings have been completed). 26. Immigrant Cash Bond Class A: Plaintiff Jorge Echavarria seeks to represent, as the Immigrant Cash Bond Class A, (a) all Immigrants released on a Cash Bond, (b) which bond was breached on or after July 28, 1998, following a demand made on the Obligor which was returned undelivered to the Federal Defendants, and (c) where the Immigrant appeared at all hearings and other required appearances of which s/he received appropriate notice, and (d) where the Federal Defendants did not make additional efforts to provide actual notice of the demand to the Obligors, as would be required by Jones v. Flowers, 126 S. Ct. 1708 (2006). Plaintiff Jorge Echavarria seeks injunctive and declaratory relief on behalf of himself and the Immigrant Cash Bond Class A, requiring the Federal Defendants to reinstate the breached bonds, (if proceedings are ongoing),
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or reinstate and cancel the breached bonds (if proceedings have been completed). 27. Immigrant Cash Bond Class B: Plaintiff Juan Larin-Ulloa seeks to represent, as the
Immigrant Cash Bond Class B, all Immigrants released on a Cash Bond, which bond is still outstanding, and all Immigrants who will, in the future, be released on cash bonds. Plaintiff Juan Larin-Ulloa seeks injunctive and declaratory relief on behalf of himself and the Immigrant Cash Bond Class B, requiring the Federal Defendants to make efforts to provide notice of a demand on the bond consistent with Jones v. Flowers, 126 S. Ct. 1708 (2006).
JURISDICTION AND VENUE 28. This Court has subject matter jurisdiction over the individual claims brought by Plaintiffs Irma Sandoval, Alberta Rubio, Salinas, Miguel Rubio, Aracely Zamora-Garcia, and Juana Zamora against the Bonding Defendants and Santiago Sol and the claims of the putative Indemnitor Notice Class, the Indemnitor Collateral Class, and the Bonded Immigrant Class pursuant to 28 U.S.C. § 1331 (federal question) and 28 U.S.C. § 1367 (supplemental jurisdiction). It also has subject matter jurisdiction over the claims of the Supervision Class pursuant to 28 U.S.C. § 1331. 29. This Court has personal jurisdiction over Defendants Nobel and Ranger (and their successorsin-interest), as well as over Aaron Bonding, because they have conducted business within the State of Texas and because of their specific contacts with the State of Texas, in connection with the conduct at issue in this Complaint. 30. This Court also has subject matter jurisdiction over the claims brought by Petitioners ZamoraGarcia, Manuel Sandoval, Salinas, Cedeno, Norma Pena de Herrera, Isidro Herrera, and Alvarado-Narvaez against the Federal Defendants (the Supervision Class claims and corresponding individual claims) under 28 U.S.C. § 2241. These Petitioners are all subject to restrictions on their liberty not shared by the populace at
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large, and are therefore also in custody for purposes of habeas corpus, which custody is also alleged to be in violation of the laws and Constitution of the United States.
31. Plaintiffs Zamora-Garcia, Manuel Sandoval, Salinas, Cedeno, Norma Pena de Herrera, Isidro Herrera, Alvarado-Narvaez, and Adriana Echavarria also assert jurisdiction over the Federal Defendants pursuant to 28 U.S.C. § 1331 (federal question) and § 1346(a)(2) (action against an agency, and/or officers of the U.S.).
32. Venue is appropriate pursuant to 28 U.S.C. § 1391 (general venue) and 28 U.S.C. § 1491 (United States as a defendant). This action arises out of or is connected with business conducted by the Bonding Defendants and the Federal Defendants in this district. Further, venue is proper because the transactions that form the basis of Plaintiffs’ claims were conducted in this district.
FACTS 33. Plaintiffs herein incorporate by reference the allegations in their original Petition for Writ of Habeas Corpus and Class Action Complaint for Injunctive Relief (filed April 16, 2002, in C.A. No. M-02-144) [Dkt. #1], their First Amended Petition for Writ of Habeas Corpus and Class Action Complaint for Injunctive Relief (filed May 7, 2002, in C.A. No. M-02-144) [Dkt. #2], and their Second Amended Petition for Writ of Habeas Corpus and Class Action Complaint for Damages, Injunctive Relief, and Other Relief (filed July 31, 2003, in C.A. No. M-02-144) [Dkt. #36]. Plaintiffs also hereby incorporate by reference the allegations in the Opposed Motion of Alberta Rubio and Miguel Rubio-Flores to Intervene as Named Plaintiffs (filed May 18, 2005, in C.A. No. M-02-144) [Dkt. #134]. I. THE IMMIGRANT BONDING SYSTEM – CASH BONDS AND SURETY BONDS 34. Most immigrants taken into custody by the DHS to begin removal proceedings are released pending such proceedings if they can post a bond. To post a bond, an Immigrant or an Obligor (usually a
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relative or friend) may post the full amount of the bond (a “Cash Bond”) directly with the DHS. Should the Bonded Immigrant appear for all DHS appearances pursuant to demands on the bond by the DHS, the Cash Bond is cancelled and the amount deposited with the DHS is returned to whoever posted the bond.
35. Should the Bonded Immigrant fail to appear for a DHS appearance after a demand on the Cash Bond, the bond is forfeited to the federal government. Moreover, as a result of the breach of the bond, the Bonded Immigrant may be detained and even deported and may lose a variety of legal rights regarding his ability to remain in the United States.
36. Most immigrants, however, either do not know of the Cash Bond possibility or do not have access to sufficient resources to post the full amount of the bond. Such immigrants must arrange for an Indemnitor (usually a relative or friend legally in the U.S.) to contract with a bonding company (known herein as a “Surety”) to post a “Surety Bond” with the DHS. By this Surety Bond, the Surety agrees with the DHS that, should the Bonded Immigrant fail to appear for a DHS appearance after a demand on the bond, the Surety will pay the DHS the full amount of the bond. If the Bonded Immigrant appears for all DHS appearances after DHS demands, the bond is cancelled and the Surety does not have to pay the DHS on the bond. If the Bonded Immigrant misses such an appearance, the bond may be breached.
37. The Surety’s services do not come cheap. The Defendant Sureties in this case – the Bonding Defendants – charge each of the Indemnitors a non-refundable, up-front fee of approximately half the bond amount, which, in most cases, results in a fee of thousands of dollars. Each Indemnitor generally is required to pay each month into a Build-Up Account (or collateral account), which the Bonding Defendant may draw against should the bond be breached. This amount generally equals 40%-50% of the total amount of the bond. Finally, the Indemnitor agrees that, should the bond be breached, she/he will pay the Bonding Defendant for its out-of-pocket cost in covering the bond (the amount of the bond less the Build-Up Account), plus even more
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fees. 38.

Unfortunately, in thousands of Cash Bond and Surety Bond cases, the Bonded Immigrant

does not appear for a DHS appearance after a demand on the bond, resulting in a breach of the bond. These

breaches have severe consequences for both the Bonded Immigrant and the Indemnitor.

39. In the event of a breach of the bond, the Bonded Immigrant who is under a final order of

removal will be deported if detained and forfeits his rights to pursue any administrative remedies challenging

the removal order. In the event of a breach of the bond, Bonded Immigrants not under a final removal order are

remanded to detention, forfeit the rights provided to them by the original bond, and may have difficulty

obtaining a new bond.

40. As to the Indemnitors, upon the breach of the bond, any collateral they posted with the

Bonding Defendant is in jeopardy, and they are obligated to the Bonding Defendant for whatever amount the

Bonding Defendant must pay out-of-pocket to the DHS on the bond, plus additional fees charged by the

Bonding Defendant. In most cases this amounts to thousands of dollars (on top of the non-refundable fee the

Indemnitor previously paid the Bonding Defendant).

II. THE IMPORTANCE OF NOTICE

41. The Bonded Immigrant’s immigration ability to remain in the United States, the right to

reclaim the cash bond from the DHS (whether the Immigrant or an Obligor), the Bonded Immigrant’s right to

be released on a Surety Bond, the right of the Indemnitor to claim what has been paid into a Bonding

Defendant’s Build-Up Account, and the right of the Indemnitor to retain their treasure, all depend upon the

Bonded Immigrant appearing for each DHS-scheduled appearance after a demand on the bond. Notice of such

scheduled appearances is critical to the preservation of the Bonded Immigrant’s, the Obligor’s, and the

Indemnitor’s rights.

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42. When individuals post Cash Bonds for detained immigrants, the documents given do not advise them to submit changes of address, and where the Obligor has not submitted a change of address, it is the Federal Defendants’ practice to send notice of a demand on the bond only to the Obligor, at the address given when the bond was posted, even where the Bonded Immigrant is represented by counsel, and even where the Federal Defendants have actual knowledge that the Obligor and the Bonded Immigrant are residing at a different address.
43. Where an Obligor on a Cash Bond has moved following the posting of a bond, and a demand letter is returned undelivered, it is the Federal Defendants’ practice to immediately breach the bond and send notice of that breach only to the same address (even when it is known to be incorrect) without making any further attempt to notify the Obligor, and regardless of whether the Bonded Immigrant continues to appear for his/her court appearances and other settings of which s/he had actual notice.
44. Unfortunately, in a great many Cash Bond cases notice never reaches the Obligors or the Bonded Immigrant. This results in the loss of the bond and the potential deportation of the Bonded Immigrant.
45. As to Surety Bonds, despite the critical importance of notice of DHS appearances, the Bonding Defendants never provide advance notice to either the Bonded Immigrants or the Indemnitors after receiving the demand from the DHS. As a result of this failure to provide notice, thousands of Bonded Immigrants are deported and lose their payments into the Build-Up Accounts. As a result of this failure to provide notice, thousands of Indemnitors lose the value of their up-front fees, lose the value of their payments into the Build-Up Accounts, and become obligated to pay the Bonding Defendant its out-of-pocket costs on the bond, as well as other fees charged by the Bonding Defendant.
46. The Bonding Defendants fail to provide this notice even though their contracts with the Indemnitors specifically require them to provide this notice. The Bonding Defendants’ form contracts plainly
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state as follows: “[BONDED IMMIGRANT] and INDEMNITOR will be notified by AGENCY of all appearances requested by the U.S. IMMIGRATION AND NATURALIZATION SERVICE of which AGENCY receives notice.” Unfortunately, the Bonding Defendants’ practice and intent is to not provide advance notice to either the Bonded Immigrant or the Indemnitor. The Indemnitors are thus deprived of the benefit of their bargains: they pay exorbitant, up-front fees for notice to themselves and the Bonded Immigrants, but the Bonding Defendants provide no such notice. Similarly, the Bonded Immigrants, as third-party beneficiaries of these surety contracts, are deprived of their contractual benefit, as well.
47. Instead of providing notice, the Bonding Defendants in many cases attempt to apprehend the Bonded Immigrants the night before or immediately before a DHS-scheduled appearance. In many cases these attempts are unsuccessful, leaving the Bonded Immigrant unable to appear at the DHS-scheduled appearance and the Indemnitor unable to protect his interest.
48. Notices of scheduled appearances by the DHS are not to be confused with notices of removal hearings provided by the Executive Office for Immigration Review (“EOIR”), an agency within the Department of Justice. Notices issued by the EOIR of removal hearings before the EOIR are served directly on the Bonded Immigrant or his/her attorney of record.
49. The DHS has the right to issue a call-in on the bond for any reason. Although such demands are most common when the DHS has decided to execute an administratively final order of removal, they are not limited to such situations. For example, in the case of Plaintiff Miguel Rubio, who was in deportation proceedings, and had never failed to appear before a hearing before an immigration judge, the demand was issued for the purpose of placing him under removal proceedings and detaining him without bond.
50. Unfortunately, when the Bonding Defendants serve as Surety, they as a matter of course fail to provide notice of the DHS demand that the Bonded Immigrants appear before the DHS.
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51. Despite an Order of Removal issued by an EOIR immigration judge, a Bonded Immigrant has the right to pursue a variety of administrative remedies. First and foremost, the immigrant has a right to appeal the judge’s order to the Board of Immigration Appeals (“BIA”) and to remain in the United States pending any such appeal. See 8 C.F.R. § 1003.6(a). Although DHS does not generally make demands on the bond while such appeals are pending, they occasionally do so, as in the case of Plaintiff Zamora-Garcia. In that case, the demand was issued for the purpose of executing a removal order against her before the BIA determined whether or not her appeal was timely. If she had been removed pursuant to said demand, her appeal to the BIA would have been deemed abandoned. See 8 C.F.R. § 1003.4. As a result, she would also have lost the right to judicial review of the resulting decision of the BIA for failure to exhaust her administrative remedies. See 8 U.S.C. § 1252(d). Fortunately, she was not home when Defendant Sol, acting on behalf of the Bonding Defendants, attempted to apprehend her, and she was therefore able to pursue her appeal, which was ultimately found to have been timely.
52. In addition, an immigrant who has lost his or her appeal to the BIA has the right to file a motion to reopen and/or reconsider. This right is also lost if the immigrant is physically removed from the United States before such a motion is filed, or if filed, before it is adjudicated. See 8 C.F.R. § 1003.2(d). The BIA has the power to issue stays while the motion is being adjudicated. See 8 C.F.R. § 1003.2(f). Unfortunately, however, as a matter of policy, the BIA will not consider an application for a stay unless and until the applicant is in the physical custody of DHS. In the case of Mexican nationals living near the border, such as the named plaintiffs to this lawsuit, the immigrants can be, and often are, physically removed within hours of being taken into physical custody. This renders the stay provisions illusory unless the Bonded Immigrant has advance notice of a DHS demand on the bond so that he or she may prepare to apply for a stay with the BIA before being taken into custody.
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53. Therefore, in order to have a meaningful opportunity to pursue such administrative remedies, the Bonded Immigrant must have advance notice of all DHS demands on the bond. Unfortunately, as discussed above, the Bonding Defendants uniformly fail to provide notice of those scheduled appearances before the DHS.
54. The Bonding Defendants have entered and breached thousands of these contracts. Their uniform practice and systematic contract breaches have resulted in the loss of thousands of dollars by each of thousands of Indemnitors, in addition to subjecting thousands of Bonded Immigrants to deportation. The Bonding Defendants have no intention of providing the promised notice to the Indemnitors and the Bonded Immigrants at the time they enter into form contracts with – and happily take exorbitant, non-refundable fees from – such individuals.
55. Moreover, the Bonding Defendants’ uniform bond contracts require the Bonding Defendants to return to the Indemnitors the amounts paid into the Build-Up Accounts (or collateral accounts) upon a cancellation of the bond (less certain fees). However, the Bonding Defendants make it their practice and policy to refrain from providing notice of a cancellation of a bond, and the availability of collateral for collection, to either the Indemnitors or the Bonded Immigrants. Rather, the Bonding Defendants’ policy is to simply sit quietly and hope no one learns of the cancellation of the bond and the availability of the collateral.
56. The Indemnitors and the Bonded Immigrants are generally poor, unsophisticated, non-English speakers. This fact makes the Bonding Defendants’ wrongful conduct that much more unconscionable. III. COLLUSION BETWEEN THE FEDERAL DEFENDANTS AND THE
BONDING DEFENDANTS 57. The Federal Defendants, of course, are well aware that the Bonding Defendants fail to provide notice to the Bonded Immigrant and the Indemnitor of demands by the DHS on the surety bonds. Yet they do nothing to address this problem. They could attempt to provide notice to the Bonded Immigrant, yet they
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choose not to. No rule of law prevents them from providing notice to the Bonded Immigrant. Instead, the Federal Defendants provide notice only to the Bonding Defendants and hide behind the “Amwest Settlement.” Indeed, prior to the Amwest Settlement, the Federal Defendants routinely provided notice to the Bonded Immigrants of scheduled appearances before the DHS.
58. The Amwest Settlement was negotiated without participation by the real parties in interest – the Bonded Immigrants. It provides, inter alia, that when a demand is made on a bond posted by a Surety, the Surety receives notice three days before notice, if any, is sent to the immigrant and/or his or her counsel. The Federal Defendants have adopted the practice of not providing any notice of such demands to the Bonded Immigrants. The Amwest Settlement does not prohibit or prevent the Federal Defendants from providing notice directly to the Bonded Immigrant.
59. Pursuant to the Amwest Settlement, where a bond posted by a Surety is breached, it may be mitigated, and the Surety's liability reduced or eliminated, if the Surety surrenders the immigrant within a given period of time after any bond breach.
60. In practice, the Federal Defendants exhibit a great deal of restraint and flexibility with respect to surety bonds, in some cases permitting cancellation, and full exoneration of liability, even when the Bonded Immigrant is surrendered long after the grace period allowed by the Amwest Settlement has expired, and in others, sending out more than one demand letter, years apart, and only taking steps to breach the bond if the immigrant is not produced in response to the second demand letter.
61. On information and belief, Plaintiffs allege that the surety bond system is manipulated by all Defendants to achieve the earliest possible removal of the Bonded Immigrant, with the least possible liability on the bond to the Surety, and without regard to whether this deprives the immigrant of the ability to pursue administrative or judicial remedies, or, as the real party in interest of the contract between the Surety and the
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Indemnitor, of the benefits of the bond posted on his or her behalf. 62. On information and belief, Plaintiffs allege that where Cash Bonds are posted by individuals,
the Federal Defendants manipulate the bond system, by failing to make good faith attempts to provide actual notice either to the Obligor or the real party in interest, the Bonded Immigrant, so as to be able to breach the bond and thus keep the collateral posted, without regard to whether the immigrant continues to appear at all court hearings and other settings of which s/he had actual and timely notice.
63. The practices of both the Federal Defendants and the Bonding Defendants violate the rights and interests of the Bonded Immigrants – the real parties in interest to the bond contract. The Amwest Settlement was reached without regard to their interests and has been utilized to further the interests of the Sureties (in limiting their liability under the bond) and of the Federal Defendants (in quickly executing removal orders) without regard to the rights of the Bonded Immigrants.
64. The Indemnitor Class, the Indemnitor Subclass, and the Bonded Immigrant Class have each been injured in an amount exceeding $5,000.000.00. As discussed above, the Bonding Defendants issued and breached thousands of these surety bonds, each involving thousands of dollars. IV. FACTS REGARDING THE NAMED PLAINTIFFS
A. Manuel Sandoval-Herrera And Irma Sandoval Ibarra Valencia 65. Manuel Sandoval is a native and citizen of Mexico, who entered the United States as an LPR on or about July 25, 1988 and has resided here continuously since that date. 66. On or about November 7, 1996, Mr. Sandoval pleaded guilty to a criminal offense and was placed on probation. 67. Mr. Sandoval was detained by the Federal Defendants on or about November 18, 1997. Irma Sandoval, Mr. Sandoval’s daughter, contracted with Aaron Bonding, as agent for Nobel and/or Ranger, for it to
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post a Surety Bond securing Mr. Sandoval’s release. Irma Sandoval gave Defendant Aaron Bonding $900 at the time as a non-refundable, up-front fee, and contractually agreed to make monthly payments into a Build-Up Account, until Aaron Bonding had received an additional $750. The Sandovals timely paid all of the required amounts. Mr. Sandoval regularly reported to Aaron Bonding and had appeared at each and every scheduled hearing before the EOIR. As part of its contract with Irma Sandoval, Aaron Bonding agreed to provide notice of demands on the bond to both Irma Sandoval and Mr. Sandoval.
68. On January 15, 1999, an immigration judge ordered Mr. Sandoval’s removal to Mexico, and on April 3, 2002, the Board of Immigration Appeals (“BIA”) dismissed his appeal and ordered his removal to Mexico.
69. On June 4, 2002, the Federal Defendants issued a demand on Mr. Sandoval’s bond, requiring Aaron Bonding to produce Mr. Sandoval for deportation on July 5, 2002. Aaron Bonding received this demand on the bond on June 6, 2002. Aaron Bonding provided no notice of this demand to either Mr. Sandoval (or his attorney) or Irma Sandoval. Because neither he nor Irma Sandoval was informed of this demand, he did not appear, and the bond was breached.
70. On or about July 6, 2002, Mr. Sandoval heard that someone in Brownsville, Texas, had been looking for him, to arrest and deport him. On advice of counsel, he promptly filed his petition for habeas corpus and arranged to be put under an Order of Supervision. Had Mr. Sandoval been picked up by Aaron Bonding after July 5, 2002, he would have been subject to detention and possible immediate deportation. Consequently, he might never have had the opportunity to file a habeas corpus petition and would almost certainly have been unable to regain his liberty and obtain an Order of Supervision – all because of Aaron Bonding’s failure to provide notice of the DHS-scheduled appearance.
71. In August 2002, Irma Sandoval received a demand from Aaron Bonding for $1,100, on the
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grounds that her father had failed to report for a DHS-scheduled appearance, and the bond had therefore been breached. On September 18, 2002, when Mr. Sandoval called Aaron Bonding, he was told that if he did not pay that amount, an agent of Aaron Bonding would come pick him up, and physically take him to Mexico, thereby effectuating his deportation.
72. Aaron Bonding, acting as agent for Nobel, breached its contract with Irma Sandoval when it failed to provide notice of DHS’ demand on the bond in July, 2002. This breach caused financial damage to Irma Sandoval and/or Mr. Sandoval and threatened to compromise the immigration rights of Mr. Sandoval.
B. Miguel Rubio and Alberta Rubio 73. Miguel Rubio is a native and citizen of Mexico and lawful permanent resident of the U.S. who was placed in deportation proceedings in 1996. His mother, Alberta Rubio, contracted with Aaron Bonding for the posting of the Surety Bond, and served as the Indemnitor on the bond contract. Ms. Rubio paid Aaron Bonding $4,000 in up-front fees and collateral, and Aaron Bonding posted a $3,000 Surety Bond on behalf of Mr. Rubio. Aaron Bonding contractually agreed to provide both Mr. Rubio and Alberta Rubio with notice of all appearances of Mr. Rubio requested by the INS/DHS. 74. Although his case was still pending before the Immigration Court, and Mr. Rubio had duly appeared at all his scheduled hearings, the INS, without informing Mr. Rubio, sent notice of a demand on the bond to Aaron Bonding on March 1, 2005, requiring that it cause Mr. Rubio to appear before the INS on April 12, 2005. Aaron Bonding did not provide advance notice of this demand on the bond to either Miguel Rubio or his Indemnitor, Alberta Rubio. Aaron Bonding therefore breached its contractual obligation to provide notice to Miguel and Alberta Rubio. 75. Aaron Bonding physically detained Mr. Rubio in the middle of the night on April 11, 2005, and surrendered him to the INS on April 12, 2005. Although the Federal Defendants had only demanded that
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Aaron Bonding present Mr. Rubio for an interview, Aaron Bonding surrendered Mr. Rubio into the custody of the INS, and the INS cancelled Mr. Rubio’s bond. The bonding contract between Alberta Rubio and the Bonding Defendants required the Bonding Defendants to maintain the surety bond until the conclusion of Mr. Rubio’s immigration case. No provision of the bonding contract allowed the Bonding Defendants to surrender Mr. Rubio back to the INS prior to the conclusion of Mr. Rubio’s immigration case, absent a breach of the contract by the Rubios. The Rubios fulfilled all of their obligations under the terms of the surety bond contract.
Mr. Rubio was forced to remain in INS detention for nearly five months, until September 5, 2005, when he finally was able to obtain a new surety bond from a different bond company.
76. By letter dated April 27, 2005, a bond company called “C.C.S.” demanded that the Indemnitor, Alberta Rubio, pay them the full amount of the initial bond, plus a $350 collection fee, because Mr. Rubio had allegedly not appeared when required, and the bond had been breached.
77. Aaron Bonding’s breach of its obligation to provide notice threatened to compromise the immigration rights of Mr. Rubio and caused him to be unnecessarily detained for approximately five months. It also deprived Ms. Rubio of the value of her up-front fees – Ms. Rubio paid for notice to be provided to both her and her son, but no notice was provided.
78. Finally, even though the Federal Defendants cancelled Mr. Rubio’s bond, releasing the Bonding Defendants of any obligation to pay on the bond, Aaron Bonding and Ranger (the surety on Mr. Rubio’s bond) have failed to return Ms. Rubio’s collateral to her. Moreover, documents in the bond file maintained by the Bonding Defendants regarding Mr. Rubio’s bond specifically acknowledge that Ms. Rubio is owed a return of a portion of the collateral she posted.
C. Petra Carranza de Salinas 79. Plaintiff Petra Carranza de Salinas is a native and citizen of Mexico, who became a lawful
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permanent resident (“LPR”) on or about August 29, 1985. Ms. Salinas was detained by the INS on or about August 18, 1997, and removal proceedings were commenced shortly thereafter. In 1997, her friend, Juan De La Rosa, contracted with Aaron Bonding to post a surety bond with the INS on Ms. Salinas’ behalf. On information and belief, Aaron Bonding contractually agreed that it would provide notice of any demands on the bond to both Ms. Salinas and Mr. De La Rosa. In exchange, Mr. De La Rosa paid Aaron Bonding an up-front, non-refundable fee and further agreed that he or Ms. Salinas would pay the entire amount of the bond into a Build-Up Account, which would be forfeited to Aaron Bonding in the event the bond was breached.
80. Ms. Salinas has personally paid, and Defendant Aaron Federal Bonding has accepted, all required payments from her as into the Build-Up Account, which monies she will lose if she fails to appear in response to any demand made on her bond. Ms. Salinas has appeared at each and every scheduled hearing before the EOIR. Her case is currently pending before the Fifth Circuit.
81. Although, to her knowledge, the DHS has not yet issued a demand on her bond, should it do so and should the Bonding Defendants continue their practice of breaching their bond contracts by failing to provide notice of DHS demands on Surety Bonds to either the Bonded Immigrant (here, Ms. Salinas) or the Indemnitor (here, Mr. De La Rosa), Ms. Salinas will likely lose the money she has paid into her Build-Up Account with Aaron Bonding. Moreover, she may face a loss of her ability to remain in the United States because of this lack of notice.
D. Aracely Zamora-Garcia and Juana Zamora 82. Aracely Zamora-Garcia is a Mexican national who immigrated to the U.S. with her family, in 1982, at the age of eight, and has resided here continuously ever since. She and her mother, Juana Zamora, live in Mission, Texas. In February of 2000, Zamora-Garcia was detained and placed under removal proceedings in the San Antonio district of the EOIR for helping two young girls enter the U.S. illegally, in order to reunite
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them with their mother. 83. To secure Aracely’s release from detention, Juana Zamora contacted Juvencio Peña, Aracely’s
cousin. Peña, on Juana Zamora’s behalf, entered a contract with Defendant Aaron Bonding by which Aaron Bonding agreed to post a Surety Bond on Aracely Zamora’s behalf. Aaron Bonding served as the agent of Ranger in contracting with Peña.
84. On September 20, 2001, an immigration judge ordered her removal, and her appeal to the BIA was pending on November 20, 2001, when the Federal Defendants issued a demand on the bond to Aaron Bonding, requiring that Aaron Bonding present Aracely Zamora-Garcia for an appearance before the DHS on December 12, 2001. Neither the Federal Defendants nor Aaron Bonding attempted to inform Aracely ZamoraGarcia (the Bonded Immigrant) or Peña (the Indemnitor) of this demand prior to December 12, 2001. When Aracely Zamora did not appear, her bond was breached.
85. Aaron Bonding’s failure to provide notice to Aracely Zamora-Garcia and Peña constituted a breach of the contract it entered with Peña and a breach of Aracely Zamora-Garcia’s third-party beneficiary contract rights. This breach threatened to compromise her immigration rights.
86. On April 15, 2002, several men, including Defendant Sol, and an officer from the Mission Police Department, went to the home of Juana Zamora in Mission, Texas. Defendant Sol left a business card with an "office" phone number, (713) 225-1386, which was, at the time the instant action was filed, answered by Defendant Aaron Bonding, and was listed in various websites as one of their numbers. Mr. Sol falsely asserted that he had a warrant for Zamora’s removal, issued in December, 2001, and that he was authorized to arrest her. He further claimed that there was an order that she surrender to INS in San Antonio at 8:00 a.m. the following day. Fortunately, Aracely Zamora-Garcia was not home, and Sol was unable to apprehend her.
87. Juana Zamora called counsel, who contacted Mr. Sol and advised him that any warrant for
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Aracely Zamora's removal issued in December 2001 could not be valid because her appeal was pending at that time and, thus, she was not subject to deportation. She also advised him that she would surrender Aracely Zamora to the Harlingen INS office in the morning. Mr. Sol insisted that she be surrendered to him, and threatened both Juana Zamora and her counsel with criminal charges of harboring a fugitive, for refusing to do so. In fact, Aracely Zamora-Garcia surrendered herself to the Federal Defendants the next day, at the Harlingen INS Office, where she remained when this action’s predecessor action was filed, and was thereafter allowed to leave because she successfully filed a habeas petition with this Court (under current DHS policy, the filing of a petition by an immigrant in Aracely’s situation would not have permitted her to leave detention).
88. Defendant Sol returned to the homes of Juana and Aracely Zamora-Garcia, and to the homes of other relatives several times over the next few days following April 16, 2002, even after being advised that the petition for habeas corpus had been filed, and that Aracely Zamora-Garcia had been allowed to leave the Harlingen INS office. He harassed and scared Juana Zamora to the point that she refused all contact with her daughter, who was forced to spend several days at other locations, in fear of him, causing both Juana and Aracely great emotional distress. Aracely Zamora-Garcia was only recently able to resume her normal life, partly for fear that he would locate her and take reprisals, and partly for fear that an encounter with him or with DHS/INS would lead to her removal, thus mooting her case before the BIA, and finalizing her removal.
89. From January 10, 2002 to December 12, 2002, and again from March 24, 2004 to the present, Aracely Zamora-Garcia was under an administratively final order of removal but was pursuing first administrative and, thereafter, judicial remedies. In April, 2002, she filed a fee-paid application with the INS District Director for a stay of deportation. INS cashed the check, but has never adjudicated the application.
E. Adrianna Echavarria 90. Jorge Echavarria was detained by the Federal Defendants and placed under deportation
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proceedings in 1993. On November 5, 1993, his wife, Plaintiff Adriana Echavarria, paid a Cash Bond in the amount of $1,500 to secure his release during proceedings. The bond papers did not warn Mrs. Echavarria that she had to report any change of address, independently of any changes of address of her husband. Jorge Echavarria has never failed to appear at an immigration court setting and has been represented by counsel at all relevant times. Neither Jorge Echavarria nor his wife ever received notice, in person or through counsel, of any demand on the bond. On June 10, 2003, Mr. Echavarria was granted relief from deportation, and the Government waived appeal. The Echavarrias assumed that this meant that the bond would be cancelled. On inquiry, however, counsel was informed by the Federal Defendants that it had been breached.
91. On an unknown date, the Federal Defendants made a demand on Mrs. Echavarria that she produce her husband, but they sent the demand only to her, and sent it to the address where she had resided in 1993. However, on information and belief, Plaintiffs allege that the Federal Defendants knew that she and her husband were no longer at that address, and the Federal Defendants had information regarding how to contact Mr. Echavarria.
F. Maria Francisa Cedeno 92. Cedeno is the mother of an 11-year-old U.S. citizen son, Jeremy, who suffers from a lifethreatening blood disorder, propionic acidemia. It is hereditary, and at least three of her other children were born with this condition, and are deceased. Her husband and two of their Mexican national children are lawful permanent residents. 93. In order to enable her to care for Jeremy, Ms. Cedeno has been under an Order of Supervision since 1997, with no stay of removal. However, given the changes in the policies of the Federal Defendants, her Order of Supervision was cancelled. She was obliged to file an I-246, application for stay of removal, and even though that stay has been granted, until July 2007, the Federal Defendants have refused to issue her a new
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Order of Supervision. This will make it impossible for her to renew her employment authorization documents and will compromise the family’s economic stability.
G. Norma Pena de Herrera and Isidro Herrera 94. Norma Pena de Herrera and Isidro Herrera are husband and wife. They have five children, of whom two are U.S. citizens, including a twelve-year-old daughter, Brenda, who suffers from Beta Thalassemia Major, a serious blood disease for which there is no cure, but the effects of which can be mitigated by frequent blood transfusions and a drug called Desferol. Brenda requires constant medical attention of a nature which she could not obtain in Mexico, and which the Herreras could not provide if they were in Mexico. These facts have been known to the Federal Defendants for a number of years. 95. Ms. Herrera was previously a party to this litigation, following an incident on February 14, 2002, when the Federal Defendants arrested and deported her, in violation of prior verbal assurances to the contrary. Subsequently, an agreement was made, whereby DHS agreed, inter alia, to allow her to remain in the U.S. for so long as Brenda’s condition required her presence, and to give an Order of Supervision, so that she could obtain employment authorization to enable her to support her children. In exchange, she agreed to drop her participation in the instant action. No stay of removal was ever issued for either Mr. or Mrs. Herrera. 96. On March 10, 2006, Mr. and Mrs. Herrera were advised that they needed to file I-246s, applications for administrative stays of deportation. On March 15, 2006, they filed said I-246s and were temporarily allowed to keep their Orders of Supervision, although they were required to report to ICE on a monthly basis, while awaiting their adjudication. See Plaintiffs’ Exhibit R, herein incorporated by reference. 97. On August 22, 2006, Mr. and Mrs. Herrera reported, as instructed, and were informed that their I-246s had not yet been adjudicated. At that time, ICE confiscated their Orders of Supervision and informed them that they would no longer be able to have such Orders. Without Orders of Supervision, the Herreras will
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be unable to renew their employment authorization documents and will be unable to maintain employment adequate to support the family. The family situation will become a crisis, emotionally, logistically, and financially, if, as appears likely, Isidro Herrera is forced to leave the United States, and Norma Herrera is left alone in the United States with the children.
H. Luis Alvarado-Narvaez 98. Alvarado-Narvaez is a seventy-three-year-old native and citizen of Mexico who has resided continuously in the United States since entering as an LPR on August 12, 1960. 99. On October 30, 1997, Mr. Alvarado pleaded no contest to a minor offense. Removal proceedings were commenced, charging conviction of an aggravated felony. 100. At his hearing, Mr. Alvarado denied deportability, and the Immigration Judge terminated proceedings, concluding that the offense was not an aggravated felony. INS appealed, and on November 20, 2002, the BIA granted INS’ appeal. However, instead of remanding for the IJ to give Mr. Alvarado an opportunity to apply for relief, under 8 C.F.R. § 1240.11, the BIA ordered removal. 101. Mr. Alvarado promptly filed a petition for habeas corpus in U.S. District Court, CA M-02-526. He raised various claims, which the Court winnowed down to two: that the BIA Order was ultra vires (see Noriega-Lopez v. Ashcroft, 335 F.3d 874 (9th Cir. 2003)) and that under the facts of his case, removal would violate substantive Due Process. Following passage of the REAL ID Act of 2005, the case was transferred to the Fifth Circuit, where it is currently pending. On May 5, 2006, more than three years after the expiration of the 90-day removal period, that Court granted a stay of removal, pending review. I. Juan Larin-Ulloa 102. Juan Larin-Ulloa is a native and citizen of El Salvador who came to the United States on or about May 11, 1981, and became a lawful permanent resident on November 28, 1989.
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103. On January 24, 2002, the Federal Defendants detained Mr. Larin-Ulloa, and issued a Notice to
Appear. On May 22, 2002, an immigration judge ordered Mr. Larin-Ulloa’s removal. On August 20, 2003, the
BIA affirmed the order of the immigration judge. Mr. Larin-Ulloa filed a motion to reopen on November 17,
2003, which was denied by the BIA on January 2, 2004. Mr. Larin-Ulloa petitioned the U.S. Court of Appeals
for the Fifth Circuit for review of both BIA decisions, and on August 24, 2006, the Fifth Circuit vacated the
BIA decisions and remanded his case to the BIA.
104. On September 1, 2006, an immigration judge set bond at $1500, and an Obligor posted a cash
bond on his behalf. He has appeared at every appearance requested by the Federal Defendants. He is still
released pursuant to that cash bond.
CLASS ALLEGATIONS
105. Plaintiffs Irma Sandoval and Alberta Rubio seek certification of the Indemnitor Notice Class
under Federal Rule of Civil Procedure (“FRCP”) 23(b)(3). On behalf of themselves and the Indemnitor Notice
Class, Plaintiffs Irma Sandoval and Alberta Rubio seek to recover the up-front fees they and members of the
class paid the Bonding Defendants.
a. There are thousands of members of the Indemnitor Notice Class, and the members are so numerous that joinder of all members of the class would be impracticable. The Indemnitor Notice Class satisfies the numerosity requirement of FRCP 23(a)(1).
b. There are multiple issues of fact and law common to the claims of the Indemnitor Notice Class, including whether the uniform contracts the Bonding Defendants enter into with the Indemnitors require the Bonding Defendants to provide notice of appearances requested by the INS/DHS to the Indemnitors and the Bonded Immigrants, and whether the Insurers are liable for the misconduct of their agent, Aaron Bonding. Indeed, these common questions predominate over any individual issues that may exist. The Indemnitor Notice Class satisfies the commonality requirement of FRCP 23(a)(2) and the predominance requirement of FRCP 23(b)(3).
c. The claims of Alberta Rubio and Irma Sandoval are typical of the claims of the members of the Indemnitor Notice Class. The Bonding Defendants contracted to provide Ms. Rubio and Ms. Sandoval and the Bonded Immigrants on those bonding contracts with notice of all
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appearances requested by the INS/DHS of which the Bonding Defendants received notice. The Bonding Defendants entered the same contract with every member of the Indemnitor Notice Class. Like every member of the Indemnitor Notice Class, Ms. Rubio and Ms. Sandoval paid the Bonding Defendants up-front fees for the Bonding Defendants’ services. The Bonding Defendants failed to provide the notice contracted for by every member of the Indemnitor Notice Class. The Indemnitor Notice Class and the proposed class representatives thus satisfy the typicality requirement of FRCP 23(a)(3).
d. Alberta Rubio and Irma Sandoval, and their counsel, will adequately represent the class. The proposed class representatives satisfy the requirements of FRCP 23(a)(4).
e. Pursuit of the claims of the Indemnitor Notice Class through a class action is superior to the litigation of each of the thousands of individual class member claims on an individual basis, each of which are for small amounts that cannot justify independent litigations, and the Indemnitor Notice Class thus satisfies the superiority requirement of FRCP 23(b)(3).
106. Plaintiff Alberta Rubio seeks certification of the Indemnitor Collateral Class under FRCP
23(b)(3). On behalf of herself and the Indemnitor Collateral Class, Plaintiff Alberta Rubio seeks to recover the
collateral the Bonding Defendants have retained after a cancellation of the immigration bond at issue in the
contract.
a. There are hundreds of members of the Indemnitor Collateral Class, and the members are so numerous that joinder of all members of the class would be impracticable. The Indemnitor Collateral Class thus satisfies the numerosity requirement of FRCP 23(a)(1).
b. There are multiple issues of fact and law common to the claims of the Indemnitor Collateral Class, including whether the uniform contracts the Bonding Defendants enter into with the Indemnitors require the Bonding Defendants to return the collateral the Indemnitors deposited with the Bonding Defendants, and whether the Insurers are liable for the misconduct of their agent, Aaron Bonding. Indeed, these common questions predominate over any individual issues that may exist. The Indemnitor Collateral Class thus satisfies the commonality requirement of FRCP 23(a)(2) and the predominance requirement of FRCP 23(b)(3)
c. The claim of Alberta Rubio is typical of the claims of the members of the Indemnitor Collateral Class. Like every member of the Indemnitor Collateral Class, the bond Ms. Rubio contracted for was ultimately cancelled by the Federal Defendants. Like every member of the Indemnitor Collateral Class, pursuant to the Bonding Defendants’ uniform contracts, upon the cancellation of the bond, Ms. Rubio is entitled to a return of the collateral she deposited with the Bonding Defendants. Like every member of the Indemnitor Collateral Class, Ms. Rubio has not received a return of her collateral. The Indemnitor Collateral Class and the proposed class representative thus satisfy the typicality requirement of FRCP 23(a)(3).
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d. Alberta Rubio, and her counsel, will adequately represent the class. The proposed class representative satisfies the requirements of FRCP 23(a)(4).
e. Pursuit of the claims of the Indemnitor Collateral Class through a class action is superior to the litigation of each of the hundreds of individual class member claims on an individual basis, each of which cannot justify individual litigations, and the superiority requirement of FRCP 23(b)(3) is satisfied.
107. Plaintiff Petra Carranza de Salinas seeks certification of the Bonded Immigrant Class under
FRCP 23(b)(2). On behalf of herself and the Bonded Immigrant Class, Plaintiff Petra Carranza de Salinas
seeks an injunction requiring the Bonding Defendants to provide the notice required under the terms of the
uniform bond contracts, and corresponding declaratory relief.
a. There are hundreds of members of the Bonded Immigrant Class, and the members are so numerous that joinder of all members of the class would be impracticable. The Bonded Immigrant Class therefore meets the numerosity requirement of FRCP 23(a)(1).
b. There are multiple issues of fact and law common to the claims of the Bonded Immigrant Class, including whether the uniform contracts the Bonding Defendants enter into with the Indemnitors require the Bonding Defendants to provide notice of all appearances requested by the INS/DHS, of which the Bonding Defendants receive notice, to the Indemnitors and the Bonded Immigrants. The Bonded Immigrant Class therefore meets the commonality requirement of FRCP 23(a)(2).
c. The claim of Petra Carranza de Salinas is typical of the claims of the members of the Bonded Immigrant Class. Like every member of the Bonded Immigrant Class, Ms. Salinas is a thirdparty beneficiary to the bond contracts entered into by the Indemnitors and the Bonding Defendants. Each of these bond contracts imposes a duty on the Bonding Defendants to provide notice of appearances requested by the INS/DHS to both the Bonded Immigrant and to the Indemnitor. Unfortunately, the Bonding Defendants make it their uniform practice to breach this duty by failing to provide the required notice. The Bonded Immigrant Class and the proposed class representative therefore meet the typicality requirement of FRCP 23(a)(3).
d. Petra Carranza de Salinas, and her counsel, will adequately represent the class. The requirement of FRCP 23(a)(4) is met.
e. By making it their practice to fail to fulfill their duty to provide notice to the Bonded Immigrants and the Indemnitors under the terms of the bond contracts, the Bonding Defendants have acted or failed to act on grounds generally applicable to the class. The requirement of FRCP 23(b)(2) is therefore met.
108. Plaintiffs Zamora-Garcia, Manuel Sandoval, Salinas, Cedeno, Norma Pena de Herrera, Isidro
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Herrera, and Alvarado-Narvaez seek certification of the Supervision Class under FRCP 23(b)(2). Plaintiffs
seek injunctive relief requiring the Federal Defendants to grant Orders of Supervision to the members of the
class upon request of the class member, and in the absence of individual factors which would warrant the
refusal to do so.
a. The members of the Supervision Class are so numerous that joinder is impracticable. b. The claims of Plaintiffs Zamora-Garcia, Manuel Sandoval, Salinas, Cedeno, Norma Pena de
Herrera, Isidro Herrera, and Alvarado-Narvaez seek are typical of the members of the class. Plaintiffs Zamora-Garcia, Manuel Sandoval, Salinas, Cedeno, Norma Pena de Herrera, Isidro Herrera, and Alvarado-Narvaez, like the members of the Supervision Class, fall within the definition of the class members described above. c. There are multiple issues of fact and law common to the claims of the Supervision Class, including whether federal law requires the Federal Defendants to grant the class members Orders of Supervision. d. Plaintiffs Zamora-Garcia, Manuel Sandoval, Salinas, Cedeno, Norma Pena de Herrera, Isidro Herrera, and Alvarado-Narvaez, along with their counsel, will adequately represent the interests of the class members. e. The Federal Defendants have refused to act on grounds generally applicable to the class members. 109. Plaintiff Adriana Echavarria seeks certification of the Obligor Cash Bond Class under FRCP
23(b)(2). Plaintiff Adriana Echavarria seeks, for herself and the members of the Obligor Cash Bond Class,
injunctive and declaratory relief requiring the Federal Defendants to reinstate the breached bonds posted by the
members of the class, (if proceedings are ongoing), or reinstate and cancel the breached bonds (if proceedings
have been completed).
a. The members of the Obligor Cash Bond Class are so numerous that joinder is impracticable. b. The claim of Plaintiff Adrianna Echavarria is typical of the members of the class. c. There are multiple issues of fact and law common to the claims of Obligor Cash Bond Class,
including whether federal law requires the Federal Defendants to take additional steps to provide notice of a demand on a cash bond to the Obligors on those bonds, in the situation of persons in the Obligor Cash Bond Class.
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d. Plaintiff Adrianna Echavarria, along with her counsel, will adequately represent the interests of the class members.
e. The Federal Defendants have refused to act on grounds generally applicable to the class members.
110. Plaintiff Jorge Echavarria seeks certification of Immigrant Cash Bond Class A under FRCP 23(b)(2). Plaintiff Jorge Echavarria seeks injunctive and declaratory relief on behalf of himself and the Immigrant Cash Bond Class A, requiring the Federal Defendants to reinstate the breached bonds posted to secure the release of the class members (if proceedings are ongoing), or reinstate and cancel the breached bonds (if proceedings have been completed).
a. The members of the Immigrant Cash Bond Class A are so numerous that joinder is impracticable.
b. The claim of Plaintiff Jorge Echavarria is typical of the members of the class. c. There are multiple issues of fact and law common to the claims of Immigrant Cash Bond
Class A, including whether federal law required the Federal Defendants to take additional steps to provide actual notice of a demand on a cash bond to the Obligors on the bonds that secured the release of persons in Immigrant Cash Bond Class A. d. Plaintiff Jorge Echavarria, along with his counsel, will adequately represent the interests of the class members. e. The Federal Defendants have refused to act on grounds generally applicable to the class members. 111. Plaintiff Juan Larin-Ulloa seeks to represent, as the Immigrant Cash Bond Class B under FRCP 23(b)(2). Plaintiff Juan Larin-Ulloa seeks injunctive and declaratory relief on behalf of himself and the Immigrant Cash Bond Class B, requiring the Federal Defendants to make efforts to provide notice of a demand on the bond consistent with Jones v. Flowers, 126 S. Ct. 1708 (2006), to the Obligors on the cash bonds securing the release of the members of the Immigrant Cash Bond Class B. a. The members of the Immigrant Cash Bond Class B are so numerous that joinder is impracticable.
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b. The claim of Plaintiff Juan Larin-Ulloa is typical of the members of the class. c. There are multiple issues of fact and law common to the claims of Immigrant Cash Bond
Class B, including whether federal law requires the Federal Defendants to take additional steps to provide notice of a demand on a cash bond to the Obligors on those bonds securing the release of persons in Immigrant Cash Bond Class B. d. Plaintiff Juan Larin-Ulloa, along with his counsel, will adequately represent the interests of the class members. e. The Federal Defendants have refused to act on grounds generally applicable to the class members.
CAUSES OF ACTION I. CLAIMS BROUGHT BY ALBERTA RUBIO AND IRMA SANDOVAL, INDIVIDUALLY
AND ON BEHALF OF THE INDEMNITOR NOTICE CLASS, ARISING OUT OF THE BONDING DEFENDANTS’ FAILURE TO PROVIDE NOTICE OF DHS-REQUESTED APPEARANCES.
Count One: Breach of Contract 112. All preceding paragraphs are incorporated in this Count as if expressly stated herein. 113. Aaron Bonding (as agent for Nobel and/or Ranger) entered into valid, written surety contracts with Irma Sandoval, Alberta Rubio, and the members of the Indemnitor Notice Class. 114. Plaintiffs Irma Sandoval, Alberta Rubio, and the members of the Indemnitor Notice Class have performed or, in the alternative, have substantially performed their obligations under the surety contracts. They have each paid the amounts due under the contracts to the Bonding Defendants, including payment of the exorbitant up-front fees. 115. The uniform surety contracts with the members of the Indemnitor Classes obligate Aaron Bonding (as agent for Nobel and/or Ranger) to provide notice of all appearances requested by the DHS, of which they receive notice, to the Bonded Immigrant on such surety contract and to the Indemnitor on that surety contract. 116. The surety contract entered into by Irma Sandoval obligated Aaron Bonding (as agent for
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Nobel) to provide notice of demands on the Surety Bond for Manuel Sandoval, of which Aaron Bonding received notice, to Irma Sandoval and Manuel Sandoval.
117. The surety contract entered into by Alberta Rubio obligated Aaron Bonding (as agent for Ranger) to provide notice of demands on the Surety Bond for Miguel Rubio, of which Aaron Bonding received notice, to Alberta Rubio and Miguel Rubio.
118. However, the Bonding Defendants have systematically failed to provide notice of DHS demands on the Surety Bonds to either the members of the Indemnitor Notice Class (including Irma Sandoval and Alberta Rubio) or the Bonded Immigrant on those surety contracts (including Manuel Sandoval and Miguel Rubio).
119. In fact, the Bonding Defendants make it their practice not to provide this notice, despite entering uniform contracts requiring them to provide notice to both the Bonded Immigrant and the Indemnitor and without regard to whether the Indemnitors and Bonded Immigrants maintain regular communication with the Bonding Defendants.
120. Every time the Bonding Defendants fail to provide notice of a demand of which they have notice on these Surety Bonds, the Bonding Defendants breach their contracts with the Indemnitors.
121. As a result of the Bonding Defendants’ breach, Irma Sandoval, Alberta Rubio, and the other members of the Indemnitor Class and Indemnitor Subclass have all been damaged.
122. Plaintiffs Irma Sandoval and Alberta Rubio, individually, and on behalf of the Indemnitor Class and the Indemnitor Subclass, seek damages equal to the value of all non-refundable, up-front fees paid to the Bonding Defendants when entering the Surety Contracts.
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II. CLAIMS BROUGHT BY ALBERTA RUBIO INDIVIDUALLY AND ON BEHALF OF THE INDEMNITOR COLLATERAL CLASS, ARISING OUT OF THE BONDING DEFENDANTS’ FAILURE TO RETURN COLLATERAL UPON A CANCELLATION OF THE BOND. Count Two: Breach of Contract 123. All preceding paragraphs are incorporated in this Count as if expressly stated herein. 124. Aaron Bonding (as agent for Nobel and/or Ranger) entered into valid, written surety contracts
with Alberta Rubio and the members of the Indemnitor Collateral Class. 125. Plaintiff Alberta Rubio and the members of the Indemnitor Collateral Class have performed or,
in the alternative, have substantially performed their obligations under the surety contracts. In particular, they have each paid the amounts due under the contracts to the Bonding Defendants, including payment of the exorbitant up-front fees and the collateral due under the contracts.
126. The uniform surety contracts with the members of the Indemnitor Classes obligate the Bonding Defendants to return collateral paid under the terms of the contracts to the Indemnitors upon the cancellation of the bond at issue.
127. The Bonding Defendants have failed to return the posted collateral to Alberta Rubio and the members of the Indemnitor Collateral Class. This failure constitutes a material breach of the terms of the bonding contracts. This breach has caused Alberta Rubio and the members of the Indemnitor Collateral Class injury in the amount of the collateral deposited with the Bonding Defendants, less any fees or costs the Bonding Defendants may validly deduct from the collateral, pursuant to the terms of the contracts.
128. Plaintiff Alberta Rubio, individually, and on behalf of the Indemnitor Collateral Class, seek damages equal to the value of all collateral deposited with the Bonding Defendants, less any fees or expenses that may be validly charged against the collateral under the terms of the bonding contracts.
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III. CLAIMS BROUGHT BY PETRA CARRANZA DE SALINAS INDIVIDUALLY AND ON BEHALF OF THE BONDED IMMIGRANT CLASS, ARISING OUT OF THE BONDING DEFENDANTS’ FAILURE TO PROVIDE NOTICE OF APPEARANCES REQUESTED BY THE DHS. Count Three: Equitable Relief Preventing Breach of Contract 129. All preceding paragraphs are incorporated in this Count as if expressly stated herein. 130. In accordance with Federal Rule of Civil Procedure 65 and pursuant to the Federal Declaratory
Judgment Act, 28 U.S.C. §§2201-02, Plaintiff Petra Carranza de Salinas seeks injunctive and declaratory relief on her own behalf and on behalf of the members of the Bonded Immigrant Class.
131. Plaintiff Petra Carranza de Salinas, individually and on behalf of the Bonded Immigrant Class, seeks an injunction requiring the Bonding Defendants, directly or through their agents, to make good faith efforts to provide actual, timely, and reasonable notice to the Bonded Immigrants and the Indemnitors of any and all demands for performance made on those bonds by the Federal Defendants.
132. Because the breach of the bond contract securing her release from INS/DHS detention threatens her immigration rights and her ability to remain in the United States, Petra Carranza de Salinas has no adequate remedy at law.
133. Plaintiff Petra Carranza de Salinas individually, and on behalf of the Bonded Immigrant Class, also seek corresponding declaratory relief.
ATTORNEYS’ FEES 134. Plaintiffs have retained the undersigned counsel to seek recovery of the damages listed above. Plaintiffs seek recovery of reasonable and necessary attorneys’ fees as well as costs of suit. 135. Attorneys fees are also recoverable pursuant to Tex. Civ. Prac. & Rem. Code Chapter 38 for breach of contract.
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IV. COUNTS AND CLAIMS BROUGHT BY ARACELY ZAMORA-GARCIA, MANUEL SANDOVAL, PETRA CARRANZA DE SALINAS, MARIA FRANCISCA ARCE CEDENO, NORMA PENA DE HERRERA, ISIDRO HERRERA, LUIS ALVARADO-NARVAEZ, AND ALMA RITA MALAGON DE FUENTES, INDIVIDUALLY AND ON BEHALF OF THE SUPERVISION CLASS. Count Four: Supervision Class Claims 136. Plaintiffs listed immediately above request an injunction on their own behalves and on behalf
of the class they seek to represent requiring that, upon request of the class member, and in the absence of individual factors which would warrant the refusal to do so, the Federal Defendants place said class members under Orders of Supervision. V. COUNTS AND CLAIMS BROUGHT BY ADRIANA ECHAVARRIA, JORGE
ECHAVARRIA, AND JUAN LARIN-ULLOA INDIVIDUALLY AND ON BEHALF OF THE CASH BOND CLASSES.
Count Five: Obligor Cash Bond Class Claim Count Six: Immigrant Cash Bond Class Claim A Count Seven: Immigrant Cash Bond Class Claim B 137. The Immigrants at issue in each of the Cash Bond Classes have appeared at every hearing or other required appearance of which they have received notice. Jorge Echivarria and Juan Larin-Ulloa have appeared at every hearing or other required appearance of which they have received notice over the course of their removal proceedings. 138. Where attempted notice of a demand on a cash bond sent to an Obligor is returned undelivered, and no further attempt is made to send notice to the Obligor, but where the Bonded Immigrant presents him or herself at all scheduled hearings and appearances of which s/he had actual notice, the cash obligor has “substantially” complied with the conditions of the bond at least to the same degree as a surety obligor who presents a Bonded Immigrant long after a scheduled surrender date. Where the Federal Defendants breach the cash bond, and cancel the bond posted by the surety under such circumstances, it deprives the cash obligor of
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Equal Protection and Due Process. 139. The favoritism shown by the Federal Defendants to surety obligors over cash obligors deprives
cash obligors of Equal Protection and Due Process. 140. The complicity between the Federal Defendants and the Bonding Defendants violates public
policy and often deprives the real parties in interest (the Immigrants released on cash bonds) of Due Process in their removal proceedings, and of the benefits of the bonds for which they contracted, and results in the unjust enrichment of all Defendants.
141. Under Jones v. Flowers, 126 S. Ct. 1708 (2006), the Federal Defendants must make efforts to provide actual notice of a demand on a cash bond to the obligors on the bonds, after a demand on the bond has been returned to the Federal Defendants undelivered, but where the Immigrants on the bond have appeared at every hearing or other required appearance of which they have notice.
142. Therefore, Plaintiff Adrianna Echavarria, individually and on behalf of the Obligor Cash Bond Class, seeks an injunction injunctive and declaratory relief requiring the Federal Defendants to reinstate the breached bonds posted by the members of the class, (if proceedings are ongoing), or reinstate and cancel the breached bonds (if proceedings have been completed).
143. Plaintiff Jorge Echavarria, individually and on behalf of the Immigrant Cash Bond Class A, seeks injunctive and declaratory relief requiring the Federal Defendants to reinstate the breached bonds posted on behalf of the members of the class, (if removal proceedings are ongoing), or reinstate and cancel the breached bonds (if removal proceedings have been completed).
144. Plaintiff Juan Larin-Ulloa, individually and on behalf of the Immigrant Cash Bond Class B, seeks injunctive and declaratory relief requiring the Federal Defendants to make efforts to provide notice of a demand on the bond consistent with Jones v. Flowers, 126 S. Ct. 1708 (2006), to the Obligors on the cash
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bonds securing the release of the members of the Immigrant Cash Bond Class B. VI. INDIVIDUAL CLAIMS BROUGHT BY JUANA ZAMORA AND ARACELY ZAMORA-
GARCIA, AND MIGUEL RUBIO. Count Eight: Intentional Infliction of Emotional Distress
145. All preceding paragraphs are incorporated in this Count as if expressly stated herein. 146. On April 15, 2002, several men, including Defendant Sol, and an officer from the Mission Police Department, went to the home of Juana Zamora in Mission, Texas. 147. On information and belief, Plaintiffs allege that Defendant Sol was acting as agent for Defendant Aaron Bonding. Indeed, he left a business card with an "office" phone number, (713) 225-1386, which was, at the time the instant action was filed, answered by Defendant Aaron Bonding. In addition, this telephone number and was also listed in various websites as belonging to Defendant Aaron Bonding. 148. Mr. Sol falsely asserted that he had a warrant for Aracely Zamora’s removal, issued in December, 2001, and that he was authorized to arrest her. He further claimed that there was an order that she surrender to INS in San Antonio at 8:00 a.m. the following day. 149. As a result, Plaintiff Juana Zamora called Counsel, who contacted Mr. Sol and advised him that any warrant for Aracely Zamora's removal issued in December, 2001, could not be valid, because her appeal was pending at that time and, thus, she was not subject to deportation. Counsel also advised him that she would surrender Aracely Zamora to the Harlingen INS office in the morning. 150. Nevertheless, Defendant Sol insisted that Aracely Zamora be surrendered to him, and threatened both Juana Zamora and Counsel with criminal charges of harboring a fugitive, for refusing to do so. 151. However, Counsel made arrangements with the Federal Defendants and Aracely Zamora was surrendered to the Federal Defendants the next day at the Harlingen INS Office, where she remained when the instant action was filed, and was thereafter allowed to leave.
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152. Despite Aracely Zamora’s voluntary surrender, Defendant Sol returned to the homes of Juana and Aracely Zamora, and to the homes of other relatives several times over the next two days, even after being advised that the petition for habeas corpus had been filed, and that Zamora had been allowed to leave the Harlingen INS office.
153. Defendant Sol harassed and scared Juana Zamora so severely that she refused any contact with her daughter Aracely Zamora. In addition, Aracely Zamora was forced to spend several days at various locations, out of fear for Defendant Sol.
154. These incidents caused severe emotional distress for both Aracely Zamora and Juana Zamora. This emotional distress was so severe, Aracely Zamora has only recently been able to resume her normal life, for fear that Defendant Sol would locate her, and take reprisals, and for fear that an encounter with him or with INS would lead to her removal, thereby mooting her motion to reconsider and finalizing her removal.
155. Therefore, Plaintiffs Aracely and Juana Zamora seek recovery for intentional infliction of emotional distress, in that Defendant Aaron Bonding and Defendant Sol engaged in intentional, outrageous conduct that proximately cause Plaintiffs Aracely and Juana Zamora to suffer severe emotional distress. Plaintiffs seek damages in the sum of $100,000 for Plaintiff Aracely Zamora and $50,000 for Plaintiff Juana Zamora. VII. INDIVIDUAL CLAIMS BROUGHT BY MIGUEL RUBIO.
Count Nine: False Imprisonment 156. All preceding paragraphs are incorporated in this Count as if expressly stated herein. 157. Miguel Rubio-Flores (“Miguel Rubio”) is a native and citizen of Mexico and lawful permanent resident of the U.S., who was placed in deportation proceedings in 1996. His mother, Alberta Rubio, contacted Aaron Bonding, contracted with it for the posting of the Surety Bond, and served as the Indemnitor on the bond.
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The bond company posted a $3,000 Surety Bond on behalf of Mr. Rubio. The bond company contractually agreed to provide both Mr. Rubio and Alberta Rubio with notice of all appearances of Mr. Rubio requested by the INS/DHS.
158. Approximately a month before his DHS-scheduled appearance, the INS, without informing Miguel Rubio, sent notice of a demand on the bond to the bonding company, requiring that it deliver him to INS. The bond company did not inform either Miguel Rubio or his Indemnitor, Alberta Rubio.
159. An agent of Aaron Bonding apprehended Mr. Rubio, in the middle of the night, in his home, on April 11, 2005, and surrendered him to the INS/DHS on April 12, 2005. Aaron Bonding had no right, contractually or otherwise, to apprehend Mr. Rubio on April 11, 2005, or April 12, 2005. Aaron Bonding’s surrender of Mr. Rubio prior to the conclusion of Mr. Rubio’s removal proceedings was a violation of the bonding contract between Ms. Rubio and Aaron Bonding and a violation of Mr. Rubio’s third-party contract rights. Because of the Bonding Defendants’ surrender of Mr. Rubio, he was forced to remain in detention for nearly five months, until September 5, 2005, when he finally was able to obtain a new surety bond from a different bond company.
160. Therefore, Plaintiff Miguel Rubio seeks recovery for false imprisonment in that the Bonding Defendants apprehended Mr. Rubio with no contractual or legal authority for doing so.
161. Plaintiff Miguel Rubio also seeks recovery for the damages caused him by the Bonding Defendants’ surrender of him to the INS/DHS in violation of his contractual rights as a third-party beneficiary of the contract between Alberta Rubio and the Bonding Defendants. Miguel Rubio also seeks to recover punitive damages.
WHEREFORE Plaintiffs pray that the Court certify the named classes; and WHEREFORE Plaintiffs hereby demand a trial by jury for all issues raised by the foregoing Sixth
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Amended Petition for Writ of Habeas Corpus and Class Action Complaint that are so triable; and WHEREFORE Plaintiffs respectfully pray that upon trial of this cause, judgment be entered in their
favor for the following relief: a. judgment against the Defendants for all the actual damages sustained by Plaintiffs complained of herein; b. punitive damages; c. just and reasonable attorney fees; d. pre- and post-judgment interest; e. the injunctive and declaratory relief described herein; f. cost of suit, and g. such other relief at law or in equity to which Plaintiffs may be entitled. Respectfully Submitted,

Lisa S. Brodyaga (Attorney In Charge) State Bar No. 03052800 Southern District ID No. 1178
REFUGIO DEL RIO GRANDE 17891 Landrum Park Rd. San Benito, TX 78586 Phone: (956) 421-3226
Attorneys for all Plaintiffs

/s/ J. Benjamin King J. Benjamin King
J. Benjamin King State Bar No. 24046217 Southern District ID No. 605914
Diamond McCarthy Taylor Finley & Lee, LLP Renaissance Tower 1201 Elm Street, 34th Floor Dallas, Texas 75270 Phone: (214) 389-5300 Fax: (214) 389-5399
William T. Reid, IV State Bar No. 00788817 Southern District ID No. 17074
Diamond McCarthy Taylor Finley & Lee, LLP 6504 Bridgepoint Pkwy., Suite 400 Austin, Texas 78730 Phone: (512) 617-5200
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Fax: (512) 617-5299 Jason Davis
State Bar No. 00793592 Southern District ID No. 20114 Law Office of Jason Davis, P.C. 5945 Broadway San Antonio, Texas 78209 Phone: (210) 930-4611 Fax: (210) 930-3815 Tucker Ronzetti, Esq. Kozyak Tropin & Throckmorton, PA 2525 Ponce de Leon Ninth Floor Coral Gables, FL 33134 Phone: (305) 377-0667 Attorneys for Plaintiffs Aracely Zamora-Garcia, Irma Sandoval Ibarra Valencia, Alberta Rubio, Manuel Sandoval-Garcia, Petra Carranza de Salinas, and Miguel Rubio
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 Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 1 of 51

UMTED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS
McALLEN DIVISION

ARACELY ZAMORA-GARCIA, et al.,

)

Petitioners!Plaintiffs,

)

)

v.

)

)

MARC MOORE, et aI.,

)

RespondentslDefendants.

)

--------------------------------)

c.A. No. M-05-331

PLAINTIFFS' OPPOSED MOTION FOR CLASS CERTIFICATION

Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 2 of 51
TABLE OF CONTENTS Page No.
INTRODUCTION ...................................................................................................................................... 1 FACTS .......................................................................................................................................................... 5 PROPOSED CLASSES ........................................................................................................................... 14 ARGU11ENT............................................................................................................................................ 17 1. PLAINTIFFS' PROPOSED SURETY BOND CLASSES ALL SATISFY
FRCP23(a), (b)(2), AND (b)(3) ................................................................................................. 17 A The Members ofthe SuretyBond Classes Are Sufficiently Numerous.................. 18 B. There Are Questions ofLaw or Fact Common to the Classes................................. 19 C. The Claims ofthe Class Representatives Are Typical ofthe Class......................... 20 D. The Named Plaintiffs and Class Counsel Will Adequately
Represent the Interests ofthe Surety Bond Classes................................................... 22 1. Class Counsel Is Adequate.................................................................................... 22 2. The Class Representatives Are Adequate............................................................ 24
n. PLAINTIFFS' PROPOSED INDEMNITOR NOTICE CLASS AND
INDEMNITOR COLLATERAL CLASS SATISFY FRCP 23(b)(3)................................ 27 A Common Issues Predommate Over Individual Issues
With Respect to the Claims ofthe Indemnitor Notice Class and Indemnitor Collateral Class.......................................................................................... 27 B. Class-wide Adjudication ofthe Claims ofthe Indemnitor Notice Class and Indemnitor Collateral Class Is Superior to Other Available Methods ofAdjudication.............................................................................................. 31
Ill. PLAINTIFFS' PROPOSED BONDED IMMIGRANT CLASS SATISFIES THE REQUIREMENTS OF FRCP 23(b)(2).................................................... 32
N. PLAINTIFFS' PROPOSED SUPERVISION CLASS SATISFIES RULES 23(a) AND (b)(2) OF THE FEDERAL RULES OF CNIL PROCEDURE.......................................................................................................... 33
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A. The Members ofthe Supervision Class Are Sufficiently Numerous ...................... 33 B. There are Questions ofLaw or Fact Common to the Supervision Class................. 36 C. The Claims ofthe Supervision Class Representatives Are Typical
ofthe MeJ11bers ofthe Class......................................................................................... 36 D. The Named Plaintiffs and Class Counsel Will Adequately
Represent the Interests ofthe Supervision Class ........................................................ 37 1. Class Counsel is Adequate.................................................................................... 37 2. The Class Representatives Are Adequate ............................................................ 37 E. The Federal Defendants Have Acted or Have Refused to Act on Grounds Generally Applicable to the Supervision Class .......;.................................. 38 V. PLAINTIFFS' PROPOSED CASH BOND CLASSES SATISFY RULES 23(a) AND (b)(2) OF THE FEDERAL RULES OF CNIL PROCEDURE.......................................................................................................... 38 A. The Members ofthe Cash Bond Classes Are SufficientlyNumerous .................... 38 B. There Are Questions ofLaw or Fact Common to the Cash Bond Classes........................................................................................................ 39 C. The Claims ofthe Representatives ofthe Cash Bond Classes Are Typical ofthe MeJ11bers ofthe Classes....................................................................... 40 D. The Named Plaintiffs and Class Counsel Will Adequately Represent The Interests ofthe Cash Bond Classes...................................................................... 40 E. The Federal Defendants Have Acted or Refused to Act on Grounds Generally Applicable to the Class................................................................................ 41 CONCLUSION ...................................................................................................................................... 41
111

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TABLE OF AUTHORITIES

CASES

Page No.

Allapattah Servs., Inc. v. Exxon, 333 F.3d 1248 (11th C:ir. 2(03) ......................................................................................................... 32

Allapattah Servs., Inc. v. Exxon, 157F. Supp. 2d 1291 (S.D. Fla 2001) ............................................................................................. 32

Apanewicz v. Gen. Motors Corp., 80 F.R.D. 672 (E.D. Pa 1978) .......................................................................................................... 24

Arenson v. Whitehall Convalescent & Nursing Home, Inc., 164F.R.D. 659 (N".D. lli. 1996) ........................................................................................................ 28

Ballard v. Equifax Check Servs., Inc., 186F.R.D. 589 (E.D. Ca1. 1999)....................................................................................................... 28

Berger v. Compaq Computer Corp., 257 F.3d 475 (5th C:ir. 2001) ....................................................................................................... 24, 37

Bywaters v. United States, 196F.R.D. 458 (E.D. Tex. 2000) ...................................................................................................... 27

Colindres v. Quietjlex Manu., 235 F.R.D. 347 (S.D. Tex. 2006) ...................................................................................................... 17

In re Commonpoint Mort. Co., 283 B.R. 469 (Bankr. W.D. Mich. 2002) ......................................................................................... 28

DeSantis v. Wackenhut Corp., 793 S.W.2d 670 (Tex. 1990) ............................................................................................................. 28

Durrett v. John Deere Co., 150 F.R.D. 555 (N".D. Tex. 1993) ..................................................................................................... 28

Egge v. Healthspan Servs. Co., 208 F.R.D. 265 (D. Minn. 2002) ....................................................................................................... 28

Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974)............................................................................................................................ 17

In re Elec. Data Sys. Corp. Sec. Litig., 226 F.R.D. 559 (E.D. Tex. 2005) ...................................................................................................... 27

IV

Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 5 of 51
In re Firstplus Fin. Group, Inc. Sec. Litig., No.3:98-CV-2551-M, 2002 WL31415951 (N.D. Tex. Oct. 23,2002) (Lynn, J.) ............................................................. 24
Gibb v. Delta Drilling Co., 104F.R.D. 59 (N.D. Tex. 1984)........................................................................................................ 28
In re Great S Life Ins. Co Sales Practices Litig., 192 F.R.D. 212 (N.D. Tex. 2000) ..................................................................................................... 33
Harco, Inc. v. Am. Nat. Bank & Trust Co., 121 F.R.D. 664 (N.D. ID. 1988) ........................................................................................................ 28
Heartland Comms., Inc. v. Sprint Corp., 161 F.R.D. 111 (D. Kan. 1995) ......................................................................................................... 28
Heastie v. Cmty. Bank ofGreater Peoria, 125 F.R.D. 669 (N.D. ID. 1989) ........................................................................................................ 24
Hector Martinez & Co. v. S Pac. Transp. Co., 606 F.2d 106 (5th Cir. 1979) ............................................................................................................. 30
Invin v. Mascott, 112F. Supp. 2d937 (N.D. Cal. 2000) .............................................................................................. 33
IT Corp. v. Motco Site Trust Fund, 903 F. Supp. 1106 (S.D. Tex. 1994) ................................................................................................. 30
James v. City ofDallas, 254 F.3d 551 (5th Cir. 2001) ............................................................................................................. 21
Jenkens v. RaymarkIndus., Inc., 782 F.2d 468 (5th Cir. 1986) ................................................................................................ 17,27,37
Johnson v. Am. Credit Co. ofGa. , 581 F.2d 526 (5th Cir. 1978) ............................................................................................................. 19
Jones v. Flowers, 126 S. Ct. 1708 (2006)................................................................................................................ passim
Kadhum v. Homecomings Fin. Network, Inc., -- S.W.3d --, 2006 WL 1125240 (Tex. App.-Houston [1st. Dist] Apr. 27,2006, no pet. hist.) ....................................................... 29
v

Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 6 of 51
Klay v. Humana, Inc., No. 02-16333,
2004 WL 1938845 (11th Crr. Sept. 1, 2004) ............................................................................. 28, 32
Kleiner v. First Nat'l Bank ofAtlanta, 97F.R.D. 683 {N".D. Ga. 1983) ......................................................................................................... 28
Lehocky v. Tidel Techs., 220 F.R.D. 491 (S.D. Tex. 2004) ...................................................................................................... 24
Mayo v. Sears, Roebuck & Co., 148 F.R.D. 576 (S.D. Ohio 1993) ..................................................................................................... 28
Meyer v. CUNA Mut. Group, No. Civ. A. 03-602, 2006 WL 197122 (W.D. Pa. Jan. 25, 2006)..................................................................................... 28
Morris v. Transouth Fin. Corp., 175 F.R.D. 694 (M.D. Ala. 1997) ..................................................................................................... 24
Mullen v. Treasure Chest Casino, LLC,
186 F.3d 620 (5th Crr. 1999) .................................................................................... 17, 18, 19,20,37
Munoz v. Orr,
200 F.3d 291 (5th Crr. 2000) ............................................................................................................. 37
Ogden v. AmeriCredit Corp., 225 F.R.D. 529 (N".D. Tex. 2005) ..................................................................................................... 24
Recinos-Recinos v. Express Forestry, Inc., 233 F.R.D. 472 (B.D. La. 2006) ........................................................................................... 25, 24, 27
Robin Drug Co. v. PharmaCare Mgmt. Servs., Inc., No. Civ. 033397 (pAMlRLE), 2004 WL 1088330 (D. Minn. May 13,2004) ................................................................................. 28
Smilow v. Southwestern Bell Mobile Sys.,
323 F.3d 32 (1st Crr. 2003) .......................................................................................................... 28, 31
State ofAla. v. Blue Bird Body Co., Inc.,
573 F.2d 309 (5th Crr. 1978) ............................................................................................................. 30
Steinberg v. Nationwide Mut. Ins. Co., 224 F.R.D. 67 (B.D.N.Y. 2004) ........................................................................................................ 28
VI

Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 7 of 51
Stirman v. Exxon Corp., 280 F.3d 554 (5th Cir. 2002) ............................................................................................................. 37
Tae Mun Chung v. Jeong Ran Lee, -- S.W.3d --, 2006 WL 1391249 (Tex. App.-Dallas May 23, 2006, no pet. hist.) ............................................................................ 30
Texas Nom Ltd. P'ships v. Alatna Matata Invs., Ltd., No. 04-04-00447-CV, 2005 WL 159459 (Tex. App.-San Antonio Jan. 26, 2005, pet. denied) .................................................................... 30
Transamencan Refining Corp. v. Dravo Corp., 130 F.R.D. 70 (S.D. Tex. 1990) ........................................................................................................ 30
In re Tn-State Crematory Litig., 215 F.R.D. 660 ~.D. Ga. 2003) ....................................................................................................... 28
In re Universal Access, Inc. Sees. Litig., 209 F.R.D. 379 (E.D. Tex. 2002) ...................................................................................................... 22
In re Universal Servo Fund Tele. Billing Practices Litig., 219 F.R.D. 661 (D. Kan. 2004) ........................................................................................................ 28
Winlder v. DTE, Inc., 205 F.R.D. 235 (D. Ariz. 2001) ......................................................................................................... 28
STATUTES 8U.S.C. § 1231(a)...................................................................................................................................... 36 FED. R. Cw. P. 23............................................................................................................................... passim
SECONDARY SOURCES 7 CHARLES ALAN WRIGHT, ARTHURR. MILLER & MARy KAy KANE,
FEDERAL PRACTICE & PROCEDURE § 1765 (2ded. 1986).............................................................. 24 7B CHARLES ALAN WRIGHT, ARTHURR. MILLER & MARyKAy KANE,
FEDERAL PRACTICE & PROCEDURE § 1781 (2d ed. 1986).............................................................. 30 7B CHARLES ALAN WRIGHT, ARTHURR. MILLER & MARyKAy KANE,
FEDERAL PRACTICE & PROCEDURE § 1775 (2d ed. 1986). ............................................................. 33 RESTATEMENT (SECOND) OF CONFLICTS OF LAW § 187(1) (1988) ...................................................... 28
VB

Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 8 of 51
Aracely Zamora-Garcia, Juana Zamora, Manuel Sandoval-Herrera, Inna Sandoval Ibarra Valencia, Adriana Echavarria, Jorge Luis Echavarria, Petra Carranza de Salinas, Miguel RubioFlores, Alberta Rubio, Nonna Pena De Herrera, Isidro Herrera, Maria Francisca Arce Cedeno, Luis Alvarado-Narvaez, and Juan Larin-Ulloa (collectively, "Plaintiffs"), in their own names, and as representatives for the putative class, seek certification of plaintiff classes pursuant to Rules 23(a), (b)(2) and (b)(3) ofthe Federal Rules ofCivil Procedure ("FRCP"), as set forth herein.
INTRODUCTION Plaintiffs seek to bring class claims against both the Bonding Defendants! and the Federal Defendants. Plaintiffs' class claims against the Bonding Defendants arise out their systematic breaches oftheir unifonn bonding contracts (the "Bond Contracts"). Plaintiffs' class claims against the Federal Defendants based on their systematic compromise and denial ofimmigration rights and their failure to provide constitutionally required notice ofcalls on immigration bonds. First, Plaintiffs' class claims against the Bonding Defendants stem from their failure to provide notice of appearances requested by the Immigration and Naturalization Service ("INS") (now known as the Department ofHomeland Security (''DHS'')). The Bonding Defendants entered into unifonn Bond Contracts with thousands ofpersons (known herein as "Indemnitors") seeking to secure the release of aliens detained by the INSIDHS? In the Bond Contracts, the Bonding Defendants contractually agreed to post surety bonds with the INSIDHS for the release ofthe third-
1 The ''Bonding Defendants" are Aaron Federal Bonding Company ("Aaron Bonding") and two insurance companies on whose behalf and in whose names Aaron Bonding operated - Fairmont Specialty fusurance Company (f7k/a Ranger fusurance Company) and Stonington fusurance Company (f7k/a Nobel fusurance Company) (collectively, the "fusurers"). Aaron Bonding was the business name for Don Vannerson, who is now deceased. Michael Padilla is the independent executor of the Vannerson Estate and manages Aaron Bonding. Mr. Padilla, the Vannerson Estate, and Aaron Bonding are all referred to collectively herein.
2 See Sixth Amended Petition for Writ ofHabeas Corpus and Class Action Complaint ("SAC") W2, 36, 37. On October
11, 2006, Plaintiffs filed their Unopposed Motion for Leave to File Plaintiffs' Sixth Amended Complaint [Dkt. 108]. The Sixth Amended Complaint is attached to that motion as an exlnbit.
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Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 9 of 51
party beneficiaries of these contracts - ''Bonded Immigrants.,,3 The Bonding Defendants charged
fudemnitors - financially unsophisticated persons of limited education and limited incomes exorbitant up-front fees equal to 40%-50% ofthe total amount ofthe bond for their services.4
The Bond Contracts require the Bonding Defendants to provide notice to both fudemnitors and Bonded Immigrants of all appearances requested by the INSIDHS.5 The INSIDHS only
provides notice of scheduled appearances for interviews or for deportation to the Bonding
Defendants. Consequently, the Bonding Defendants' failure to provide notice essentially results in
no notice at all. Moreover, notice of these appearances is critical to the Bonded Immigrants and
fudemnitors because a Bonded Immigrant's failure to appear may result in the INSIDHS' detennination that a bond breach has occurred.6 After a bond breach, fudemnitors are obligated to
pay the Bonding Defendants for the bond's face amount, less deposited collateral, plus any
expenses the Bonding Defendants incur in attempting to apprehend the Bonded Immigrant? fu
addition, a breach may cause the fudemnitors' collateral to be forfeited and may impair the Bonded Immigrant's ability to remain in the United States.8
Unfortunately, although the Bond Contracts require the Bonding Defendants to provide
notice, they made it their uniform practice not to noti6; either fudemnitors or Bonded Immigrants -
at least until after this lawsuit was filed when they began to provide notice in certain instances after
3 See SACW2, 36, 37. 4 See SAC W 2,37; Cuayahuitl Dep. at 35-37 (Ex. CC1). To avoid 1lllllecessary burden on the Court, Plaintiffs refer herein to exlnbits previously submitted in support of their prior briefing on class certification, mther than re-submit these same exlnbits here. See Dkt 93 (Exhibits CCl-20) and Dkt 99 (Exlnbits CC21-27). Newexlnbits CC28-CC38A are submitted herewith. If, however, the Court desires fresh copies ofthe previously submitted exlnbits, Plaintiffs will gladly provide them to the Court. S See SAC ~ 46. 6 See SAC W 5, 38, 41, 45, 50. A "breach ofthe bond" or ''bond breach" by the INSIDHS should not be confused with the Bonding Defendants' breaches ofcontract When an immigrant released from detention on bond breaches the terms of the bond (by failing to appear before the INSIDHS whenever requested), the INSIDHS will "breach the bond" - meaning that the immigrant released under the bond is again subject to detention and that the collateral posted for the release ofthe immigrant is forfeited to the INSIDHS. As discussed in detail herein, the Bonding Defendants breach the Bond Contracts (as opposed to the bond itself) by failing to provide the appropriate notice ofINSIDHS-scheduled appearances. 7 See SAC W 3,40,45. 8 See SAC W 3, 39,40,45.
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December 2005.9 Plaintiffs seek to certify a class offudemnitors (the "fudemnitor Notice Class'') to recover the up-front fees that they paid for notice that was never provided. Because the record amply demonstrates that the Bonding Defendants uniformly breach their Bond Contracts, certification ofthis class under FRCP 23(b)(3) is appropriate.
Second, the Bond Contracts obligate the Bonding Defendants to return the fudemnitors' collateral upon cancellation of the bond.lO However, the Bonding Defendants, as a matter of practice, do not return the fudemnitors' collateral absent a demand. 'This wrongful retention of the collateral also constitutes a breach of the Bond Contracts. Plaintiffs seek to certify a class of fudemnitors whose collateral has been wrongfully retained by the Bonding Defendants after cancellation ofbond (the "fudemnitor Collateral Class''). The Bonding Defendants have uniformly breached the Bond Contracts by systematically retaining collateral absent demand. Thus, Plaintiffs are entitled to certification ofthe fudemnitor Collateral Class pursuant to FRCP 23(b)(3).
Third, Plaintiffs seek to bring class claims for injunctive and declaratory relief against the Bonding Defendants on behalf of Bonded Immigrants still released pursuant to a bond posted by the Bonding Defendants (the ''Bonded Immigrant Class''). The Bonded Immigrants' ability to remain in the United States will be at risk if the Bonding Defendants continue their practice of refusing to provide notice of DHS/INS appearances. Because Bonded Immigrants - third-party beneficiaries of the bonding contracts - removed from the United States will have no adequate remedy at law to redress the contractual breach by the Bonding Defendants, class-wide equitable reliefis appropriate, as is certification ofthis class pursuant to FRCP 23(b)(2).
9 See SACW 5,46,47,50, 55; see also infrapp. 5-12. 10 When the Bonded hnmigrant has complied with all requirements ofhislher release, including appearing at all required appearances, the government "cancels" the bond and absolves the Bonding Defendants ofany further obligation under the bond.
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Fourth, Plaintiffs seek to bring class claims against the Federal Defendants based on their failure to provide constitutionally required notice of DRS-requested appearances where an immigrant or someone acting on the immigrant's behalf(an "Obligor") posts the full amount ofthe immigrant's bond directly with the DRS (which bond is known as a "cash bond''). In cash bond cases, where a written appearance request is returned undelivered to the DRS, the DRS fails to make any additional effort to provide notice ofthe requested appearance to either the Obligor or the immigrant, even where the immigrant had previously appeared at all prior hearings in her removal proceedings and whenever else requested.11 Instead, the DRS sits idly by and allows the bond to breach, the Obligor to forfeit the amounts posted, and the immigrant's rights to be compromisedY The DRS' policy in this regard is unifonn, and certification of Plaintiffs' proposed cash bond classes pursuant to FRCP 23(b)(2) is justified.
Fifth, Plaintiffs seek to bring class claims against the Federal Defendants for their failure to issue Orders ofSupervision for immigrants released on bond and who have been or will be under a final order of deportation, exclusion, or removal, which order was not executed during the threemonth removal period following its issuance, notwithstanding that the immigrant did not obtain a judicial stay of deportation during that period, or otheIWise impede removal. Plaintiffs seek an injunction requiring that, upon a request by a class member, the Federal Defendants place the class member under an Order ofSupervision. This Court previously ordered that the Federal Defendants grant this relief to individual Plaintiffs Garrido, Lucio, Torres, and Rodriguez in the predecessor action.13 The Federal Defendants have refused to provide such relief to other similarly situated
11 SeeSAC~43.
12 Seeid. 13 See Memorandum Opinion and Order, Zamora-Garcia v. Ridge, Civ. A. M-02-144 (Jan. 4, 2005) (Ex. 1) [Dkt. 60].
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Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 12 of 51
immigrants ''unless instructed by Court order',14 and Plaintiffs now seek this relief on behalf of other named Plaintiffs, and on behalfofthe members ofthe Supervision Class.
Because each of Plaintiffs' proposed classes satisfies FRCP 23, Plaintiffs request that this Court certify each ofPlaintiffs' proposed classes.
FACTS Although Plaintiffs need not prove the merits at this stage, the discovery taken to date confinns Plaintiffs' key allegation that the Bonding Defendants systematically breached the Bond Contracts by: (i) failing to provide the contractually promised notice; and (ii) failing to return collateral deposited with the Bonding Defendants upon a cancellation ofthe bond.
The Bonding Defendants' Uniform Contract Documents When an Indemnitor enters into a Bond Contract to obtain a surety bond for a Bonded Immigrants' release, Aaron Bonding presents the Indemnitor with a pre-printed package ofcontract documents.15 These pre-printed documents are unifonn in every relevant respect from Indemnitor to Indemnitor.16 Among these pre-packaged documents is one entitled, ''Tenns and Conditions Under Immigration Bond.,,17 These Tenns and Conditions documents are unifonn in all of the Bond Contracts.18 The Bond Contracts executed in support of securing the release of Miguel Rubio, Manuel Sandoval, Petra Carranza de Salinas, and Aracely Zamora-Garcia are in the record.19 Through discovery, Plaintiffs obtained copies of63 random bond files from Aaron Bonding, 59 of
14 See Ex. L [Dkt. 64 atp.5]. 15 See LopezDep. at51, 53, 61, 64-65, 67, 74 (Ex. CC2). 16 See Lopez Dep. at 52, 53-54, 60, 62, 68; A. Gaeta AlI. ~ 6 (Ex. CC3). 17 See Lopez Dep. at 67; Cuayahuitl Dep. at 31-32 (Ex. CC1). 18 See LopezDep. at 68; CuayahuitlDep. at 31-32; A. Gaeta AlI. ~7. 19 See Zamora-Garcia Bond File at BF-OOOO139 (Ex. CC4); Sandoval Bond File at BF-OOOO238 (Ex. CC5); Rubio Bond }lie at BF-OOOO274 (Ex. CC6); Salinas Bond File at BF-OOOO320 (Ex. CC7).
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those files contained copies of the unifonn Tenns and Conditions document.2o In no case was the
TelIDs and Conditions document aUered.21
Each ofthese TelTI1S and Conditions documents obligated the Indemnitors to guarantee the
appearance ofthe Bonded hnmigrant whenever the INSIDHS requested:
WHEREAS the undersigned [INDEMNITOR], whether one or more do now make application to AARON FEDERAL BONDING AGENCY of an hnmigration Bond in the sum of $_ on behalf of [pRINCIPAL], in favor of the US. IMMIGRATION AND NATURALIZATION SERVICE, guaranteeing the faithful appearance of PRINCIPAL at any time, and from time to time, as the US. IMMIGRATION AND NATURALIZATION SERVICE may direct.22
In each ofthe TelIDs and Conditions documents, the Bonding Defendants agreed:
PRINCIPAL and INDEMNITOR will be notified by AGENCY of all appearances requested by the US. IMMIGRATION AND NATURALIZATION SERVICE of which AGENCY receives notice.23
Within the context of the contract, this provision makes sense: if the Bonding Defendants
do not provide notice of appearances requested by the INSIDHS, the Indemnitors cannot guarantee
the appearance of the Bonded hnmigrants. Each of the Indemnitors was required to pay an up-
front, non-refundable fee of 40% to 50% of the total bond amount for the Bonding Defendants'
services.24
The Bonding Defendants' Failure to Provide the Promised Notice
The INSIDHS does not contact Bonded hnmigrants, their attorneys, or their hndemnitors
when it schedules an appearance for an interview or for deportation?S Instead, it sends a ''Notice to
20 See T. Stone Aff. ~ 3 (Ex. CC 8). 21 See id. 22 See, e.g., Salinas Bond File at BF-OOOO320 (Ex. CCl). 23 See, e.g., Salinas Bond File at BF-OOOO320, ~ 4. 24 See Cuayahuid Dep. at 35-37; Zamora-Garcia Bond File at BF-0000062; Sandoval Bond File at BF-OOOO250; Rubio
Bond File at BF-0000303; Salinas Bond File at BF-OOOO343. See also SAC 111 2, 37,46.
25 SeeG. StewartDep. at 33-34, 36 (Ex. CCI2).
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Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 14 of 51
Obligor to Deliver Alien" (Fonn 1-340) only to the obligor on the bond, which, in the case ofsurety bonds, is the bond company.26 If the Bonded Immigrant fails to appear before the INSIDHS as
directed in the 1-340, the INSIDHS may declare a breach ofthe immigrant's bond, which will likely lead to the lndemnitor's loss ofcollateral and the Bonded Immigrant's removal or deportation?7
Despite the obligation to provide notice of all appearances requested by the INSIDHS, the
Bonding Defendants made it their unifonn practice not to provide notice. There is not a scrap of documentary evidence in this case indicating that the Bonding Defendants fulfilled their obligations
to provide notice under a single Bond Contract. Log books: Eliud Salinas, Aaron Bonding's fonner manager, testified that, at least up until
2001, Aaron Bonding employees would record in log books whether the Bonded Immigrant and
lndemnitor had been notified of the requested appearance?8 lndeed, Salinas emphasized that Aaron Bonding employees perfonned this task regularly and faithfully.29 Plaintiffs only recently
obtained copies of Aaron Bonding's logbooks from 1999 to the present. The logbooks do not
reflect a single instance in which Aaron Bonding provided notice to any Indemnitor or Bonded Immigrant. 30
Electronic bond files: The Bonding Defendants produced to Plaintiffs computer bond files, which contain additional infonnation that is not in the hard-copy files. Although these
electronic records contain dozens of columns recording a wealth of infonnation about the
26 See SAC '1142; Zamora-Garcia Bond File at BF-OOOOO51 (including 1-340 addressed only to surety); Sandoval Bond File atBF-OOOO217 (same); Rubio Bond File atBF-OOOO285 (same). 27 See SAC mr 3, 39, 45, 47; G. Stewart Dep. at 4041. Questioning by counsel for the Bonding Defendants indicates that they will rely on the existence of a 1-800 number immigrants can call to get updates on the status of their immigration cases. See Lopez Dep. at 129; Cuayahuitl Dep. at 69-70. This 1-800 number does not provide notice of appearance dates noticed in Notice to Obligor to Deliver Alien. Of the 63 bond files produced to plaintiffs in the predecessor action, 51 contained a Notice to Obligor to Deliver Alien. See T. Stone Aff. '117 (Ex. CC8). Calls to the 1-800 number demonstrated that the Innnigration Court's automated system provided no information regarding appearances noticed in the Notices to Obligor to Deliver Alien. See id. 28 See E. Salinas Dep. at 48-50 (Ex. CC29). 29 Id. 30 See T. Stone FRE 1006 Sunnnary atmr 24 (Ex. CC28).
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Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 15 of 51
Indemnitors and the Bonded Immigrants, no colrnnn is dedicated to recording whether the Bonding Defendants provided notice of a DHSIlNS appearance to anyone?1 In fact, there are 10,345 bond
contracts contained in the electronic files, but none of them reflect that Aaron Bonding provided
notice to anyone on a single bond contract before December 21, 2005. There are, however, a few
instances in which there was notice provided to either the Indemnitor or the Bonded Immigrant, but only after this lawsuit was filed.32
Hard copy bondfiles: Abby Lopez, the former record-keeper at Aaron Bonding, testified
that ifAaron Bonding sent a letter to either the Bonded Immigrant or the Indemnitor, a copy ofsuch
a letter would be kept in the Bonded Immigrant's bond file?3 None of the 63 random bond files
produced in discovery contain any letter indicating that Aaron Bonding sent notice of receipt of a Notice to Obligor to Deliver Alien to a single Indemnitor or Bonded Immigrant.34 None of the bond files indicate that any notice was sent by telephone, either.35
The deposition testimony also demonstrates that the Bonding Defendants implemented a
practice ofdeliberately withholding notice to the Indemnitors and the Bonded Immigrants.
Laura Calderon Cuayahuitl worked at Aaron Bonding as a receptionist, bonding agent, in
accounting, and in collections (where she was responsible for collecting fees or expenses from
Indemnitors) from October 2001 until May 2005. She testified that if Aaron Bonding received a
31 SeeT. StoneFRE 1006 Sunnnary~ 5. 32 See id. The electronic records contain some vague notes regarding contacts with Indernnitors and Bonded Immigrants, and those notes may indicate that notice of appearances were provided to a handful of Indemnitors and Bonded Immigrants. However, none of these notes specifically indicate that notice was provided to both the Indemnitor and the Bonded Immigrant on a single contract (as is required by the bonding contracts), and all ofthese notes are dated on or after December 21, 2005.
That the Bonding Defendants may have begun to provide some of the notice required by the contracts in December 2005 likely reflects two facts. First Ranger Insurance Company (now known as Fairmont Specialty Insurance Company) assumed responsibility for the day-to-dayaffairs of Aaron Bonding in 2005. See Lopez Dep. at 9, 105 (Ex. CC2). Second, Plaintiffs filed their Third Amended Complaint, specifically naming the Insurers as defendants, on September 30, 2005. The Insurers were both served shortly thereafter. 33 See Lopez Dep. at 82. 34 See T. Stone A:ff. ~ 4 (Ex. CC8). 35 See id.
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Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 16 of 51
Notice to Obligor to Deliver Alien for deportation, no notice would be provided to the Bonded
funnigrant, and, in fact, she was instructed to not provide such information to Bonded funnigrants
who called in and asked for information regarding scheduled appearances:
Q. And ifthe people called in and you - and the file or the computer
indicated that there was a notice to deliver the alien into custody for deportation, would you provide that information to the person who called m. .? A. No. Q. Did indemnitors call in, as well as - I'm sony. Did sureties call in as well as aliens? A. To check in, no. Sometimes they would call just to see if they were making - if the alien was making the payments or not. But most of the time it was just the alien calling in. Q. Did anyone instruct you not to provide information regarding a notice for deportation, such as Exhibit 21, to the aliens when they would call in? A. Yeah. I mean, it was - our supervisor would just tell us, you know, [t]his is the way it works. And if they have a court, you can tellyou tell them, you know, so they can go. But if they have a deportation, you just get their information and pass it on to the pickup department. Q. SO if someone called in and asked if they had any appearances scheduled and you saw that they had a notice to appear for a deportation, you would not provide them with that information? A. No?6 Abigail Lopez worked for Aaron Bonding from 1999 to September 200S?7 For most of
this time Lopez selVed as a secretary to Don Vannerson and Max Christensen?8 Lopez was
responsible for updating and maintaining the Bonded funnigrants' files, including updates
regarding information found in the Notices to Obligor to Deliver Alien?9 According to Eliud
36 Cuayahuitl Dep. at 68-69; See also Cuayahuitl Dep. at 66:6-13 (descnbing Aaron Bonding's contacts with Indenmitors and Immigrants after entering the bonding contracts, which does not include contacts with the Indenmitors to provide notice of surrender dates); 72: 11-21 (descnbing Aaron Bonding's obligations ooder the contracts, which did not include providing notice ofsurrender dates); 73: 15-18 (testifying that she failed to infonn the Indenmitors that Aaron Bonding was not going to provide notice ofsurrender dates). 37 See Lopez Dep. at 8-10. 38 Id at 10-12. 39 Seeid at 13-14, 76-77.
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Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 17 of 51

Salinas, Aaron Bonding's fonner manager, Lopez was responsible for providing notice of

appearances to the Bonded Immigrants and the Indemnitors:

Q. And so at some point Abby Lopez took over the responsibility of providing notice of deportation dates to indemnitors and to aliens; is that right?

A. Yes. Correct.

Q. And if notice was provided to the indemnitors or the aliens, Ms. Lopez would be the one who would have done that. Is that right?

[Objection.]

A.

Yes.40

However, Lopez made clear in her deposition that she did not provide notice to the Bonded

Immigrant ofthe appearances requested in the Notices to Obligor to Deliver Alien, nor did anyone

else at Aaron Bonding:

Q. So your understanding was that INS would send copies of the notice to obligor to deliver alien directly to the alien, ifthey had the correct address for the alien?

A. Yes.

Q. And for that reason you did not provide notice to the alien?

[Objection by counsel.]

A. Right.

Q. (By Mr. King) To your knowledge did anyone else at Aaron Bonding provide notice of receipt of a nqtice to obligor to deliver alien document to the alien?

A.

No.41

Q. (By Mr. King) Tum the page to 285 [Bates No. BF-0000285 of
Depo. Ex. 28]. This is the notice to obligor to deliver alien for Mr. Rubio Flores. Is that correct?

A. Yes.

Q. And this is the document - a copy of the document that we were
discussing earlier that Aaron Bonding would not provide notice of to the alien, correct?
A. Right.42

40 E. Salinas Dep. at 63:23-64:7. 41 Id. at 79-80.

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Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 18 of 51
Eliud Salinas testified that after Aaron Bonding's front office received a Notice to Obligor
to Deliver Alien, the alien's :file was passed along to hlln, but he would not provide any notice
hllnself (at least during the class period).43 illstead, he would pass the file to a bounty hunter. The
bounty hunters assigned to recover the Immigrants would not provide notice to the Immigrants.
illstead, the bounty hunters simply tried to apprehend the aliens prior to their surrender date:
Q. Okay. So when you received the notice to obligor to deliver alien for deportation, what further steps did you take to contact the aliens andlor the indemnitors? A. I passed it on [to] ... A bounty hunter. Recovery.
Q. SO the recovery agent would attempt to go out and apprehend at
some point the alien. Is that correct? A. Correct. Q. Okay. Would the bounty hunter give the alien a call to let them know about the deportation date? A. At this time?
Q. Yes.
A. It was - they tried to apprehend hlln. And they didn't, so they were still looking for hlln.... Q. Okay. Why would the-so the bounty hunter would at some pointjust go out to where they believed the alien was and try to get hlln? .. A. Correct.44 Named plaintiffs: The record in this case is consistent with the named plaintiffs'
experience. Aaron Bonding failed to provide the named plaintiffs with any notice of appearances
scheduled by the INSIDHS, of which Aaron Bonding received notice via Notices to Obligor to Deliver Alien.45
42 Id at 98-99; See also Lopez Dep. at 62: 16-63:5 (testifying with regard to Aaron Bonding's responsibility to provide notice of surrender dates, once the parties enter the bonding contracts, "everybody is on their own"), 134:3-21 (Aaron Bonding kept no records of affinnative attempts to contact the Immigrants and the Inderrmitors because Aaron Bonding never made such attempts, other than to try to collect payments) 43 See id. 44 See id.
45 See SAC W69, 74,84; I. Sandoval Int. Resp. No.8 (Ex. CC22); I. Sandoval Decl. (CClO); M. Sandoval Int. Resp. No.
9 (Ex. CC30); M. Sandoval Decl. (CC9); M. Rubio Int. Resp. No.9 (Ex. CC31); Zamora-Garcia Int. Resp. No. 10 (Ex. CC39); A. Rubio Int. Resp. No.9 (Ex. CC32).
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Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 19 of 51
The Bonding Defendants' failure to provide notice ofINSIDRS-scheduled appearances is consistent with their stated understanding oftheir responsibilities under the Bond Contracts. Aaron Bonding admits that it believes the Bond Contracts do not require it to provide notice of a DRS call on an immigrant's bond to either the Bonded Immigrant or the Indemnitors.46 Believing that they
have no obligation to provide notice, it is no wonder that they do not do so. The Indemnitors and the Bonded Immigrants are largely poor and financially
unsophisticated.47 Many cannot read or write English, as evidenced by the fact that most of the contract documents are produced to the Indemnitors in English and Spanish. These facts make the Bonding Defendants' treatment of the Bonded Immigrants and the Indemnitors that much more unconscionable.
The Bond Files The hard copy bond files maintained by the Bonding Defendants provide a substantial amount of useful information that will simplify the management and administration of Plaintiffs' surety bond claims on a class-wide basis, including:
• Date ofthe bond contract. See, e.g., Zamora-Garcia Bond File at BF-0000162. • Amount ofinitial fee. See Lopez Dep. at 15; Zamora-Garcia Bond File at 0000062. • Contact information for the Indemnitor and the Bonded Immigrant. See Lopez Dep. at
20-21,27,30; Zamora-Garcia Bond File at BF-0000127. • Whether Aaron Bonding received a Notice to Obligor to Deliver Alien. See A. Lopez
Dep. at 77-78. • Whether the bond was breached, cancelled, or still outstanding. See Lopez Dep. at 15,
27; Zamora-Garcia Bond File at BF-0000045; Rubio Bond File at BF-0000289. • Whether Aaron Bonding sent written notice of a DRS-requested appearance to the
Bonded Immigrant or the Indemnitor. See Lopez Dep. at 82.
46 See Defendants' Responses to Plaillt:iffS' Second Set of Requests for Admission to Defendant Estate of Don Vannerson, As Sole Proprietor ofAaron Federal Bonding Agency (May 15,2006) at Resps. 20-23 (Ex. CC13). 47 See Lopez Dep. at 35-36. See also Receiver's Response to Ranger Insurance Company's Motion to Reconsider, or, in the Alternative, Motion for New Trial on Court's Order of April 27, 2005, In re Don Vannerson, No. 345,829 (Hanis County Probate Corut) (June 2, 2005) (arguing that "[m]any Indemnitors were financially unsophisticated") (CC14).
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In addition, Aaron Bonding maintained much of this infonnation, and more, ill a searchable, sortable computer database.48
The Bonding Defendants' Failure to Return Collateral Upon Cancellation ofthe Bond In addition to requiring notice of lNSIDHS appearances, each Bond Contract contains a
document entitled ''Promissory Note" (or "Pagare" or "Nota de Pago" in Spanish), which obligates the Indemnitors to deposit collateral worth 50% to 60% ofthe total bond amount with the Bonding Defendants.49 The ''Promissory Note" document also requires the Bonding Defendants to return the collateral posted with the Bonding Defendants to the Indemnitors in the event the Federal Defendants cancel the bond:
Monies will be deposited into a collateral fund to be returned upon the completion of Immigration Case No. __ Defendant __ and receipt ofImmigration Bond Cancellation Fonn 1_391.50 The Bond Contract contains no requirement that the Indemnitors contact the Bonding Defendants to seek a return of the collateral. Such a requirement would not make sense as the document that triggers the Bonding Defendant's obligation to refund the collateral- the 1-391 sent by the Federal Defendants - is addressed to the Bonding Defendants, not to the Indemnitor or the Bonded Immigrant.51 In many cases (as in the case of Alberta Rubio), the Indemnitor may never know that the immigration bond was cancelled and that the collateral is available for collection, absent notice. Unfortunately, the Bonding Defendants, as a matter of practice, never contact the Indemnitors to advise them that they are entitled to return of their collateral. Instead, the Bonding
48 See LopezDep. at21, 24-27, 30-33; T. StoneFRE 1006 SummarymJ2, 5. 49 See Cuayahuitl Dep. at 60-61 (Ex. CC1); Zamora-Garcia Bond File at BF-OOOO141 (Ex. CC4); Sandoval Bond File at BF-OOOO235-36 (Ex. CC5); Salinas Bond File at BF-OOOO322 (Ex. CC7). The Rubio Bond File does not contain a copy of the Promissory Note document, but former Aaron Bonding employees made clear that each Indenmitor (like Ms. Rubio) signed a unifrom Promissory Note. See Cuayahuitl Dep. at 34-36 (acknowledging that the Promissory Note document was used in every bond contract on which the deponent worked); Lopez Dep. at 71 ("Q: Did all the indenmitors sign promissory notes in connection with the surety agreements? A: Yes."). 50 Salinas Bond File at BF-322. 51 See Rubio Bond File atBF-OOOO289.
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Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 21 of 51
Defendants wrongfully retain the collateral, recognizing that the unsophisticated Indemnitors are
unlikely to realize that they are entitled to its return.52 PROPOSED CLASSES53
TIris case presents an intertwined set of claims by seven classes ofplaintiffs, broken down
by the applicable defendants and distinctions in the relief each group is seeking. The first set of
classes brings claims against the Bonding Defendants for their systematic breaches ofcontract. The
second set of classes brings claims against the Federal Defendants for their systematic denial of
immigration and constitutional rights.
Classes Bringing Claims Against the Bonding Defendantsthe "Surety Bond Classes"
The Indemnitor Notice Class: Plaintiffs Irma Sandoval and Alberta Rubio seek to
represent a class of the following Indemnitors in bringing claims for money damages against the
Bonding Defendants:
(a) those who served or are serving as Indemnitors on a surety bond posted by a Bonding Defendant to secure the release of a Bonded Immigrant detained by the Federal Defendants, and (b) who have fully paid their up-front, non-reimbursable fees to the Bonding Defendants pursuant to the terms ofthe bonding contracts, and (c) where the Bonding Defendant received notice that the DRS has scheduled an appearance for the Bonded Immigrant before it, on or after April 16, 1998, and where the Bonding Defendant failed to provide notification of the scheduled appearance to either the Indemnitor or the Bonded Immigrant. The Indemnitor Collateral Class: PlaintiffAlberta Rubio seeks to represent a class ofthe
following Indemnitors in bringing claims for money damages against the Bonding Defendants:
(a) those who have served as Indemnitors on a surety bond posted by a Bonding Defendant to secure the release of a Bonded Immigrant detained by the Federal Defendants, and
52 See CuayahuitlDep. at 63:7-12 (CC1); LopezDep. at 118:19-119:8 (CC2). 53 A table listing each ofthe classes, the causes ofaction pursued by each, and the relief sought by each is attached hereto as Exhibit CC34.
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(b) where the Bonded Immigrant's bond has been cancelled by the Federal Defendants, and (c) where the Bonding Defendants have failed to return any collateral, net of fees validly charged under the bonding contracts, deposited with the Bonding Defendants to either the Indemnitor or the Bonded Immigrant on the bonding contract. The Bonded Immigrant Class: Plaintiff Petra Carranza de Salinas seeks to represent a class of the following Bonded Immigrants in bringing claims for injunctive and declaratory relief against the Bonding Defendants: (a) those who have been released from custody of the Federal Defendants pursuant to surety bonds posted by the Bonding Defendants, and (b) where the bond is still outstanding.
Classes Bringing Claims Against the Federal Defendants the "Federal Classes"
The Supervision Class: Plaintiffs Zamora-Garcia, Manuel Sandoval, Salinas, Cedeno, Norma Pena de Herrera, Isidro Herrera, and Alvarado-Narvaez seek to represent the class of persons who are or will be under removal proceedings, who are not physically detained by the Federal Defendants, and who have been or will be under a final order of deportation, exclusion, or removal, which has not been or will not be executed for three months or more after its issuance, notwithstanding that there was no judicially ordered stay of deportation, exclusion or removal during that three month period, and to whom the Federal Respondents have not issued Orders of Supervision, or have subsequently revoked or refused to renew previously issued Orders of Supervision.
Obligor Cash Bond Class: PlaintiffAdriana Echavarria seeks to represent, as the Obligor Cash Bond Class
(a) all Obligors who posted an immigration Cash Bond, (b) which bond was breached on or after July 28, 1998, following a demand made on the Obligor which was returned undelivered to the Federal Defendants, and
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(c) where the hnmigrant appeared at all hearings and other required appearances of which slhe received appropriate notice, and (c) where the Federal Defendants did not make additional efforts to provide actual notice of the demand to the Obligors, as would be required by Jones v. Flowers, 126 S. Ct. 1708 (2006). Plaintiff Adrianna Echavarris seeks injunctive and declaratory relief on behalf of herself
and the Obligor Cash Bond Class, requiring the Federal Defendants to reinstate the breached bonds,
(if proceedings are ongoing), or reinstate and cancel the breached bonds (if proceedings have been
completed). Immigrant Cash Bond Class A: Plaintiff Jorge Echavarria seeks to represent, as the
hnmigrant Cash Bond Class A,
(a) all hnmigrants released on a Cash Bond, (b) which bond was breached on or after July 28, 1998, following a demand made on the Obligor which was returned undelivered to the Federal Defendants, and (c) where the hnmigrant appeared at all hearings and other required appearances of which slhe received appropriate notice, and (d) where the Federal Defendants did not make additional efforts to provide actual notice of the demand to the Obligors, as would be required by Jones v. Flowers, 126 S. Ct. 1708 (2006). Plaintiff Jorge Echavarria seeks injunctive and declaratory relief on behalf of himself and the
hnmigrant Cash Bond Class A, requiring the Federal Defendants to reinstate the breached bonds, (if
proceedings are ongoing), or reinstate and cancel the breached bonds (if proceedings have been completed).
Immigrant Cash Bond Class B: Plaintiff Juan Larin-lIDoa seeks to represent, as the hnmigrant Cash Bond Class B, all Immigrants released on a Cash Bond that is still outstanding, and all Immigrants who will, in the future, be released on cash bonds. Plaintiff Juan Larin-Ulloa seeks
injunctive and declaratory relief on behalf of himself and the hnmigrant Cash Bond Class B,
requiring the Federal Defendants to make efforts to provide notice of a demand on the bond
consistentwithJonesv. Flowers, 126 S. 0.1708 (2006).
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Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 24 of 51
ARGUMENT I. PLAINTIFFS' PROPOSED SURETY BOND CLASSES SATISFY FRCP 23(a).
A district court has wide discretion in detennining whether to certify a class, and if the district court considers the appropriate Rille 23 criteria in certifying a class, then it may only be reversed on appeal for an abuse of discretion.54 Although this Court may go beyond the pleadings to detennine whether a class may be certified,
[t]he issue on a certification motion is not whether the plaintiffs will ultimately prevail on the merits of their claims, or the strengths and weaknesses of the evidence as to defenses. Rather, the court must examine the nature ofthe evidence that will be used to establish the claims and the defenses, to determine whether the evidence can be presented on a class-wide basis.55 As the Supreme Court has held, there is "nothing in either the language or history ofRule 23 that gives a court any authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action. Indeed, such a procedure contravenes the Rule.,,56 Under FRCP 23, a case qualifies for class certification if a plaintiff demonstrates that the proposed class satisfies all of the requirements of Rille 23(a) - numerosity, commonality, typicality, and adequacy of representation - and at least one of the provisions ofRule 23(b). Here, Plaintiffs' proposed Surety Bond Classes all satisfy the Rule 23(a) requirements. The Indemnitor Notice Class and the Indemnitor Collateral Class satisfy the additional requirement ofRille 23(b)(3) - predominance and superiority. The Bonded Immigrant Class satisfies the Rule 23(b)(2) requirements for classes seeking injunctive and declaratory relief
54 See Jenkens v. Raymark Indus.,Inc., 782 F.2d 468, 471-72 (5th Cir. 1986); Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620,624 (5th Cir. 1999). 55 Colindres v. Quietfle:x Manu., 235 F.RD. 347, 369 (S.D. Tex. 2006). 56 Eisenv. Carlis/e&Jacquelin,417U.S.156, 177-78(1974).
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A. The Members ofthe Surety Bond Classes Are Sufficiently Numerous. Plaintiffs meet FRCP 23(a)'s numerosity requirement by demonstrating the ''the class is so numerous that joinder of all members is impracticable." Any class consisting of more than forty members is presumptively sufficiently numerous.57 Rere,joinder of all ofthe members of any ofthe proposed classes would be impracticable. The Bonding Defendants have admitted that there are nearly 8,000 bond files for surety bonds issued by Aaron Bonding for the Insurers after May 7, 1998.58 The Bonding Defendants received Notices to Obligor to Deliver Alien in most cases. In the predecessor action, Aaron Bonding produced 63 random bond files to Plaintiffs. Ofthese 63 bond files, a Notice to Obligor to Deliver Alien appeared in 51 of them.59 The files for named plaintiffs Manuel Sandoval, Zamora-Garcia, and Miguel Rubio all contained a Notice to Obligor to Deliver Alien in the bond files ofPlaintiffs.6o Because the Bonding Defendants never provided notice of DRS-requested appearances to either Indemnitors or the Bonded Immigrants prior to December 2005, there are thousands of putative class members in the Indemnitor Notice Class. Moreover, the number of Plaintiffs in the Indemnitor Collateral Class will number in the hundreds (if not thousands), as well. According to the Bonding Defendants' computer bond files, since April 16, 1998, 3423 bonds were cancelled yet collateral appears to have been returned in only 324 cases.61 The Indemnitors on bond contracts where collateral was not returned after a cancellation ofthe bond are too numerous to join.
57 SeeMullen, 186 F.3d at 624. 58 SeeR KlimaszewskiAff. at 1 (Apr. 7, 2006) (CCl6). 59 See T. Stone Aff. at ~ 6 (Ex. CC8). 60 See Zamora-Garcia Bond File at BF-OOOOO51 (Ex. CC4); Sandoval Bond File at BF-OOOO217 (Ex. CC5); Rubio Bond File atBF-OOOO285 (Ex. CC6). 61 SeeT. StoneFRE 1006 SummaryatW 10,11 (Ex. CC28).
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The Bonded Immigrant Class comprises all of the Bonded Immigrants associated with outstanding surety bonds posted by the Bonding Defendants. According to the Bonding Defendants, the number ofmembers ofthese classes is far too numerous to join.62
B. There Are Questions of Law or Fact Common to the Classes. Plaintiffs meet the commonality requrrement simply by demonstrating that ''there are questions oflaw or fact common to the class.',63 "The test for commonality is not demanding and is met 'where there is at least one issue, the resolution ofwhich will affect all or a significant number of the putative class members.",64 The absent class members' interests need not be identical to meet the commonality requrrement.65 Numerous questions of law and fact common to the members of the Indemnitor Notice Class, the Indemnitor Collateral Class, and the Bonded Immigrant Class are present. At least two questions are common to all classes' claims against the Bonding Defendants:
1. Whether Texas law applies to Plaintiffs' breach ofcontract claim; and 2. Whether the Insurers can be requrred to answer for Aaron Bonding's conduct. In addition to the two questions listed above, the following questions will be common to the Indemnitor Notice Class: 1. Whether the bonding contracts requITed the Bonding Defendants to provide notice
ofDHS-scheduled appearances dITectly to the Bonded Immigrants; 2. Whether the bonding contracts requrred the Bonding Defendants to provide notice
ofDHS-scheduled appearances dITectly to the Indemnitors; 3. Whether the Bonding Defendants failed to provide notice to the Bonded
Immigrants; 4. Whether the Bonding Defendants failed to provide notice to the Indemnitors;
62 See Verification ofRick Klimaszewski, In re Don Vannerson, No. 345,829 (Hanis County Probate Court) (July 27, 2004) at PTF-VAN 00563 (indicating that Aaron Bonding had 1,450 bonds outstanding in July 2004) (Ex. CC20). 63 FRCP 23(a). 64 Mullen, 186 FJd at 625 (citing Lightboum v. County ofEl Paso, 118 FJd 421, 426 (5th Cir.l997)). 6S See Johnson v. Am. CreditC..o. ofGeorgia, 581 F.2d526, 532 (5thCir. 1978).
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5. Whether the failure to provide notice to both the Bonded hnmigrants and the fudemnitors constituted a breach ofthe bonding contracts;
6. Whether the failure to provide notice caused damage to the fudemnitors; and 7. Whether the breach entitles the fudemnitors to a return of all or a portion of the
non-refundable fees paid for the bond. The questions common to the Bonded hnmigrant Class will include many of the same common questions listed above, plus the following
1. Whether the Bonded hnmigrants are third party beneficiaries of the bonding contracts;
2. Whether, absent equitable relief, the Bonding Defendants wi1llikely continue to fail to provide the contractually required notice; and
3. Whether the Court can order future injunctive relief for the Bonding Defendants' future anticipated breach ofcontract.
Finally, the following questions will be common to the claims of the members of the fudemnitor Collateral Class:
1. Whether the Bonding Defendants are required by the bonding contracts to return collateral to the fudemnitors in the event the bond was canceled;
2. Whether the failure to return collateral to the fudemnitors upon the cancellation of the bond constituted a breach ofthe bonding contracts; and
3. Whether the failure to return collateral damaged the fudemnitors. The answer to these questions will not vary from class member to class member, given the uniform contracts, uniform conduct, and uniform governing standards. As in most class actions, the commonality requirement is met here. C. The Claims of the Class Representatives Are Typical of the Class. "Like commonality, the test for typicality is not demanding. It 'focuses on the similarity between the named plaintiffs legal and remedial theories and the theories of those whom they prnport to represent.,,,66 Typicality requires only that "the class representative's claims have the
66 Mullen, 186 FJd at 625 (citing Lighboum, 118 F.3d at 426).
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same essential characteristics ofthose ofthe putative class. Ifthe claims arise from a similar course ofconduct and share the same legal theory, factual differences will not defeat typicality.,,67
The similarities between the named Plaintiffs' claims and the putative class ofSurety Bond claimants are apparent. With respect to the fudemnitor classes, Inna Sandoval and Alberta Rubio are both fudemnitors who have contracted with the Bonding Defendants to secure the release from INS detention of a Bonded Immigrant (Manuel Sandoval and Miguel Rubio, respectively).68 The Bonding Defendants received notices of appearance for both Manuel Sandoval and Miguel Rubio but failed to relate these notices to any ofthe Sandovals or the RUbios.69
With respect to the Bonded Immigrant Class, Plaintiff Salinas is currently released from DRS detention pursuant to a surety bond posted by the Bonding Defendants?O She currently faces the risk that the Bonding Defendants will not fOlward to her notice of a DRS-requested appearance.71 Rer claim for prospective relief is typical of other Bonded Immigrants released on surety bonds who face the risk that the Bonding Defendants will not fOlWard notice of a DRSrequested appearance.
Alberta Rubio's claim is typical of the members of the fudemnitor Collateral Class. Even though the Federal Defendants cancelled Miguel Rubio's bond, releasing the Bonding Defendants of any obligation to pay on the bond, Aaron Bonding and Ranger (the surety on Mr. Rubio's bond) have failed to return Alberta Rubio's collateral.72 Moreover, the Bonding Defendants' records regarding Mr. Rubio's bond specifically acknowledge that Alberta Rubio is owed a return of a
67 James v. City ofDallas, 254 FJd 551, 571 (5th Cir. 2001) (citation and internal quotation marks omitted).
m 68 See Sandoval BondFile atBF-OOOO238; Rubio BondFile atBF-OOOO274.
69 See Sandoval Bond File at BF-OOOO217; Rubio Bond File atBF-OOOO285; SAC 69,74. 70 See Salinas Bond File atBF-OOOO334-338. 71 See SAC ~ 81. 72 SeeSAC~78;RubioBondFileatBF-289.
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portion of the collateral she posted?3 Like the other Indemnitor Collateral Class members, Ms. Rubio suffered hann from the Bonding Defendants' policy ofretaining collateral.
D. The Named Plaintiffs and Class Counsel Will Adequately Represent the Interests of the Surety Bond Classes.
Rule 23 also imposes the requirement that the class representative "fairly and adequately protect the interest ofthe class.,,74 The court must consider both the adequacy of class counsel and the adequacy ofthe named class representatives.75
1. Class Counsel Is Adequate. Rille 23(g), adopted in 2003, preserves the long-standing requirement that class counsel "must fairly and adequately represent the interests of the class.,,76 Rille 23(g) sets forth specific
factors this Court must consider in determining whether to appoint an attorney or attorneys to serve as class counsel:
• the work counsel has done in identifying or investigating potential claims in the action, • counsel's experience in handling class actions, other complex litigation, and claims of
the type asserted in the action, • counsel's knowledge ofthe applicable law, and • the resources counsel will commit to representing the class?7 Here, Plaintiffs propose that William T. Reid, N, and J. Benjamin King of Diamond McCarthy, LLP -with the support of other Diamond McCarthy attorneys and staff- serve as class counsel for the Surety Bond Classes. The attorneys from Diamond McCarthy routinely handle complex civil litigation matters - including matters involving claims of fraud, negligent misrepresentation, breach of contract, and unjust enrichment. Diamond McCarthy has the
73 See Rubio Bond File at BF-0000279 (''Need to Refund. To: Alberta Rubio, $2500"). 74 FRCP 23(a). 75 See, e.g., Recinos-Recinos v. Express Forestry, Inc., 233 FRD. 472, 480 (ED. La. 2006). See also FRCP 23(g) (setting forth specific requirements and considerations for the appointment ofclass counsel). 76 Id. See also In re UniversalAccess, Inc., Sees. Litig., 209 FRD. 379, 386 (ED. Tex. 2002) (class counsellllliSt be "qualified, experienced and able to vigorously conduct the proposed litigation"). 77 FRCP 23(gXl)(C)(i).
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resources to diligently prosecute the class' claims, and they will use whatever resources are necessary to do SO.78
Plaintiffs also propose that Tucker Ronzetti of the Kozyak Tropin & Throckmorton (''KTT'') law finn in Coral Cables, FL, represent the Surety Bond Classes as co-counsel. Tucker Ronzetti specializes in class action litigation. An adjunct professor of the University of Miami School of Law teaching a seminar on class action litigation, Mr. Ronzetti, with other members of KTT, has served as class counsel in In re Managed Care Litigation, MDL No. 1334 (S.D. Fla.), Lipuma v. American Express Co., no. 04-20314-CN-Altonaga (S.D. Fla.), Smith v. First Union National Bank, no. 00-4485-CN-Marra (S.D. Fla.), Borcea v. Carnival Corp., no. 05-22968-CNCooke (S.D. Fla.), and Hollinger v. Keybank National Ass 'n, no. 03-08-4925 (Ohio Ct. Cmn. Pleas), among other cases?9
ill addition, Plaintiffs propose that Elisabeth S. Brodyaga represent the Surety Bond Classes. Ms. Brodyaga has successfully prosecuted two class actions in the Southern District of Texas, one before this Court.80 Ms. Brodyaga has over twenty-five years of experience in immigration law, which is closely intertwined with the claims of the Surety Bond Classes.81 ill addition, Ms. Brodyaga has received national recognition for her work on behalf of immigrants, receiving awards from the American Immigration Lawyers Association and the National Lawyers Guild, as well as the Lexis-Nexis Daniel Levy Memorial Award.82 Her commitment to the rights ofimmigrants is unquestionable, as is her resolve to fairly and adequately advance the rights of the proposed class members.
78 See King Dec!. ~ 7 (Ex. CC18). 79 See RonzettiDecl. atW 4-5 (Ex. CC33). 80 See Brodyaga Dec!. (Ex. CC19). 81 See id 82 ee id.
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2. The Class Representatives Are Adequate.
As a general rule, "class representatives are not required to have a complete knowledge of
the case.,,83 They do not need to be "legal scholars" and are "entitled to rely on counsel.',s4 The
only requirement imposed on class representatives is that they must "possess a sufficient level of
knowledge and understanding to be capable of 'controlling' or 'prosecuting' the litigation.',s5 The
Berger adequacy standard must be applied in light of the facts of each case and in light of the
characteristics ofaparticular body ofclass members.86
Inna Sandoval and Alberta Rubio seek to represent the Indemnitor Notice Class, and they have demonstrated that they meet the adequacy standard.87 Ms. Sandoval demonstrated in her
deposition and her affidavit that she understands the "action's factual undetpinnings.',s8 Her
knowledge amounts to more than just the knowledge that she was "involved in a bad business
deal.,,s9 Ms. Sandoval's deposition and declaration show that she:
• Knew that Aaron Bonding had been the bond company for her father. See I. Sandoval Dep. at 13-14 (Ex. CC2l); I. Sandoval Decl. at ~ 2 (Ex. CClO).
• Believed Aaron Bonding would provide her father with notice of court dates by . mail. See I. Sandoval Dep. at 20, 23; I. Sandoval Decl. at ~ 4.
83 See Lehocky v. Tidel Techs., 220 FRD. 491, 503 (SD. Tex. 2004) citingBaffo v. Donaldson, Luj/dn & Jenrette Sec. Corp., 222 FJd 52, 62 (2d Cir. 2000); In re Firstplus Fin. Group, Inc. Sec. Litig., No. 3:98-CV-2551-M, 2002 WL 31415951, at *2-3 (N.D. Tex. Oct 23, 2002) (Lynn, J.)). 84 Bergerv. Compaq Comp. Corp., 257 FJd475, 483 (5th Cir. 2001), clarified on rehg. en banc, 279 FJd 313 (5th Cir. 2002). 85 Id. at482-83. 86 See 7 WRIGHT AND MILLER § 1765 (''what constitutes adequate representation is a question offact that depends on the CirClUllStances ofeach case"); Apanewicz v. Gen. Motors Corp., 80 FRD. 672 (ED. Pa. 1978) (same). See, e.g., Morris v. Transouth Fin. Corp., 175 FRD. 694, 698 (MD. Ala. 1997) (ruling that ''unsophisticated consmners" who sued a finance company and who did not necessarily understand the "intricacies of finance" or have intimate understanding of their claims could serve as class representatives); Heastie v. Community Bank o/Greater Peoria, 125 FRD. 669, 677 (N.D. ill. 1989) (refusing to require proposed class plaintiffs to demonstrate sophistication where defendant ''targeted these consmners partly because they were unsophisticated'); Recinos-Recinos, 233 FRD. at 480.
87 SeeSACat~21.
88 Ogden v. AmeriCredit Corp., 225 FRD. 529, 533 (ND. Tex. 2005) (considering the awareness offacts giving rise to the lawsuit as one ofthe factors in the adequacy analysis). 89 Id. at 534.
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• Remembered Aaron Boncling representative telling her that she would receive half ofher fee back ifher father showed up for his appointments. See 1. Sandoval Dep. at 35-36; 1. Sandoval Decl. at ~ 2.
• Knew that she was responsible to making sure her father appeared for his appointments. See 1. Sandoval Dep. at 19.
Additionally, in her interrogatory responses Ms. Sandoval stated that she believed Aaron
Bonding would fulfill all ofits promises in the contract and that Aaron Bonding would let her know of every appearance requested so that she could make sure that her father appeared.90 She also
demonstrated knowledge of the basis for her legal claims by stating that she wants to recover the
money she paid to post the bond because Aaron Bonding did not notify her or her father of his appointment with INS.91
Ms. Sandoval has also demonstrated that she is an active participant in this litigation. She
has participated in the preparation ofinterrogatory responses and a declaration in the support ofher
claims. She timely appeared at the deposition noticed in this case,92 and looks forward to testifying
before the court at an evidentiary hearing, as necessary. During the deposition, Ms. Sandoval even testified that she would be willing to travel to Houston to pursue her claims, if necessary.93 Ms.
Sandoval has also attended at least one hearing in this case, and testified that she regularly kept in contact with class counsel, Lisa Brodyaga, about this litigation.94
Alberta Rubio exemplifies the proposed class members' vulnerability. She paid Aaron Bonding $4,000 on a $3,000 bond to secure the release of her son, Plaintiff Miguel Rubio.95
Although Ms. Rubio is an unsophisticated plaintiff, she appeared promptly for her deposition, and
90 See 1. Sandoval Interrog. Resp. No.6 (Ex. CC22). 91 See 1. SandovalDep. at36 (CC21). 92 In fact, Ms. Sandoval and her father, Manuel Sandoval traveled to the deposition cite in McAllen, which is an hour and a half away from their current residence, and spent almost 10 hours at the offices where the depositions were being taken Ms. Sandoval's actions show dedication to the pursuit ofthis class action 93 See 1. SandovalDep. atp. 44. 94 Id. at 45. 95 See Rubio Bond File at BF268, 304 (Ex. CC6).
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she knows she is attempting to recover her money from the bond company.96 Moreover, she
understands that she is attempting to represent the interests of people like her and that she has a
responsibility to protect their interests, and she has had frequent meetings with counsel regarding hercase.97
Ms. Salinas seeks to represent the Bonded Immigrant Class - those immigrants currently
released from detention on a bond issued by Aaron Bonding. See SAC ~ 23. She has
demonstrated personal knowledge ofthe facts that give rise to her claim:
• Aaron Bonding is a defendant in this lawsuit. See P. Salinas Dep. at 49 (Ex. CC26). • Aaron Bonding posted the bond for her. See P. Salinas Dep. at 15; Salinas Decl. at ~ 3
(Ex.CC27). • She knows that Juan De La Rosa contracted with Aaron Bonding to post a $3,000
bond on her behalf See P. Salinas Dep. at 18-19; Salinas Decl. at ~ 3. • She gave an address to Aaron Bonding when she was released on bond. See P. Salinas
Dep. at 16.
In her deposition testimony, Ms. Salinas demonstrated that she understands the claims, the
relief she is seeking, and the significance ofacting as a class representative:
• She would be entitled to a return of her deposit with Aaron Bonding should her immigration case conclude without her ever having missed an appearance. See P. Salinas Dep. at 78-79.
• She knew that she would forfeit the entire amount ofthe bond if she did not make all ofher appearances required under the contract. See Salinas Decl. at ~ 3.
• Aaron Bonding has a responsibility to provide her with notice ofdeportation dates. See P. Salinas Dep. at 62-63; 80.
• She understands that she is a representative of a class of people who are in her same situation and that she has a responsibility to represent their interests. See P. Salinas Dep. at 81; Salinas Decl. (10/23/06) (CC36 & CC36A).
• She has kept in contact with her attorneys throughout this case and intends to continue to do so. See P. Salinas Dep. at 81; Salinas Decl. (10/23/06).
96 See A. Rubio Dep. at 33 (CC23). 97 See A. Rubio Dec1. (Ex. CC35 & CC35A).
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Ms. Salinas also demonstrated herself to be an active participant in this litigation. She, too, participated in the preparation of a declaration and interrogatory responses and timely attended her deposition.
For these reasons, and those set forth in Plaintiffs' Motion for Class Certification, under any reasonable interpretation ofthe Berger standard, Inna Sandoval, Alberta Rubio, and Petra Carranza de Salinas are adequate representatives ofthe classes described above. II. PLAINTIFFS' PROPOSED INDEMNITOR NOTICE CLASS AND
INDEMNITOR COLLATERAL CLASS SATISFY FRCP 23(b)(3). A. Common Issues Predominate Over Individual Issues With Respect to the
Indemnitor Notice Class and Indemnitor Collateral Class. The Indemnitor Notice Class and Indemnitor Collateral Class seek to bring class claims for breach of contract against the Bonding Defendants pursuant to Rule 23(b)(3). To qualify for class treatment under Rule 23(b)(3), "questions of law or fact common to the members of the class [must] predominate over any question affecting only individual members.,,98 ''The Rule 23(b)(3) predominance inquiry tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation.,,99 "In order to 'predominate' common issues must constitute a significant part of the individual cases."lOO However, "[p]redominance does not require all questions of law or fact to be common, but only that common questions predominate over individual questions."lOl ''The existence of individual questions concerning class members does not necessarily defeat the
98 FRCP 23(bX3). 99 Bywaters v. United States, 196 F.RD. 458,468 (ED. Tex. 2(00). 100 Jenkens,782F.2dat472. 101 Recinos-Recinos, 233 FRD. at 481;In re Elec. Data Sys. Corp. Sec. Litig., 226 FRD. 559, 570 (ED. Tex. 2005).
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commonality requirement; the Rule requires only that common issues predominate, not that they
be unanimoUS.,,102
Plaintiffs' claims allege unifonn breaches of the Bond Contracts. These fonn documents
define the parties' contractual rights. Because evidence of a breach of a fonn contract can be
presented on a class-wide basis, it is a well-recognized tenet of federal procedural law that "claims
arising from interpretations of a fonn contract appear to present the classic case for treatment as a
class action, and breach ofcontract cases are routinely certified as SUCh.,,103
Texas law104 establishes the following elements for breach of contract claims: (i) the
plaintiff and defendant had a valid, enforceable contract; (ii) the plaintiff perfonned or tendered
102 Kleiner v. First Nat'l Bank ofAtlanta, 97 FRD. 683, 692 (ND. Ga. 1983) (citations omitted). See also Smilow v. Southwestern Bell Mobile Sys., Inc., 323 FJd 32, 39 (1st Cir. 2(03) (''Rule 23(bX3) requires merely that cormnon issues predominate, not that all issues be cormnon to the class.") \03 Kleiner, 97 FRD. at 692 (citing multiple cases). See also Steinberg v. Nationwide Mut. Ins. CO., 224 FRD. 67,74 (E.D.N.Y. 2(04) (citing quoted language from Kleiner); Klay v. Humana, Inc., No. 02-16333, 2004 WL 1938845, at *17 (11th Cir. Sept 1,2(04) (same); Egge v. Healthspan Servs. CO., 208 FRD. 265, 269 (D. Minn 2(02) (same); Ballard v. Equifax Check Servs., Inc., 186 FRD. 589, 595 (ED. Cal. 1999) (same); Harco, Inc. v. Am. Nat'l Bank & Trust CO., 121 F.RD. 664, 669 (ND. ill. 1988) (same); Arenson v. Whitehall COnvalescent & Nursing Home, Inc., 164 FRD. 659, 664 (ND. ill. 1996) (same); Robin Drug CO. v. Pharacare Mgmt. Servs., Inc., No. Civ. 033397 (pAMlRLE), 2004 WL 1088330, at 5* (D. Minn May 13, 2(04) (citing Kleiner for similar proposition); Gibb v. Delta Drilling CO., 104 FRD. 59,73 (N.D. Tex. 1984) (same); Meyer v. CUNA Mutual Group, No. Civ. A. 03-602,2006 WL 197122, at *4 (W.o. Pa. Jan. 25, 2(06) (finding that cormnon issue of contract interpretation predominated over any individual issues); In re Universal Servo Fund Tele. Billing Practices Litig., 219 FRD. 661, 679 (D. Kan. 2004) (allegations ofbreach of certain provisions of standard fonn contracts satisfied predominance requirement); Heartland COmms., Inc. v. Spn'nt Corp., 161 FRD. 111, 117-18 (D. Kan. 1995) (same); In re Tn'-State Crematory Litig., 215 F.RD. 660, 693 (ND. Ga. 2(03) (''Breach of contract claims are certifiable as appropriate for class action"); In re Commonpoint Mort. CO., 283 BR 469, 478 (Bankr. W.o. Micn 2(02) ("Cormnon questions oflaw and Fact are particularly likely to predominate in cases which derive from fonn documents and standardized procedures.''); Winkler v. DTE, Inc., 205 F.RD. 235, 243 (D. Ariz. 2(01); Mayo v. Sears, Roebuck & CO., 148 FRD. 576, 583 (SD. Ohio 1993); Durrettv. John Deere CO., 150 FRD. 555, 558 (N.D. Tex. 1993) ("cormnon questions oflaw and tact abound" in class claims arising out of"virtually" unifonn contracts; granting certification under Rule 23(b)(3)). 104 Each ofthe unifonn bonding contracts contains a choice of law provision specifying that Texas law shall govern the contract See, e.g., Sandoval Bond File at BF-238 (Ex. CC5). Texas routinely enforces contractual choice of law provisions and has adopted the approach articulated in REsTATEMENT (SECOND) OF CONFLICTS OF LAW § 187 (1988) to determine the enforceability ofa contractual choice oflaw provision See DeSantis v. Wackenhut COrp., 793 S.W.2d 670, 677 (Tex. 1990). Section 187(1) provides that "[t]he law ofthe state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement directed to that issue." REsTATEMENT (SECOND) OF CONFLICT OF LAWS § 187(1) (1988). Here, Plaintiffs' breach ofcontract claims center around the Bonding Defendants' failure to provide notice ofall DHS-scheduled appearances and failure to return collateral upon cancellation of the bond Both of these issues not only "could have resolved by an explicit provision in their agreement," but were in fact subject to explicit provisions of the agreement. Therefore, the law of the state chosen by the parties-in this case, Texas---should be applied on a class-wide basis to determine Plaintiffs' breach ofcontract claims.
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petfonnance; (iii) the defendant breached the contract; and (iv) the defendant's breach caused the plaintiff's injuries. !Os
1. Valid and Enforceable Contract The hard-copy and electronic bond files establish the existence of valid and enforceable contracts.
2. Plaintiff's Substantial Performance Receipts and other docmnents in the bond files will demonstrate which class members made the payments required under the contracts.
3. Defendants' Breach Indemnitor Notice Oass: The central question regarding the Indemnitor Notice Class is whether the Bonding Defendants are obligated to provide notice of surrender and interview dates set forth in the Notice to Obligor to Deliver Alien. This question requires a legal answer to a question that is unifonn to the class. Moreover, the bond files demonstrate whether the Bonding Defendants received a Notice to Obligor to Deliver Alien.l 06 Because the class is limited to people whom the Bonding Defendants did not notifY, the answer to that legal question will establish the breach or the absence of a breach class-wide. Thus, the Indemnitor Notice Class falls squarely within Rule 23(b)(3). Indemnitor Collateral Oass: Similarly, the central question regarding the Indemnitor Collateral Class is whether the Bonding Defendants were obligated to retillll collateral to the Indemnitors. The answer to that question will not vary among class members because the Bonding Defendants' contractual obligations are unifonn across the class. Because the class is limited to
105 See Kadhum v. Homecomings Fin. Network, Inc., -- S.W.3d --, 2006 WL 1125240, at *4 (Tex. App.Houston [1"1 Dist.] Apr. 27, 2006, no pet. hist.). The Bonding Defendants' uniform contracts contain a Texas choice-of-law provision. See, e.g., Salinas Bond File at BF-0000320 (Ex. CC7). 106 See A. Lopez Dep. at 77-78 (Ex. CC2); T. Stone Aff. ~ 6 (Ex. CC8); T. Stone FRE 1006 Summary ~ 7 (Ex. CC28).
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those individuals that did not receive a return of their collateral from the Bonding Defendants, the Indemnitor Collateral Class falls squarely within Rule 23(b)(3).
4. Damages Caused by Breach Under Texas law, plaintiffs may seek reliance damages for breach of contract claims. Where a party makes a substantial investment in performing their obligations under an agreement and the agreement is breached, the party is entitled to a return of their investment as reliance damages. 107 Alternatively, a court may award a plaintiff the benefit the plaintiff's performance conferred on the defendant in a restitution award.108 In either event, a uniform damage model could be constructed using the Defendants' bond files, which reflect amounts paid by the Indemnitors.109 Similarly, individual damage calculations emanating from the Bonding Defendants' retention of collateral could be easily calculated by reference to the bond files, which reflect the collateral accounts. Plaintiffs' contract claims present overriding common questions and any individual issues will not predominate and can easily be managed through the bond files. Accordingly, Plaintiffs request that this Court certify the Indemnitor Notice Class and the Indemnitor Collateral Class as described above.
107 See TaeMun Chungv. Jeong Ran Lee, - S.W.3d-, 2006 WL 1391249, at *4 (Tex. App. May 23, 2(06). Seealso Texas Nom Ltd. P'ships v. AkunaMatatalnvs., Ltd., No. 04-04-00447-CV, 2005 WL 159459, at *5 (Tex. App. Jan. 26, 2(05) ("[R]eliance damages seek to restore the status quo at the time before the contract"). 108 See Hector Martinez & Co. v. S. Pac. Transp. Co., 606 F.2d 106, 108 n3 (5th Cir. 1979); IT Corp. v. Moteo Site Trust Fund, 903 F. Supp. 1106, 1132 (S.D. Tex. 1994) ("[1]t is undisputed that restitution is one appropriate damage measure for a breach ofcontract claim"). 109 Differences in damages as to individual class members will not preclude class certification, especially where reasonable means for assessing damages on an individual basis exist See State 0.(Ala. v. Blue Bird Body Co., Inc., 573 F.2d 309, 326 (5th Cir. 1978); Transamerican Refining Corp. v. Dravo Corp., 130 FRD. 70, 76 (S.D.Tex. 1990); 7B CHARLEs ALAN WRIGHT, ARTHURR MillER & MARy KAy KANE, FEDERAL PRACTICE & PROCEDURE § 1781 (2d ed. 1986) ("[1]t unifonnly has been held that differences among the members [of a class] as to the amount of damages incurred does not mean that a class action would be inappropriate." ) (collecting cases).
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B. Class-wide Adjudication of the Claims of the Indemnitor Notice Class and Indemnitor Collateral Class Is Superior to Other Available Methods of Adjudication.
Rule 23(b)(3) sets forth four factors federal courts are to consider in determining whether
proceeding by class litigation is superior to other methods. First, the absent class members have no
interest in proceeding individually. The claims of the class members are insufficient to justify the
expense of litigation against the Bonding Defendants. The facts of this case present the exact
situation - relatively small amOlll1ts of damage suffered because ofuniform conduct against a large
number ofsimilarly situated persons - for which class-action treatment was designed:
The core prupose of Rule 23(b)(3) is to vindicate the claims of consumers and other groups of people whose individual claims would be too small to warrant litigation. See [Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997)] ("While the text of Rule 23(b)(3) does not exclude from certification cases in which individual damages flll1 high, the Advisory Committee had dominantly in mind vindication of the rights of groups of people who individually would be without effective strength to bring their opponents into court at all." (internal quotation marks omitted); Mace [v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997)] (''The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone's (usually an attorney's) labor.',).11o
Classes ''that are made up of consumers are especially likely to satisfy the predominance requirement.,,111
Second, Plaintiffs are lll1aware of any litigation concerning the controversy already
commenced by members of the class. Thus, certifying the proposed classes will not interfere with
any ongoing litigation.
Third, it is desirable to concentrate the litigation of these claims in this Court. This Court
has extensive experience with this case and the claims raised herein.
110 Smilow v. Southwestern BellMobile 5ys., 323 FJd 32, 41-42 (1st Cir. 2003). 111 Id. at42n.19 (citing AmChem Prods. Inc., 521 U.S. at 625).
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Fourlh, as discussed above, litigation of this class is manageable. Liability to the Indemnitor Notice Class and Indemnitor Collateral Class may be deteImined on a class-wide basis. Individual class member damages may be deteImined by reference to the bond files and Aaron Bonding's computer records. This case is indeed less complex than other certified classes.112 Once the common questions are resolved, the remainder of the case may be disposed of through a relatively quick claims process. I 13 Thus, while every class action case involves some complexity, class treatment here remains a superior method of resolving all of the claims the Defendants' wrongdoing presents.
Moreover, the members of the proposed Indemnitor Notice Class can be easily identified from Aaron Bonding's records. As Plaintiffs have alleged and as the evidence gathered thus far confinns, the Bonding Defendants uniformly fail to provide the contractually required notice. Thus, virtually all fudemnitors (within the class period) fall within the fudemnitor Notice Class.
Likewise, the members of the proposed fudemnitor Collateral Class can also be easily identified from Aaron Bonding's records. The Plaintiffs have alleged, and the evidence confirms, that the Bonding Defendants have made it their unifonn practice to not return the posted collateral to the fudemnitors absent a request by the fudemnitors to do so. Whether the bond was canceled and whether the collateral has been returned can be easily deteImined from the bond files.114
m. PLAINTIFFS' PROPOSED BONDED IMMIGRANT CLASS SATISFIES THE
REQUIREMENTS OF FRCP 23(b)(2). fu addition to certification of classes seeking money damages pursuant to Rule 23(b)(3), Plaintiffs seek certification ofthe Bonded Immigrant Class under Rille 23(b)(2) for the pruposes of
112 See, e.g., Klay v. Humana, Inc., 382 FJd 1241 (11th Cir. 2004) (approving certification a class of essentially all the doctors in the country); Allapattah Servs. v. Exxon Corp., 333 FJd 1248 (11th Cir. 2003) (approving certification of hundreds ofgasoline dealers across the country). 113 See, e.g., Allapattah Servs., Inc. v. Exxon, 157 F. Supp. 2d 1291, 1324 (S.D. Fla. 2001) (descnbing a claims process adopted to resolve post trial issues in a breach ofcontract class case). 114 SeeT. StoneFRE 1006 Sunnnaryat'llll (Ex. CC28).
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obtaining :injlll1ctive and declaratory relief Certification lll1der Rule 23(b)(2) is appropriate where the defendant "had acted :in a consistent manner toward members of the class so that his actions may be viewed as part of a pattem of activity." 7B CHARLES ALAN WRIGHT, ARTIIUR R. MILLER &MARyKAyKANE,F'EDERALPRACTICE&PROCEDURE § 1775 (2ded. 1986). The conduct ofthe Bond:ing Defendants :in routinely failing to provide notice of DHS-requested appearances to both the Indemnitors and the Bonded Immigrants plainly satisfies this requirement. Plaintiffs seek certification ofthe proposed classes for the purposes ofseek:ing an :injlll1ction requiring the Bond:ing Defendants to provide reasonable notice of all DHS-requested appearances they receive to both the Bonded Immigrants and the Indemnitors, and correspond:ing declaratory relief 115 IV. PLAINTIFFS' PROPOSED SUPERVISON CLASS SATISFIES RULES 23(a)
AND (b)(2) OF THE FEDERAL RULES OF CIVIL PROCEDURE. Zamora-Garcia, Manuel Sandoval, Salinas, Cedeno, Nonna Pena de Herrera, Isidro Herrera, and Alvarado-Narvaez seek habeas cotpus relief for themselves, and declaratory and :injlll1ctive relief on behalf of the class they seek to represent. For many of the same reasons as discussed above, Plaintiffs' proposed supervision class satisfies Rilles 23(a) and (b)(2) of the Federal Rilles ofCivil Procedure. A. The Members of the Supervision Class Are Sufficiently Numerous. In general, there are three classes of aliens lll1der final orders of removal who, :in the past, have received Orders of Supervision. The first class consists of nationals of cOlll1tries, such as Cuba, who refuse to accept them as deportees. That group is not represented and is not :involved here:in. The second group, represented here:in by Plaintiffs Zamora-Garcia, Manuel Sandoval, Sa1:inas, and Alvarado-Narvaez, consists of :immigrants who are or will be lll1der final orders of
115 See, e.g., Irnrin v. Mascott, 112 F. Supp. 2d 937, 964-65 (N.D.Cal. 2(00) (granting injunction against defendants and ordering them to cease collection of debts in a consumer class-action asserting a violation of the Fair Debt Collection Practices Act.); In re Great Southern Lifo Insurance Co Sales Practices Litig., 192 FRD. 212, 221-22 (N.D. Tex. 2(00) (certifying class seeking injunctive relief to prevent insurance fraud).
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removal and who challenged or will challenge their removal orders in federal court, and whom the Federal Defendants did not or will not remove during the ninety-day removal period, notwithstanding that the immigrants did not obtain a judicial stay of removal during that period, or otherwise obstruct removal. Previously, such immigrants were routinely placed under Orders of Supervision. Even after this policy was changed, in 2002, aliens to whom Orders of Supervision had previously been issued were allowed to remain at liberty, and to obtain and renew employment authorization documents, so long as they substantially complied with the conditions ofthe Orders of Supervision. The third group, represented herein by Plaintiffs Cedeno, Norma Pena de Herrera, and Isidro Herrera, consists ofimmigrants who are or will be under final orders ofremoval, and whom, for humanitarian reasons, the Federal Defendants did not or will not remove during the ninety-day removal period, notwithstanding that the immigrants did not obtain ajudicial stay ofremoval during that period, or otherwise obstruct removal. Such immigrants were previously also routinely placed under Orders ofSupervision
The policy of the Federal Defendants with respect to both the second and third groups changed on or about February 27, 2006, with the Interoffice memorandum issued by Michael Watkins, Assistant Field Office Director for the Harlingen Office of ICE. II6 Said Memorandum advised "All Staff' that, except for those aliens who were under Orders ofSupervision because their home countries would not accept them as deportees, (the first group, not involved herein), they were to cancel or revoke the Orders of Supervision and employment authorization documents of all aliens who were under such Orders, and to instruct such persons to :file applications for administrative stays ofremoval with the Federal Defendants.I I?
116 [Dlct. 55, ppJ-4]. 117 Id.
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By letter dated April 21, 2006/ 18 counsel requested that aliens who had been allowed to
remain in the United States for more than the 90-day removal period, and who thereafter obtained
stays ofremoval, be issued Orders ofSupervision, or, ifthey already had such Orders, be allowed to
keep them. Mr. Watkins responded by letter dated April 24, 2006, denying counsel's request.119 He
further informed counsel that he would allow only those aliens named in this Court's prior order,120
to remain under Orders of Supervision, and that he would no longer abide by the informal
agreement allowing people to remain who had federal challenges pending. This uniform treatment
by the Federal Defendants satisfies Rule 23(b)(2). As a result, counsel started the process of
obtaining judicial stays of removal for her clients who had previously been subject to the informal agreement, and advised Mr. Watkins ofthe existence ofsuch stays as they were granted.l21
As prior counsel for the Federa1 Defendants, Lisa Putnam, admitted in open court, there
were in 2002-2003 approximately 2,000 immigrants in this district who had been allowed to remain
at liberty while they challenged removal orders in federal court. Although some (if not most) have
doubtless been removed, the fact that a substantial number remain is shown by the fact that counsel
has obtained stays ofremoval from the Fifth Circuit for at least 26 such individuals.122 Three others have cases pending at the Supreme COurt.123 Counsel also represents several such clients who were
118 [Dkt. 59 atpp.7-8]. 119 [Dkt. 64, pp.3-5]. This policy applies regardless ofwhether the stay ofremoval is issuedjudicially, or administratively. For example, putative class member Alfonso Acosta-Grimaldo, A90 453 081, was ordered removed on December 15, 2005. His timely petition for review to the Fifth Circuit was dismissed on March 16, 2006. A timely petition for certiorari to the Supreme Court, No. 05-1276, is being held in abeyarJce, apparently until the Court resolves the underlying issue in Lopez v. Gonzales, No. 05-547 and Toledo-Flores v. United States, No. 05-7496. An administrative stay of deportation was granted June 19, 2006. See Plaintiffs' Exh. "S" [Doc. 111]. However, Mr. Acosta has not beer! placed under an Order ofSupervision 120 [Dkt. 60]. 121 [Dkt. 61,64,90]. 122 [Dkt. 90]. 123 Laura Salazar, Nohemi Range~ and Alfonso Acosta, Nos. 05-830 and 05-1276, respectively. Applications for stays of removal were filed for all three. Those of Ms. Salazar and Ms. Rangel have never been adjudicated. Mr. Acosta was
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under Orders of Supervision for humanitarian reasons, including Plaintiffs Cedeno, Herrera, and Pena de Herrera. In their cases as well, applications for administrative stays ofremoval have been filed, but not adjudicated.124 None has been ordered to report for removal, and none currently has an Order ofSupervision.
B. There Are Questions of Law or Fact Common to the Supervision Class. By definition, there are questions of law common to the class. The primary legal issue presented by this class is whether an alien under a final order of deportation, exclusion, or removal, in whose case there was no judicial stay of removal in effect during the 90-day "removal period" specified by 8 U.S.c. § 1231(a), and who did not fail or refuse to request any necessary travel documents, or otherwise "conspire[] or act[] to prevent ... removal" during that period, is entitled to an Order of Supervision, regardless of whether said alien subsequently obtained a judicial or administrative stay of removal. Most if not all class members also have a common fact pattern, to wit, in most ifnot all cases, these are individuals in whose cases the Federal Defendants voluntarily abstained from executing an administratively final order of removal, either because of an informal agreement between the federal defendants and counsel for the aliens, or for humanitarian reasons. C. The Claims of the Supervision Class Representatives Are Typical of the
Members of the Class. The claims of the class representatives are typical of the class. In each case, the class representative was under an administratively final order ofremoval for more than ninety days, and was not removed during that period, even though s/he did nothing during the removal period to prevent the Federal Defendants from executing that order.
twice denied a stay, but ICE reversed itself, following intervention by the Office of the Solicitor Genera~ and granted a stay sua sponte. [Dkt.91,111]. 124 See, e.g., [Dkt.55, atpp.lO-26].
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D. The Named Plaintiffs and Class Counsel Will Adequately Represent the Interests of the Supervision Class. 1. Class Counsel Is Adequate.
For the reasons discussed above, it is submitted that class counsel is adequate.125 2. The Class Representatives Are Adequate.
The named plaintiff's interests are not antagonistic to the interests' of absent class members.126 ''Differences between named plaintiffs and class members render the named plaintiffs inadequate representative only if those differences create conflicts between the named plaintiffs' interests and the class members' interests."l27 Here, the interests of the Order of Supervision Plaintiffs reflect the interests of the absent class members, and rise and fall along with the interests ofthe absent class members. They also "possess a sufficient level ofknowledge and understanding to be capable of 'controlling' or 'prosecuting' the litigation.,,128 They have worked with Ms. Brodyaga for years in litigating their claims against the Federal Defendants. Moreover, named Plaintiffs Petra Carranza de Salinas, Isidro Herrera-Moreno, and Nonna Pena de Herrera have submitted sworn declarations demonstrating that they understand their responsibilities as class representatives and that they have remained in regular contact with their attorneys regarding this case.129
125 In the Order ofSupervision and cash bond causes ofaction, Plaintiffs are represented solelyby Ms. Brodyaga. 126 Stinnan, 280 F.3d at 563; Munoz, 200 FJd at 306; Jenkens, 782 F.2d at 472. 127 Mullen, l86F.3dat626;Jenkens, 782 at 472. 128 Berger, 257 FJd at 482-83. 129 SeeP. Salinas Decl. (10/23/06) (Ex. CC36 & CC36A); I. Herrera-Moreno Decl. (Ex. CC37 & CC37A); N. Herrera Decl. (Ex. CC38 & CC38A).
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E. The Federal Defendants Have Acted or Have Refused to Act on Grounds Generally Applicable to the Supervision Class.
As described above, the Federal Defendants' failure to grant the Orders of Supervision is done in a manner generally applicable to the members of the Supervision Class. Thus, equitable reliefpursuant to FRCP 23(b)(2) is appropriate.
v. PLAINTIFFS' PROPOSED CASH BOND CLASSES SATISFY RULES 23(a)
AND (b)(2) OF THE FEDERAL RULES OF CIVIL PROCEDURE. Plaintiff Adriana Echavania seeks certification of the Obligor Cash Bond Class on behalf of the proposed class of all Obligors who posted or will post an immigration Cash Bond to secure the release of a person during deportation, exclusion or removal proceedings, which bond is either still outstanding, or was breached on or after July 28, 1998, following a demand made on the Obligor which was returned undelivered to Federal Defendants, and where the Federal Defendants did not make further efforts to provide actual notice of the demand to the Obligors, and where the Bonded Immigrant appeared at all hearings and other required appearances ofwhich s/he received appropriate notice.130 Jorge Echavania seeks to represent, as Immigrant Cash Bond Class A, all Bonded Immigrants in whose behalfsuch Cash Bonds have been issued.131 Juan Larin-Ulloa seeks to represent, as the Immigrant Cash Bond Class B, all Immigrants released on such cash bonds. 132 A. The Members of the Cash Bond Classes Are Sufficiently Numerous. As shown above, Plaintiffs are not required to show actual numbers of class members. Here, numerosity can be discerned from the discovery conducted in Zamora 1. Plaintiffs' Exhibit CC therein, [Dkt. 66], consists of excerpts from the bond logs of the San Antonio office of the federal defendants, between January 1, 2003 and June 30, 2003. These logs reveal that about equal
130 See SAC~ 25.
131 SeeSAC~26. 132 SeeSAC~27.
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numbers of cash and surety bonds were posted during that period, in the neighborhood ofthirty per month of each type. They also show that Mexicans were more likely to post cash than surety bonds, and that the bond amounts for Mexicans tended to be significantly lower than those for other nationalities. Further, they show that as many, if not more, bonds were breached as were posted, indicating that a very high number ofcash bonds were breached during that period.
Further, the deposition of Glen Stewart reveals that if an 1-340 sent to a cash obligor is returned by the Postal Service as undeliverable, no further efforts are made to contact the obligor, and the bond is breached.133 This not only satisfies the requirements of Rule 23(b)(3), but it also makes highly likely that there is a significant percentage ofbreaches ofcash bonds, regardless ofthe good faith or intent ofthe obligor and bonded immigrant. Unless and until the class is certified, and class counsel appointed, more detailed discovery cannot be conducted, and reasonable estimates cannot be provided.
B. There Are Questions ofLaw or Fact Common to the Cash Bond Classes. Here too, the class is essentially defined by its common characteristics. The Obligor Cash Bond Class and the Immigrant Cash Bond Class A seek similar relief: injunctive and declaratory reliefrequiring the Federal Defendants to reinstate the breached bonds (ifproceedings are ongoing), or to reinstate and cancel the breached bonds (ifproceedings have been completed). The Immigrant Cash Bond Class B seeks declaratory and injunctive relief requiring the Federal Defendants to provide the constitutionally required notice. The notice required under Jones v. Flowers and the U.S. Constitution is a question common to each ofthese classes.
133 See Stewart Dep. at 4346 (Ex. CC12).
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C. The Claims of the Representatives of the Cash Bond Classes Are Typical of the Members of the Classes.
Again, the clalins of the class representatives are typical of the class. Mr. Echavarria is a Mexican national, which is typical of immigrants for whom cash bonds are posted. As a lawful permanent resident, with a potential defense against deportation, his bond was in the low range, ($1,500), typical ofbonded immigrants whom the federal Defendants consider likely to appear for their hearings. The Echavarrias also moved during the deportation proceedings, and assumed that notice ofMr. Echavarria's change of address was sufficient to ensure that they would be notified of any demands on the bond. Mr. Echavarria also appeared at all appearances ofwhich he had notice, and eventually won his case. This would also be typical of cases where cash bonds were breached, even though the bonded immigrant appeared at all settings of which he had notice. Mr. Echavarria's A-file reveals that the 1-130 sent to his wife was returned undelivered by the Postal Service, that no further efforts were made to contact her, that the bond was breached on the date he was to have been presented, and the notice ofthe bond breach sent only to the same address, which the federal Defendants already knew to be invalid. These are typical facts.
Mr. Larin-Ulloa is currently released on a cash bond. He faces the prospect that the Federal Defendants will fail to provide the constitutionally required notice ofa demand on his bond.
D. The Named Plaintiffs and Class Counsel Will Adequately Represent the Interests ofthe Cash Bond Classes.
Again, for the reasons previously discussed, both the Echavarrias, Mr. Larin-Ulloa, and class counsel, will adequately represent the interests ofthe class. The Echavarrias have both a long history with class counsel and a stake in the outcome of the case. And class counsel has the experience and resources necessary to prosecute the instant action.
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E. The Federal Defendants Have Acted ofRefused to Act on Grounds Generally Applicable to the Class.
Accor~g to the testimony ofthe Federal Defendants' FRCP 30(b)(6) witness, the Federal Defendants routinely fail to attempt to provide additional notice of a call on a bond after the notice is returned to them undelivered, even where the released immigrant has appeared at all hearings and other appearances ofwhich he has received notice. See Stewart Dep. at 43-46 (Ex. CC12). Thus, the requirement ofFRCP 23(b)(2) is met here - the Federal Defendants have acted or have refused to act on grounds generally applicable to the class, thereby making appropriate final equitable relief
CONCLUSION For all the reasons stated above, Plaintiffs request that this Court certifY the classes described above and appoint Lisa Brodyaga, Diamond McCarthy, LLP (through 1. Benjamin King and William T. Reid, N), and Kozyak Tropin & Throckmorton, PA (through Tucker Ronzetti) as class counse1.
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Respectfully submitted,
Is! J. Benjamin King J. Benjamin King
Lisa S. Brodyaga (Attorney ill Charge) State Bar No. 03052800 Southern District ID No. 1178
REFUGIO DELRIO GRANDE 17891 Landrum Park Rd. San Benito, TX 78586 Phone: (956) 421-3226
Attorneyfor all Plaintiffs

J. Benjamin King State Bar No. 24046217 SouthernDistrictIDNo.605914
Diamond McCarthy Taylor Finley & Lee, LLP Renaissance Tower 1201 Elm Street, 34th Floor Dallas, Texas 75270 Phone: (214) 389-5300 Fax: (214) 389-5399
William T. Reid, N State Bar No. 00788817 Southern District ID No. 17074
Diamond McCarthy Taylor Finley & Lee, LLP 6504 Bridgepoint Pkwy., Suite 400 Austin, Texas 78730 Phone: (512) 617-5200 Fax: (512) 617-5299
Tucker Ronzetti Kozyak Tropin & Throckmorton, PA 2525 Ponce de Leon Ninth Floor Coral Gables, FL 33134 Phone: (305) 377-0667
lasonDavis State Bar No. 00793592 Southern District ID No. 20114
Law Office ofJason Davis, P.c. 5945 Broadway San Antonio, Texas 78209 Phone: (210) 930-4611
Attorneysfor Plaintiffs Aracely Zamora-Garcia, Irma Sandoval Ibarra Valencia, Alberta Rubio, Manuel Sandoval-Herrera, Petra Carranza de Salinas, and Miguel Rubio

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CERT~CATEOFCONFERENCE
I hereby certify that, on October 24, 2006, counsel for Plaintiffs emailed all opposing counsel, asking whether they were opposed to this motion. Counsel for the Bonding Defendants and Federal Defendants indicated that they were opposed to the motion.
/s/ J. BenjaminKillg J. Benjamin Killg
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Case 7:05-cv-00331 Document 112 Filed in TXSD on 10/24/06 Page 51 of 51 CERTIFICATE OF SERVICE
I certify that, on October 24, 2006, a true, correct, and complete copy of the foregoing document, with exhibits, was sent via email toBradIrelanatirelan@irelanhargis.com and to Rene Benavides at rene.benavides@usdoj.gov.
lsI J. BenjaminKillg J. Benjamin Killg
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 Case 7:05-cv-00331 Document 138 Filed in TXSD on 04/25/07 Page 1 of 26

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS
MCALLEN DIVISION

ARACELY ZAMORA-GARCIA, et al, Plaintiff,
VS. MARC MOORE, et al,
Defendant.

§ § § § CIVIL ACTION NO. M-05-331 § § § §

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’/PETITIONERS’ MOTION TO CERTIFY FEDERAL CLASSES

I. Introduction
Now before the Court is Plaintiffs’/Petitioners’ Motion for Class Certification. (Doc. 112).
Plaintiffs/Petitioners seek to certify three classes with claims against Bonding Defendants1
(“Surety Bond Classes”) and four classes with claims against Federal Defendants/Respondents2
(“Federal Classes”). Id.3 The Court will consider the certification of Plaintiffs’/Petitioners’
Federal Classes herein.
Plaintiffs’/Petitioners’ Sixth Amended Petition for Writ of Habeas Corpus and Class Action
Complaint for Injunctive and Declaratory Relief asserts claims against Federal Respondents in
connection with said Respondents’ refusal to grant Orders of Supervision (“OOS”) to certain
individuals, as well as due process and equal protection claims against Federal Defendants 1 Bonding Defendants include Fairmont Specialty Insurance Company (f/k/a Ranger Insurance
Company); Stonington Insurance Company (f/k/a Nobel Insurance Company); and Michael W. Padilla, in his capacity as Independent Administrator with Will Annexed of the Estate of Don Vannerson, d/b/a Aaron Federal Bonding Agency. (Doc. 114 at ¶¶ 16-18).
2 Federal Defendants include Marc Moore, District Director for Interior Enforcement, Department of Homeland Security; and Alberto Gonzales, U.S. Attorney General, The United States of America. (Doc. 114 at ¶¶ 13-15). Federal Defendants/Respondents are sued in their official capacity. Id.
3 Where addressing the habeas claims before it, the Court will refer to Petitioners and Federal Respondents. Where addressing the non-habeas claims before it, the Court will refer to Plaintiffs and Federal Defendants.

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arising out of said Defendants’ alleged mishandling of immigration cash bonds. (Doc. 114). Plaintiffs/Petitioners seek class-wide relief with respect to these claims and propose to certify the following classes pursuant to Federal Rule of Civil Procedure 23: (1) Supervision Class; (2) Obligor Cash Bond Class; (3) Immigrant Cash Bond Class A; and (4) Immigrant Cash Bond Class B. (Doc. 112). II. Analysis A. Class Certification Standard of Review
To certify a class action under Federal Rule of Civil Procedure 23, Plaintiffs/Petitioners must fulfill the four requirements set forth in Rule 23(a) and at least one of the three requirements enumerated in Rule 23(b). E.g. , Vizena v. Union Pac. R.R. Co. , 360 F.3d 496, 502 (5th Cir. 2004)(per curiam). Plaintiffs/Petitioners bear the burden of establishing that all of the applicable Rule 23 requirements have been satisfied. Steering Comm. v. Exxon Mobil Corp. , 461 F.3d 598, 601 (5th Cir. 2006); Unger v. Amedisys Inc. , 401 F.3d 316, 320 (5th Cir. 2005). 1. FED. R. CIV. P. 23(a) a. Numerosity
Pursuant to Rule 23(a), Plaintiffs/Petitioners must first show that “the class is so numerous that joinder of all members is impracticable.” FED. R. CIV. P. 23(a)(1). “Impracticable” need not mean “impossible,” but rather that it is “extremely difficult or inconvenient” to join all members of the class. WRIGHT, CHARLES ALAN & MILLER, ET AL., FEDERAL PRACTICE & PROCEDURE: FEDERAL RULES OF CIVIL PROCEDURE § 1762 (2006). By itself, the mere allegation that a class is too numerous to make joinder practicable is insufficient to satisfy the “numerosity” prong. Pederson v. La. State Univ. , 213 F.3d 858, 868 (5th Cir. 2000). Rather, “‘a plaintiff must ordinarily demonstrate some evidence or reasonable estimate of
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the number of purported class members.’” Id. (quoting Zeidman v. J. Ray McDermott & Co., Inc., 651 F.2d 1030, 1038 (5th Cir. 1981)). The Fifth Circuit has also noted that, when conducting a numerosity analysis, the district court must not focus on sheer numbers alone but also on whether joinder of all members is practicable in view of all other relevant factors. Id. at 868 n.11. “Practicability of joinder depends on size of the class, ease of identifying its members and determining their addresses, facility of making service on them if joined and their geographic dispersion.” Garcia v. Gloor , 618 F.2d 264, 267 (5th Cir. 1980). The Fifth Circuit has indicated that a district court may draw reasonable inferences regarding these factors notwithstanding the lack of any direct evidence. Mullen v. Treasure Chest Casino, LLC , 186 F.3d 620, 624-25 (5th Cir. 1999). The inclusion of future members in the class definition is also a factor to consider in determining if joinder is impracticable; in fact, that the class includes unknown, unnamed future members weighs in favor of certification. Pederson , 213 F.3d at 868 n.11. b. Commonality
Second, Plaintiffs/Petitioners must show that “there are questions of law or fact common to the class.” FED. R. CIV. P. 23(a)(2). The test for “commonality” is not a demanding one, as it requires the presence of only one common question of law or fact whose resolution will affect all or a significant number of the putative class members. James v. City of Dallas , 254 F.3d 551, 570 (5th Cir. 2001); see also Jenkins v. Raymark Indus. , 782 F.2d 468, 472 (5th Cir. 1986)(threshold of commonality “is not high”). That some of the putative class members may have claims that require some individualized analysis is not fatal to commonality. James , 254 F.3d at 570; see also Forbush v. J.C. Penney Co., Inc. , 994 F.2d 1101, 1106 (5th Cir. 1993)(necessity for even somewhat complex calculations of individual awards does not defeat commonality requirement).
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c. Typicality Third, Plaintiffs/Petitioners must show that “the claims or defenses of the representative
parties are typical of the claims or defenses of the class.” FED. R. CIV. P. 23(a)(3). The “typicality” inquiry “‘focuses on the similarity between the named plaintiffs’ legal and remedial theories and the theories of those whom they purport to represent.’” James , 254 F.3d at 571 (quoting Mullen , 186 F.3d at 625). Like commonality, the test for typicality is not demanding, as it does not require a complete identity of claims. Id. “‘Rather, the critical inquiry is whether the class representative’s claims have the same essential characteristics of those of the putative class. If the claims arise from a similar course of conduct and share the same legal theory, factual differences will not defeat typicality.’” Id. (quoting 5 JAMES WM. MOORE ET AL., MOORE’S FEDERAL PRACTICE ¶ 23.24[4] (3d ed. 2000)). d. Adequacy
Fourth, Plaintiffs/Petitioners must demonstrate that “the representative parties will fairly and adequately protect the interests of the class.” FED. R. CIV. P. 23(a)(4). In considering the “adequacy” requirement, the Court should evaluate whether the class representatives have a sufficient stake in the outcome of the litigation and whether they have interests antagonistic to the unnamed class members. See Jenkins , 782 F.2d at 472. In addition, the Court should inquire into the zeal and competence of counsel for the class representatives as well as the class representatives’ willingness and ability to take an active role in the litigation and to protect the interests of the absent class members. Berger v. Compaq Computer Corp. , 257 F.3d 475, 479 (5th Cir. 2001). Generally, class representatives should “possess a sufficient level of knowledge and understanding to be capable of ‘controlling’ or ‘prosecuting’ the litigation.” Id. at 482-83. They need to know more than that they were “‘involved in a bad business deal’”; however, they
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“need not be legal scholars and are entitled to rely on counsel....” Id. at 483 (quoting Kelley v. Mid-America Racing Stables , Inc., 139 F.R.D. 405, 410 (W.D.Okla. 1990)). Differences between the class representatives and other class members do not defeat the adequacy requirement so long as those differences do not “‘create conflicts between the named plaintiffs’ interests and the class members’ interests.’” James , 254 F.3d at 571 (quoting Mullen , 186 F.3d at 625-26). 2. FED. R. CIV. P. 23(b)(2)
Of the three requirements enumerated in Federal Rule of Civil Procedure 23(b), Plaintiffs/Petitioners purport to satisfy the second–that is, they claim that “the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class a whole.” FED. R. CIV. P. 23(b)(2).
A Rule 23(b)(2) class is characterized by harm of a “group nature” and relief of a “broad character,” such that “the (b)(2) class is, by its very nature,...a homogenous and cohesive group with few conflicting interests among its members.” Allison v. Citgo Petroleum Corp. , 151 F.3d 402, 413 (5th Cir. 1998). The Fifth Circuit has further noted that “[a]ctions for class-wide injunctive or declaratory relief are intended for (b)(2) certification precisely because they involve group remedies.” Id. at 414. Generally, no notice is required and no absolute right of opt-out exists for a class certified pursuant to Rule 23(b)(2). FED. R. CIV. P. 23(c)(2)(A)(“For any class certified under Rule 23(b)(1) or (2), the court may direct appropriate notice to the class”)(emphasis added); Ayers v. Thompson , 358 F.3d 356, 375-76 (5th Cir. 2004); Bollin v. Sears, Roebuck & Co. , 231 F.3d 970, 975 n.22 (5th Cir. 2000)(“The uniformity of the injury across the class is what renders the notice and opt-out provisions...unnecessary” in Rule 23(b)(2)
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class actions). B. Supervision Class
Petitioners Aracely Zamora-Garcia, Manuel Sandoval-Herrera, Petra Carranza de Salinas, Maria Francisca Arce Cedeno, Norma Pena de Herrera, Isidro Herrera, and Luis AlvaradoNarvaez seek to represent the “Supervision Class,” described as follows:
[Those] persons who are or will be under removal proceedings, who are not physically detained by [Federal Respondents], and who have been or will be under a final order of deportation, exclusion, or removal, which has not been or will not be executed for three months or more after its issuance, notwithstanding that there was no judicially ordered stay of deportation, exclusion or removal during that three month period, and to whom the Federal Respondents have not issued Orders of Supervision, or have subsequently revoked or refused to renew previously issued Orders of Supervision. (Doc. 112). Petitioners request an injunction on their own behalf and on behalf of the class they seek to represent requiring that, upon request of the class member, and in the absence of individual factors which would warrant the refusal to do so, Federal Respondents place said class members under Orders of Supervision (“OOS”). (Doc. 114 at ¶ 136). 1. Overview of Petitioners’ OOS Claims In the predecessor action to the present suit, this Court found that it had jurisdiction over Petitioners’ habeas challenge to Federal Respondents’ refusal to issue OOS. Zamora-Garcia v. Trominski , Southern District of Texas, McAllen Division, Case No. M-02-144 (Docs. 61, 124). Furthermore, the Court granted the habeas relief requested in Plaintiffs’/Petitioners’ Second Amended Petition for Writ of Habeas Corpus and Class Action Complaint for Damages, Injunctive, Declaratory, and Other Relief, wherein Petitioners Miriam Garrido, Eugenio ReynaMontoya, Cesar Lucio, Apolinar Torres-Espino, and Praxedis Rodriguez-Castro sought to be
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placed under OOS. Zamora-Garcia v. Trominski (Doc. 36 at ¶¶ 58, 68-70; Doc. 124).4 Petitioners were all citizens of Mexico who were under administratively final orders of
removal and had actions pending in federal court challenging said orders. Zamora-Garcia v. Trominski (Doc. 36 at ¶ 6). As individuals under administratively final removal orders, Petitioners were subject to removal during a 90-day “removal period.” See 8 U.S.C. § 1231(a)(1). Petitioners had not pursued judicial stays of removal; therefore, their removal periods began on the date each Petitioner’s order of removal became administratively final. Id.; 8 C.F.R. § 241.4(g). Petitioners argued that because Federal Respondents had not removed Petitioners within their 90-day removal periods, Federal Respondents were statutorily required to provide Petitioners with OOS while they remained in the United States to pursue their pending federal court actions. Zamora-Garcia v. Trominski (Docs. 118, 124).
In its order, the Court noted that 8 U.S.C. § 1231(a)(3) provides that “if the alien does not leave or is not removed within the removal period, the alien, pending removal, shall be subject to supervision under regulations prescribed by the Attorney General.” Zamora-Garcia v. Trominski (Doc. 124)(quoting 8 U.S.C. § 1231(a)(3)(emphasis added)). The Court further noted that it was “reasonably clear” that the “terms of supervision” in paragraph (3) are “orders of supervision” as described in 8 C.F.R. § 241.5. Zamora-Garcia v. Trominski (Doc. 124)(citing 8 C.F.R. § 241.5.; 8 U.S.C. §§ 1231(a)(3), (a)(6)). The Court dismissed Federal Respondents’ argument that the statutory mandate to provide OOS applies only to aliens detained during the removal period and then released, instead finding that the statute clearly provides that a non-detained alien who does not leave within the 90-day removal period shall be granted an OOS. Zamora-Garcia v. Trominski (Docs. 117, 124). In addition, the Court rejected Federal Respondents’ position that the 90-day removal period is renewed where an alien challenges his or her administratively final
4 These individuals are no longer Plaintiffs/Petitioners in the present action. (Doc. 114).
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removal order in federal court. Zamora-Garcia v. Trominski (Docs. 117, 124). The Court recognized that 8 U.S.C. § 1231(a)(1)(C) states, in relevant part, that “[t]he removal period shall be extended beyond a period of 90 days...if the alien...conspires or acts to prevent the alien’s removal subject to an order of removal.” Zamora-Garcia v. Trominski (Doc. 124 (quoting 8 U.S.C. § 1231(a)(1)(C)(emphasis added)). If, as Federal Respondents argued, challenging a final order of removal in federal court is conspiring or acting to prevent removal, such act would extend the 90-day removal period and remove the alien from the group of individuals for whom OOS are mandated–that is, non-detained aliens under administratively final orders of removal whose removal periods have expired. Zamora-Garcia v. Trominski (Doc. 124). The Court analyzed existing case law and concluded that the filing of a habeas petition by an alien under an administratively final order of removal is a permissible means of seeking judicial review of questions of law and thus cannot be characterized as conspiring or acting to prevent removal under § 1231(a)(2)(C). Id. Therefore, each Petitioner’s removal period had expired and, under § 1231(a)(3), each Petitioner was required to be provided an OOS by Federal Respondents. Id.
Subsequent to the issuance of the Court’s January 4, 2005 order granting the individual OOS Petitioners’ habeas relief, Federal Respondents issued an “Interoffice Memorandum” clarifying its OOS policy. (Docs. 55, 112). The Memorandum, dated February 27, 2006, advises that except for those aliens who were under OOS because their home countries would not accept them as deportees (a group not represented by either the previous or current Petitioners), the OOS and employment authorization documents of all aliens under OOS would be cancelled or revoked and such aliens would be required to file applications for administrative stays of removal with Federal Respondents. Id. By letter dated April 21, 2006, counsel for Petitioners requested that those aliens who had been allowed to remain in the United States for more than the 90-day
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removal period, and who thereafter obtained stays of removal, be issued OOS or, if they already had such orders, be allowed to keep them. (Doc. 59, 112). Federal Respondents denied counsel’s request in a letter dated April 24, 2006, informing counsel that only those aliens named in this Court’s January 4, 2005 order would remain under OOS. (Docs. 64, 112). The letter further informed counsel that Federal Respondents would no longer abide by the informal agreement allowing individuals with pending federal court actions to remain in the United States. Id. According to the letter, these aliens are now required to obtain either an administrative stay of removal or a judicial stay issued by a federal court. (Doc. 64). Federal Respondents’ letter further indicated that the requirement to issue OOS upon the expiration of the 90-day removal period applied only to aliens detained and then released, and that aliens with cases pending in federal court were “blocking” their removal, thereby preventing them from obtaining OOS. Id. In other words, with respect to aliens other than the individual Petitioners whose habeas relief was granted by this Court, Federal Respondents continue to challenge the Court’s interpretation of the applicable statute and regulations.
In light of these developments, Petitioners now seek to represent within the proposed Supervision Class two groups of individuals affected by Federal Respondents’ current OOS policy: (1) those immigrants who are or will be under final orders of removal and who challenged or will challenge their removal orders in federal court, and whom Federal Respondents did not or will not remove during the 90-day removal period, notwithstanding that the immigrants did not obtain a judicial stay of removal during that period, or otherwise obstruct removal (represented by Petitioners Zamora-Garcia, Sandoval-Herrera, Carranza de Salinas, and Alvarado-Narvaez); and (2) those immigrants who are or will be under final orders of removal and whom, for humanitarian reasons, Federal Respondents did not or will not remove during the
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90-day removal period, notwithstanding that the immigrants did not obtain a judicial stay of removal during that period, or otherwise obstruct removal (represented by Petitioners Arce Cedeno, Pena de Herrera, and Herrera). (Doc. 112).
In its prior order, the Court noted that to determine whether class certification is appropriate “when the underlying claim is without merit is to promote inefficiency for its own sake.” Zamora-Garcia v. Trominski (Doc. 124)(quoting Marx v. Centran Corp. , 747 F.2d 1536, 1552 (6th Cir. 1984)). Although the Court previously analyzed Petitioners’ OOS claims and ordered that the individual Petitioners be granted OOS, at the time the Court had only to consider whether OOS are mandated for those individuals who had not pursued judicial stays of removal, and therefore their 90-day removal periods had expired. Zamora-Garcia v. Trominski (Doc. 124). The Court recognizes that 8 U.S.C. § 1231 provides, in relevant part, that the 90-day removal period begins on the latest of the following:
(i) The date the order of removal becomes administratively final. (ii) If the removal order is judicially reviewed and if a court orders a stay of the removal of the alien, the date of the court’s final order.... 8 U.S.C. § 1231(a)(1)(B)(emphasis added).5 Here, Petitioners have provided the Court with evidence that Petitioners Sandoval-Herrera, Lucio, and Alvarado-Narvaez have obtained judicial stays of removal with the Fifth Circuit. (Docs. 55, 90). In addition, Petitioners’ live habeas petition and class action complaint alleges that Petitioner Carranza de Salinas has a pending case before the Fifth Circuit, although the Court cannot determine whether a judicial or administrative stay of removal has been issued in her 5 See also 8 C.F.R. § 241.4(g)(1)(i): (i) The removal period for an alien subject to a final order of removal shall begin on the latest of the following dates: (A) The date the order becomes administratively final; (B) If the removal order is subject to judicial review (including review by habeas corpus and if the court has ordered a stay of the alien's removal, the date on which, consistent with the court's order, the removal order can be executed and the alien removed.
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case. (Doc. 114 at ¶¶ 80). Furthermore, Petitioners’ live petition and complaint indicates that Petitioner Zamora-Garcia is currently pursuing “judicial remedies” and that her application for an administrative stay of removal has never been adjudicated, although it was filed in 2002. (Doc. 114 at ¶¶ 89). With respect to those Petitioners who have been allowed to remain in the United States for humanitarian reasons, Petitioners allege that they have either been granted administrative stays of removal (Petitioner Arce Cedeno) or have filed applications for administrative stays of removal (Petitioners Pena de Herrera and Herrera). (Doc. 55; Doc. 114 at ¶¶ 93, 96-97).
Petitioners apparently take the position that because Federal Respondents have not removed any of the above-named Petitioners within 90 days of the date of their administratively final order of removal, Petitioners are entitled to OOS. Petitioners have therefore defined their Supervision Class accordingly. However, the Court cannot ignore that several Petitioners are pursuing judicial review of their administratively final orders of removal and have obtained, or will obtain, judicial stays of removal. In such case, it appears that the 90-day removal period begins when the reviewing court issues its final order, not when the order of removal becomes administratively final. See 8 U.S.C. § 1231(a)(1)(B); 8 C.F.R. § 241.4(g)(1)(i). Therefore, it appears that the first group of Petitioners within the Supervision Class–that is, those who are seeking judicial review of their administratively final removal orders and have obtained, or will obtain, judicial stays of removal–have not yet remained in the United States beyond their 90-day removal periods and are not yet entitled to OOS under 8 U.S.C. § 1231(a)(3). However, as the second group of Petitioners within the Supervision Class have remained in the United States for humanitarian reasons and have not obtained stays of removal from a court, these Petitioners’ 90day removal periods have expired and, pursuant to the Court’s prior analysis, they are entitled to
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OOS.6 Therefore, the Court will herein determine whether their claims are appropriate for class certification.
Before doing so, however, the Court must address Federal Respondents’ argument that the certification of a class is generally inappropriate in habeas proceedings. (Doc. 123). According to Federal Respondents, the writ of habeas corpus historically has been used to afford relief to an individual then in custody, not to classes of individuals who may be in custody in the future. Id. Petitioners point out that although they styled their OOS claims only as habeas claims in the predecessor action, they now bring such claims both in habeas and pursuant to 28 U.S.C. §§ 1331 (federal question) and 1346(a)(2)(action against an agency and/or officers of the United States). (Doc. 129 (citing Doc. 114 at ¶ 31)). The Court also notes that at least two courts have found appropriate the certification of a class of habeas petitioners challenging the government’s immigration procedures, and still more have approved of habeas class actions outside the immigration context. See Ali v. Ashcroft , 346 F.3d 873 (9th Cir. 2003), overruled on other grounds , 421 F.3d 795 (9th Cir. 2005)(approving of nationwide class of habeas petitioners challenging alleged violations of 8 U.S.C. § 1231); Kazarov v. Achim , 2003 WL 22956006 (N.D.Ill. Dec. 12, 2003)(certifying class under Rule 23(b)(2) of habeas petitioners challenging government’s immigration detention procedures); U.S. ex. rel. Sero v. Preiser , 506 F.2d 1115, 1126-27 (2d Cir. 1974)(certification of habeas class of state prisoners avoided “[t]he considerable expenditure of judicial time and energy in hearing and deciding numerous individual petitions presenting the identical issue”); Williams v. Richardson , 481 F.2d 358, 361 (8th Cir. 1973)(finding that habeas class action “may very well represent the most appropriate manner of litigating the general claims” of inmates challenging conditions of confinement); Mead v. Parker ,
6 That these Petitioners are now required to apply for administrative stays of removal with Federal Respondents does not affect the statutory requirement that they be provided with OOS upon the expiration of the 90-day removal period.
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464 F.2d 1108, 1112-13 (9th Cir. 1972)(although habeas relates to “the individual petitioner and to his unique problem[,]...there can be cases...where the relief sought can be of immediate benefit to a large and amorphous group. In such cases, it has been held that a class action may be appropriate.”). As such, the Court rejects Federal Respondents’ argument. 2. FED. R. CIV. P. 23(a) a. Numerosity
With respect to the second group of Petitioners within the Supervision Class–that is, those individuals who have been allowed to remain in the United States for humanitarian reasons, Petitioners advance that there are “a significant number” of these Petitioners. (Doc. 129). Petitioners have provided evidence that Petitioners Pena de Herrera and Herrera were previously granted OOS for humanitarian reasons, which OOS were cancelled pursuant to the policy outlined in Federal Respondents’ February 27, 2006 Interoffice Memorandum. (Doc. 55). More specifically, the evidence supports Petitioners’ allegation that Mr. and Mrs. Herrera have been allowed to remain in the United States to care for their 12-year-old U.S. citizen daughter who suffers from beta thalassemia major, a serious blood disease which requires frequent red blood cell transfusions. (Doc. 55; Doc. 114 at ¶ 94). Petitioners’ live petition and complaint also alleges that Petitioner Arce Cedeno was issued an OOS for humanitarian reasons in 1997, which OOS was cancelled pursuant to Federal Respondents’ current policy. (Doc. 114 at ¶ 93). According to the petition and complaint, Ms. Arce Cedeno has been allowed to remain in the United States to care for her 11-year-old U.S. citizen son who suffers from a life-threatening blood disorder, propionic acidemia. (Doc. 114 at ¶ 92).
Although Petitioners identify only three individuals who fit within the class of persons allowed to remain in the United States for humanitarian reasons, and who are in need of OOS,
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the Court recognizes that Petitioners seek declaratory and injunctive relief on behalf of all those individuals who may warrant OOS on such basis in the future. Clearly, the joinder of all of these individuals would be impracticable at this time. As such, the Court finds that the class is sufficiently numerous. b. Commonality
As indicated in the Court’s discussion of Petitioners’ OOS claims, a question of law common to the class Petitioners seek to represent is clearly present. Specifically, the legal issue presented by this class is whether a non-detained alien under an administratively final order of removal who has been allowed, for humanitarian reasons, to remain in the United States more than 90 days after the issuance of the order, is entitled to receive an OOS. The resolution of this issue will affect Petitioners and all of the class members they seek to represent; as such, the test for commonality is satisfied. c. Typicality
That the claims of the named class representatives are typical of the claims of the proposed class is also evident. As noted supra , Petitioners Arce Cedeno, Pena de Herrera, and Herrera have all been allowed to remain in the United States for humanitarian reasons. They currently do not have OOS despite the fact that their 90-day removal periods have expired and argue that Federal Respondents are required to provide them with OOS pursuant to the applicable statute and regulations. Petitioners’ claims clearly have the same essential characteristics of those of the putative class; therefore, Petitioners have demonstrated the requisite typicality. d. Adequacy
Finally, the named Petitioners have shown that they are adequate representatives of the putative class. Petitioners Arce Cedeno, Pena de Herrera, and Herrera all have a sufficient stake
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and a shared interest in the outcome of the litigation, as their ability to receive OOS hinges upon such outcome. In addition, Mr. and Mrs. Herrera have submitted sworn declarations indicating that they understand their responsibilities as class representatives and have met with counsel “many times” to discuss the present case. (Doc. 112, Exs. CC 37, CC 37A, CC 38, CC 38A). The Court is also satisfied that counsel for Petitioners is sufficiently zealous and competent to prosecute the claims of the class. (Doc. 93, Ex. CC 19). As such, Petitioners have satisfied all of the requirements of Rule 23(a). 3. FED. R. CIV. P. 23(b)(2)
As indicated in the Court’s prior discussion of Petitioners’ OOS claims, it is evident that Federal Respondents have acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole. In the predecessor action, the Court concluded that 8 U.S.C. § 1231(a)(3) requires that an alien who has not been removed by the expiration of the 90-day removal period be granted an OOS.7 Accordingly, the Court granted the individual Petitioners’ requested relief by ordering that they be provided with OOS. Although Federal Respondents complied with the Court’s order with respect to the individual Petitioners, the evidence submitted to the Court indicates that Federal Respondents continue to challenge the Court’s interpretation of the applicable statute and regulations and refuse to grant OOS to similarly situated persons. Therefore, Petitioners now request an injunction on their own behalf and on behalf of the class they seek to represent requiring that Federal Respondents place said class members under OOS. Given Federal Respondents’ refusal to act on grounds generally applicable to the class and Petitioners’ request that the Court grant class-wide injunctive relief directly addressing such
7 The Court recognizes, as do Petitioners, that OOS are statutorily mandated only in the absence of any actions by the alien to obstruct removal. See 8 U.S.C. § 1231(a)(1)(C).
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refusal to act, the class is appropriate for certification under Rule 23(b)(2).
For the foregoing reasons, the Court DENIES Petitioners’ request to certify the first group of
Petitioners within the Supervision Class and GRANTS Petitioners’ motion to certify the second
group of Petitioners within the Supervision Class.
C. Obligor Cash Bond Class, Immigrant Cash Bond Class A, and Immigrant Cash Bond
Class B (“Cash Bond Classes”)
As noted supra , Plaintiffs also seek to represent three classes of individuals challenging
Federal Defendants’ handling of cash bonds. First, Plaintiff Adrianna Echavarria seeks to
represent the “Obligor Cash Bond Class,” defined as follows: (a) all Obligors who posted an immigration Cash Bond, (b) which bond was breached on or after July 28, 1998, following a demand made on the Obligor which was returned undelivered to the Federal Defendants, and (c) where the Immigrant appeared at all hearings and other required appearances of which s/he received appropriate notice, and (d) where the Federal Defendants did not make additional efforts to provide actual notice of the demand to the Obligors, as would be required by Jones v. Flowers , 126 S.Ct. 1708 (2006).
(Doc. 112).
Mrs. Echavarria, individually and on behalf of the class she seeks to represent, seeks
injunctive and declaratory relief requiring Federal Defendants to reinstate the breached bonds
posted by the members of the class (if proceedings are ongoing) or reinstate and cancel the
breached bonds (if proceedings have been completed). (Doc. 112; Doc. 114 at ¶ 142).
Second, Plaintiff Jorge Echavarria seeks to represent the “Immigrant Cash Bond Class A,”
defined as follows: (a) all Immigrants released on a Cash Bond, (b) which bond was breached on or after July 28, 1998, following a demand made on the Obligor which was returned undelivered to the Federal Defendants, and (c) where the Immigrant appeared at all hearings and other required appearances of which s/he received appropriate notice, and (d) where the Federal Defendants did not make additional efforts to provide actual notice
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Case 7:05-cv-00331 Document 138 Filed in TXSD on 04/25/07 Page 17 of 26
of the demand to the Obligors, as would be required by Jones v. Flowers , 126 S.Ct. 1708 (2006). (Doc. 112). Mr. Echavarria, individually and on behalf of the class he seeks to represent, seeks injunctive and declaratory relief requiring Federal Defendants to reinstate the breached bonds (if proceedings are ongoing) or reinstate and cancel the breached bonds (if proceedings have been completed). (Doc. 112; Doc. 114 at ¶ 143). Finally, Plaintiff Juan Larin-Ulloa seeks to represent the “Immigrant Cash Bond Class B,” defined as “All Immigrants released on a Cash Bond that is still outstanding, and all Immigrants who will, in the future, be released on cash bonds.” (Doc. 112). Mr. Larin-Ulloa, on his own behalf and on behalf of the class, seeks injunctive and declaratory relief requiring that Federal Defendants make efforts to provide notice of a demand on a bond consistent with Jones v. Flowers , supra . (Doc. 112; Doc. 114 at ¶ 144). 1. Overview of Claims of Cash Bond Classes The parties do not dispute that an immigrant in removal proceedings who is detained by the Department of Homeland Security (“DHS”) may bond out from detention by obtaining a cash bond posted with DHS by an obligor for the benefit of the immigrant. (Doc. 114 at ¶ 34). Federal Defendants notify the bonded immigrant of any DHS demand, or call-in, on the bond by sending notice to the obligor at the address provided to Federal Defendants by the obligor when posting the bond. (Doc. 114 at ¶¶ 42, 49).8 9 Plaintiffs’ live complaint alleges that where notice of a demand on a cash bond sent to an obligor is returned undelivered, Federal Defendants make no additional attempt to send notice to the obligor and immediately breach the bond. (Doc. 114 8 Although Plaintiffs concede that Federal Defendants most frequently issue a demand on a bond for the purpose of executing an administratively final order of removal, Plaintiffs allege that Federal Defendants have the right to issue a call-in on a bond for any reason. (Doc. 114 at ¶ 49). 9 Plaintiffs allege that the cash bond documents do not advise the obligor to submit a change of address. (Doc. 114 at ¶ 42).
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Case 7:05-cv-00331 Document 138 Filed in TXSD on 04/25/07 Page 18 of 26
at ¶¶ 42-43). According to Plaintiffs, Federal Defendants do so even where they have knowledge that the obligor is residing at a different address. Id. Consequently, the amount of the bond is forfeited to Federal Defendants and the immigrant’s liberty and immigration rights are endangered. (Doc. 114 at ¶¶ 35, 43-44). Plaintiffs claim that Federal Defendants’ breach of the cash bond under these circumstances deprives the obligor and bonded immigrant of due process. (Doc. 114 at ¶ 138).10 Plaintiffs further claim that pursuant to the Supreme Court’s recent decision in Jones v. Flowers , 126 S.Ct.1708 (2006), Federal Defendants are required to make additional, reasonable efforts to provide notice of a demand on a cash bond to the obligor after the bond has been returned to Federal Defendants undelivered, but where the bonded immigrant has appeared at every hearing or other required appearance of which he or she has received notice. (Doc. 112; Doc. 114 at ¶ 141). 2. FED. R. CIV. P. 23(a) a. Numerosity
In support of their contention that the proposed classes are sufficiently numerous, Plaintiffs point to excerpts from the bond logs of Federal Defendants’ San Antonio, Texas office between January 1, 2003 and June 30, 2003. (Doc. 112); Zamora-Garcia v. Trominski (Doc. 66). Plaintiffs claim that the logs reveal that during this period around 30 cash bonds were posted per month in the San Antonio district. Id. In addition, Plaintiffs claim that the cash bond logs for the Port Isabel Service Processing Center (“PISPC”) show even higher numbers, with approximately 680 cash bonds posted during the same six month period. (Doc. 129); Zamora-Garcia v.
10 Plaintiffs also allege that with respect to surety bonds, which are posted with DHS by a surety, who has contracted with an indemnitor, for the benefit of the immigrant, Federal Defendants treat the surety more favorably than the cash bond obligor, in violation of due process and equal protection. (Doc. 114 at ¶¶ 60, 139). However, Plaintiffs’ class-wide obligor and immigrant cash bond claims against Federal Defendants appear to hinge on due process rather than equal protection. (Doc. 112). At this time, the Court will assume that Plaintiffs do not seek class-wide relief with respect to any claim against Federal Defendants grounded in equal protection.
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Trominski (Doc. 66). According to Plaintiffs, the logs also show that “many, if not more, bonds were breached as were posted, indicating that a very high number of cash bonds were breached during that period.” (Doc. 112); Zamora-Garcia v. Trominski (Doc. 66).
Plaintiffs also cite to the deposition of DHS supervisory detention and deportation officer Glenn Stewart (“Stewart”), in which Stewart attested that Federal Defendants send a notice of a demand on a cash bond to the obligor’s address listed in the bond contract. (Doc. 112); ZamoraGarcia v. Trominski (Doc. 69 at p. 44). Stewart further stated that “[i]f [the demand notice is] returned undeliverable and the post office said it’s undeliverable, then we’ll declare that bond breached” and “[w]e don’t go any further trying to track this person down.” Zamora-Garcia v. Trominski (Doc. 69 at pp. 44-45). Stewart indicated that Federal Defendants consult no other documents in the bonded immigrant’s “A file” to determine the obligor’s correct address. (Doc. 66 at pp. 44-45). Plaintiffs claim that in addition to satisfying Rule 23(b)(2), as discussed infra, the information provided in Stewart’s deposition “makes [it] highly likely that there is a significant percentage of breaches of cash bonds, regardless of the good faith or intent of the obligor and bonded immigrant.” (Doc. 112).
Federal Defendants contest numerosity on the sole basis that Plaintiffs have identified only one class representative for each of the three Cash Bond Classes. (Doc. 123). Federal Defendants’ argument is hardly persuasive, given the evidence of numerosity submitted by Plaintiffs as well as the fact that the Immigrant Cash Bond Class B includes future members, the latter of which cannot be identified at this time. In light of the evidence submitted to the Court and the inclusion of future members in the Immigrant Cash Bond Class B, the Court finds that the classes are sufficiently numerous so as to render joinder impracticable.
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b. Commonality In essence, the question of law presented by each of the Cash Bond Classes is whether
Federal Defendants’ failure to take additional, reasonable measures to notify an obligor of a demand on a cash bond where the notice is returned undelivered, and where the bonded immigrant has appeared at all hearings and other required appearances of which he or she received appropriate notice, is violative of the constitutional guarantee of due process. The representatives of the Obligor Cash Bond Class and the Immigrant Cash Bond Class A both seek injunctive and declaratory relief requiring the reinstatement or reinstatement and cancellation of bonds already breached as a result of Federal Defendants’ failure to provide additional notice. In addition, the representative of Immigrant Cash Bond Class B seeks injunctive and declaratory relief requiring Federal Defendants to provide additional, reasonable notice to obligors of demands on cash bonds in the future.
Although Federal Defendants advance no specific argument as to why Plaintiffs have failed to meet the test for commonality, an issue was raised at a hearing before the Court on November 17, 2006 that bears upon the commonality analysis. (Doc. 123). Specifically, the question arose as to whether the proposed classes are too broad, in that they encompass not only situations where the obligor has moved, but where the address to which the demand notice is sent is correct and the obligor purposefully fails to claim it. In such case, the classes as defined would potentially encompass persons with differing degrees of “fault,” and thus present differing questions of law or fact.
Plaintiffs point to Jones v. Flowers , supra , in support of their argument that the Cash Bond Classes are not overly broad so as to endanger commonality. (Doc. 29). In that case, the Commissioner of State Lands of the State of Arkansas attempted to notify the petitioner of a tax
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Case 7:05-cv-00331 Document 138 Filed in TXSD on 04/25/07 Page 21 of 26
sale on his property by sending two letters by certified mail to the property’s address. Jones , 126 S.Ct. at 1712-13. Both letters were returned “unclaimed.” Id. The State eventually sold the property and the petitioner thereafter filed suit, claiming that the Commissioner’s failure to provide notice of the tax sale had resulted in the taking of the petitioner’s property without due process. Id. at 1713. The Supreme Court recognized that although “[d]ue process does not require that a property owner receive actual notice before the government may take his property,” “due process requires the government to provide ‘notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.’” Id. at 1713-14 (citing Dusenbery v. United States , 534 U.S. 161, 170 (2002); Mullane v. Cent. Hanover Bank & Trust Co. , 339 U.S. 306, 314 (1950)). In addition, “‘when notice is a person’s due...[t]he means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it.’” Id. at 1715 (quoting Mullane , 339 U.S. at 315).
In addressing the question of “whether due process entails further responsibility when the government becomes aware prior to the taking [of property] that its attempt at notice has failed,” the Supreme Court reasoned that it did not believe that “a person who actually desired to inform a real property owner of an impending tax sale of a house he owns would do nothing when a certified letter sent to the owner is returned unclaimed.” Id. at 1714, 1716. In other words, “[n]o one ‘desirous of actually informing’ the owners would simply shrug his shoulders...and say ‘I tried.’” Id. at 1716. As such, the Court held that the State should have taken additional reasonable steps to notify the petitioner of the tax sale, if practicable to do so. Id. at 1718.11 That the letters may have been returned unclaimed because the petitioner “was not home when the postman called and did not retrieve the letter[s] at the post office” did not affect such holding.
11 The Court concluded that additional reasonable steps were available to the State. Id. at 1718-21.
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See id. at 1718. Here, Plaintiffs have stated a due process claim cognizable under Jones .12 More specifically,
Plaintiffs claim that Federal Defendants figuratively “shrug their shoulders” when notice of a demand on a cash bond mailed to an obligor’s address listed in the bond contract is returned, and that Federal Defendants’ failure to take additional, reasonable steps to notify the obligor of the bond demand, thus leading to the breach of the bond and the deprivation of the obligor’s property interest and the bonded immigrant’s liberty interest, violates due process. In Jones , the possible reasons why the letters sent to the petitioner were returned “unclaimed” did not affect the Court’s determination that the State had failed to comply with due process. Similarly, this Court finds that the specific reasons why Federal Defendants’ demand notices are returned do not bear upon the question of law common to the proposed class–that is, whether Federal Defendants must take additional, reasonable steps to notify the obligor of a demand on a cash bond when that notice is returned. As such, the Court finds that Plaintiffs have satisfied the commonality requirement. c. Typicality
Plaintiffs submit that the claims of Plaintiffs Adrianna Echavarria, Jorge Echavarria, and Juan Larin-Ulloa are typical of those of the classes they seek to represent. (Doc. 112). Specifically, Plaintiffs allege that Plaintiff Adrianna Echavarria paid a cash bond in order to secure the release of her husband, Plaintiff Jorge Echavarria, during his removal proceedings.
12 In a previous order in the present case, the Court found that the obligor Plaintiffs have stated a due process claim for which relief can be granted under Jones . (Doc. 100). The Court recognizes that the due process claim of these Plaintiffs concerns the deprivation of a property interest–that is, the forfeiture of the bond amount, whereas the bonded immigrant Plaintiffs’ due process claim concerns the deprivation of a liberty interest, in that the breach of a cash bond may result in the bonded immigrant’s return to the custody from which he or she was bonded. See Zamora-Garcia v. Trominski (Doc. 135). In a previous order issued in the predecessor action, the Court found that the bonded immigrant’s liberty interest is not implicated by Federal Defendants’ failure to send notice of a demand on a cash bond directly to the bonded immigrant, as notice to the obligor is all that is constitutionally required. Id. However, the Court did not hold that the bonded immigrant Plaintiffs may not assert a due process claim with regard to the lack of reasonable notice to the obligor.
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(Doc. 114 at ¶ 90). According to Plaintiffs, Mr. Echavarria never failed to appear at an Immigration Court setting, was represented by counsel at all relevant times, and was granted relief from deportation on June 10, 2003. (Doc. 112; Doc. 114 at ¶ 90). However, Federal Defendants allegedly breached the bond of Mr. Echavarria after a demand notice sent to Mrs. Echavarria at an address where she had resided in 1993 was returned undelivered. (Doc. 112; Doc. 114 at ¶¶ 90-91). Plaintiffs claim that neither Mr. or Mrs. Echavarria ever received notice, in person or through counsel, of any demand on the bond. (Doc. 114 at ¶ 90). Plaintiffs also allege, upon information and belief, that Federal Defendants knew that Mrs. Echavarria and her husband were no longer at the 1993 address and had information regarding how to contact Mrs. Echavarria. (Doc. 114 at ¶ 91).
With regard to Plaintiff Larin-Ulloa, Plaintiffs allege that an obligor posted a cash bond on his behalf on September 1, 2006. (Doc. 114 at ¶ 104). Plaintiffs claim that Mr. Larin-Ulloa is currently released from the custody of Federal Defendants pursuant to that cash bond and that he has appeared at every appearance requested by Federal Defendants as he continues to contest his removal through legal channels. Id.
Federal Defendants offer no specific argument as to why these three Plaintiffs’ claims are atypical of the classes they seeks to represent. (Doc. 123). As discussed supra , the question of law presented by the classes is whether Federal Defendants’ failure to take additional, reasonable measures to notify an obligor of a demand on a cash bond where the notice is returned undelivered, and where the bonded immigrant has appeared at all hearings and other required appearances of which he or she received appropriate notice, violates due process. Here, Federal Defendants apparently made no further efforts to notify Mrs. Echavarria, the obligor, of the demand on the cash bond of Mr. Echavarria, the bonded immigrant, when the demand notice was
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returned undelivered, despite having information regarding how to contact Mrs. Echavarria, and despite the fact that Mr. Echavarria had appeared at all required court settings. Clearly, Mr. and Mrs. Echavarria’s claims are typical of the Obligor Cash Bond Class and the Immigrant Cash Bond Class A.
In addition, Plaintiffs have provided sufficient argument and evidence to suggest that should Federal Defendants send notice of a demand on the bond of Mr. Larin-Ulloa to the address of the obligor listed in the bond contract, Mr. Larin-Ulloa’s obligor is in danger of failing to receive such notice, thus resulting in the breach of Mr. Larin-Ulloa’s bond and the potential deprivation of his liberty. As he seeks to represent all individuals in danger of these very consequences, Mr. Larin-Ulloa’s claims are typical of the Immigrant Cash Bond Class B. d. Adequacy
Finally, Plaintiffs claim that Mr. and Mrs. Echavarria and Mr. Larin-Ulloa are adequate representatives of the proposed class. (Doc. 112). According to Plaintiffs, the Echavarrias “have both a long history with class counsel and a stake in the outcome of the case.” Id. In addition, Plaintiffs submit that class counsel has the experience and resources necessary to prosecute the claims of the class. Id. Federal Defendants offer no specific argument as to why these individuals are inadequate class representatives. (Doc. 123).
The Court agrees with Plaintiffs that Mr. and Mrs. Echavarria have a sufficient stake and interest in the outcome of the litigation, as the reinstatement and cancellation of the bond Mrs. Echavarria posted on Mr. Echavarria’s behalf is dependent upon such outcome. In addition, Mr. Larin-Ulloa’s ability to remain free on bond as he challenges his removal order may depend upon the outcome of the present litigation. Moreover, neither the Echavarrias nor Mr. Larin-Ulloa appear to have interests antagonistic to those of the classes they seek to represent. Finally, as
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noted supra , the Court is satisfied that counsel for Petitioners is sufficiently zealous and competent to prosecute the claims of the class. (Doc. 93, Ex. CC 19). As such, the Cash Bond Classes satisfy all the requirements of Rule 23(a). 3. FED. R. CIV. P. 23(b)(2)
Plaintiffs submit that the Cash Bond Classes are appropriate for certification under Rule 23(b)(2), in that Federal Defendants have acted or refused to act on grounds generally applicable to the class, thereby making appropriate final equitable relief. (Doc. 112). Without more, Federal Defendants assert that Plaintiffs fail to meet their burden to make a demonstration of at least one of the factors under Rule 23(b). (Doc. 123). However, Plaintiffs allege, and the record provides some evidence, that Federal Defendants do not attempt to provide additional notice of a call on a cash bond to the obligor after the notice is returned undelivered. According to Plaintiffs, Federal Defendants’ inaction occurs even where the bonded immigrant has appeared at all required hearings and other appearances of which he or she has received notice, and even where Federal Defendants possess additional information regarding how to contact the obligor. Clearly, at issue with respect to the Cash Bond Classes are Federal Defendants’ actions, or failure to act, on grounds generally applicable to cash bond obligors such as Mrs. Echavarria and bonded immigrants such as Mr. Echavarria and Mr. Larin-Ulloa. As such, the Cash Bond Classes are appropriate for certification under Rule 23(b)(2).
For the foregoing reasons, the Court GRANTS Plaintiffs’ motion to certify the Obligor Cash Bond Class, Immigrant Cash Bond Class A, and Immigrant Cash Bond Class B. III. Conclusion
For the reasons described above, the Court hereby ORDERS that Plaintiffs’/Petitioners’ Motion for Class Certification is GRANTED in part and DENIED in part. (Doc. 112). More
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Case 7:05-cv-00331 Document 138 Filed in TXSD on 04/25/07 Page 26 of 26 specifically, the Court hereby DENIES Petitioners’ request to certify the first group of Petitioners within the Supervision Class and GRANTS Petitioners’ motion to certify the second group of Petitioners within the Supervision Class. In addition, the Court GRANTS Plaintiffs’ motion to certify the Obligor Cash Bond Class, Immigrant Cash Bond Class A, and Immigrant Cash Bond Class B.
SO ORDERED this 25th day of April, 2007, at McAllen, Texas.
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 Case 7:05-cv-00331 Document 139 Filed in TXSD on 04/25/07 Page 1 of 40

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS MCALLEN DIVISION

ARACELY ZAMORA-GARCIA, et ai, Plaintiff,
VS. MARC MOORE, et ai,
Defendant.

§ § § § CIVIL ACTION NO. M-05-331 § § § §

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION TO CERTIFY SURETY BOND CLASSES

I. Introduction Now before the Court is Plaintiffs'/Petitioners' Motion for Class Certification. (Doc. 112).
Plaintiffs/Petitioners seek to certify three classes with claims against Bonding Defendantsl ("Surety Bond" Classes) and four classes with claims against Federal DefendantsIRespondents2 ("Federal" Classes). Id. The Court will consider the certification of Plaintiffs' Surety Bond Classes herein.
Plaintiffs'/Petitioners' Sixth Amended Petition for Writ of Habeas Corpus and Class Action Complaint for Injunctive and Declaratory Relief asserts claims for breach of contract against Bonding Defendants arising out of said Defendants' alleged mishandling of immigration surety bonds. (Doc. 114 at -,r-,r 112-33). More specifically, Plaintiffs allege that Defendants Fairmont

Bonding Defendants include Fairmont Specialty Insurance Company (f/kJa Ranger Insurance Company)("Fairmont"); Stonington Insurance Company (f/kJa Nobel Insurance Company)("Stonington"); and Michael W. Padilla, in his capacity as Independent Administrator with Will Annexed of the Estate of Don Vannerson, d/b/a Aaron Federal Bonding Agency ("Aaron Bonding"). (Doc. 114 at ~~ 16-18).
2 Federal Defendants/Respondents include Marc Moore, District Director for Interior Enforcement, Department of Homeland Security; and Alberto Gonzales, U.S. Attorney General, The United States of America. (Doc. 114 at ~~ 13-15). Federal Defendants/Respondents are sued in their official capacity. Id.

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and Stonington ("Insurer Defendants"), through their agent, Aaron Bonding,3 enter into surety contracts with the indemnitor Plaintiffs,4 wherein Bonding Defendants5 agree to post surety bonds for the surety bonded immigrant Plaintiffs with the Department of Homeland Security ("DHS")(or its predecessor in relevant respects, the Immigration and Naturalization Service, or "INS") to enable the bonded immigrants to leave confinement while their removal proceedings are pending. Id. at ~~ 1-2. For these services, the indemnitors pay up-front, non-refundable fees equal to half of the total bond and agree to indemnify Bonding Defendants for the full amount of the bond should the bond be breached for failure of the bonded immigrant to attend a DHSscheduled appearance. Id. at ~ 2. Moreover, Bonding Defendants require the indemnitors to pay, or guarantee the payment of, roughly half the amount of the bond in monthly installments into a "Build-Up Fund," or collateral account, that Bonding Defendants may draw from in paying on the bond to DRS in the event the bond is breached. Id. According to Plaintiffs, Bonding Defendants contractually agree to provide notice to both the indemnitors and bonded immigrants of all appearances scheduled by DHS of which Bonding Defendants receive notice but "never provide advance notice of DHS-scheduled appearances" to either, thus resulting in bond breaches. Id. at ~~ 2, 5. In addition, Plaintiffs allege that although the surety bond contracts at issue require Bonding Defendants to return the collateral posted after Federal Defendants cancel a bond, Bonding Defendants' policy is to silently retain the collateral. Id. at ~ 8. Plaintiffs claim that Bonding Defendants' failure to provide notice of DHS-scheduled appearances and failure to return the collateral posted in the event of bond cancellation constitute actionable breaches of
Plaintiffs allege that Aaron Bonding is sometimes known as U.S. Immigration Bonds and Services. (Doc. 114 at ~ 1).
4 Plaintiffs allege that the indemnitor Plaintiffs are usually friends or relatives of the immigrants in removal proceedings. (Doc. 114 at ~ 2).
5 The Court refers to "Aaron Bonding" and "Bonding Defendants" interchangeably throughout this order. However, the Court notes that whether Insurer Defendants Fairmont and Stonington are liable for Aaron Bonding's conduct is an issue yet to be resolved.
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contract for which Plaintiffs seek damages and equitable relief. Id. at ~~ 112-33. Plaintiffs seek class-wide relief with respect to their breach of contract claims and propose to certify the following classes pursuant to Federal Rule of Civil Procedure 23: (1) Indemnitor Notice Class; (2) Indemnitor Collateral Class; and (3) Bonded Immigrant Class. (Doc. 112). II. Analysis A. Class Certification Standard of Review
To certify a class action under Federal Rule of Civil Procedure 23, Plaintiffs must fulfill the four requirements set forth in Rule 23(a) and at least one of the three requirements enumerated in Rule 23(b). E.g., Vizena v. Union Pac. R.R. Co., 360 F.3d 496, 502 (5th Cir. 2004). Plaintiffs bear the burden of establishing that all of the applicable Rule 23 requirements have been satisfied. Steering Comm. v. Exxon Mobil Corp., 461 F.3d 598, 601 (5th Cir. 2006); Unger v. Amedisys Inc., 401 F.3d 316, 320 (5th Cir. 2005). Here, Plaintiffs contend that the Indemnitor Notice and Indemnitor Collateral Classes fulfill the requirements of Rule 23(b)(3), and that the Bonded Immigrant Class satisfies Rule 23(b)(2). (Doc. 112). 1. FED. R. CIV. P. 23(a) a. Numerosity
Pursuant to Rule 23(a), Plaintiffs must first show that "the class is so numerous that joinder of all members is impracticable." FED. R. CIV. P. 23(a)(1). "Impracticable" need not mean "impossible," but rather that it is "extremely difficult or inconvenient" to join all members of the class. WRIGHT, CHARLES ALAN & MILLER, ET AL., FEDERAL PRACTICE & PROCEDURE: FEDERAL RULES OF CIVIL PROCEDURE § 1762 (2006). By itself, the mere allegation that a class is too numerous to make joinder practicable is insufficient to satisfy the "numerosity" prong. Pederson v. La. State Univ., 213 F.3d 858, 868 (5th Cir. 2000). Rather,
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"'a plaintiff must ordinarily demonstrate some evidence or reasonable estimate of the number of purported class members.'" Id. (quoting Zeidman v. J Ray McDermott & Co., Inc., 651 F.2d 1030, 1038 (5th Cir. 1981)). The Fifth Circuit has also noted that, when conducting a numerosity analysis, the district court must not focus on sheer numbers alone but also on whether joinder of all members is practicable in view of all other relevant factors. Id. at 868 n.11. "Practicability of joinder depends on size of the class, ease of identifying its members and determining their addresses, facility of making service on them if joined and their geographic dispersion." Garcia v. Gloor, 618 F.2d 264,267 (5th Cir. 1980). The Fifth Circuit has indicated that a district court may draw reasonable inferences regarding these factors notwithstanding the lack of any direct evidence. Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 624-25 (5th Cir. 1999). The inclusion of future members in the class definition is also a factor to consider in determining if joinder is impracticable; in fact, that the class includes unknown, unnamed future members weighs in favor of certification. Pederson, 213 F.3d at 868 n.ll. b. Commonality
Second, Plaintiffs must show that "there are questions of law or fact common to the class." FED. R. ClV. P. 23(a)(2). The test for "commonality" is not a demanding one, as it requires the presence of only one common question of law or fact whose resolution will affect all or a significant number of the putative class members. James v. City of Dallas, 254 F.3d 551, 570 (5th Cir. 2001); see also Jenkins v. Raymark Indus., 782 F.2d 468,472 (5th Cir. 1986)(threshold of commonality "is not high"). That some of the putative class members may have claims that require some individualized analysis is not fatal to commonality. James, 254 F.3d at 570; see
also Forbush v. Jc. Penney Co., Inc., 994 F.2d 1101, 1106 (5th Cir. 1993)(necessity for even
somewhat complex calculations of individual awards does not defeat commonality requirement).
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c. Typicality Third, Plaintiffs must show that "the claims or defenses of the representative parties are
typical of the claims or defenses of the class." FED. R. CIY. P. 23(a)(3). The "typicality" inquiry '''focuses on the similarity between the named plaintiffs' legal and remedial theories and the theories of those whom they purport to represent.'" James, 254 F.3d at 571 (quoting Mullen, 186 F.3d at 625). Like commonality, the test for typicality is not demanding, as it does not require a complete identity of claims. Id. "'Rather, the critical inquiry is whether the class representative's claims have the same essential characteristics of those of the putative class. If the claims arise from a similar course of conduct and share the same legal theory, factual differences will not defeat typicality.'" Id. (quoting 5 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE ~ 23.24[4] (3d ed. 2000)). d. Adequacy
Fourth, Plaintiffs must demonstrate that "the representative parties will fairly and adequately protect the interests of the class." FED. R. CIY. P. 23(a)(4). In considering the "adequacy" requirement, the Court should evaluate whether the class representatives have a sufficient stake in the outcome of the litigation and whether they have interests antagonistic to the unnamed class members. See Jenkins, 782 F.2d at 472. In addition, the Court should inquire into the zeal and competence of counsel for the class representatives as well as the class representatives' willingness and ability to take an active role in the litigation and to protect the interests of the absent class members. Berger v. Compaq Computer Corp., 257 F.3d 475,479 (5th Cir. 2001). Generally, class representatives should "possess a sufficient level of knowledge and understanding to be capable of 'controlling' or 'prosecuting' the litigation." Id. at 482-83. They need to know more than that they were "'involved in a bad business deal"'; however, they "need
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not be legal scholars and are entitled to rely on counsel. ..." Id. at 483 (quoting Kelley v. MidAmerica Racing Stables, Inc., 139 F.R.D. 405, 410 (W.D.Okla. 1990)). Differences between the class representatives and other class members do not defeat the adequacy requirement so long as those differences do not '''create conflicts between the named plaintiffs' interests and the class members' interests.'" James, 254 F.3d at 571 (quoting Mullen, 186 F.3d at 625-26). 2. FED. R. CIV. P. 23(b) a. Rule 23(b)(2)
Rule 23(b)(2) authorizes the certification of a class satisfying all the requirements of Rule 23(a) where "the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class a whole." FED. R. Cry. P. 23(b)(2). A Rule 23(b)(2) class is characterized by harm of a "group nature" and relief of a "broad character," such that "the (b)(2) class is, by its very nature,...a homogenous and cohesive group with few conflicting interests among its members." Allison v. Citgo Petroleum Corp., 151 F.3d 402, 413 (5th Cir. 1998). The Fifth Circuit has further noted that "[a]ctions for class-wide injunctive or declaratory relief are intended for (b)(2) certification precisely because they involve group remedies." Id. at 414. b. Rule 23(b)(3)
Pursuant to Rule 23(b)(3), a class satisfying all the requirements of Rule 23(a) may be certified where "the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." FED. R. ClV. P. 23(b)(3). Rule 23(b)(3) also provides that "matters pertinent to the findings
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include: (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; [and] (D) the difficulties likely to be encountered in the management of a class action." Id.
Assessing whether the "predominance" and "superiority" requirements of Rule 23(b)(3) are met "requires [the court's] understanding of the relevant claims, defenses, facts, and substantive law presented in the case." Allison, 151 F.3d at 419 (citing Castano v. Am. Tobacco Co., 84 F.3d 734, 744 (5th Cir. 1996)). The court must identify the substantive issues that will control the outcome of the case, assess which will predominate, and determine whether the issues are common to the class. O'Sullivan v. Countrywide Home Loans, Inc., 319 F.3d 732, 738 (5th Cir. 2003). The court's analysis regarding whether common issues predominate is meant to "prevent[] the class from degenerating into a series of individual trials." Id. The greater the number of individual-specific issues, the less likely it is that the class action device is the superior method for resolving those issues. See Allison, 151 F.3d at 419. Although similar to the commonality requirement of Rule 23(a)(2), the predominance and superiority requirements are "'far more demanding.'" O'Sullivan, 319 F.3d at 738 (quoting Amchem Prods., Inc. v. Windsor, 52 U.S. 591,617 (1997)). B. Indemnitor Notice Class
Plaintiffs Irma Sandoval and Alberta Rubio seek to represent the "Indemnitor Notice Class," described as follows:
(a) those who served or are serving as Indemnitors on a surety bond posted by a Bonding Defendant to secure the release of a Bonded Immigrant detained by the Federal Defendants, and (b) who have fully paid their up-front, non-reimbursable fees to the Bonding Defendants
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pursuant to the tenns of the bonding contracts, and (c) where the Bonding Defendant received notice that the DRS has scheduled an appearance for the Bonded Immigrant before it, on or after April 16, 1998, and where the Bonding Defendant failed to provide notification of the scheduled appearance to either the Indemnitor or the Bonded Immigrant. (Doc. 112). Plaintiffs request, on their own behalf and on behalf of the class they seek to represent, damages equal to the value of all non-refundable, up-front fees paid to Bonding Defendants when entering into the surety contracts at issue. (Doc. 114 at,-r 122). 1. FED. R. elv. P. 23(a) a. Numerosity In support of their contention that the Indemnitor Notice Class is sufficiently numerous, Plaintiffs point out that Bonding Defendants have admitted to the existence of nearly 8,000 bond files for surety bonds issued by Aaron Bonding for Insurer Defendants after May 7, 1998. (Doc. 112 (citing Doc. 93, Ex. CC 16)). According to Plaintiffs, Bonding Defendants received a "Notice to Obligor to Deliver Alien,"-that is, the fonn notifying Bonding Defendants of a demand on the surety bonded immigrant's bond by DRS-"in most cases." (Doc. 112). More specifically, Plaintiffs note that of 63 random bond files produced by Aaron Bonding to Plaintiffs, a Notice to Obligor to Deliver Alien appeared in 51 of them. (Doc. 112 (citing Doc. 93, Ex. CC 8)). As discussed infra, the evidence submitted to the Court also indicates that Bonding Defendants have not consistently provided notice to indemnitors and bonded immigrants of these demands on the bonded immigrants' bonds. As such, Plaintiffs estimate that the Indemnitor Notice Class numbers in the thousands. (Doc. 112). Bonding Defendants do not attempt to dispute numerosity. (Docs. 121, 125). Given the evidence submitted regarding the number of individuals who have served as indemnitors on surety bonds posted by Bonding Defendants, and of Bonding Defendants' failure to provide
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notice to indemnitors and bonded immigrants of demands on those bonds, the Court finds that joinder of these individuals would be impracticable, and thus the numerosity requirement is satisfied. b. Commonality
Plaintiffs contend that numerous questions of law or fact are common to the proposed Indemnitor Notice Class, including: (1) whether Texas law applies to Plaintiffs' breach of contract claim; (2) whether Insurer Defendants can be required to answer for Aaron Bonding's conduct; (3) whether the bond contracts required Bonding Defendants to provide notice of DRSscheduled appearances directly to the bonded immigrants; (4) whether the bond contracts required Bonding Defendants to provide notice of DRS-scheduled appearances directly to the indemnitors; (5) whether Bonding Defendants failed to provide notice to the bonded immigrants; (6) whether Bonding Defendants failed to provide notice to the indemnitors; (7) whether the failure to provide notice to both the bonded immigrants and the indemnitors constituted a breach of the bond contracts; (8) whether the failure to provide notice caused damage to the indemnitors; and (9) whether the breach entitles the indemnitors to a return of all or a portion of the non-refundable fees paid for the bond. (Doc. 112). According to Plaintiffs, "[t]he answer to these questions will not vary from class member to class member, given the uniform contracts, uniform conduct, and uniform governing standards." Id.
Bonding Defendants offer no argument challenging Plaintiffs' purported showing of commonality, choosing rather to focus their efforts on disputing whether common issues predominate so as to render a class action the most appropriate method for resolving these issues. (Docs. 121, 125); see FED. R. CIV. P. 23(b)(3). At this stage of its inquiry, the Court notes that Plaintiffs have shown that at least one common question of law or fact exists whose resolution
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will affect all or a significant number of the putative class members. As such, the Court finds that the Indemnitor Notice Class satisfies the commonality requirement. c. Typicality
Plaintiffs claim that the similarities between named class representatives Irma Sandoval and Alberta Rubio and the proposed class members are apparent. (Doc. 112). Specifically, Plaintiffs submit evidence indicating that Ms. Sandoval and Ms. Rubio are both indemnitors who contracted with Bonding Defendants to secure the release from federal detention of a bonded immigrant (bonded immigrant Plaintiffs Manuel Sandoval and Miguel Rubio, respectively). (Doc. 112 (citing Doc. 93, Exs. CC 5, CC 6)). According to Plaintiffs, the evidence also shows that Bonding Defendants received notices for appearance for both Mr. Sandoval and Mr. Rubio but did not relay this notice to any of the Sandovals or the Rubios. (Doc. 112 (citing Doc. 93, Exs. CC 5 at BF-217, CC 6 at BF-285; Doc. 114 at ~~ 69, 74)).
Again, Bonding Defendants do not dispute that the requisite typicality exists. (Docs. 121, 125). As Ms. Sandoval and Ms. Rubio both challenge the lack of notice of DRS demands on surety bonds issued by Bonding Defendants of which these Defendants had notice, the Court finds that the named class representatives' claims have the same essential characteristics of those of the putative class. Therefore, Plaintiffs have fulfilled the typicality requirement. d. Adequacy
Plaintiffs claim that both Ms. Sandoval and Ms. Rubio have demonstrated that they are adequate representatives of the proposed Indemnitor Notice Class. (Doc. 112). According to Plaintiffs, Ms. Sandoval's deposition testimony and sworn declaration show that she: (1) knew that Aaron Bonding had been the bond company for her father; (2) believed Aaron Bonding would provide her father with notice of court dates by mail; (3) remembered Aaron Bonding's
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representative telling her that she would receive half of her fee back if her father showed up for his appointments; and (4) knew that she was responsible for making sure her father appeared for his appointments. (Doc. 112 (citing Doc. 93, Ex. CC 10 at ~~ 2, 4; Doc. 99, Ex. CC 21 at pp. 1314, 19-20, 23, 35-36)). Additionally, Plaintiffs point to Ms. Sandoval's interrogatory responses in which she stated that she believed Aaron Bonding would fulfill all of its promises in the contract and that Aaron Bonding would let her know of every appearance requested so that she could make sure her father appeared. (Doc. 112 (citing Doc. 99, Ex. CC 22 at No.6)). Plaintiffs further submit that Ms. Sandoval has shown knowledge of the basis for her legal claims by testifying that she wants to recover the money she paid to post the bond because Aaron Bonding did not notify her of any appearance requested of her father. (Doc. 112 (citing Doc. 99, Ex. CC 21 at p. 35)). According to Plaintiffs, Ms. Sandoval has also demonstrated that she is an active participant in the present litigation by timely appearing for her deposition, stating that she would be willing to travel to Houston to pursue her claims, if necessary, and regularly keeping in contact with class counsel. (Doc. 112 (citing Doc. 99, Ex. CC 21 at pp. 44-45)).
In support of Plaintiffs' claim that Alberto Rubio is a proper class representative, Plaintiffs submit evidence indicating that Ms. Rubio paid $4,000 on a $3,000 bond to secure the release of her son. (Doc. 112 (citing Doc. 93, Ex. CC 6 at BF-268, BF-304)). Although Plaintiffs admit that Ms. Rubio is "an unsophisticated plaintiff," Plaintiffs point out that Ms. Rubio has met with counsel many times regarding her case and has timely appeared for her deposition, where she testified that she knows she is attempting to recover her money from the bond company. (Doc. 112 (citing Doc. 99, Ex. CC 23 at p. 33; Doc. 112, Exs. CC 35, CC 35 A)). In addition, Ms. Rubio stated in a declaration submitted to this Court that she understands that she is attempting to represent the interests of people like her and that she has a responsibility to protect their
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interests. (Doc. 112 (citing Doc. 112, Exs. CC 35, CC 35 A)). Bonding Defendants dispute that the named class representatives of the Indemnitor Notice
Class are adequate on the grounds that these plaintiffs know "very little" about the facts of their own cases and "much less about the putative class [they] seek to represent." (Doc. 121). Bonding Defendants contend that although the surety bond contract is "undeniably the most critical document" in Plaintiffs' breach of contract action against Bonding Defendants, Ms. Sandoval has not demonstrated that she knows what the contract says. Id. More specifically, Bonding Defendants point to Ms. Sandoval's testimony that although she reads only Spanish, the contract, which is written in English, has never been translated to her. (Doc. 121 (citing Doc. 121, Ex. 6 at pp. 16-19)). Bonding Defendants further assert that Ms. Sandoval is an inadequate class representative because she was unaware ofInsurer Defendants' Motion to Transfer Venue to Houston, Texas and testified that she would be willing to pursue her claims in Houston without knowing how a transfer of venue might impact her fellow class members. (Doc. 121 (citing Doc. 121, Ex. 6 at p. 24)). In addition, Bonding Defendants point to Ms. Sandoval's admitted lack of knowledge regarding Insurer Defendants' connection to the bond issued by Aaron Bonding, as well as her confusion regarding the difference between Aaron Bonding and the federal authorities, as indicative of her inadequacy as a class representative. (Doc. 121 (citing Doc. 121, Ex. 6 at pp. 24-25, 38-39)). According to Bonding Defendants, the declaration submitted by Ms. Sandoval regarding her understanding of her role as a class representative is lacking in specificity and inconsistent with her deposition testimony in which she demonstrated that she knew little about the facts of her case. (Doc. 121 (citing Doc. 121, Ex. 7)).
Bonding Defendants also claim that Ms. Rubio's declaration fails to demonstrate her adequacy as a class representative because of its lack of specificity and inconsistency with Ms.
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Rubio's testimony. (Doc. 121 (citing Doc. 121, Ex. 8)). Bonding Defendants further assert that Ms. Rubio's deposition testimony shows that she is unable to read English, can read only a little Spanish, and in fact she Calmot read anything because her eyesight is poor and her eyes need an operation. (Doc. 121 (citing Doc. 121, Ex. 5 at pp. 12-13, 44)). Bonding Defendants contend that because "[t]his is a document intensive case, and Plaintiffs' class action is premised on the alleged existence of uniform documentation," Ms. Rubio's apparent inability to review documents and thus assist counsel in prosecuting and controlling the present litigation demonstrates that she cannot adequately represent the Indemnitor Notice Class. (Doc. 121). Bonding Defendants also point out that Ms. Rubio testified that she does not remember the name of the bonding company that issued her son's bond, that she does not understand the document she signed was a contract, and that she does not know if any promises were made in the contract, or that any promises were broken. Id. (citing Doc. 121, Ex. 5 at pp. 9, 38).
Upon considering the parties' arguments, the Court finds that the evidence submitted demonstrates that Ms. Sandoval sufficiently understands the factual and legal bases for the breach of contract claim to be prosecuted by the Indemnitor Notice Class. Although Ms. Sandoval testified that the entirety of the bond contract has not been translated to her, she also attested that an Aaron Bonding employee told her that the contract would make her responsible if her father did not appear in court, and that she would recover half of the money she paid to Aaron Bonding if she fulfilled her responsibilities. (Doc. 121, Ex. 6 at pp. 16-19). In other words, she has demonstrated that she has an understanding of her own obligations, as well as the asserted obligations of Aaron Bonding, under the contract. The evidence further shows that Ms. Sandoval knows that she paid money to Aaron Bonding to secure the release of her father, and that she did so with the understanding that Aaron Bonding would notify her of any appearances
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requested of her father. She has also exhibited an understanding of the recovery sought by the class-that is, the return of money paid to Aaron Bonding.
Were the Court to find Ms. Sandoval to be an inadequate class representative due to her lack of knowledge regarding Insurer Defendants' filing of a motion to transfer venue, it would be requiring her to possess knowledge of the case akin to that expected of counsel. In addition, that she expressed that she would be willing to travel to Houston to prosecute the case provides further evidence of her willingness to take an active role in the litigation. Furthermore, the Court finds that Ms. Sandoval's lack of knowledge regarding any connection between Aaron Bonding and Insurer Defendants is not fatal to a showing of adequacy. Plaintiffs assert that Insurer Defendants acted in the name of Aaron Bonding, their agent, such that an indemnitor contracting with Aaron Bonding could not be expected to know of Insurer Defendants by name. Here, the Court finds that it is sufficient that Plaintiff has demonstrated specific knowledge of her dealings with Aaron Bonding. The Court also notes that the surety bond process involves both Aaron Bonding and Federal Defendants; therefore, it is hardly surprising that Ms. Sandoval admitted some confusion regarding the difference between the two. Finally, the Court finds that Ms. Sandova1's declaration expressing her general understanding of her role as a class representative provides some additional evidence of her willingness to take an active role in the litigation and to protect the interests of the class members she seeks to represent. As such, the Court finds that PlaintiffIrma Sandoval is an adequate representative of the Indemnitor Notice Class.
Although Plaintiffs have provided evidence that Ms. Rubio's claims are typical of those of the Indemnitor Notice Class, the Court finds troubling that Ms. Rubio's testimony indicates a lack of personal knowledge regarding the facts of her case and the claims of the class members she seeks to represent. Plaintiffs point to evidence that Ms. Rubio knows that she is attempting
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to recover her money from a bond company; however, Ms. Rubio testified that she does not remember who the bond company is. (Doc. 99, Ex. CC 23 at p. 9). Ms. Rubio further testified that her daughter may have been "the one who filled [out a paper]" for Ms. Rubio to sign in order to secure the bond. !d. at p. 11. According to Ms. Rubio's testimony, she did not know that this document was a contract, she does not remember what the document said, and she does not know what "had to happen" for her to get some of the money back that she had paid for the bond. Id. at pp. 14, 18, 38. When asked whether she thought the bonding company would tell her when her son needed to go to court or meet with "immigration," Ms. Rubio responded in the negative. Id. at p. 32. Furthermore, she indicated that she did not know whether the document she signed contained any promises from the bonding company or whether any of those promises were broken. !d. at p. 38.
Lack of notice is integral to the claims of the Indemnitor Notice Class, as evidenced by the name given to the class by Plaintiffs. Here, where Ms. Rubio has demonstrated a lack of knowledge regarding any obligation of notice on the part of the bonding company, the Court cannot find that she possesses the requisite level of knowledge to control or prosecute the litigation. When coupled with this lack of knowledge, her inability to read documents relevant to a document-intensive case provides further indication that Ms. Rubio is an inadequate class representative. Given the above, that Ms. Rubio signed a declaration indicating her general understanding of her role as a class representative carries little weight. As such, the Court finds that Ms. Rubio is not an adequate representative of the Indemnitor Notice Class.
In sum, the Court concludes that Ms. Sandoval, but not Ms. Rubio, IS an adequate representative of the Indemnitor Notice Class. As Bonding Defendants have not disputed the adequacy of counsel to prosecute the claims of the class (Docs. 121, 125), and in fact the Court is
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satisfied that counsel for Plaintiffs is sufficiently zealous and competent to do so (Doc. 93, Exs. CC 18, CC 19; Doc. 112, Ex. CC 33), the Court finds that Plaintiffs have satisfied all of the requirements of Rule 23(a). 2. FED. R. CIV. P. 23(b)(3)
Plaintiffs assert that the Indemnitor Notice Class is appropriate for certification under Rule 23(b)(3) because issues common to the class predominate over any individual issues. (Doc. 112). In addition, Plaintiffs contend that a class action is the superior method for adjudicating these issues. Id. As noted supra, the proposed Indemnitor Notice Class asserts a claim against Bonding Defendants for breach of contract. (Doc. 114 at ~~ 112-22). Under Texas law, the elements of a breach of contract cause of action are: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the defendant's breach. E.g., McLaughlin, Inc. v. Northstar Drilling Tech, Inc., 138 S.W.3d 24, 27 (Tex.App.-San Antonio 2004, no pet.); Prime Prods., Inc. v. S.S.I Plastics, Inc., 97 S.W.3d 631,636 (Tex.App.-Houston [1 st Dist.] 2002, pet. denied); Lewis v. Bank of Am. NA, 343 F.3d 540, 544-45 (5th Cir. 2003). Here, Plaintiffs' breach of contract claim concerns a uniform, written contract between the indemnitor Plaintiffs and Bonding Defendants. (Doc. 114 at ~~ 113). Plaintiffs' proposed Indemnitor Notice Class includes those indemnitors who allegedly have performed, or, in the alternative, have substantially performed their obligations under the contract by paying the amounts due under the contracts, including payment of the up-front, non-reimbursable fees they seek to recover. Id. at ~~ 114, 122. According to Plaintiffs, the breach of the surety contract consists of Bonding Defendants' routine failure to abide by the contract's express provision that "[BONDED IMMIGRANT] and INDEMNITOR will be notified by AGENCY of all
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appearances requested by the U.S. IMMIGRATION AND NATURALIZATION SERVICE of which AGENCY receives notice." Id. at ~~ 46, 115-20. Plaintiffs claim that they have been damaged by Bonding Defendants' breach in the amount of the up-front, non-refundable fees paid to Bonding Defendants when entering into the surety contracts. Id. at ~~ 121-22. Plaintiffs further claim that the payment of these fees can be established by documents in the bond files, and that the bond files can be used to construct a uniform damages model. (Doc. 112). As such, Plaintiffs contend that their breach of contract claim presents overriding common questions and that any individual issues will not predominate and can easily be managed through the bond files. !d.
In applying the four factors set forth by Rule 23(b)(3) to aid a court in determining whether a class action is superior to other available methods of adjudication, Plaintiffs first assert that the members of the Indemnitor Notice Class "have no interest in proceeding individually." Id.; see FED. R. CIV. P. 23(b)(3)(A). Plaintiffs contend that the relatively small amount of damages suffered by each indemnitor, and the fact that the conduct alleged to have caused such damages is uniform and affects a large number of indemnitors, point to the desirability of proceeding with a class action as opposed to individual actions. (Doc. 112). Plaintiffs also state that they are unaware of any litigation concerning the controversy already commenced by members of the class, and that the Court's "extensive experience" with the case renders the forum a desirable one. Id.; see FED. R. CIV. P. 23(b)(3)(B)-(C). Finally, Plaintiffs propose that the litigation of the class is manageable, as class members can be identified easily from Aaron Bonding's records, Bonding Defendants' liability may be determined on a class-wide basis, and individual class member damages may be determined by reference to the bond files and Aaron Bonding's computer records. (Doc. 112); see FED. R. CIV. P. 23(b)(3)(D). Plaintiffs claim that once
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common questions are resolved, the remainder of the case may be disposed of through a relatively quick claims process. (Doc. 112).
Bonding Defendants do not dispute that the surety contract at issue is uniform and includes the above-cited notice provision. (Docs. 121). However, Bonding Defendants claim that numerous issues are specific to each class member and predominate over any common issues of law or fact. Bonding Defendants contend that the predominance of individual issues, as well as the unmanageable nature of the class as defined, demonstrate that a class action is not the superior method of adjudicating the breach of contract claim asserted by the Indemnitor Notice Class. Id. a. Issues Identified by Bonding Defendants as Specific to Each Class Member i. Whether Bonding Defendants Breached the Surety Bond Contract
Bonding Defendants first claim that an issue specific to each class member is whether Bonding Defendants in fact breached the bond contract. (Doc. 121). As noted supra, the breach at issue is Bonding Defendants' alleged failure to provide contractually required notice of demands on bonds to indemnitors. Whereas Plaintiffs contend that Bonding Defendants routinely fail to provide such notice upon receiving the "Notice to Obligor to Deliver Alien," and that the indemnitors who have not received notice can thus be identified easily, Bonding Defendants claim that notice of requested appearances has been provided, and is being provided, in some cases. (Doc. 112, 121, 14, 125, 127). Bonding Defendants further argue that the evidence shows that ascertaining which indemnitors have received notice could not be achieved by consulting Aaron Bonding's logbooks. (Doc. 125). In sum, Bonding Defendants contend that since they do not have a uniform policy of failing to give notice, and because Aaron's logbooks will not accurately reflect whether notice was given, whether Bonding Defendants breached the
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contract by failing to provide notice needs to be determined on a case-by-case basis. !d. Bonding Defendants represent that Defendant Fairmont is currently attempting to wind down
the open liabilities resulting from bonds that remain outstanding since the death of Don Vannerson in 2004. (Doc. 125; see also Doc. 121, Ex. 1). According to the affidavit of Michael Padilla, Independent Administrator of the Estate of Mr. Vannerson and Loss Mitigation Specialist for Fairmont, Mr. Padilla and his staff "are attempting to notify aliens and indemnitors of all interviews and hearings requested by the Department of Homeland Security of which we receive notice...." (Doc. 121, Ex. 1). In addition, Bonding Defendants submit the deposition testimony of Aaron Bonding employees Eliud Salinas and Laura Cuayahuitl, as well as the affidavit of employee Santiago Sol, in support of their contention that Bonding Defendants have provided such notice in the past. (Doc. 125). According to Mr. Salinas, a manager for Aaron Bonding from 1980 until his termination in October 2005, Aaron Bonding was "supposed to" provide notice of hearings of which Bonding Defendants received notice. (Doc. 125, Ex. 17 at pp. 10-12, 48). Mr. Salinas testified that Aaron Bonding would provide notice to the bonded immigrant by "[p]hone call" and would "sometimes" send letters. Id. at p. 48. He also stated that, at least until about 2001 or 2002, an employee would place a "check mark" in the "general log" in each file to indicate that notice had been provided. Id. at pp. 48-49. 6 Mr. Salinas further testified that, "[t]o [his] knowledge," Aaron Bonding would also attempt to provide notice to the indemnitor through the phone and through mail. !d. at p. 51. Mr. Salinas also stated that Aaron Bonding would, "80 percent or more" of the time, contact the indemnitor to help recover the
6 Bonding Defendants submit excerpts from Aaron Bonding's 2002 logbook showing check marks by the names of some bonded immigrants. (Doc. 125, Ex. 19). However, Mr. Salinas indicated that the check mark procedure may have been followed only until Abigail Lopez "took over the department" in 2001 or 2002. (Doc. 125, Ex. 17 at p. 49). When asked during her deposition whether Aaron Bonding's logbook contained any information about attempts to contact aliens with regard to hearing dates or deportation notices, Ms. Lopez responded, "No." (Doc. 125, Ex. 15 at p. 81).
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bonded immigrant for purposes of deportation. !d. at pp. 107, 117, 119. Ms. Cuayahuitl testified that "[a]s far as [she] knew," a notice of deportation "would go to the pickup department, and the recovery agents would be in charge of finding the sureties [i.e., the indemnitors] ...." (Doc. 125, Ex. 18 at pp. 70-71). Mr. Sol, who attests in his affidavit that he worked as a recovery agent for Aaron Bonding from February 2002 to March 2003, states that "I would frequently contact the indemnitors on the file, to ask if they would assist in locating the alien. If I was successful in contacting the indemnitor, I would tell the indemnitor about the deportation date, or the interview date, whichever it was, so that they would know that it was important to help locate the alien." (Doc. 121, Ex. 13). He estimates that he made an effort to contact the indemnitors "over 90% of the time," and that he was successful in doing so "over 50% of the time." Id.
The Court agrees with Bonding Defendants that some evidence exists that said Defendants have provided, and do provide, notice of some requested DHS-scheduled appearances, and that whether such notice has been given cannot be ascertained without conducting individual inquiries. However, the Court notes, as do Plaintiffs, that Mr. Padilla stated in his affidavit that "Fairmont does not notify aliens of deportations after their final orders of removal because of the high likelihood the aliens will flee .... Nothing in the [bond contract] required Aaron to give prior notice to the indemnitor and/or alien of a demand to surrender the alien for deportation." (Doc. 121, Ex. 1). In addition, the Court recognizes that counsel for Bonding Defendants represented at a hearing before this Court on November 17, 2006 that "[w]ith respect to deportation, no, we don't provide notice [to the alien]. Absolutely. And I think that is agreed, that that's uniform." (Doc. 130 at p. 39). Mr. Padilla's affidavit conflicts with the evidence submitted by Bonding Defendants indicating that notice of requested appearances for deportation has been provided in the past to indemnitors; however, it is consistent with the absence of evidence regarding notice to
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the bonded immigrant. In other words, the excerpts of deposition testimony and affidavits submitted to the Court by Bonding Defendants in no way indicate that notice of requested appearances for deportation has ever been provided to the bonded immigrant. Pursuant to the above-cited language in the bond contract, the indemnitor Plaintiffs assert that Bonding Defendants are required to provide notice of "all appearances," including appearances for deportation, to the indemnitor and bonded immigrant. (Doc. 114 at ~ 115; Doc. 127; Doc. 130 at p. 40). As the Indemnitor Notice Class is defined as those indemnitors on bond contracts where Bonding Defendants failed to provide notice to either the indemnitor or the bonded immigrant, Bonding Defendants' notice practice appears to be uniform with respect to each class member, so long as the class definition pertains only to notice of requested appearances for deportation. Plaintiffs have indicated their willingness to amend the definition of the class accordingly, and the Court finds that doing so would alleviate any problems concerning individual issues of notice. (Docs. 124, 127); see also In re Monumental Life Ins. Co., 365 F.3d 408, 414 (5th Cir. 2004)(noting that "[d]istrict courts are permitted to limit or modify class definitions to provide the necessary precision"). ii. Whether the Indemnitor Performed His or Her Obligations Under the Contract
Bonding Defendants also claim, however, that ascertaining which individuals are entitled to class membership would require the Court to conduct "mini-trials" regarding which indemnitors performed their obligations under the contract. (Doc. 121). Bonding Defendants contend that the Indemnitor Notice Class cannot be defined as all those indemnitors who made their required payments under the contract, as the contract contains other obligations on the part of indemnitor, namely: (1) the obligation to report to Bonding Defendants every 30 days; and (2) the obligation to report any change of address, telephone number, employer, attorney, or immigration status, as
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well as to report any departure from the United States by the bonded immigrant. Id. (citing Doc. 121, Exs. 2, 14). Bonding Defendants also point to provisions in the contract that allow Bonding Defendants to surrender the bonded immigrant back to custody where the indemnitor fails to fulfill any term of the contract, and to cancel the bond and not return the premium as a result of various actions, or inaction, of the indemnitor and/or bonded immigrant. !d. In addition, Bonding Defendants cite to a provision in the contract that provides that "[t]ime is specifically declared to be of essence in this Agreement." Id. Bonding Defendants assert that an indemnitor's failure to comply with any of the above obligations under the contract may constitute a material breach that excuses Bonding Defendants from further performance under the contract. (Doc. 121). In addition, Bonding Defendants claim that an indemnitor who fails to timely perform under the contract relinquishes his or her right to Bonding Defendants' performance. Id. As Bonding Defendants would then be excused from any obligation to inform the indemnitor or bonded immigrant of a demand on a bond, the indemnitor could not assert that any breach had occurred, and therefore would not be a proper class member. Id. Bonding Defendants claim that were the Court to certify the Indemnitor Notice Class, it would be forced to determine, on an individual basis, whether each member of the class had fulfilled his or her obligations under the contract. Id.
The Court recognizes that a party's material breach of a contract, or a party's failure to timely perform where time is of the essence to a contract, discharges or excuses the other party from further performance. Mustang Pipeline Co., Inc. v. Driver Pipeline Co., Inc., 134 S.W.3d 195, 196 (Tex. 2004)(per curiam)(citing Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691,692 (Tex. 1994); D.E. W, Inc. v. Depco Forms, Inc., 827 S.W.2d 379, 382 (Tex.App.-San Antonio 1992, no writ)). At this point, the non-breaching party is entitled to terminate the agreement and
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sue for breach. See Long Trusts v. Griffin, 2006 WL 3524376, at *2 (Tex. 2006). However, '" [a] party who elects to treat a contract as continuing deprives himself of any excuse for ceasing performance on his own part.'" /d. (quoting Hanks v. GAB Bus. Serve., Inc., 644 S.W.2d 707, 708 (Tex. 1982)). Here, Plaintiffs complain that regardless of any breach of the bond contract by the indemnitor, Bonding Defendants routinely fail to provide contractually mandated notice of a requested appearance for deportation. (Doc. 114 at ~~ 1-8). The Court notes that this scenario can only occur if the contract is continuing, as a demand on the bond is made only where the bond is still in effect. As such, membership in the Indemnitor Notice Class may be determined without investigating whether each indemnitor has complied with each and every obligation under the contract. iii. Whether the Contract is Barred by the Affirmative Defenses of Waiver and Ratification
Bonding Defendants further contend that class certification under Rule 23(b)(3) IS inappropriate because individual issues regarding whether each class member's breach of contract claim is barred by the affirmative defenses of waiver and ratification predominate over the common issues in the case. (Doc. 121). Under Texas law, waiver is the intentional relinquishment of a known right or intentional conduct inconsistent with claiming that right. Jernigan v. Langley, III S.W.3d 153, 156 (Tex. 2003); Monumental Life Ins. Co. v. HayesJenkins, 403 F.3d 304, 312 (5th Cir. 2005). A waivable right may spring from a contract. Tenneco Inc. v. Enterprise Prods. Co., 925 S.W.2d 640, 643 (Tex. 1996). In order to show waiver and ratification, Texas law requires proof that a party either (1) continued to accept benefits under a contract after becoming aware of a breach of that contract; or (2) conducted himself so as to recognize the contract as binding. See Arroyo Shrimp Farm, Inc. v. Hung Shrimp Farm, Inc., 927 S.W.2d 146, 151-52 (Tex.App.-Corpus Christi 1996, no writ); LSR Joint
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Venture No.2. v. Callewart, 837 S.W.2d 693, 699 (Tex.App.-Dallas 1992, no writ); Spangler v. Jones, 797 S.W.2d 125, 131 (Tex.App.-Dallas 1990, writ denied). According to Bonding Defendants, that the proposed class representative Ms. Sandoval signed her bond contract with Aaron Bonding in 1997 but never complained of lack of notice by Aaron Bonding until she appeared in this lawsuit in 2003, shows that Ms. Sandoval's breach of contract claim, as well the breach of contract claim of other proposed class members, may be barred by waiver and ratification. (Doc. 121).7 Here, the "known right" under the contract is the right to notice of requested appearances for deportation. Ms. Sandoval could not have known that this right had been denied to her, andlor to Mr. Sandoval, until after Mr. Sandoval had failed to appear, his bond was subsequently breached, and Bonding Defendants sought to arrest him and collect on the bond from Ms. Sandoval. (Doc. 114 at ~~ 65-72). At this point, Ms. Sandoval had already lost the benefit for which she had contracted-that is, the bond for Mr. Sandoval. In the context of this scenario, it would therefore be impossible for an indemnitor such as Ms. Sandoval to continue to accept benefits under the contract or to conduct herself so as to recognize the contract as binding. As such, the Court finds that whether each indemnitor waived the right to notice under the contract or ratified the contract is not an issue that predominates over the issues common to the class. iv. Whether Any Breach of the Contract Caused Damages to the Indemnitor
Bonding Defendants also claim that another individual issue presented by the Indemnitor Notice Class is whether any breach of the bond contract by Bonding Defendants caused each proposed class member to sustain damages. (Doc. 121). According to Bonding Defendants, if
7 Bonding Defendants also claim that Ms. Rubio faces a similar challenge to her breach of contract claim. (Doc. 121). However, as the Rubios did not receive notice of an interview, as opposed to notice of a deportation date, Ms. Rubio is not a proper class member for that reason and the Court need not determine whether her contract claim, and the contract claim of individuals like her, would potentially be barred by the affirmative defenses of waiver and ratification. (Doc. 114 at ~~ 73-78).
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an indemnitor, or a bonded immigrant, received actual notice of a DHS-requested appearance through some other means, then Bonding Defendants' alleged failure to provide notice could not be the cause of any harm to that class member. Id. Plaintiffs, on the other hand, argue that the harm for which the Indemnitor Notice Class seeks to recover arises from paying for a service that would never be provided, not from any consequential effects of Bonding Defendants' failure to provide the service. (Doc. 124).
As noted supra, a plaintiff asserting a breach of contract claim under Texas law must prove that he or she suffered damages as a result of the breach. Also as discussed supra, the breach at issue is Bonding Defendants' failure to notify indemnitors and/or bonded immigrants of requested appearances for deportation. Here, Plaintiffs do not seek consequential damages resulting directly from lack of notice, but rather their out-of-pocket damages-that is, the up-front, non-reimbursable fees they paid to Bonding Defendants to enter into the bond contract. (Doc. 124). The Court recognizes that the out-of-pocket measure of damages allows an injured party "to recover the actual injury suffered measured by the difference between the value of that which he has parted with, and the value of that which he has received." Formosa Plastics Corp. USA v. Presidio Engineers & Contractors, Inc., 960 S.W.2d 41,49 (Tex. 1998)(quoting Leyendecker & Assocs., Inc. v. Wechter, 683 S.W.2d 369, 373 (Tex. 1984))(emphasis and internal quotations omitted). Here, where the proposed class members paid up-front, non-reimbursable fees to enter into contracts under which they and the bonded immigrants were allegedly entitled to notice, and Bonding Defendants failed to provide such notice, Plaintiffs may seek to recover the difference between what they paid and what they received. That an indemnitor or bonded immigrant may have been notified of a deportation date in some other manner is therefore irrelevant, and the Indemnitor Notice Class thus presents no individual issues of causation.
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v. Assessment of Damages Finally, Bonding Defendants challenge the certification of the Indemnitor Notice Class under
Rule 23(b)(3) on the grounds that each plaintiffs damages would be subject to an individual damage assessment. (Doc. 121). However, the Court notes that the fact that certification would require calculating damages on an individual basis, and even that "wide disparity among class members as to the amount of damages suffered" exists, will not necessarily preclude the certification of a class under Rule 23(b)(3). Bell Atl. Corp. v. AT&T Corp., 339 F.3d 294, 306 (5th Cir. 2003); Steering, 461 F.3d at 602; see also Bogosian v. Gulf Oil Corp., 561 F.2d 434, 456 (1977)(noting that "the necessity for calculation of damages on an individual basis should not preclude class determination where the common issues which determine liability predominate"). "However, where individual damages cannot be determined by reference to a mathematical or formulaic calculation, the damages issue may predominate over any common issues shared by the class." Steering, 461 F.3d at 602 (citing Bell, 339 F.3d at 308). Here, the damages sought by the proposed class members concern only the up-front, non-reimbursable fees they paid to enter into the bond contract. The Court finds that Plaintiffs have produced evidence to show that this amount can be ascertained by consulting each bond file-that is, by consulting the same evidence needed to identify each class member. (Doc. 93, Ex. CC 5). This method of assessing individual damages is therefore uniform with respect to the class as a whole and does not present the danger of predominating over issues common to the class.
As the Court recognized in its discussion of commonality, Plaintiffs have identified a number of issues of law and fact whose resolution would affect the Indemnitor Notice Class as a whole, most notably because the dispute between members of the class and Bonding Defendants concerns the interpretation of a form contract. For the reasons discussed supra, the Court finds
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that these issues predominate over any individual issues, so long as the class is amended so as to

concern only notice of DRS-requested appearances for deportation. See Smilow v. Southwestern

Bell Mobile Sys., 323 F.3d 32, 42 (lS! Cir. 2003)(common issues of law and fact predominated

where case turned on interpretation of form contract executed by all class members and

defendant); Durrett v. John Deere Co., 150 F.R.D. 555, 560 (N.D.Tex. 1993)(questions of law

and fact predominated where all arose out of "similar ifnot identical" contracts).

h. Superiority

The Court also finds that Plaintiffs have shown that a class action is the superior method for

adjudicating the breach of contract claim asserted by the Indemnitor Notice Class. Although the

proposed members of the class could conceivably pursue their breach of contract claims

individually, the Court finds that the amounts at stake are so small that separate suits would be

impracticable. See Amchem Prods., Inc., 521 U.S. at 616 (interest in conducting separate

lawsuits may be theoretical, not practical, where amount at stake is small).8 That the issues of

liability presented by the class are identical further demonstrates that the prosecution of

individual actions would be inefficient. See Durrett, 150 F.R.D. at 559 (interest of potential

class members in controlling their own litigation in separate suits "should be subordinated to the

advantages of having a defendant's liability determined in one proceeding when virtually all

legal and factual issues are common to the class members"). In addition, no showing has been

made that litigation concerning the controversy presented here has already been commenced, nor

8 As the Supreme Court recognized,

"The policy at the very core of the class action mechanism is to overcome the problem that recoveries do not provide the incentive for any individual to bring a solo action prosecuting her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone's (usually an attorney's) labor."

small hIS or

Amchem Prods., Inc., 521 U.S. at 617 (quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (1997)).

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can the Court discern any reason why proceeding with the case in this forum would be
undesirable. Finally, Plaintiffs have sufficiently demonstrated that prosecuting these Plaintiffs'
breach of contract claims as a class action would be manageable. As discussed supra, issues of
Bonding Defendants' liability may be determined on a class-wide basis, and the identification of
class members and the calculation of damages may be accomplished by consulting Aaron
Bonding's bond files. For all of these reasons, the Court concludes that the certification of the
Indemnitor Notice Class under Rule 23(b)(3) is appropriate.
3. Conclusion
Therefore, the Court ORDERS that Plaintiffs' Motion for Class Certification is GRANTED
with respect to the Indemnitor Notice Class, represented by Plaintiff Irma Sandoval and defined
as follows: (a) those who served or are serving as Indemnitors on a surety bond posted by a Bonding Defendant to secure the release of a Bonded Immigrant detained by the Federal Defendants, and (b) who have fully paid their up-front, non-reimbursable fees to the Bonding Defendants pursuant to the terms of the bonding contracts, and (c) where the Bonding Defendant's records indicate that on or after April 16, 1998, it received a "Notice to Obligor to Deliver Alien" indicating that the INSIDHS had scheduled an appearance for deportation for the Bonded Immigrant, and where the Bonding Defendant did not provide notice of the requested appearance for deportation to either the Indemnitor or the Bonded Immigrant.
C. Indemnitor Collateral Class
Plaintiff Alberta Rubio seeks to represent the "Indemnitor Collateral Class," described as
follows: (a) those who have served as Indemnitors on a surety bond posted by a Bonding Defendant to secure the release of a Bonded Immigrant detained by the Federal Defendants, and (b) where the Bonded Immigrant's bond has been cancelled by the Federal Defendants, and (c) where the Bonding Defendants have failed to return any collateral, net of fees validly charged under the bonding contracts, deposited with the Bonding Defendants to either the Indemnitor or the Bonded Immigrant on the bonding contract.
(Doc. 112).
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Ms. Rubio requests, individually and on behalf of the class she seeks to represent, damages equal to the value of all collateral deposited with Bonding Defendants, less any fees or expenses that may be validly charged against the collateral under the terms of the bonding contract. (Doc. 114 at ~ 128). 1. FED. R. elv. P. 23(a)
Bonding Defendants contend that because Plaintiffs fail to establish that Plaintiff Alberta Rubio ever paid collateral on the surety bond she secured for her son, Miguel Rubio, Plaintiffs cannot establish the commonality, typicality, or adequacy requirements of Rule 23(a). (Docs. 121, 125). The Court notes, as do Bonding Defendants, that Plaintiffs' Motion for Class Certification indicates that the claims of the Indemnitor Collateral Class are premised upon the existence of document entitled "Promissory Note" (or "Pagare" or "Nota de Pago" in Spanish) contained in each surety bond contract which allegedly obligates the indemnitor to deposit collateral worth 50% to 60% of the total bond amount with Bonding Defendants. (Doc. 112). Plaintiffs contend that this Promissory Note also requires Bonding Defendants to return the collateral posted to the indemnitor in the event that Federal Defendants cancel the bond. Id. According to Plaintiffs, Bonding Defendants "never" contact the indemnitors to advise them that they are entitled to return of the collateral, but instead wrongfully retain the collateral posted. Id.
Notably, Plaintiffs admit in their Motion for Class Certification that Mr. Rubio's bond file does not contain the Promissory Note. (Doc. 112).9 However, they attempt to show that Ms.
9 Plaintiffs take the position that although the Promissory Note is not contained in the file, the deposition testimony of Aaron Bonding employees Laura Cuayahuitl and Abigail Lopez "made it clear" that each indemnitor signs this note, and thus It must have been signed by Ms. Rubio. (Doc. 112 (citing Doc. 93, Exs. CC 1 at pp. 34-36, CC 2 at p. 71». However, Bonding Defendants point out that Ms. Rubio entered into the bond contract in 1996-that is, several years before Ms. Lopez and Ms. Cuayahuitl began their employment with Aaron Bonding in 1999 and 2001, respectively. (Doc. 121 (citing Doc. 121, Exs. 2 at BF-273, BF-274, BF-275, BF-277, 3 at pp. 8-10,4 at pp. 9-10». Plaintiffs have failed to point to any specific evidence that Ms. Rubio herself signed a Promissory Note.
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Rubio is a proper class representative by pointing to other evidence contained in and outside the file. (Doc. 124). According to Plaintiffs, Mr. Rubio's bond file indicates that Ms. Rubio paid a total of $4,000 for a $3,000 bond, and hand-written notes in the file indicate that Bonding Defendants owe her $2,500 in collateral-that is, Ms. Rubio's $4,000 payment less her $1,500 upfront, non-reimbursable fee. (Docs. 112, 124 (citing Doc. 93, Ex. CC 6 at BF-279, BF-289, BF304)). In further support of their claim that Ms. Rubio paid collateral, Plaintiffs submit the declaration of Tina Stone, a paralegal for Plaintiffs' counsel. (Doc. 124 (citing Doc. 124, Ex. CC 40)). Ms. Stone states that Plaintiffs' counsel provided her with an electronic copy of an Excel spreadsheet labeled "Collateral Notes" that "appears to set forth notes regarding payments of collateral and attempts by Aaron Bonding to collect collateral." (Doc. 124, Ex. CC 40). Attached to Ms. Stone's affidavit is what she calls a "screen capture" from her computer screen of a section of the spreadsheet with an entry for the alien number of Miguel Rubio. Id. (citing Doc. 93, Ex. CC-6). This entry, apparently dated January 20, 2004, states as follows: "PAID IN FULL BY MARCO...YEIMI." (Doc. 124, Ex. CC 40). Ms. Stone points out that the depositions of Aaron Bonding employees Laura Cuayahuitl and Eliud Salinas indicate that Marco Soto was the manager or supervisor of Aaron Bonding's collections department. Id. (citing Doc. 93, Exs. CC 1 at p. 13, CC 29 at p. 22). Plaintiffs further support their contention that Ms. Rubio paid collateral, and that she is entitled to its return, by citing to what they refer to as "judicial admissions" contained in an adversary proceeding filed in the probate action for the Estate of Don Vannerson, Deceased. (Doc. 124 (citing Doc. 93, Ex. CC 11; Doc. 124, Ex. CC 41)). Aaron Bonding, through its court-appointed receiver, stated in a response filed in this action that "[t]he terms of the agreement with the indemnitor were that money received would 'be deposited into a collateral fund to be return upon [cancellation of the bond].'" (Doc. 93, Ex. CC 11,
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Receiver's Response, at p. 2). In addition, Ranger Insurance Company stated in a response filed in the action that "indemnitors should recover the collateral that Aaron should have held in a collateral account upon cancellation of the immigration bonds at issue." (Doc. 93, Ex. CC 11, Ranger's Response, at pp. 1-2). Plaintiffs also point out that the co-executors of the Vannerson Estate stated in their "Response to Ranger's Motion for Partial Summary Judgment" as follows:
As to [collateral held on unbreached bonds], Aaron owns the money (like a security deposit at an apartment) subject to contractual obligations to return it to the paying party if the bond requirements are met.... Aaron owns the money, but has contracts requiring the money to be returned if certain conditions are met. Failure to return the money, like failure to return any security deposit, does nothing more than create a cause of action for breach of contract. (Doc. 124, CC 41 at p. 3 n.7). According to Plaintiffs, these "admissions" reveal that "all indemnitors on immigration bonds are entitled to a return of collateral upon the cancellation of the bond"; as such, Ms. Rubio and all indemnitors on surety bonds are so entitled. (Doc. 124). As Bonding Defendants note, the primary difficulty with Plaintiffs' evidence is that it is derived from documents other than the Promissory Note that Plaintiffs claim is contained in each bond file, and which allegedly obligates Bonding Defendants to return collateral posted by the indemnitor upon the cancellation of the immigrant's bond. (Docs. 121, 125). In other words, if the Promissory Note is the document from which Plaintiffs hope to identify each class member and his or her damages, and upon which the breach of contract claim of the Indemnitor Collateral Class is based, that Ms. Rubio's payment of collateral and entitlement to its return cannot be established by reference to this document makes her an improper class representative. Moreover, Bonding Defendants submit evidence to show that Ms. Rubio never paid $2,500 in collateral. (Docs. 121, 125). First, Bonding Defendants point to a handwritten note on the cover of Mr. Rubio's bond file that states: "Collateral Payments-O." (Doc. 121 (citing Doc. 121, Ex. 2 at BF266)). In addition, Bonding Defendants cite to an "information sheet" in the file that has blanks
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to insert the bond amount, bond fee, and collateral. (Doc. 121 (citing Doc. 121, Ex. 2 at BF268)). Although $3,000 is listed in the blank next to "bond amount" and $2,500 in the blank for "bond fee," the blank for "collateral" contains no amount. (Doc. 121, Ex. 2 at BF-268). Bonding Defendants also reference a "Promissory Note" contained in the file which, unlike the Promissory Note upon which Plaintiffs' Indemnitor Notice Class claim is based, does not require any collateral deposits but rather provides that the note is due and payable in full upon the breach ofMr. Rubio's bond. (Doc. 121 (citing Doc. 121, Ex. 2 at BF-273)). Bonding Defendants claim that because Mr. Rubio's bond was cancelled rather than breached, this note, in the amount of $3,000, never became due. (Doc. 121). Furthermore, Bonding Defendants point to a document in Mr. Rubio's file entitled "Receipt for Collateral Deposited" which states as follows:
Received of Alberta Rubio ...[a]s security for the execution of this Immigration Bond written in the sum of$3,000.00 on behalf of the Principal the following described collateral: -0-. Id. (citing Doc. 121, Ex. 2 at BF-287). With respect to the evidence offered by Plaintiffs in support of their contention that Ms. Rubio paid collateral, Bonding Defendants point out that the word "collateral" does not appear on the receipts for Ms. Rubio's payments of$2,500 and $1,500. (Doc. 125 (citing Doc. 121, Ex. 2 at BF-304)). In addition, Bonding Defendants note that the alien, or "A" number, on each receipt is different, perhaps indicating the possibility of two bonds for Mr. Rubio. (Doc. 125 (citing Doc. 121, Ex. 2 at BF-304; Doc. 125, Ex. 15 at p. 96)). According to Bonding Defendants, the handwritten note in Mr. Rubio's file which indicates a "need to refund" $2,500 to Ms. Rubio does not state that this amount is collateral, and the fact that it apparently was written in September 1996, more than nine years prior to the cancellation of Mr. Rubio's bond in April 2005, would indicate that it is not. (Doc. 125 (citing Doc. 121, Ex. 2 at BF-279)). Bonding Defendants suggest that one possible explanation for the need to refund this amount to
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Ms. Rubio is that Ms. Rubio may have been inadvertently charged twice on her initial bond. (Doc. 125). According to Bonding Defendants, the bond amount was originally set at $5,000 in September 1996 but was later reduced to $3,000 by the time the bond posted with INS in October 1996. Id. (citing Doc. 121, Ex. 2 at BF-270, BF-271, BF-295, BF-304). Whereas one document in the bond file indicates that the "bond fee" is $2,500, another states that the "total charges" are $1,500. (Doc. 125 (citing Doc. 121, Ex. 2 at BF-268, BF-303)). Therefore, Bonding Defendants submit that Ms. Rubio may have paid an initial bond fee of $2,500 in September 1996 on what the parties thought would be a $5,000 bond and then, when the bond was reduced to $3,000, another bond fee of half that amount in October 1996. (Doc. 125 (citing Doc. 121, Ex. 2 at BF-304)). Bonding Defendants also contend that Ms. Stone's declaration is not sufficient proof that Ms. Rubio paid $2,500 in collateral, as Ms. Stone was never an employee of Aaron Bonding and has no knowledge of Aaron Bonding's procedures for entering information in the electronic bond files. (Doc. 125). Further, Bonding Defendants claim that no explanation has been provided of who "Yeimi" is, or why the entry cited by Plaintiffs is dated January 20, 2004. Id. As further evidence, Bonding Defendants submit another "screen capture" allegedly taken from the same electronic bond files referenced by Ms. Stone and which lists Alberta Rubio under the "Surety Name" column and an amount of"$O.OO" under the "Collateral" column in the row of data pertaining to Mr. Rubio. (Doc. 125, Ex. 16).
Upon reviewing the evidence submitted, the Court finds that Plaintiffs have failed to establish that Ms. Rubio ever made a collateral deposit, much less a deposit reflected by the Promissory Note referenced in Plaintiffs' Motion for Class Certification, or that she is entitled to the return of any collateral on the grounds alleged by the Indemnitor Notice Class. Therefore, Plaintiffs cannot establish that Ms. Rubio's breach of contract claim, or the facts upon which it is
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based, are common to the proposed class, nor can they show that her claim is typical of the claims of the proposed class members. Furthermore, Plaintiffs cannot establish that Ms. Rubio is an adequate class representative, both because of the potential conflict between her interests and those of the proposed class, as well the concerns discussed in the Court's analysis of whether Ms. Rubio is an adequate representative of the Indemnitor Notice Class. 10 As such, Plaintiffs have failed to fulfill the requirements of Rule 23(a).11 Therefore, the Court ORDERS that Plaintiffs' Motion for Class Certification is DENIED with respect the Indemnitor Collateral Class. D. Bonded Immigrant Class
Finally, Plaintiff Petra Carranza de Salinas seeks to represent the "Bonded Immigrant Class," described as follows:
(a) those who have been released from custody of the Federal Defendants pursuant to surety bonds posted by the Bonding Defendants, and (b) where the bond is still outstanding. (Doc. 112). Ms. Salinas requests, individually and on behalf of the class she seeks to represent, an injunction requiring Bonding Defendants, directly or through their agents, to make good faith efforts to provide actual, timely, and reasonable notice to bonded immigrants and indemnitors of any and all demands for performance made on those bonds by Federal Defendants. (Doc. 114 at ~ 131). Ms. Salinas, individually and on behalf of the class, also seeks corresponding declaratory relief. (Doc. 114 at ~ 133).
10 In its discussion, the Court noted the lack of Ms. Rubio's knowledge regarding the bond company against whom she sought recovery and that Ms. Rubio did not know she had signed a contract with the bond company, what the contract may have promised, or whether the bond company may have broken any contractual promise. The same concerns apply here. 11 The Court has no need, therefore, to consider whether certification of the Indemnitor Collateral Class satisfies Rule 23(b)(3).
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1. FED. R. CIV. P. 23(a) a. Numerosity
Plaintiffs attempt to show that the Bonded Immigrant Class is sufficiently numerous by pointing to a document filed in the probate action for the Estate of Don Vannerson, Deceased which indicates that Aaron Bonding had 1,450 bonds outstanding in July 2004. (Doc. 112 (citing Doc. 93, Ex CC 20)). As indicated in the Court's discussion of the Indemnitor Notice Class, Plaintiffs have also submitted evidence of the existence of nearly 8,000 bond files for surety bonds issued by Aaron Bonding for Insurer Defendants after May 7, 1998. (Doc. 93, Ex. CC 16). Bonding Defendants have not disputed the numerosity of the Bonded Immigrant Class, and the Court is satisfied that Plaintiffs have shown that the number of immigrants whose surety bonds are outstanding are too numerous to join. (Docs. 121, 125). As such, the Court finds that Plaintiffs have fulfilled the numerosity requirement. b. Commonality
Plaintiffs submit that the following questions of law or fact are common to the proposed Bonded Immigrant Class: (1) whether the bonded immigrants are third party beneficiaries of the bonding contracts; (2) whether, absent equitable relief, Bonding Defendants will likely continue to fail to provide the contractually required notice; and (3) whether the Court can order future injunctive relief for Bonding Defendants' future anticipated breach of contract. (Doc. 112).
Bonding Defendants do not offer any argument to dispute commonality. (Docs. 121, 125). In addition, the Court notes that determining the propriety of an injunction requiring Bonding Defendants to provide the requested notice of all demands on surety bonds clearly would require the resolution of at least one issue of law or fact common to all immigrants with bonds outstanding. As such, the Court finds that Plaintiffs have satisfied the commonality requirement.
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c. Typicality According to Plaintiffs, Ms. Salinas's claim for prospective relief is typical of that of other
bonded immigrants released on surety bonds who face the risk that Bonding Defendants will fail to forward notice of a DRS-requested appearance. (Doc. 112). Plaintiffs submit evidence that Ms. Salinas is currently released from DRS detention pursuant to a surety bond posted by Bonding Defendants. (Doc. 93, Ex. CC 7 at BF-334-338). Furthermore, as discussed supra, Plaintiffs have provided some evidence that Bonding Defendants do not uniformly notify indemnitors or bonded immigrants of DRS-requested appearances, and in fact Bonding Defendants admit that they do not provide notice of requested appearances for deportation to bonded immigrants. The Court therefore finds that Ms. Salinas's claim is typical of that of the proposed Bonded Immigrant Class. d. Adequacy
Plaintiffs submit the deposition testimony and sworn declarations of Ms. Salinas in support of their contention that she is an adequate representative of the Bonded Immigrant Class. (Doc. 112). According to Plaintiffs, this evidence shows that Ms. Salinas has personal knowledge of the facts of her case and that she has an understanding of the claims of the class she seeks to represent, the relief sought by the class, and the significance of acting as a class representative. Id. The Court notes that Plaintiffs have submitted evidence showing that Ms. Salinas knows that Juan De La Rosa contracted with Aaron Bonding to post a $3,000 surety bond on her behalf. (Doc. 99, Exs. CC 26 at pp. 15, 18-19, CC 27). Ms. Salinas has further demonstrated that she knows that she would forfeit the amount of the bond if she fails to appear for deportation, and that she believes that Aaron Bonding has the responsibility to provide her with notice of her need to appear. (Doc. 99, Exs. CC 26 at pp. 62-63, 79-80, CC 27). In addition, Ms. Salinas has
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indicated that she has kept in contact with her attorneys throughout the case and understands her responsibility to remain in contact. (Doc. 99, Ex. CC 26 at p. 81; Doc. 112, Exs. CC 36, CC 36A). Finally, she attested in her declaration that she understands that she is a representative of a class of people like her who have similar claims and that she has a responsibility to protect their interests. (Doc. 112, Exs. CC 36, CC 36A).
Bonding Defendants contest Ms. Salinas's adequacy as a class representative on the sole ground' that she is not an indemnitor, and thus she cannot request relief in the form of an injunction requiring notice to both bonded immigrants and indemnitors. (Doc. 121). However, whether the bonded immigrant Plaintiffs have standing to complain of lack of notice to the indemnitor is an issue common to the class that may be resolved on a class-wide basis; it is not a ground for defeating the adequacy requirement. Given the evidence submitted by Plaintiffs, the Court is satisfied that Ms. Salinas is an adequate class representative; as such, Plaintiffs have fulfilled all of the requirements of Rule 23(a). 2. FED. R. elv. P. 23(b)(2)
According to Plaintiffs, Bonding Defendants' failure to provide notice of DHS-scheduled appearances to both bonded immigrants and indemnitors demonstrates that these Defendants have acted or refused to act on grounds generally applicable to the Bonded Immigrant Class, thereby making appropriate the injunctive and corresponding declaratory relief sought. (Doc. 112); see FED. R. CIV. P. 23(b)(2). However, Bonding Defendants contend that because the indemnitor Plaintiffs, through the certification of the Indemnitor Notice Class, seek money damages for Bonding Defendants' alleged failure to provide notice, this monetary relief predominates over any injunctive or declaratory relief requested by these Plaintiffs indirectly through the certification of the Bonded Immigrant Class. (Doc. 121). As Bonding Defendants
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note, the Fifth Circuit has explained that Rule 23(b)(2) certification "'does not extend to cases in which the appropriate final relief relates exclusively or predominantly to money damages.'" Allison, 151 F.3d at 411 (quoting FED. R. CIV. P. 23 advisory committee's note)(emphasis omitted). However, monetary relief does not predominate where it "'flow[s] directly from liability to the class as a whole on the claims forming the basis of the injunctive or declaratory relief.'" In re Monumental Life Ins. Co., 365 F.3d at 416 (5th Cir. 2004)(quoting Allison, 151 F.3d at 415)(emphasis omitted). Here, the Indemnitor Notice Class seeks the return of the upfront, non-reimbursable fees paid to Bonding Defendants to enter into the surety contracts on the grounds that Bonding Defendants did not provide notice of DHS-requested appearances to the indemnitors and/or bonded immigrants as required by the contracts. Whether or not such notice is contractually mandated is also the determinative issue with respect to the Bonded Immigrant Class, which requests an injunction requiring that such notice be given. Clearly, the monetary relief requested by the Indemnitor Notice Class flows directly from an issue of liability affecting the Bonded Immigrant Class as a whole. As such, monetary damages do not predominate.
Bonding Defendants further contend that because their notice practices under the surety contracts have been "anything but uniform," they have not acted or refused to act on grounds generally applicable to the class. (Doc. 121). Here, where Plaintiffs' class claim is based on their contention that uniform notice is required, Bonding Defendants' argument is hardly persuasive. In addition, Bonding Defendants plainly admit that they do not provide bonded immigrants with notice of appearances for deportation. Id. As the Bonded Immigrant Class asserts that notice of deportation dates, as well as notice of other appearances, is contractually required and seeks injunctive relief requiring such notice to be given in all cases, the Court finds that Plaintiffs have shown that Bonding Defendants are acting or refusing to act in a manner
38/40

Case 7:05-cv-00331 Document 139 Filed in TXSD on 04/25/07 Page 39 of 40
generally applicable to the class, thus making appropriate the relief sought. Finally, Bonding Defendants contend that certification under Rule 23(b)(2) is inappropriate
because the notice provision of the surety contract at issue cannot be enforced against Insurer Defendants Fairmont and Stonington. (Doc. 121). However, this issue is one whose resolution may be resolved on a class-wide basis. It is not, as Bonding Defendants contend, a basis for defeating class certification.
For the foregoing reasons, the Court finds that the Bonded Immigrant Class is appropriate for certificate under Rule 23(b)(2). Therefore, the Court ORDERS that Plaintiffs' Motion for Class Certification is GRANTED with respect to the Bonded Immigrant Class. III. Conclusion
In sum, the Court ORDERS that Plaintiffs' Motion for Class Certification (Doc. 112) is GRANTED with respect to the following classes:
(1) The Indemnitor Notice Class, represented by Plaintiff Irma Sandoval and defined as follows:
(a) those who served or are serving as Indemnitors on a surety bond posted by a Bonding Defendant to secure the release of a Bonded Immigrant detained by the Federal Defendants, and (b) who have fully paid their up-front, non-reimbursable fees to the Bonding Defendants pursuant to the terms of the bonding contracts, and (c) where the Bonding Defendant's records indicate that on or after April 16, 1998, it received a "Notice to Obligor to Deliver Alien" indicating that the INS/DHS had scheduled an appearance for deportation for the Bonded Immigrant, and where the Bonding Defendant did not provide notice of the requested appearance for deportation to either the Indemnitor or the Bonded Immigrant. (2) The Bonded Immigrant Class, represented by Plaintiff Petra Carranza de Salinas and defined as follows: (a) those who have been released from custody of the Federal Defendants pursuant to surety bonds posted by the Bonding Defendants, and (b) where the bond is still outstanding.
39/40

Case 7:05-cv-00331 Document 139 Filed in TXSD on 04/25/07 Page 40 of 40 Further, the Court ORDERS that Plaintiffs' Motion for Class Certification (Doc. 112) is DENIED with respect to the Indemnitor Collateral Class. Accordingly, the Court hereby appoints William T. Reid, IV, J. Benjamin King, Tucker Ronzetti, and Elisabeth S. Brodyaga as class counsel. FED. R. CIV. P. 23(g).
40/40

 
 Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 1 of 41

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS
MCALLEN DIVISION

ARACELY ZAMORA-GARCIA,

§

et al.,

§

in their own name and right, and on

§

behalf of all others similarly situated, §

§

Petitioners/Plaintiffs

§

§

v.

§

§

MARC MOORE, DISTRICT

§

DIRECTOR FOR INTERIOR

§

ENFORCEMENT, DEPARTMENT OF §

HOMELAND SECURITY, et aI.,

§

§

Respondents/Defendants.

§

C.A. No. M-05-331

DEFENDANT FAIRMONT'S MOTION FOR SUMMARY JUDGMENT

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 2 of 41

TABLE OF CONTENTS

I.

Introduction ................................................................................................1

A. Fairmont is entitled to a dismissal of all class action claims ............. 1

B. Fairmont is entitled to a dismissal of all individual claims ................3

II. Summary Judgment Standard of Review ...................................................4

III. Summary Judgment Evidence ....................................................................5

IV. Because Class Representative, Irma Sandoval, never had any relationship with Fairmont - contractual or otherwise-this Court lacks jurisdictional power to hear and decide Ms. Sandoval's individual and class claims against Fairmont... ...........................................5

A. Plaintiffs' allegations and factual background ..................................5

B. There is no privity of contract between Ms. Sandoval and Fairmont. ...................................................................................8

C. This Court lacks jurisdictional power to hear and decide Irma Sandoval's breach of contract claims against Fairmont ................. 11

D. Rule 23 of the Federal Rules of Civil Procedure does not affect class representative Irma Sandoval's lack of standing .................. 12

V. Class Representative, Petra Carranza de Salinas, never contracted with Fairmont, and therefore, this Court lacks jurisdictional power to hear and decide Ms. Salinas's individual and class claims against Fairmont.. ........ 14

A. Plaintiffs' allegations and factual background ................................ 14

B. There is no privity of contract between Ms. Salinas and Fairmont. ........................................................................................15

VI. Miguel Rubio and Alberta Rubio also had no dealings with Fairmont, and have no standing to maintain a cause of action against Fairmont ..... 18

A. Plaintiffs' allegations and factual background ................................ 18

B. Because there is no contractual relationship between Fairmont and Alberta Rubio, Fairmont does not owe a duty to provide Alberta Rubio and Miguel Rubio with notice of scheduled

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 3 of 41
appearances before the INS/DHS .................................................19
C. Fairmont never had an obligation to return collateral to Ms. Rubio .............................................................................................22
D. There is no evidence that Fairmont willfully detained Miguel Rubio or had any involvement with his detention and surrender to the federal immigration authorities .......................................................23
VII. Aracely Zamora and Juana Zamora claims against Fairmont for intentional infliction of emotional distress are barred by the two-year statute of limitations ..................................................................................25
A. Plaintiffs' allegations and factual background ................................25
B. The Zamoras' tort claim against Fairmont is barred by the two-year statute of limitations ........................................................27
VIII. Conclusion ................................................................................................31

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 4 of 41

TABLE OF AUTHORITIES
Cases Aetna Life Ins. Co. v. Haworlh,
300 U.S. 227,239(1937) ............................................................................... 11

Bailey v. U.S., 289 F. Supp.2d 1197, 1207 (D. Haw. 2003) ................................................... 30

Bhalli v. Methodist Hosp., 896 S.w.2d 207, 211 (Tex. App.-Houston [1st Dist.j1995, writ denied) ...... 27

Cannon v. ICO Tubular Serv., Inc., 905 S.W.2d 380, 392-393 (Tex. App.-Houston [1st Dist.j1995, no writ) 10, 19

Celotex Corp. v. Catrett., 477 U.S. 317, 322 (1986) ................................................................................. 4

City of Beaumont v. Excavators & Constructors, Inc., 870 S.W.2d 123, 129 (Tex. App.-Beaumont 1993, writ denied) ............. 21,22

Cothrum Drilling Co. v. Parlee, 790 S.w.2d 796, 800 (Tex. App.-Eastland 1990, writ denied) ...................... 31

East Texas AIIotor Freight Sys., Inc. v. Rodriguez, 431 U.S. 395,403(1977) ............................................................................... 13

Flast v. Cohen, 392 U.S. 83, 94-101(1968) ............................................................................. 11

J. Giels Band Employee Benefit Plan v. Smith Barney Shearson, Inc., 76 F.3d 1245, 1251 (1st Cir. 1996) ................................................................... 4

Jacobson v. Osborne, 133 F.3d 315, 319-20 (5th Cir. 1998).............................................................. 29

Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 149-154 (1951) ........................................................................ 11

Kauffman v. Dreyfus Fund, Inc.,

F nd \'n"rd ""- 19"'''\ 12 L.f,~)L.f .~ 7.2~I, ~I 34

vII.

{V) ................................................................. ..

Koch Oil Co. v. Wilber, 895 S.w.2d 854, 863 (Tex. App.-Beaumont 1995, writ denied) ................... 31

La Mar v. H & B Novelty Loan Co., 489 F.2d461, 466 (9th Cir.1973) ............................................................. 12, 13

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 5 of 41
Lane Bank Equipment Co. v. Smith Southern Equipment, Inc., 10 S.W.3d 308, 312 (Tex. 2000) ..................................................................... 10
Leeds v. Cooley,
702 S.W.2d 213, 215 (Tex. App.-Houston Wt Dist.] 1985, writ ref'd n.r.e.) .. 31
Leonard v. Merrill Lynch, Pierce, Fenner & Smith, 64 F.R.D. 432, 435 (S.D.N.Y. 1974) ......................................................... 13, 14
Lewis v. Bank of Am. NA, 343 F.3d 540, 544-45 (5th Cir. 2003)................................................................. 8
MD. Anderson Cancer Center v. Novak, 52 S.w.3d 704, 711 (Tex. 2002) ..................................................................... 13
McGregor v. Louisiana State Univ., 3 F.3d 850, 864-65 (5th Cir. 1993).................................................................. 30
Mcintosh v. Wiley, 2006 WL 3691109, at *2 (S.D. Tex. Dec. 11,2006)........................................ 11
McLaughlin, Inc. v. Northstar Drilling Tech., Inc., 138 S.w.3d 24, 27 (Tex. App.-San Antonio 2004, no pet.) ............................ 8
Oros v. Hull &Assocs.,
217 F.R.D. 401, 404-05 (N.D.Ohio 2003) ...................................................... 30
Osborn v. Bank of United States, 9 Wheat. 738, 819, 6 L.Ed. 204 (1824) ........................................................... 11
O'Shea v. Littleton, 414 U.S. 488, 494 (1974) ......................................................................... 13,17
Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631636 (Tex. App.-Houston [1 st Dist.] 2002, pet. denied) ............ 8
Rivera v. Wyeth-Ayerst Laboratories, 283 F.3d 315, 318 (Tex. 2002) ....................................................................... 13
Soto v. Brooklyn Carr. Facility. 80 F.3d 34, 36 (2nd Cir. 1996)........................................................................ 29
Texas Interstate Contracting Corp. v. City of Dallas, 135 S.W.3d 605, 607 (Tex. 2004) ............................................................. 10.17
Wal-Mart Stores v. Rodriguez,
11

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 6 of 41
92 S.w.3d 502, 506 (Tex. 2002) ..................................................................... 24
Weiner v. Bank of King of Prussia, 358 F. Supp. 684, 690 (E.D. Penn. 1973)................................................. 11, 12
Zamora-Garcia et al. v. Moore, et al., No. M-05-331, Dkt. 139 (S.D. Tex. Apr. 25, 2007) .................................... 1, 2, 3
Zamora-Garcia et al. v. Moore, et al., No. M-05-331, Dk!. 39 (S.D. Tex. Mar. 9, 2006) ............................................... 2
Zamora-Garcia et al. v. Moore, et a/., No. M-05-331, Dk!. 73 (S.D. Tex. May 22, 2006) ....................................... 2, 17
Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Dk!. 139 (S.D. Tex. Apr. 25, 2007) ................................... passim
Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Dk!. No. 114 (S.D. Tex. Oct. 27, 2006) ............................ passim
Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Dkt. No. 114, (S.D. Tex. Oct. 27, 2006) ........................... passim
Zamora-Garcia, et a/. v. Tromski, et aI., No. M-02-144, Dk!. 1 (S.D. Tex. Apr. 16, 2002) .............................................. 28
Zamora-Garcia, et al. v. Tromski, et al., No. M-02-144, Dkt. 148 (S.D. Tex. Sept. 30, 2005) ........................................ 30
Zamora-Garcia, et al. v. Tromski, et aI., No. M-02-144, Dkt. 2 (S.D. Tex. May 7,2002)............................................... 28
Zamora-Garcia, et al. v. Tromski, et a/., No. M-02-144, Dkt. 87 (S.D. Tex. Mar. 30, 2004) ................................. 2, 28
Statutes
TEX. CIV. PRAC & REM. CODE § 16.003(a)....................................................... 4,27 TEX. CIV. PRAC & REM. CODE § 16.068 (Vernon 1986) ........................................30
Rules FED. R. CIV. P. 4(m) ..................................................................................... 29,30 FED. R. CIV. P. 15(c)........................................................................................... 29 FED. R. CIV. P. 15(c)(1) ...................................................................................... 30 FED. R. CIV. P. 15(c)(3) .......................................................................... 28,29,30 FED. R. CIV. P. 23 ........................................................................................... 1, 12 FED. R. CIV. P. 23(b)(3) ........................................................................................ 2 FED. R. CIV. P. 56(c) ............................................................................................. 4
111

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 7 of 41 Constitutional Provisions Article III. Section 2. Clause 1 of the U.S. Constitution .................3. 4. 7.11.17 31
iv

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 8 of 41

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS
MCALLEN DIVISION

ARACELY ZAMORA-GARCIA,

§

et aI.,

§

in their own name and right, and on

§

behalf of ali others similarly situated, §

§

Petitioners/Plaintiffs

§

§

v.

§

§

MARC MOORE, DISTRICT

§

DIRECTOR FOR INTERIOR

§

ENFORCEMENT, DEPARTMENT OF §

HOMELAND SECURITY, et aI.,

§

§

Respondents/Defendants.

§

C.A. No. M-05-331

DEFENDANT FAIRMONT'S MOTION FOR SUMMARY JUDGMENT
Defendant, Fairmont Specialty Insurance Company, flk/a Ranger Insurance Company ("Fairmont"), files this Motion for Summary Judgment, and in support shows the following: I. Introduction A. Fairmont is entitled to a dismissal of all class action claims.
Under Federal Rule of Civil Procedure 23, the Court certified two plaintiff classes in this case: (1) the Indemnitor Notice Class; and (2) the Bonded Immigrant Class. 1 The two classes assert contract claims against Fairmont
1 See generally Order Granting In Part and Denying In Part Plaintiffs' Motion to Certify Surety Bond Classes ("Certification Order"), Zamora-Garcia et a/. v. Moore, et a/., No. M05-331, Ok!. 139 (S.D. Tex. Apr. 25, 2007).

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 9 of 41
Specialty Insurance Company (flk/a Ranger Insurance Company), Stonington
Insurance Company (flk/a Noble Insurance Company), and Aaron Federal
Bonding Agency (sometimes known as U.S. Immigration Bonds and Services),
an assumed name for Don Vannerson, deceased ("Aaron Bonding,,).2
The Indemnitor Notice Class is represented by Plaintiff Irma Sandoval.
Ms. Sandoval represents a class of plaintiffs who served or are serving as
Indemnitors on immigration-surety bonds posted by Ranger Insurance Company
("Ranger") or Nobel Insurance Company ("Nobel") to secure the release of
bonded immigrants detained by the Immigration and Naturalization Services
("INS"), the predecessor agency to the Department of Homeland Security
("DHS,,).3 Ms. Sandoval and the Indemnitor Notice Class seek to recover
damages under Federal Rule of Civil Procedure 23(b)(3) for a single breach of
contract claim resulting from Defendants alleged failure to notify the Indemnitors
and Bonded Immigrants of scheduled appearances before the DHS4
2 Aaron Federal Bonding Agency and U.S. Immigration Bonds and Services were assumed names for Don Vannerson. Mr. Vannerson died on March 1, 2004, almost two years after the predecessor action was filed. See Suggestion of Death, Zamora-Garcia, et al. v. Tromski, et aI., No. M-02-144, Ok!. 87 (S.D. Tex. Mar. 30, 2004). No efforts were made to substitute a personal representative of Mr. Vannerson's estate until Plaintiffs filed their Motion to Add Co-Executors Rodney Vannerson and Eleni Papadakis as Party Defendants on March 9, 2006. See Zamora-Garcia et al. v. Moore, et al., No. M-05-331, Dkt. 39 (S.D. Tex. Mar. 9, 2006). Shortly thereafter, and prior to appearing in this lawsuit, Rodney Vannerson and Eleni Papadakis resigned as the Co-Executors of the Vannerson Estate. The first appearance in this lawsuit by an estate representative was filed by Michael Padilla, as Independent Administrator, on May 22, 2006. See Defendant's, Michael Padilla as Independent Administrator of the Estate of Don Vannerson, Original Answer, Zamora-Garcia et al. v. Moore, et aI., No. M-05-331, Ok!. 73 (S.D. Tex. May 22, 2006). 3 See Certification Order at 39, Zamora-Garcia et al. v. Moore, et al., No. M-05-331, Dkt. 139 (S.D. Tex. Apr. 25, 2007). 4 Seeid. at 16-18.
2

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 10 of 41
The Bonded Immigrant Class is represented by Plaintiff Petra Carranza de Salinas. Ms. Salinas represents a class of plaintiffs who are bonded immigrants that have been released from INS/DHS custody pursuant to immigration-surety bonds posted by Ranger or Nobel, and where the bond is still outstanding. Ms. Salinas and the Bonded Immigrant Class seek an injunction under Federal Rule of Civil Procedure 23(b)(2) requiring Defendants, directly or through their agents, to make good faith efforts to provide actual, timely, and reasonable notice to Indemnitors and Bonded Immigrants of the Bonded Immigrants' scheduled appearances before the DHS.5
Defendant Fairmont seeks a dismissal of all class claims against it because the class representatives, Ms. Sandoval and Ms. Salinas, never had any contracts, transactions, or other dealings with Fairmont, and suffered no injury from Fairmont. As a result, Ms. Sandoval and Ms. Salinas do not have standing to assert causes of action against Fairmont, and this Court lacks jurisdictional power to hear and decide the class claims under Article III, Section 2, Clause 1 of the U.S. Constitution, which restricts judicial power to "cases" and "controversies." B. Fairmont is entitled to a dismissal of all individual claims.
In addition to the class action claims, Plaintiffs Alberta Rubio, Miguel Rubio, Juana Zamora, and Aracely Zamora assert various individual claims against Fairmont and the other Defendants in this case. Specifically, Alberta Rubio asserts two separate breach of contract claims, Miguel Rubio asserts a
5 See id. at 34-39.
3

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 11 of 41
claim for false imprisonment, and Juana and Aracely Zamora assert a claim for intentional infliction of emotional distress.
Similar to the class action claims, Fairmont seeks a dismissal of all claims asserted by Alberta and Miguel Rubio because the Rubios never had any contracts, transactions, or dealings with Fairmont, and suffered no injury from Fairmont. Therefore, the Rubios do not have standing to assert causes of action against Fairmont, and this Court lacks jurisdictional power to hear and decide the Rubios' claims under Article III, Section 2, Clause 1 of the U.S. Constitution.
Fairmont seeks a dismissal of Juana and Aracely Zamora's claims for intentional infliction of emotional distress because they are barred under Texas law by the two-year statute of limitations. See TEX. CIV. PRAC & REM. CODE § 16.003(a) ("[Aj person must bring suit for ... personal injury ... not later than two years after the day the cause of action accrues."). II. Summary Judgment Standard of Review
Summary judgment is proper in a case where there is no genuine issue of material fact. FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett. 477 U.S. 317, 322 (1986). A defendant who seeks summary judgment on a plaintiff's cause of action must demonstrate the absence of a genuine issue of material fact by either (1) submitting summary judgment evidence that negates the existence of a material element of plaintiff's claim or (2) showing there is no evidence to support
an essential element of plaintiff's claim. J. Gie/s Band Employee Benefit Plan v.
Smith Barney Shearson, Inc., 76 F.3d 1245, 1251 (1st Cir. 1996); see Celotex Corp., 477 U.S. at 322-23. In this case, Irma Sandoval, Petra Carranza de
4

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 12 of 41

Salinas, Alberta Rubio, and Miguel Rubio cannot establish the existence of a

contractual relationship with Fairmont, or that they suffered any injury from

Fairmont. Aracely Zamora and Juana Zamora cannot establish that they filed

their tort claim against Fairmont within the two-year statute of limitations. For

these reasons, all claims in this lawsuit against Fairmont must be dismissed as a

matter of law.

III. Summary Judgment Evidence.

In support of its motion, Defendant Fairmont includes evidence in the attached appendix, which is incorporated by reference in this motion.6 The

motion for summary judgment is based on the following evidence:

Exhibit 1 Judgment of Conviction of Manuel Sandoval

Exhibit 2 Manuel Sandoval's bond file

Exhibit 3

Agreement executed by the United States of America on behalf of the Department of Homeland Security and Stonington Insurance Company dated June 30, 2005

Exhibit 4

Agent Underwriting Agreement between Ranger Insurance Company and Don Vannerson d/b/a Aaron Federal Bonding Agency dated June 29, 1999

Exhibit 5 Petra Carranza de Salinas's bond file

Exhibit 6 Miguel Rubio's bond file

IV. Because Class Representative, Irma Sandoval, never had any relationship with Fairmont-contractual or otherwise-this Court lacks jurisdictional power to hear and decide Ms. Sandoval's individual and class claims against Fairmont

A. Plaintiffs' allegations and factual background.

6 See also Affidavit of Susan Logsdon in Support of Fairmont's Motion Summary Judgment filed with this motion.
5

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 13 of 41
According to Plaintiffs' Complaint, Irma Sandoval is the daughter of Manuel Sandoval.7 Mr. Sandoval is a native and citizen of Mexico who entered the United States in July 1998, and has resided here continuously since that date. 8 In November 1996, Mr. Sandoval pleaded guilty to possession of cocaine, and was placed on probation B In November 1997, Mr. Sandoval was detained by the Immigration and Naturalization Services ("INS"), now known as the Department of Homeland Security ("DHS").'o
Plaintiffs contend that Irma Sandoval "contracted with Aaron Bonding, as agent for Noble and/or Ranger, for it to post a Surety Bond securing Mr. Sandoval's release," from INS/DHS detention n The contract at issue is entitled 'Terms and Conditions Under Immigration Bond,,,,2 and the named parties to that contract are Aaron Federal Bonding and Irma Sandoval. '3 Plaintiffs contend that the Terms and Condition contract was a uniform contract used in the transactions
between Aaron Bonding and members of the Indemnitor Notice Class. '4
7 See Plaintiffs' Sixth Amended Petition for Writ of Habeas Corpus and Class Action Complaint ("Plaintiffs' Sixth Amended Complaint") at 111167, Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Dk!. No. 114 (SD. Tex. Oct. 27, 2006). 8 See id. at 111165-67. 9 See id. at 1166; see also Ex. 1, Judgment of Conviction of Manuel Sandoval. 10 See id. at 1167. In their complaint, Plaintiffs' collectively refer to the INS and DHS as the" Federal Defendants." See also id. at 1115. 11 See id. at 1167. 12 Ex. 2, Manuel Sandoval bond file at BF-238. 13 See id. 14 See Plaintiffs' Sixth Amended Complaint at 115, Zamora-Garcia, et a/. v. Moore, et a/., No. M-05-331, D k!. No. 114, (S.D. Tex. Oct. 27, 2006) ("Despite entering uniform
6

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 14 of 41
Plaintiffs further contend that Aaron Bonding is the agent of "Nobel and/or
Ranger," and therefore, Nobel and/or Ranger are liable for Aaron Bonding's
conduct. '5
Irma Sandoval and the Indemnitor Notice Class's breach of contract claim
consists of the "Bonding Defendants",'6 alleged routine failure to abide by the
following provision in the Terms and Condition contract:
[Bonded Immigrant] and INDEMNITOR will be notified by AGENCY of all appearances requested by the U.S. IMMIGRATION AND NATURALIZATION SERVICE of which AGENCY receives notice H
However, as demonstrated below, the class representative for the Indemnitor
Notice Class, Ms. Sandoval, never entered into any transactions with Fairmont,
and suffered no injury from Fairmont. As a result, Ms. Sandoval cannot assert a
cause of action against Fairmont, and this Court lacks jurisdictional power to hear
and decide Ms. Sandoval's claims under Article III, Section 2, Clause 1 of the
U.S. Constitution.
contracts requiring them to provide the critical notice to both the Bonded Immigrant and indemnitor, the Bonding Defendants never provide advance notice of DHS-scheduled appearances to both the Bonded Immigrant and the Indemnitor."). 15 See id. at ffff 112-122. In their Complaint, Plaintiffs collectively refer to Fairmont Specialty Insurance Company (f/k/a Ranger Insurance Company), Stonington Insurance Company (f/k/a Noble Insurance Company), and Aaron Federal Bonding as the "Bonding Defendants," imputing the conduct of Aaron Federal Bonding to Fairmont and Stonington. See id. at ff 1. But see Certification Order at n. 5, Zamora-Garcia, ef a/. v. Moore, et a/., No. M-05-331, Dk!. 139 (S.D. Tex. Apr. 25, 2007) ("[T]he Court notes that whether Insurer Defendants Fairmont and Stonington are liable for Aaron Bonding's conduct is an issue yet to be resolved."). 16 See supra note 15. 17 See Certification Order at 16-17; Zamora-Garcia, et a/. v. Moore, et aI., No. M-05-331, Dk!. 139 (S.D. Tex. Apr. 25, 2007), see also Plaintiffs' Sixth Amended Complaint at ff5, Zamora-Garcia, ef al. v. Moore, ef a/., No. M-05-331, Dkt. No. 114, (SD. Tex. Oct. 27, 2006); and Ex. 2, Manuel Sandoval bond file at BF-238.
7

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 15 of 41
B. There is no privity of contract between Ms. Sandoval and Fairmont.
Irma Sandoval and the Indemnitor Notice Class assert a single cause of action for breach of contract against Fairmont. '8 As recognized by this Court:
Under Texas law, the elements of a breach of contract cause of action are: (1) the existence of a valid contract; (2) performance or tendered performance by plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the defendant's breach. E.g., McLaughlin, Inc. v. Northstar Drilling Tech., Inc., 138 SW.3d 24, 27 (Tex. App.-San Antonio 2004, no pet.); Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631 636
(Tex. App.-Houston Wt Oist.] 2002, pet. denied); Lewis v. Bank of
Am. NA, 343 F.3d 540, 544-45 (5th Cir. 2003).'9
In this case, Ms. Sandoval cannot prove her breach of contract claim against
Fairmont because she has no contractual relationship with Fairmont-or any other dealings with Fairmont. There is no evidence that privity of contract exists
between Irma Sandoval and Fairmont. The documents in Manuel Sandoval's bond file show that Irma Sandoval's dealings were entirely with Nobel
(Stonington Insurance Company's predecessor-in-interest). The following
transactions are evidenced in Mr. Sandoval's bond file and other documents
produced in this case:
• Irma Sandoval executed an undated contract entitled Terms and Conditions Under Immi~ration Bond on an Aaron Federal Bonding Agency form. 0 This is the contract with the notice provision at issue in this case. 21
18 See Plaintiffs' Sixth Amended Complaint at 1111 112-122, Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Okt. No. 114 (S.D. Tex. Oct. 27, 2006).
19 See Certification Order at 16; Zamora-Garcia, et al. v. Moore, et al., No. M-05-331,
Okt. 139 (S.D. Tex. Apr. 25, 2007). 20 Ex. 2, Manuel Sandoval bond file at BF-238.
21 See id. at BF-238 at 11 4.
8

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 16 of 41
• On November 14, 1997, Irma Sandoval executed an indemnity agreement in favor of Nobel, and in consideration of Nobel posting a bond with the INS to obtain Manuel Sandoval's release from federal detention 22
• On November 18, 1997, Nobel Insurance Company issued a Power of Attorney, Power No. N15-0122773, appointing Don Vannerson as its Attorney-in-Fact to execute an immigration bond on behalf of Nobel Insurance for Manuel Sandoval, and to deliver the bond to the INS.23
• On November 18, 1997, Nobel Insurance Company issued an immigration bond guaranteeing the delivery of Miguel Rubio to the INS upon demand. Don Vannerson signed the bond on behalf of Nobel Insurance Company. Mr. Vannerson's Power of Attorney No. N15-0122773 is referenced in the upper right-hand corner of the bond. 24
• On June 4, 2002, the INS issued Noble a Notice to Obligor to deliver Mr. Sandoval for deportation on July 5,2002. 25
• On July 17, 2002, the INS issued Noble a notice that the immigration bond for Manuel Sandoval had been breached because Noble failed to deliver Mr. Sandoval for deportation on July 5, 2002.26
• On September 20, 2002, the INS sent Nobel an invoice for $1,500 for payment on the breached bond.27
• On June 30, 2005, Stonington, as successor-in-interest to Nobel, entered into a settlement agreement the Department of Homeland Security ("DHS") to settle Stonington's alleged
22 See Ex. 2, Manuel Sandoval bond file at BF-241.
23 See Ex. 2, Manuel Sandoval bond file at BF-232.
24 See Ex. 2, Manuel Sandoval bond file at BF-224.
25 See id. at BF-0217.
26 See id. at BF-211.
27 See id. at BF-206.
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Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 17 of 41
indebtedness to the DHS for breached immigration bonds posted by Nobel.28 • The bond Nobel posted on behalf of Manuel Sandoval was part Stonington's settlement with the DHS 29
These documents establish that Aaron Bonding and Nobel had a contractual relationship with Irma Sandoval, but they provide no evidence of the existence of a contract between Irma Sandoval and Fairmont or Ranger. Indeed, neither Fairmont, nor Ranger, are mentioned anywhere among the bond file documents for Manuel Sandoval.3o
"In a breach of contract action, the plaintiff has the burden to prove that the defendant has obligated himself under the contract. . . . Maintenance of an action for breach of contract requires privity between the damaged party and the party sought to be held liable." Cannon v. ICO Tubular Serv., Inc., 905 S.W.2d 380, 392-393 (Tex. App.-Houston [1 st Dis!.] 1995, no writ), abrogated on other grounds by Lane Bank Equipment Co. v. Smith Southern Equipment, Inc., 10 S.W.3d 308, 312 (Tex. 2000); see also Texas Interstate Contracting Corp. v. City of Dallas, 135 SW.3d 605, 607 (Tex. 2004) ("Privity of contract, as a necessary predicate to suit on a contract, has a long and settled history in this State.");
28 See Ex. 3, Agreement executed by the United States of America on behalf of the Department of Homeland Security and Stonington Insurance Company at BF 35193552. 29 See id, at BF-3522, 30 See generally Ex. 2, Manuel Sandoval bond file. Furthermore, when Nobel posted the immigration bond for Manuel Sandoval on November 18, 1997, Ranger did not have any relationship with Don Vannerson. Ranger and Don Vannnerson d/b/a Aaron Federal Bonding Agency entered into an Agency Underwriting Agreement on June 29, 1999. See Ex. 4, Agency Underwriting Agreement.
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Mcintosh v. Wiley, 2006 WL 3691109, at *2 (S.D. Tex. Dec. 11,2006) (Plaintiff's breach of contract claim was dismissed against one of the defendants because the defendant was not a party to the contract, and thus there was no privity of contract as required under Texas law). Because there is no privity of contract between Fairmont and Irma Sandoval, Ms. Sandoval's individual contract claims against Fairmont must be dismissed as a matter of law. C. This Court lacks jurisdictional power to hear and decide Irma
Sandoval's breach of contract claims against Fairmont. Under federal law, if a plaintiff cannot demonstrate injury by the defendant, the plaintiff lacks standing to request adjudication of the issue, and the federal court lacks jurisdictional power to hear and decide the case. It is a fundamental principle of law that a plaintiff must demonstrate injury to himself by the parties whom he sues before that plaintiff can successfully state a cause of action. This principle is found in Article III, Section 2, Clause 1 of the Constitution which restricts judicial power to "cases" and "controversies." Weiner v. Bank of King of Prussia, 358 F. Supp. 684, 690 (E.D. Penn. 1973).31 In Weiner, the plaintiff sued 20 banks for violations of the federal Truth-inLending act, among other things. Id. at 687. But, the complaint acknowledged that the plaintiff was a customer and borrower of only one of the 20 banks, and that he had no transactions or loans from the other 19 banks. Id. The plaintiff claimed he was suing on behalf of a class of customers and borrowers in "this District." Id.
31 Citing Flast v. Cohen, 392 U.S. 83, 94-101(1968); Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 149-154 (1951); Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239 (1937); Muskrat v. United States, 219 U.S. 346, 356-363 (1911); Osborn v. Bank of United States, 9 Wheat. 738, 819, 6 L.Ed. 204 (1824).
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Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 19 of 41
The 19 defendant banks that had no transactions with the plaintiff filed a motion to dismiss the complaint on the grounds that the plaintiff lacked standing to maintain his action. Id. Recognizing that "standing is a jurisdictional issue which concerns the power of the federal courts to hear and decide cases," id. at 697, the district court agreed that the plaintiff had no standing to sue the 19 banks, and dismissed them from the action. Id. at 705. Since Irma Sandoval had no transactions with Fairmont, she does not have standing to sue Fairmont, and this Court lacks jurisdictional power to hear and decide her breach of contract case against Fairmont. D. Rule 23 of the Federal Rules of Civil Procedure does not affect class
representative Irma Sandoval's lack of standing. In Weiner, the district court also held that the plaintiff could not cure his standing defect by claiming to sue for violations of the Truth-in-Lending Act on behalf of those who may have been so injured. 358 F. Supp. at 694. "A plaintiff may not use the procedural device of a class action to boot strap himself into standing he lacks under the express terms of the substantive law." Id. As stated by another court, "a predicate to [a plaintiff's] right to represent a class is his eligibility to sue in his own right. What he may not achieve himself, he may not accomplish as a representative of a class." Kauffman v. Dreyfus Fund, Inc., 434 F.2d 727, 734 (3rd Cir. 1970), (Shareholder of four mutual funds which allegedly sustained damage by reason of violations of antitrust and securities !aws did not have standing to serve as class representative under Federal Rule 23 on behalf of similarly situated shareholders of other mutual funds.) cert. denied, 401 U.S. 974 (1971); see also La Mar v. H & B Novelty Loan Co., 489 F.2d 461,466 (9th
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Cir. 1973) (actions against pawnbroker for violation of Truth-in-Lending Act and
against air carrier for overcharging for tickets were not appropriate for class
action as to pawnbrokers and air carriers who engaged in similar conduct, but at
whose hands plaintiffs suffered no injury and have no cause of action).
Because Ms. Sandoval suffered no injury, and has no cause of action
against Fairmont, Ms. Sandoval has no standing to represent absentee class
members who served as indemnitors on bonds posted by Fairmont. The United
States Supreme Court has "repeatedly held, a class representative must be part
of the class and 'possess the same interest and suffer the same injury' as the
class members." East Texas Motor Freight Sys., Inc. v. Rodriguez, 431 U.S.
395, 403 (1977) (citing cases).
In other words, the representative must show that his individual claim rises to the level of a "case" or "controversy." As the Supreme Court recently stated: "[Ilf none of the named plaintiffs purporting to represent a class establishes the requisite of a case or controversy with the defendants, none may seek relief on behalf
of himself or any other member of the class." O'Shea v. Littleton,
414 U.S. 488, 494 (1974).32
Leonard v. Merrill Lynch, Pierce, Fenner & Smith, 64 F.R.D. 432,435 (S.D.N.Y.
1974)33 Leonard, is another case in which class action claims were dismissed
32 Texas law follows the federal law on this issue. See M.D. Anderson Cancer Center v. Novak, 52 S.W.3d 704, 711 (Tex. 2002) (Relying on federal case law, the Texas Supreme Court held "that a named plaintiffs lack of individual standing at the time suit is filed deprives the court of subject matter jurisdiction over the plaintiff's individual claims and claims on behalf of a class."). 33 See also Rivera v. Wyeth-Ayers! Laboratories, 283 F.3d 315, 318 (Tex. 2002) ("The irreducible constitutional minimum of standing contains three elements: The plaintiff must have suffered an injury in fact, there must be a causal connection between the injury and the conduct complained of, and it must be likely that the injury will be redressed by a favorable decision.") (internal quotations omitted).
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because the representative plaintiffs had no cause of action against the defendants in their own right. The district court held plaintiffs who did not purchase unregistered securities from defendants, and who had no dealings with defendants, did not have standing to maintain an action against defendants under a provision of the Securities Act creating civil liability in favor of an aggrieved purchaser with respect to the sale of unregistered securities. Id. at 434-435. Thus, the named plaintiffs could not serve as class representatives of purchasers of unregistered securities, some of whom might have purchased securities from defendants. Id. In the same way, class representative Irma Sandoval lacks standing to sue Fairmont for breach of contract in her own right, and on behalf of absentee class members who served as indemnitors on bonds posted by Fairmont. Therefore, the Indemnitor Notice Class claims against Fairmont must be dismissed as a matter of law. V. Class Representative, Petra Carranza de Salinas, never contracted
with Fairmont, and therefore, this Court lacks jurisdictional power to hear and decide Ms. Salinas's individual and class claims against Fairmont A. Plaintiffs' allegations and factual background. In addition to certifying the Indemnitor Notice Class, the Court certified the Bonded Immigrant Class, which is a class of bonded immigrants who have been released from custody of the INS/DHS pursuant to immigration-surety bonds posted by Nobe! or Ranger, and where the bond is stil! Qutstanding.34 Petra
34 See Certification Order at 34-40; Zamora-Garcia, e/ al. v. Moore, e/ al., No. M-05-331, Dkt. 139 (S.D. Tex. Apr. 25, 2007).
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Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 22 of 41
Carranza de Salinas is the sole representative for the Bonded Immigrant Class.35 Plaintiffs allege that Ms. Salinas is a native and citizen of Mexico, who
became a lawful permanent resident in this country on or about August 29, 1985.36 Ms. Salinas was detained by the INS on or about August 18, 1997, and removal proceedings were commenced shortly thereafter. 37 In 1997, her friend, Juan De La Rosa, contracted with Aaron Bonding to post an immigration-surety bond with the INS on Ms. Salinas' behalfas To Ms. Salinas' knowledge, the DHS has not yet issued a demand on Ms. Salinas' bond. 39 Ms. Salinas requests, individually, and on behalf of the class she seeks to represent, an injunction requiring "Bonding Defendants," directly or through their agents, to make good faith efforts to provide actual, timely, and reasonable notice to bonded immigrants and indemnitors of any and all demands for performance made of the immigration bonds by the INS/DHS 40
B. There is no privity of contract between Ms. Salinas and Fairmont.
Like Irma Sandoval, Ms. Salinas never had a contract, engaged in any transactions, or had any other dealings with Fairmont, or its predecessor Ranger. As the bonded immigrant (rather the indemnitor, like Ms. Sandoval), Ms. Salinas
35 See id. at 39-40. 36 See Plaintiffs' Sixth Amended Complaint at 11 79, Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Ok!. No. 114 (S.D. Tex. Oct. 27, 2006).
37 See id. 38 See id.
39 See id. at 1181. 40 See id. at 11131.
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did not enter into any contract with any of the defendants in this case. To the

extent, Ms. Salinas had dealings with any of the defendants, those dealings were

with Aaron Bonding and Nobel, not Fairmont or Ranger. The following

transactions are evidenced in Ms. Salinas' bond file:

• On September 25, 1997, Juan De La Rosa signed the U.S. Immigration Bonds and Services' (a/k/a Aaron Bonding)
Terms and Conditions Under Immigration Bond contract as part of his application to obtain an immigration bond in the amount of $3,000 for Petra Carranza de Salinas' release from INS detention41

• On September 25, 1997, Mr. De La Rosa executed an

indemnity agreement in favor of Nobel, and in consideration

of Nobel posting a bond with release from federal detention

t4h2 e

INS

to

obtain

Ms.

Salinas'

• On September 25, 1997, Mr. De La Rosa signed a Promissory Note in the amount of $3,000 payable to U.S. Immigration Bonds and Services in the event Ms. Salinas' bond is breached 43

• On September 25, 1997, Nobel Insurance Company issued a Power of Attorney, No. N15-0101215, appointing Don Vannerson as its Attorney-in-Fact to execute an immigration bond on behalf of Nobel Insurance for Ms. Salinas, and to deliver the bond to the INS44

• On September 25, 1997, Nobel Insurance Company issued an immigration bond guaranteeing the delivery of Ms. Salinas to the INS upon demand. Don Vannerson signed the bond on behalf of Nobel Insurance Company. Mr. Vannerson's Power of Attorney No. N15-0101215 is referenced in the upper right-hand corner of the bond 4s

41 See Ex. 5, Petra Carranza de Salinas Bond file at BF-320. 42 See id. at BF-315. 43 See id. at BF-318. 44 See id. at BF-342. 45 See id. at BF-334.

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Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 24 of 41
Like Ms. Sandoval, there is no evidence that Ms. Salinas ever had any dealings with Fairmont. Ms. Salinas' request for injunctive relief, individually and on behalf of the Bonded Immigrant class, presumes that Fairmont has an existing contractual duty to provide notice to Ms. Salinas and Mr. De La Rosa of any and all demands for performance made on her immigration bond by the INS/DHS. Ms. Salinas seeks equitable relief to prevent an anticipatory breach by Fairmont46 However, as demonstrated above, there is no contractual relationship between Ms. Salinas and Fairmont. As such, there is no privity of contract between Ms. Salinas and Fairmont, which is a prerequisite to a suit on a contract under Texas law. See Texas Interstate Contracting Corp. v. City of Dallas, 135 S.W.3d 605, 607 (Tex. 2004) ("Privity of contract, as a necessary predicate to suit on a contract, has a long and settled history in this State."). Moreover, since Fairmont owes no contractual duties to Ms. Salinas, there is no basis for her request for injunctive relief based upon an anticipatory breach of a contractual duty. As a result, this Court jacks jurisdictional power to hear and decide Ms. Salinas' claim for injunctive relief against Fairmont under Article III, Section 2, Clause 1 of the U.S. Constitution, which restricts judicial power to "cases" and "controversies." See O'Shea, 414 U.S. at 494 ("lilf none of the named plaintiffs purporting to represent a class establishes the requisite of a case or controversy with the defendants, none may seek relief on behalf of
46 See Plaintiffs' Sixth Amended Complaint at ,-r,-r 129-133, Zamora-Garcia, et al. v. Moore, et a/., No. M-05-331, Dkt. No. 114 (S.D. Tex. Oct. 27, 2006).
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Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 25 of 41
himself or any other member of the class."). For these reasons, Ms. Salinas' claims for injunctive relief against Fairmont, individually and on behalf of the Bonded Immigrant Class, must be dismissed as a matter of law. VI. Miguel Rubio and Alberta Rubio also had no dealings with Fairmont,
and have no standing to maintain a cause of action against Fairmont A. Plaintiffs' allegations and factual background
In this case, Alberta Rubio asserts two breach of contract claims against Fairmont;47 and her son, Miguel Rubio, asserts a false imprisonment against Fairmont for allegedly surrendering him to the DHS on April 12, 2005 48 Miguel Rubio's false imprisonment claim against Fairmont is premised upon his status as a third-party beneficiary of an alleged contractual relationship between Fairmont and Alberta Rubio.49 However, no contract exists between Fairmont and Alberta Rubio, and there is no evidence that Fairmont had any involvement with the detention and surrender of Miguel Rubio to federal immigration authorities. As such, Alberta and Miguel Rubio's claims against Fairmont should be dismissed.
According to Plaintiffs' complaint, immigration authorities detained Miguel Rubio in connection with deportation proceedings in 1996.50 His mother, Alberta
47 See id. at 1]1]112-128. 48 See id. at 1]1]156-161. 49 See id. at 1]161 ("Plaintiff Miguel Rubio also seeks recovery for the damages caused him by the Bonding Defendants' surrender of him to the INS/DHS in violation of his contractual rights as a third-party beneficiary of the contract between Alberta Rubio and the Bonding Defendants."). 50 See id. at 1]73.
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Rubio, contracted with Aaron Bonding for the posting of an immigration-surety bond, and served as the indemnitor on the bond contract.S1 On October 31, 1996, Noble Insurance Company posted a bond with the INS for Mr. Rubio.s2 Ms. Rubio's first breach of contract claim is identical to the contract claim asserted by Irma Sandoval and the absentee Indemnitor Notice Class members-Fairmont breached its alleged duty to "provide notice of all appearances requested by the DHS."s3 In her second breach of contract claim, Ms. Rubio contends that Fairmont failed to return collateral to her after the government cancelled Miguel Rubio's bondM B. Because there is no contractual relationship between Fairmont and
Alberta Rubio, Fairmont does not owe a duty to provide Alberta Rubio and Miguel Rubio with notice of scheduled appearances before the INS/DHS. Similar to Ms. Sandoval's circumstances, Ms. Rubio cannot assert breach of contract claims against Fairmont, because Miguel Rubio's bond file shows that Nobel, not Fairmont or its predecessor, Ranger, posted the immigration bond for Mr. Rubio. Therefore, there is no privity of contract between Fairmont and Alberta Rubio. See Cannon v. ICO Tubular Serv., Inc., 905 S.W.2d at 392-393. Mr. Rubio's bond file shows the following transactions:
51 See id. 52 See infra note 59. 53 See Plaintiffs' Sixth Amended Complaint at 1\115, Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Okt. No. 114, (S.D. Tex. Oct. 27, 2006); see generally id. at 1\1\112122 (breach of contract claim asserted by Irma Sandoval, Alberta Rubio and the Indemnitor Notice Class). 54 See id. at 1\1\124-128.
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• An undated Bond Preparation Worksheet is prepared for Miguel Rubio identif¥ing the obligor on the bond as Noble Insurance Company. 5
• On September 30, 1996, Ms. Rubio signed U.S. Immigration Bonds and Services' (a/k/a Aaron Bonding) Terms and Conditions Under Immigration Bond contract as part of her application to obtain an immigration bond in the amount of $3,000 for Miguel Rubio's release from INS detention S6
• On September 30, 1996, Alberta Rubio signed a Promissory Note in the amount of $3,000 payable to U.S. Immigration Bonds and Services in the event Miguel Rubio's bond is breached. 57
• On October 31, 1996, Nobel Insurance Company issued a Power of Attorney, Power No. N15-0036642, appointing Don Vannerson as its Attorney-in-Fact to execute an immigration bond on behalf of Nobel Insurance Company for Miguel Rubio, and to deliver the bond to the INS.58
• On October 31, 1996, Nobel Insurance Company issued an immigration bond guaranteeing the delivery of Miguel Rubio to the INS upon demand. Don Vannerson signed the bond on behalf of Nobel Insurance Company. Mr. Vannerson's Power of Attorney No. N15-0036642 is referenced in the upper right-hand corner of the bond. 59
• On March 1, 2005, the INS sent Nobel Insurance Company, in care of Don Vannerson, a Notice to Obligor to Deliver Miguel Rubio for an interview60
• On April 12, 2005, Miguel Rubio was surrendered into INS
55 See Ex. 6, Miguel Rubio Bond file at BF-269.
56 See id. at BF-274. U.S. Immigration Services, like Aaron Federal Bonding, is an assumed name for Don Vannerson.
57 See id. at BF-273.
58 See id. at BF-287.
59 See id. at BF-296.
60 See id. at BF-300.
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Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 28 of 41
custody.61 • On April 12, 2005, the INS sent Nobel Insurance Company
notice that the conditions of immigration bond for Miguel Rubio had been fulfilled, that the bond was cancelled, and Nobel was no longer liable under the bond 62 Transactions between Ms. Rubio and Nobel cannot create contractual obligations between Ms. Rubio and Fairmont. It is "a black-letter, axiomatic rule that a contract between other parties cannot create an obligation or duty on a noncontracting party, which non-contracting party was a stranger to the basic underlying ... contract." City of Beaumont v. Excavators & Constructors, Inc., 870 S.W.2d 123, 129 (Tex. App.-Beaumont 1993, writ denied) (Telephone company which was not party to contract between excavator and city had no duty arising out of ordinary contract to avoid causing delay or inefficiency in contractor's performance). Since Nobel posted the immigration bond for Mr. Rubio with the INS, Ms. Rubio cannot plausibly claim that Fairmont had a contractual duty to provide Ms. Rubio with "notice of all appearances requested by the DHS."63 In addition, since Fairmont was not the surety on Mr. Rubio's bond, Ms. Rubio cannot plausibly contend that Fairmont would ever receive notices from the DHS regarding Mr. Rubio's appearances before the DHS. Consequently, Fairmont did not have any contractual duty to provide either Alberta Rubio or Miguel Rubio with notices of schedule appearances before the
61 See id. at BF-285 (see handwritten note at the bottom of the Notice to Obligor indicating that Mr. Rubio was surrendered to the INS on April 12, 2005). 62 See id. at BF-289. 63 See Plaintiffs' Sixth Amended Complaint at 11 115, Zamora-Garcia, et a/. v. Moore, et a/., No. M-05-331, Ok!. No. 114, (S.D. Tex. Oct. 27, 2006).
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DHS, and Ms. Rubio's breach of contract claim against Fairmont for failure to provide such notice must be dismissed as a matter of law. See id. C. Fairmont never had an obligation to return collateral to Ms. Rubio.
Similarly, Fairmont does not have any contractual agreement with Ms. Rubio regarding alleged collateral payments for security on Mr. Rubio's immigration bond. On her second breach of contract claim, Ms. Rubio contends:
The uniform surety contracts ... obligate the Bonding Defendants to return collateral paid under the terms of the contracts to the Indemnitors upon the cancellation of the bond at issue. The Bonding Defendants have failed to return the posted collateral to Alberta Rubio and the members of Indemnitor Collateral Class. 64 This claim against Fairmont fails as a matter of law because there is no evidence that Ms. Rubio ever paid any collateral that needs to be returned, and there is no evidence that she had any agreement whatsoever regarding collateral with Fairmont. In Plaintiffs' complaint, Alberta Rubio sought to be the class representative for the so-called "Indemnitor Collateral Class," representing all indemnitors who were allegedly owed a collateral refund by the sureties, but never received the refund.65 In its certification order, this Court thoroughly analyzed the relevant evidence, and ultimately denied certification of the Indemnitor Collateral Class. 66 The Court concluded that Ms. Rubio could not maintain such a claim in her own right, much less on behalf of the proposed Indemnitor Collateral Class:
64 Id. at ml126-127. 651d. at ~ 106. 66 See Certification Order at 29-34, Zamora-Garcia, e/ al. v. Moore, e/ aI., No. M-05-331, Dk!. 139 (S.D. Tex. Apr. 25, 2007).
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Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 30 of 41
Upon reviewing the evidence submitted, the Court finds that Plaintiffs have failed establish that Ms. Rubio ever made a collateral deposit, much less a deposit reflected by the Promissory Note referenced in Plaintiffs' Motion for Class Certification, or that she is entitled to the return of any collateral on the grounds alleged by the Indemnitor [Collateral] Class. Therefore, Plaintiffs cannot establish that Ms. Rubio's breach of contract claim, or the facts upon which it is based, are common to the proposed class, nor can they show that her claim is typical of the claims of the proposed class members ... Therefore, the Court ORDERS that Plaintiffs' Motion for Class Certification is DENIED with respect to the Indemnitor Collateral Class 67
No additional evidence has been produced in this case that would alter the above
stated findings. Furthermore, there is no evidence that Ms. Rubio had any
agreement with Fairmont regarding collateral. Indeed, such an agreement would
serve no purpose since Fairmont did not post the bond for Miguel Rubio's
release. Consequently, Alberta Rubio's breach of contract claims against
Fairmont should be dismissed as a matter of law. See City of Beaumont, 870
S.W.2d at 129.
D. There is no evidence that Fairmont willfully detained Miguel Rubio or had any involvement with his detention and surrender to the federal immigration authorities.
Miguel Rubio contends that the INS sent "the bonding company" notice of a demand requiring the bonding company to deliver Mr. Rubio to the INS.68 The
complaint further contends that the "bond company did not inform either Miguel Rubio or his Indemnitor, Alberta Rubio," of the notice69 According to Mr. Rubio,
67 See id. at 33-34.
68 See Plaintiffs' Sixth Amended Complaint at ,-r 158, Zamora-Garcia, et al. v. Moore, et
a/., No. M-05-331, Dkt. No. 114, (S.D. Tex. Oct. 27, 2006). 69 See id.
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Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 31 of 41
an unnamed agent of Aaron Bonding apprehended Mr. Rubio, in the middle of the night, in his home on April 11, 2005, and surrendered him to the INS/DHS on April 12, 2005?O Mr. Rubio seeks recovery for false imprisonment because "the Bonding Defendants apprehended Mr. Rubio with no contractual or legal authority for doing SO.,,71 In order to prove a claim for false imprisonment against Fairmont, Mr. Rubio must show: (1) Fairmont willfully detained Mr. Rubio; (2) the detention was without Mr. Rubio's consent; and (3) the detention was without
legal authority or justification. Waf-Mart Stores v. Rodriguez, 92 S.w'3d 502,506
(Tex. 2002). In this case, there is no evidence that Fairmont willfully detained Mr.
Rubio. Mr. Rubio does not claim that Fairmont or its employees were directly involved with Mr. Rubio's detention and surrender to the INS. There is no evidence that Fairmont requested or directed Mr. Rubio's detention. See WafMart, 92 S.w'3d at 507 ("Liability for false imprisonment extends beyond those who willfully participate in detaining the complaining party to those who request or direct the detention."). Fairmont's liability to Mr. Rubio is premised entirely upon Mr. Rubio's alleged contractual rights as a third-party beneficiary of the contract between Alberta Rubio and Fairmont, which does not exist in this case72 As explained earlier, Nobel, not Fairmont or its predecessor, Ranger, posted the
70 See id. at ~ 159. 71 See id. at ~ 160. 72 See id. at ~ 161 ("Plaintiff Miguel Rubio also seeks recovery for the damages caused him by the Bonding Defendants' surrender of him to the INS/DHS in violation of his contractual rights as a third-party beneficiary of the contract between Alberta Rubio and the Bonding Defendants.").
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Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 32 of 41
immigration bond for Mr. Rubion Under these circumstances, the INS/DHS would have no reason or contractual right to issue a demand to Fairmont for the delivery of Miguel Rubio since Fairmont did not post Mr. Rubio's bond guaranteeing Mr. Rubio's delivery upon demand. There is no evidence that Fairmont had any contractual relationship with Alberta and Miguel Rubio. More importantly, there is no evidence that Fairmont had any involvement with Miguel Rubio's surrender to the federal immigration authorities. Consequently, Miguel Rubio cannot establish the elements of his false imprisonment claim against Fairmont, and it must be dismissed as a matter of law. VII. Aracely Zamora and Juana Zamora claims against Fairmont for
intentional infliction of emotional distress are barred by the two-year statute of limitations.
A. Plaintiffs' allegations and factual background. According to Plaintiffs, Aracely Zamora is a Mexican national who has resided in the United States since 1982 14 She and her mother, Juana Zamora, live in Mission, Texas. 75 In February of 2000, Aracely was detained by the federal authorities and placed under removal proceedings for helping two young girls enter the U.S. iIIegally.76 To secure Aracely's release from detention, Juana
73 See supra notes 55-62 and accompanying text.
74 See Plaintiffs' Sixth Amended Complaint at 11 82, Zamora-Garcia, et a/. v. Moore, et
a/., No. M-05-331, Okt. No. 114 (S.~. Tex. Oct. 27, 2006). 75 See id. 76 See id.
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Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 33 of 41
Zamora contacted Juvencio Pena, Aracely's cousinn Mr. Pena, on Juana
Zamora's behalf, entered a contract with Aaron Bonding by which Aaron Bonding agreed to post an immigration-surety bond on Aracely Zamora's behalt.1s Also, according to Plaintiffs, Aaron Bonding served as the agent of Ranger in contracting with Pena?9
On September 20, 2001, an immigration judge ordered Aracely's removal from the United States, and subsequently the DHS issued a demand on the bond to Aaron Bonding, requiring that Aaron Bonding present Aracely Zamora for an appearance before the DHS on December 12, 2001.so Plaintiffs allege that Aracely was not timely presented to the DHS, and the bond was declared breached by the DHS.s1
Moreover, Plaintiffs contend that on April 15, 2002, Defendant Santiago Sol, as agent for Aaron Bonding, went to the home of Juana Zamora in Mission, Texas, looking for Aracely Zamora to turn her into the DHS82 According to Plaintiffs, Mr. Sol falsely asserted that he had a warrant for Aracely's removal, issued in December 2001, and that he was authorized to arrest her83 Plaintiffs further allege that Aracely was not home on April 15, 2002, so Mr. Sol returned to 77 See id. at 1] 83.
78 See id. 79 See id.
80 See id at 1]84.
81 See id.
82 See id. at 1]1]146-149. 83 See id. at 1]148.
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Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 34 of 41
the Zamora home, and to the homes of relatives, over the next few days84 Even though there is no allegation that Mr. Sol ever in fact detained Aracely Zamoraor even met or spoke with her-Juana and Aracely Zamora claim Mr. Sol caused them great emotional distress 85 As a result of Mr. Sol's and Aaron Bonding's alleged actions, Juana and Aracely Zamora assert a cause of action for intentional infliction of emotional distress86
B. The Zamoras' tort claim against Fairmont is barred by the twoyear statute of limitations.
To the extent that Aracely and Juana Zamora seek to hold Fairmont liable for Mr. Sol's and Aaron Bonding's alleged tortious conduct, their claim is barred by the two-year statute of limitations. See TEX. CIV. PRAC & REM. CODE § 16.003(a) ("[A] person must bring suit for ... personal injury ... not later than two years after the day the cause of action accrues."). "[T]he applicable limitations period for a claim of intentional infliction of emotional distress is two years from the accrual of the cause of action." Bhalli v. Methodist Hasp., 896 S.W.2d 207, 211 (Tex. App.-Houston [1st Dist.] 1995, writ denied). According to Plaintiffs' complaint, the alleged actions by Aaron Bonding and Santiago Sol occurred in April 2002, which is when their claim for intentional infliction of emotional distress accrued. See id. at 212 (a cause of action for intentional infliction of emotional distress accrues when the tortious acts have ceased)87
84 See id. at 1188.
85 See id.
S6 See id. at 1111146-155. 87 See id. at 1111 82-89 and 1111146-155.
27

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 35 of 41
However, Fairmont was not added as a party to this lawsuit until September 30, 2005, when Plaintiffs filed their Third Amended Class Action Complaint.88 Consequently, Plaintiffs' Aracely and Juana Zamoras' claim against Fairmont for intentional infliction of emotional distress is barred as a matter of law.
Plaintiffs cannot avoid the statute of limitations by claiming that their tort claim is timely under the "relation back" provision of Federal Rule of Civil Procedure 15(c)(3). Aracely Zamora originally filed the predecessor action, Case No. M-02-144, on April 16, 2002, against the federal government.89 Aaron Federal Bonding Agency and Santiago Sol, were added as defendants in the First Amended Class Action Complaint, filed on May 7, 2002 BO Juana Zamora was added as a plaintiff in the Second Amended Class Action Complaint, filed on July 28, 2003 B1 More than two years later, on September 30, 2005, Fairmont and Ranger were added as defendants to the Third Amended Class Action
88 Compare Plaintiffs' Third Amended Petition for Writ of Habeas Corpus and Class Action Complaint ("Plaintiffs' Third Amended Complaint"), Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Okt. 2 (S.~. Tex. Sept. 30, 2005) with Plaintiffs' Second Amended Petition for Writ of Habeas Corpus and Class Action Complaint ("Plaintiffs' Second Amended Complaint"), Zamora-Garcia, et al. v. Tromski, et al., No. M-02-144, Ok!. 36 (S.D. Tex. July 31,2003). 89 See Plaintiffs' Petition for Writ of Habeas Corpus and Class Action Complaint, Zamora-Garcia, et al. v. Tromski, et aI., No. M-02-144, Okt. 1 (S.D. Tex. Apr. 16, 2002). 90 See Plaintiffs' First Amended Petition for Writ of Habeas Corpus and Class Action Complaint, Zamora-Garcia, et al. v. Tromski, et aI., No. M-02-144, Okt. 2 (S.D. Tex. May 7,2002). 91 See Plaintiffs' Unopposed Motion to File Second Amended Petition for Writ of Habeas Corpus and Class Action Complaint, Zamora-Garcia, et al. v. Tromski, et al., No. M-02144, Okt. 32 (S.D. Tex. July 28, 2003); and Plaintiffs' Second Amended Complaint, Zamora-Garcia, et al. v. Tromski, et aI., No. M-02-144, Okt. 36 (S.D. Tex. July 31,2003).
28

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 36 of 41
Complaint. 92
Federal Rule of Civil Procedure 15(c)(3) states:
c) Relation Back of Amendments. An amendment of a pleading relates back to the date of the original pleading when
(3) the amendment changes the party or the naming of the party against whom a claim is asserted if the foregoing provision (2) is satisfied and, within the period provided by Rule 4(m) for service of the summons and complaint, the party to be brought in by amendment (A) has received such notice of the institution of the action that the party will not be prejudiced in maintaining a defense on the merits, and (B) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the party.
FED. R. CIV. P. 15(c)(3). Rule 15(c)'s "relates back" provision does not apply to
Fairmont because an amended complaint adding a defendant does not relate
back to the original complaint if Plaintiff has shown neither factual mistake nor
legal mistake concerning the identity of the proper party. See Soto v. Brooklyn
Carr. Facility, 80 F.3d 34, 36 (2nd Cir. 1996); see also Jacobson v. Osborne, 133
F.3d 315, 319-20 (5th Cir. 1998) (Rule 15(c)(3) "is meant to allow an amendment
changing the name of a party to relate back to the original complaint only if the
change is the result of an error, such as misnomer or misidentification."). In this
case, Plaintiffs have not shown that they delayed adding Fairmont as a party to
this litigation as a result of factual or legal mistake. Indeed, they offer no
92 See Plaintiffs' Third Amended Complaint, Zamora-Garcia, et a/. V. Tromski, et a/., No. M-02-144, Okt. 150 (S.D. Tex. Sept. 30, 2005). The Court severed the Third Amended Complaint from cause number M-02-144, and assigned it a new cause number, M-05331. See Order of Severance, Zamora-Garcia, et a/. v. Tromski, et a/., No. M-02-144, Okt. 151 (S.D. Tex. Sept. 30, 2005); see also Plaintiffs' Third Amended Complaint, Zamora-Garcia, et a/. V. Moore, et al., No. M-05-331, Okt. No.2 (S.D. Tex. Sept. 30, 2005).
29

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 37 of 41
explanation for their delay in adding Fairmont.93 Moreover, Plaintiffs have failed
to show that within the period provided by Rule 4(m) for service of the summons
and complaint,94 Fairmont received such notice of the institution of the action that
Fairmont will not be prejudiced in maintaining a defense on the merits, and that
Fairmont knew or should have known that, but for a mistake concerning the
identity of the proper party, the action would have been brought against the
party 95 See FED. R. CIV. P. 15(c)(3); see a/so Bailey v. U.S., 289 F. Supp.2d
1197,1207 (D. Haw. 2003) (amended complaint adding new defendants did not
relate back to the date of the original complaint in wrongful death action where
plaintiffs failed to show the requirements of Rule(c)(3) were met).
Moreover, Texas procedural law does not rescue the Zamoras' tort claim
from the effect of limitations96 "Texas Civil Practice & Remedies Code section
16.068 (Vernon 1986) permits the amendment of pleadings after the statute of
93 See Plaintiffs' Motion to File Third Amended Petition for Writ of Habeas Corpus and Class Action Complaint, Zamora-Garcia, et al. v. Tramski, et al., No. M-02-144, Ok!. 148 (S.D. Tex. Sept. 30, 2005). Plaintiffs' motion is little more than a pleading title, and it is not supported by any factual allegationsl or legal authority. 94 Rule 4(m) allows 120 days for service of the summons and complaint unless an extension is obtained. See FED. R. CIV. P. 4(m). 95 See supra at note 93. 96 Under Federal Rule 15 (c)(1): "An amendment of a pleading relates back to the date of the original pleading when (1) relation back is permitted by the law that provides the statutes of limitations applicable to the date of the original pleading." FED. R. CIV. P. 15(c)(1). There is a split among the federal circuit courts as to whether state procedural rules or federal procedural rules govern the relation back principles set forth in Rule 15(c)(1). See Oras v. Hull & Assocs., 217 F.R.D. 401, 404-05 (N.D.Ohio 2003) (discussing circuit split). In McGregor v. Louisiana State Univ., 3 F.3d 850, 864-65 (5th Cir. 1993), the Fifth Circuit applied Louisiana procedural law in determining that the amended pleadings did not relate back to the original pleadings. As discussed above, neither the federal procedural rules, nor the Texas procedural rules, prevent limitations from barring the Zamoras' tort claim against Fairmont.
30

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 38 of 41
limitations has run to change 'the facts or grounds of liability or defense: but this section does not authorize the addition of new defendants after the claims against them have been barred by limitation." Cothrum Drilling Co. v. Partee, 790 S.W.2d 796, 800 (Tex. App.-Eastland 1990, writ denied); see also Koch Oil Co. v. Wilber, 895 S.W.2d 854, 863 (Tex. App.-Beaumont 1995, writ denied) (amended pleadings do not prevent the running of the statute of limitations against parties who are added by amended pleadings); and Leeds v. Cooley, 702 SW.2d 213, 215 (Tex. App.-Houston [1 st Dist.] 1985, writ refd n.r.e.) ("The statute of limitations is tolled at the time a party defendant is brought into the suit and not when the original pleading is filed."). Therefore, Plaintiffs' Aracely Zamora and Juana Zamora's claim for intentional infliction of emotional distress against Fairmont is barred by the applicable two-year statute limitation, and should be dismissed as a matter of law. VIII. Conclusion
Irma Sandoval, Petra Carranza de Salinas, Alberta Rubio, and Miguel Rubio cannot establish the existence of a contractual relationship with Fairmont, or that they suffered any injury from Fairmont. As a result, these Plaintiffs do not have standing to assert causes of action against Fairmont, and this Court lacks jurisdictional power to hear and decide their claims under Article III, Section 2, Clause 1 of the U.S. Constitution, which restricts judicial power to "cases" and "controversies." Furthermore, without standing to sue Fairmont in their own right, Irma Sandoval and Petra Carranza de Salinas cannot sue Fairmont on behalf of the Indemnitor Notice Class and the Bonded Immigrant Class. Therefore, all
31

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 39 of 41

individual and class claims asserted by Ms. Sandoval, Ms. Salinas, and the Rubios against Fairmont must be dismissed as a matter of law.
Finally, Fairmont was added as a defendant to this lawsuit more than two years after Aracely and Juana Zamora's alleged cause of action for intentional infliction of emotional distress accrued. As such, Aracely and Juana Zamora's tort claim is barred by the statute of limitations. For these reasons, all claims in this lawsuit against Fairmont must be dismissed as a matter of law.
PRAYER FOR RELIEF Defendant Fairmont Specialty Insurance Company, flk/a Ranger Insurance Company ("Fairmont"), requests that the Court grant its motion, and enter a summary judgment in its favor, and dismiss all individual and class claims asserted against Fairmont with prejudice; and for such other and further relief, at law and in equity, as the Court deems just and appropriate.
Respectfully submitted,

Lo gr~~ {J::fr:dp.~

:;:z::,. BradtorW. Irelan

t Z./vWQ'.o.-l",1"l.J'-.

State Bar No.: 10411550~:>

~

440 Louisiana Street, Suite 1800

tf'

Houston, Texas 77002-1652

Telephone: (713) 222-7666

Facsimile: (713) 222-7669

ATTORNEY-IN-CHARGE FOR

DEFENDANT,

FAIRMONT

SPECIALITY

INSURANCE

COMPANY, flk/a RANGER

INSURANCE COMPANY

32

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 40 of 41
OF COUNSEL: IRELAN .:. HARGIS, P.L.L.C. Susan A. Logsdon State Bar No. 00999300 S.D. Tex. 1.0. 12364 440 Louisiana Street, Suite1800 Houston, Texas 77002-1652 Telephone: (713) 222-7666 Facsimile: (713) 222-7669 ATLAS & HALL Dan K. Worthington State Bar No. 00785282 818 Pecan Blvd P.O. Box 3725 McAllen, TX 78501 Telephone: (956) 682-5501 Facsimile: (956) 686-6109
33

Case 7:05-cv-00331 Document 153 Filed in TXSD on 09/06/07 Page 41 of 41
CERTIFICATE OF SERVICE I hereby certify that on this the 6th day of September, 2007, a true and correct copy of the foregoing, Defendant Fairmont's Motion for Summary Judgment, was duly served in accordance with the Federal Rules of Civil Procedure on:
J. Benjamin King Diamond McCarthy Taylor, Bryant & Lee, LLP 1201 Elm Street, 34th Floor, Dallas, Texas 75270-2102 Via CMRRR: 70030500000318158906 and
Email BKing@diamondmccarthy.com
Rene Carlo Benavides US Attorney's Office, Southern District of Texas 1701 West Highway 83, McAllen, Texas 78501-5176
Via Email rene.benavides@usdoj.gov
Elisabeth Lisa Brodyaga 17891 Landrum Park Road, San Benito, Texas 78586-7197
Via CMRRR: 7003 0500 000318158913 and Emaillisabrodyaga@aol.com
Jason Murray Davis Jason Davis PC
98 San Jacinto Blvd., # 1900, Austin, Texas 78701 Via First Class Mail
Lisa M. Putman Department of Homeland Security P. O. Box 1711, Harlingen, Texas 78551-1711
Via First Class Mail
Tucker Ronzetti, Esq. Kozyak Tropin & Throckmorton, PA 2525 Ponce de Leon, Ninth Floor
Coral Gables, FL 33134 Via Email TR@kttlaw.com
34

 
 Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 1 of 28

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS
MCALLEN DIVISION

ARACELY ZAMORA-GARCIA,

§

et aI.,

§

in their own name and right, and on

§

behalf of all others similarly situated, §

§

PetitionerS/Plaintiffs

§

§

v.

§

§

MARC MOORE, DISTRICT

§

DIRECTOR FOR INTERIOR

§

ENFORCEMENT, DEPARTMENT OF §

HOMELAND SECURITY, et aI.,

§

§

Respondents/Defendants.

§

C.A. No. M-05-331

DEFENDANT STONINGTON'S MOTION FOR PARTIAL SUMMARY JUDGMENT

Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 2 of 28
TABLE OF CONTENTS
TABLE OF AUTHORiTiES ................................................................................... iii
i. introduction ................................................................................................1
A. The Indemnitor Notice Class Claims ................................................ 1
B. Stonington is entitled to a dismissal of all Indemnitor Notice Class claims that accrued before September 30, 2001, because they are bared by the applicable four-year statute of limitations .........................................................................3
C. All claims against Stonington asserted by absentee Indemnitor Notice Class members with Ranger bonds should be dismissed because there is no privity of contract ............ 3
D. Stonington is also entitled to a dismissal of individual claims asserted by Aracely Zamora, Juana Zamora, and Alberta Rubio ............................................................................4
II. Summary Judgment Standard of Review ...................................................5
III. Summary Judgment Evidence ....................................................................6
IV. All Indemnitor Notice Class claims that accrued prior to September 30, 2001, are barred by the applicable statute of limitations................................................................................................6
V. All Ranger indemnitor Class claims must be dismissed because there is no privity of contract between the absentee Ranger Indemnitors and Stonington .........................................................11
VI. Aracely Zamora and Juana Zamora individual claims against Stonington for intentional distress should also be dismissed .................... 13
A. Plaintiffs' allegations and factual background ................................ 13
B. The Zamoras' tort claim against Stonington is barred by the two-year statute of limitations .............................................15
C. There is no evidence that Stonington had any involvement in Aaron and Sol's alleged conduct ............................................... 16
VII. There is no evidence that Alberta Rubio paid any collateral to Stonington ............................................................................................18

Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 3 of 28 VIII. Conclusion ................................................................................................19
11

Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 4 of 28
TABLE OF AUTHORITIES
Cases Bailey v. U.S.,
289 F. Supp.2d 1197, 1207 (D. Haw. 2003) .................................................... 12
Bhalli v. Methodist Hosp., 896 S.w'2d 207, 211 (Tex. App.-Houston [1 st Dist.) 1995, writ denied) ....... 19
Cannon v. ICO Tubular Serv., Inc., 905 S.w'2d 380, 392-393 (Tex. App.-Houston [1st Dist.) 1995, no writ), abrogated on other grounds by Lane Bank Equipment Co. v. Smith Southern Equipment, Inc., 10 S.w'3d 308, 312 (Tex. 2000) ................. 15
Celotex Corp. v. Catrett. 477 U.S. 317, 322 (1986) .......................................... 5, 6
City of Beaumont v. Excavators & Constructors, Inc., 870 S.w'2d 123,129 (Tex. App.-Beaumont 1993, writ denied) .................... 16
Cothrum Drilling Co. v. Partee, 790 SW.2d 796, 800 (Tex. App.-Eastland 1990, writ denied) ...................... 13
J. Giels Band Employee Benefit Plan v. Smith Barney Shearson, Inc., 76 F.3d 1245, 1251 (1st Cir. 1996).................................................................... 6
Jacobson v. Osborne, 133 F.3d 315, 319-20 (5th Cir. 1998) ............................. 11
Koch Oil Co. v. Wilber, 895 S.W.2d 854, 863 (Tex. App.-Beaumont 1995, writ denied) .................... 13
Kroger Texas L.P. v. Suberu, 216 S.w'3d 788, 795-96 (Tex. 2006) .......................................................... 5, 20
Lane Bank Equipment Co. v. Smith Southern Equipment, Inc., 10 S.w'3d 308, 312 (Tex. 2000) ..................................................................... 15
Leeds v. Cooley,
702 S.w'2d 213, 215 (Tex. App.-Houston [1'1 Dist.] 1985, writ ref'd n.r.e.) ... 13
Lewis v. Bank of Am. NA, 343 F.3d 540, 544-45 (5th Cir. 2003) ............................................................... 15
McGregor v. Louisiana State Univ., 3 F.3d 850, 864-65 (5th Cir. 1993) .................................................................. 12
III

Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 5 of 28
Mcintosh v. Wiley, 2006 WL 3691109, at *2 (S.D. Tex. Dec. 11,2006) ....................................................................... 16
McLaughlin, Inc. v. Northstar Drilling Tech., Inc., 138 SW.3d 24, 27 (Tex. App.-San Antonio 2004, no pet.) ........................... 14
Oros v. Hull & Assocs.,
217 F.R.D. 401, 404-05 (N.D.Ohio 2003) ....................................................... 12
Prime Prods., Inc. v. S.S.I. Plastics, Inc.,
97 S.W.3d 631 636 (Tex. App.-Houston [1't Dist.] 2002, pet. denied) .......... 14
Soto v. Brooklyn Corr. Facility, 80 F.3d 34,36 (2nd Cir. 1996) ........................................................................ 11
Stine v. Stewart, 80 SW.3d 586, 592 (Tex. 2002)....................................................................... 9
Taub v. Houston Pipeline Co., 75 S.W.3d 606, 618 (Tex. App.-Texarkana 2002, pet. denied) ...................... 8
Texas Interstate Contracting Corp. v. City of Dallas, 135 SW.3d 605, 607 (Tex. 2004) ................................................................... 15
Zamora-Garcia et al. v. Moore, et aI., No. M-05-331, Dkt. 139 (S.D. Tex. Apr. 25, 2007) ........................................ 2, 3
Zamora-Garcia et al. v. Moore, et aI., No. M-05-331, Ok\. 39 (S.D. Tex. Mar. 9, 2006) ................................................ 2
Zamora-Garcia et al. v. Moore, et aI., No. M-05-331, Ok\. 73 (S.D. Tex. May 22, 2006) .............................................. 2
Zamora-Garcia, et al. v. Moore, et aI., No. M-05-331, Ok!. 139 (S.D. Tex. Apr. 25, 2007) ................................... passim
Zamora-Garcia, et al. v. Moore, et aI., No. M-05-331, Ok\. 153 (S.D. Tex. Sept. 6, 2007)............................................ 4
Zamora-Garcia, et al. v, Moore, et aI., No. M-05-331, Ok\. 2 (S.D. Tex. Sept. 30, 2005) .................................... 3,4, 10
Zamora-Garcia, et al. v. Tromski, et aI., No. M-02-144, Dkt. 1 (S.D. Tex. Apr. 16, 2002) .............................................. 10
Zamora-Garcia, et al. v. Tromski, et aI.,
IV

Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 6 of 28
No. M-02-144, Okt. 148 (S.D. Tex. Sept. 30, 2005) ........................................ 11 Zamora-Garcia, et al. v. Tromski, et aI.,
No. M-02-144, Okt. 150 (S.O. Tex. Sept. 30, 2005) ........................................ 10 Zamora-Garcia, et al. v. Tromski, et aI.,
No. M-02-144, Okt. 151 (S.D. Tex. Sept. 30, 2005) ........................................ 10 Zamora-Garcia, et al. v. Tromski, et aI.,
No. M-02-144, Okt. 2 (S.O. Tex. May 7,2002)................................................ 10 Zamora-Garcia, et al. v. Tromski, et
aI., No. M-02-144, Okt. 87 (S.D. Tex. Mar. 30,2004) ................................. 2,10 Statutes
TEX. CIV. PRAC &REM. CODE § 16.003(a) ....................................................... 5, 19 TEX. CIV. PRAC. & REM. Code §16.0004(a)(3) ................................................... 3, 8 TEX. CIV. PRAC. &REM. Code §16.051 ...................................................................9 TEX. CIV. PRAC. &REM. CODE § 16.068 (Vernon 1986) .................................. 11,13
Rules FED. R. CIV. P. 4(m) ........................................................................................ 9,10 FED. R. CIV. P. 56(c) ............................................................................................. 5 FED. R. CIV. P. 15(c).............................................................................................. 9 FED. R. CIV. P. 15(c)(1) ....................................................................................... 10 FED. R. CIV. P. 15(c)(3) ............................................................................... 8,9,10 FED. R. CIV. P. 23 ................................................................................................. 1 FED. R. CIV. P. 23(b)(3) ......................................................................................... 3
v

Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 7 of 28

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS
MCALLEN DIVISION

ARACELY ZAMORA-GARCIA,

§

eta!.,

§

in their own name and right, and on

§

behalf of all others similarly situated, §

§

Petitioners/Plaintiffs

§

§

v.

§

§

MARC MOORE, DISTRICT

§

DIRECTOR FOR INTERIOR

§

ENFORCEMENT, DEPARTMENT OF §

HOMELAND SECURITY, et aI.,

§

§

Respondents/Defendants.

§

CA No. M-05-331

DEFENDANT STONINGTON'S MOTION FOR PARTIAL SUMMARY JUDGMENT
Defendant, Stonington Insurance Company, f/k/a Nobel Insurance Company ("Stonington"), files this Motion for Partial Summary Judgment, and in support shows the following: I. Introduction A. The Indemnitor Notice Class Claims
Under Federal Rule of Civil Procedure 23, the Court certified two plaintiff classes in this case: (1) the Indemnitor Notice Class, and (2) the Bonded Immigrant Class. 1 The two classes assert contract claims against Fairmont
1 See generally Order Granting In Part and Denying In Part Plaintiffs' Motion to Certify Surety Bond Classes ("Certification Order"), Zamora-Garcia et al. v. Moore, et al., No. M05-331, Dkt. 139 (S.D. Tex. Apr. 25,2007).

Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 8 of 28
Specialty Insurance Company (f/k/a Ranger Insurance Company), Stonington
Insurance Company (f/k/a Noble Insurance Company), and Aaron Federal
Bonding Agency (sometimes known as U.S. Immigration Bonds and Services),
an assumed name for Don Vannerson, deceased ("Aaron Bonding,,)2 With
respect to the class claims, this summary judgment focuses on the Indemnitor
Notice Class claims, and Stonington reserves the right to timely file a summary
judgment on the Bonded Immigrant Class claims at a later date.
Plaintiff Irma Sandoval is the class representative of the Indemnitor Notice
Class. Ms. Sandoval represents a class of plaintiffs who served or are serving as
Indemnitors on immigration-surety bonds posted by Ranger Insurance Company
("Ranger") or Nobel Insurance Company ("Nobel") to secure the release of
bonded immigrants detained by the Immigration and Naturalization Services
("INS"), the predecessor agency to the Department of Homeland Security
("DHS,,).3 Ms. Sandoval and the Indemnitor Notice Class seek to recover
2 Aaron Federal Bonding Agency and U.S. Immigration Bonds and Services were assumed names for Don Vannerson. Mr. Vannerson died on March 1, 2004, almost two years after the predecessor action was filed. See Suggestion of Death, Zamora-Garcia, et a/. v. Tromski, et a/., No. M-02-144, Ok!. 87 (S.D. Tex. Mar. 30, 2004). No efforts were made to substitute a personal representative of Mr. Vannerson's estate until Plaintiffs filed their Motion to Add Co-Executors Rodney Vannerson and Eleni Papadakis as Party Defendants on March 9, 2006. See Zamora-Garcia et a/. v. Moore, et a/., No. M-05-331, Ok!. 39 (S.D. Tex. Mar. 9, 2006). Shortly thereafter, and prior to appearing in this lawsuit, Rodney Vannerson and Eleni Papadakis resigned as the Co-Executors of the Vannerson Estate. The first appearance in this lawsuit by an estate representative was filed by Michael Padilla, as Independent Administrator, on May 22, 2006. See Defendant's, Michael Padilla as Independent Administrator of the Estate of Don Vannerson, Original Answer, Zamora-Garcia et al. v. Moore, et al., No. M-05-331, Ok!. 73 (S.D. Tex. May 22, 2006). 3 See Certification Order at 39, Zamora-Garcia et al. v. Moore, et al., No. M-05-331, Ok!. 139 (S.D. Tex. Apr. 25, 2007).
2

Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 9 of 28
damages under Federal Rule of Civil Procedure 23(b)(3) for a single breach of contract claim resulting from Defendants alleged failure to notify the Indemnitors and Bonded Immigrants of scheduled appearances before the DHS4 B. Stonington is entitled to a dismissal of all Indemnitor Notice Class
claims that accrued before September 30, 2001, because they are barred by the applicable four-year statute of limitations. Stonington was added a defendant to this lawsuit on September 30, 2005,s In Texas, breach of contract claims must be filed within four years from the date they accrued or they are barred by the statute of limitations. See TEX. CIV. PRAC. & REM. Code §16.0004(a)(3). Consequently, all breach of contract claims asserted by the Indemnitor Notice Class that accrued prior to September 30, 2001, are barred by limitations, and should be dismissed as a matter of law. C. All claims against Stonington asserted by absentee Indemnitor Notice Class members with Ranger bonds should be dismissed because there is no privity of contract. As demonstrated later in this motion, most of the absentee Indemnitor Notice Class members obtained immigration bonds from Ranger Insurance Company.6 Nobel and Stonington had no involvement or dealings with these indemnitors. 7 More importantly, there is no privity of contract between Stonington
4 See id. at 16-18.
5 See Plaintiffs' Third Amended Petition for Writ of Habeas Corpus and Class Action Complaint ("Plaintiffs' Third Amended Complaint"), Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Dkt. 2 (S.D. Tex. Sept. 30, 2005). 6 See infra at notes 22-23 and accompanying text. 7 The Indemnitor Notice Class representative, Irma Sandoval, obtained an immigration bond from Nobel Insurance Company. See Ex. 1, Manuel Sandoval bond file at BF-224. There is no class representative in this case who obtained a bond from Ranger or its successor, Fairmont. Fairmont has requested a dismissal of all class claims against it
3

Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 10 of 28
and the indemnitors with Ranger bonds, and such indemnitors suffered no harm from Stonington. Therefore, all class claims asserted against Stonington by absentee Indemnitors with Ranger bonds should be dismissed as a matter of law. D. Stonington is also entitled to a dismissal of individual claims
asserted by Aracely Zamora, Juana Zamora, and Alberta Rubio In addition to the class action claims, Plaintiffs Aracely and Juana Zamora filed individual claims against Stonington and the other Defendants in this case for intentional infliction of emotional distress8 Stonington seeks a dismissal of all tort claims asserted by Aracely and Juana Zamora because they are barred by the applicable two-year statute of limitations. See TEX. CIV. PRAC & REM. CODE § 16.003(a) ("[A] person must bring suit for ... personal injury ... not later than two years after the day the cause of action accrues."). Furthermore, the Zamoras never had any involvement or dealings with Stonington, and suffered no injury from Stonington. Therefore, the Zamoras cannot establish the other elements of their tort cause of action. See Kroger Texas L.P. v. Suberu, 216 S.W.3d 788, 795-96 (Tex. 2006) (cause of action for intentional infliction of emotional distress requires proof that defendant's extreme and outrageous conduct caused plaintiff's emotional distress). Finally, Alberta Rubio seeks contract damages against Stonington and the other Defendants for their alleged failure to return collateral that she allegedly
on this basis. See Defendant Fairmont's Motion for Summary Judgment, ZamoraGarcia, ef al. v. Moore, ef al., No. M-05-331, Dkt. 153 (S.D. Tex. Sept. 6, 2007). 8 See Plaintiffs' Sixth Amended Complaint at ~~ 145-155, Zamora-Garcia, ef al. v. Moore, ef al., No. M-05-331, Dkt. No. 114, (S.D. Tex. Oct. 27, 2006).
4

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paid in connection with the immigration bond she obtained for her son, Miguel Rubi0 9 However, there is no evidence that Ms. Rubio ever paid collateral in connection with her son's bond, and therefore, this claim should be dismissed as well. II. Summary Judgment Standard of Review
Summary judgment is proper in a case where there is no genuine issue of material fact. FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett. 477 U.S. 317, 322 (1986). A defendant who seeks summary judgment on a plaintiff's cause of action must demonstrate the absence of a genuine issue of material fact by either (1) submitting summary judgment evidence that negates the existence of a material element of plaintiffs claim or (2) showing there is no evidence to support an essential element of plaintiff's claim. J. Giels Band Employee Benefit Plan v. Smith Barney Shearson, Inc., 76 F.3d 1245, 1251 (1st Cir. 1996); see Celotex Corp., 477 U.S. at 322-23. In this case, members of the Indemnitor Notice Class whose breach of contract claims accrued before September 30, 2001 are barred by limitations. Moreover, the indemnitors with Ranger bonds cannot establish that they had a contractual relationship with Stonington, or that they suffered any injury from Stonington.
Furthermore, Aracely and Juana Zamora's individual claim for intentional infliction of emotional distress is barred by the applicable two-year statute of limitations. Moreover, there is no evidence that Stonington had any involvement in the alleged misconduct relating to the Zamoras' tort claim. Similarly, there is
9 See id. at ,-r,-r124-128.
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Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 12 of 28

no evidence that Alberta Rubio paid any collateral in connection with Miguel

Rubio's bond, or that she is entitled to a refund for such collateral. For these

reasons, Stonington is entitled to a partial summary judgment on the above noted

claims.

III. Summary Judgment Evidence.

In support of its motion, Defendant Stonington includes evidence in the

attached appendix, which is incorporated by reference in this motion.lO The

motion for summary judgment is based on the following evidence:

Exhibit 1 Manuel Sandoval's bond file

Exhibit 2 Aracely Zamora's bond file

Exhibit 3

Excerpts from Plaintiffs' Excel spreadsheets identifying 4713 Ranger Indemnitors and 2105 Nobel Indemnitors produced via email on May 29,2007.

IV. All Indemnitor Notice Class claims that accrued prior to September 30, 2001, are barred by the applicable statute of limitations.

Many of the absentee Indemnitor Notice Class members are barred by the

four-year statute of limitations from asserting breach of contract claims against Stonington. In the certification order, the Court defined the Indemnitor Notice

Class as:
(a) those who served or are serving as Indemnitors on a surety bond posted by the a Bonding Defendant to secure the release of a Bonded Immigrant detained by the Federal Defendants, and
(b) who have fully paid their up-front, non-reimbursable fees to the Bonding Defendants pursuant to the terms of the bonding contracts, and

10 See also Affidavit of Susan Logsdon in Support of Stonington's Motion for Partial Summary Judgment filed with this motion.

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Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 13 of 28
(c) where the Bonding Defendant's records indicate that on or after April 16, 1998, it received a "Notice to Obligor to Deliver Alien" indicating that the INS/DHS had scheduled an appearance for deportation for the Bonded Immigrant, and where the Bonding Defendant did not provide notice of the requested appearance for deportation to either the Indemnitor or the Bonded Immigrant.
Irma Sandoval and the Indemnitor Notice Class's breach of contract claim
consists of the "Bonding Defendants'"'' alleged routine failure to abide by the
following provision in the Terms and Condition contract:
[Bonded Immigrant] and INDEMNITOR will be notified by AGENCY of all appearances requested by the U.S. IMMIGRATION AND
NATURALIZATION SERVICE of which AGENCY receives notice.'2
In Texas, "[t]he limitations period on actions for breach of contract is four years."
Taub v. Houston Pipeline Co., 75 S.W.3d 606, 618 (Tex. App.-Texarkana 2002,
pet. denied); TEX. C IV. P RAC. & R EM. Code §16.004(a)(3); see a/so TEX. C IV.
PRAC. & REM. Code §16.051; Stine v. Stewart, 80 S.w.3d 586, 592 (Tex. 2002).
"It is well-settled law that a breach of contract claim accrues when the contract is
breached." Stine, 80 S.w.3d at 593.
11 In their Complaint, Plaintiffs collectively refer to Fairmont Specialty Insurance Company (flkla Ranger Insurance Company), Stonington Insurance Company (f/kla Noble Insurance Company), and Aaron Federal Bonding as the "Bonding Defendants," imputing the conduct of Aaron Federal Bonding to Fairmont and Stonington. See
Plaintiffs' Sixth Amended Complaint at 1T 1, Zamora-Garcia, et al. v. Moore, et al., No. M-
05-331, Dkt. No. 114, (S.D. Tex. Oct. 27, 2006). But see Certification Order at n. 5, Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Dkt. 139 (S.D. Tex. Apr. 25, 2007) ("[T]he Court notes that whether Insurer Defendants Fairmont and Stonington are liable for Aaron Bonding's conduct is an issue yet to be resolved.").
12 See Certification Order at 16-17; Zamora-Garcia, et al. v. Moore, et aI., No. M-05-331, Dkt. 139 (S.D. Tex. Apr. 25, 2007), see also Plaintiffs' Sixth Amended Complaint at "'5, Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Okt. No. 114, (S.D. Tex. Oct. 27, 2006); and Ex. 1, Manuel Sandoval bond file at BF-238 at ,., 4 (Terms and Conditions Under Immigration Bond).
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Under the allegations of the Plaintiffs' Sixth Amended Complaint, Ms. Sandoval's and the absentee Indemnitor Notice Class members' breach of contract claims accrued when Aaron received demands from the INSIDHS to deliver bonded immigrants for appearances, and Defendants failed to provide such notice to the indemnitors and bonded immigrantsD However, Stonington was added as a party to this action on September 30, 2005, when Plaintiffs filed
their Third Amended Class Action Complaint. '4 Thus, any claim that accrued
before September 30, 2001, is barred by the statute of limitations. Plaintiffs cannot avoid the statute of limitations by claiming that their
contract claims accruing before September 30, 2001 are timely under the "relation back" provision of Federal Rule of Civil Procedure 15(c)(3). Plaintiff Aracely Zamora originally filed the predecessor action, Case No. M-02-144, on
'S April 16, 2002, against the federal govemment. Aaron Federal Bonding Agency
was added as a defendant in the First Amended Class Action Complaint, filed on May 7,2002. '6 More than three years later, on September 30,2005, Stonington and Nobel were added as defendants to the Third Amended Class Action
13 See Plaintiffs' Sixth Amended Complaint at mJ 112-122, Zamora-Garcia, et a/. v.
Moore, et al., No. M-05-331, Okt. No. 114, (S.O. Tex. Oct. 27, 2006). 14 Plaintiffs' Third Amended Petition for Writ of Habeas Corpus and Class Action Complaint ("Plaintiffs' Third Amended Complaint"), Zamora-Garcia, et al. v. Moore, et a/., No. M-05-331, Ok!. 2 (S.D. Tex. Sept. 30, 2005). 15 See Plaintiffs' Petition for Writ of Habeas Corpus and Class Action Complaint, Zamora-Garcia, et al. v. Tromski, et aI., No. M-02-144, Okt. 1 (S.D. Tex. Apr. 16, 2002). 16 See Plaintiffs' First Amended Petition for Writ of Habeas Corpus and Class Action Complaint, Zamora-Garcia, et al. v. Tromski, et aI., No. M-02-144, Okt. 2 (S.D. Tex. May 7,2002).
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Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 15 of 28
Complaint,17
Federal Rule of Civil Procedure 15(c)(3) states:
c) Relation Back of Amendments. An amendment of a pleading relates back to the date of the original pleading when
(3) the amendment changes the party or the naming of the party against whom a claim is asserted if the foregoing provision (2) is satisfied and, within the period provided by Rule 4(m) for service of the summons and complaint, the party to be brought in by amendment (A) has received such notice of the institution of the action that the party will not be prejudiced in maintaining a defense on the merits, and (B) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the party.
FED. R. CIV. P. 15(c)(3). Rule 15(c)'s "relates back" provision does not apply to
Stonington because an amended complaint adding a defendant does not relate
back to the original complaint if Plaintiff has shown neither factual mistake nor
legal mistake concerning the identity of the proper party. See Soto v. Brooklyn
Carr. Facility, 80 F.3d 34, 36 (2nd Cir. 1996); see also Jacobson v. Osborne, 133
F.3d 315, 319-20 (5th Cir. 1998) (Rule 15(c)(3) "is meant to allow an amendment
changing the name of a party to relate back to the original complaint only if the
change is the result of an error, such as misnomer or misidentification."). In this
case, Plaintiffs have not shown and cannot show that they delayed adding
Stonington as a party to this litigation as a result of factual or legal mistake.
if See Plaintiffs' Third Amended Complaint, Zamora-Garcia, et al. v. Tromski, et ai., No. M-02-144, Okt. 150 (S.~. Tex. Sept. 30, 2005). The Court severed the Third Amended Complaint from cause number M-02-144, and assigned it a new cause number, M-05331. See Order of Severance, Zamora-Garcia, et al. v. Tromski, et al., No. M-02-144, Ok!. 151 (S.D. Tex. Sept. 30, 2005); see also Plaintiffs' Third Amended Complaint, Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Okt. No.2 (S.D. Tex. Sept. 30, 2005).
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Indeed, they offer no explanation for their delay in adding Stonington. 's
Moreover, Plaintiffs have failed to show that within the period provided by Rule
4(m) for service of the summons and complaint,'9 Stonington received such
notice of the institution of the action that Stonington will not be prejudiced in
maintaining a defense on the merits, and that Stonington knew or should have
known that, but for a mistake concerning the identity of the proper party, the
action would have been brought against the party.20 See FED. R. CIV. P.
15(c)(3); see a/so Bailey v. U.S., 289 F. Supp.2d 1197, 1207 (D. Haw. 2003)
(amended complaint adding new defendants did not relate back to the date of the
original complaint in wrongful death action where plaintiffs failed to show the
requirements of Rule(c)(3) were met).
Moreover, Texas procedural law does not rescue the absentee Notice
Class Members claims from the effect of Iimitations 21 "Texas Civil Practice &
18 See Plaintiffs' Motion to File Third Amended Petition for Writ of Habeas Corpus and Class Action Complaint, Zamora-Garcia, et al. v. Tromski, et al., No. M-02-144, Ok!. 148 (S.D. Tex. Sept. 30, 2005). Plaintiffs' motion is little more than a pleading title, and it is not supported by any factual allegations or legal authority. 19 Rule 4(m) allows 120 days for service of the summons and complaint unless an extension is obtained. See FED. R. CIV. P. 4(m). 20 See supra at note 18. 21 Under Federal Rule 15 (c)(1): "An amendment of a pleading relates back to the date of the original pleading when (1) relation back is permitted by the law that provides the statutes of limitations applicable to the date of the original pleading." FED. R. CIV. P. 15(c)(1). There is a split among the federal circuit courts as to whether state procedural rules or federal procedural rules govern the relation back principles set forth in Rule 15(c)(1). See Oros v. Hull & Assocs., 217 F.RD. 401, 404-05 (N.D. Ohio 2003) (discussing circuit split). In McGregor v. Louisiana State Univ., 3 F.3d 850, 864-65 (5th Cir. 1993), the Fifth Circuit applied Louisiana procedural law in determining that the amended pleadings did not relate back to the original pleadings. As discussed above, neither the federal procedural rules, nor the Texas procedural rules, prevent limitations from barring certain Indemnitor Notice Class claims against Stonington.
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Remedies Code section 16.068 (Vernon 1986) permits the amendment of pleadings after the statute of limitations has run to change 'the facts or grounds of liability or defense,' but this section does not authorize the addition of new defendants after the claims against them have been barred by limitation." Cothrum Drilling Co. v. Partee, 790 S.W.2d 796, 800 (Tex. App.-Eastland 1990, writ denied); see also Koch Oil Co. v. Wilber, 895 S.W.2d 854, 863 (Tex. App.Beaumont 1995, writ denied) (amended pleadings do not prevent the running of the statute of limitations against parties who are added by amended pleadings); and Leeds v. Cooley, 702 S.W.2d 213, 215 (Tex. App.-Houston [1't Dist.] 1985, writ ref'd n.r.e.) ("The statute of limitations is tolled at the time a party defendant is brought into the suit and not when the original pleading is filed."). Therefore, the absentee Indemnitor Notice Class members' claims against Stonington that accrued prior to September 30, 2001, are barred by the applicable four-year statute limitation, and should be dismissed as a matter of law. V. All Ranger Indemnitor class claims must be dismissed because there
is no privity of contract between the absentee Ranger Indemnitors and Stonington. The immigration bonds at issue in this case were issued either by Nobel or Ranger. 22 Plaintiffs allege there are 4713 potential class members of the Indemnitor Notice Class who obtained immigrations bond from Ranger ( "Ranger Indemnitors"), and approximately 2105 potential class members ofthe Indemnitor Notice Class who obtained immigration bonds from Nobel ("Nobel
22 Compare Ex. 1 Manuel Sandoval bond file at BF-224 (immigration bond issued by Nobel) with Ex. 2, Aracely Zamora bond file at BF-056 (immigration bond issued by Ranger).
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Indemnitors,,).23 To the extent that the Ranger Indemnitors attempt to assert breach of contract claims against Stonington, those claims must be dismissed because there is no privity of contract between the Ranger Indemnitors and Stonington.
In its certification order, this Court set forth the elements of a cause of action for breach of contract in Texas:
Under Texas law, the elements of a breach of contract cause of action are: (1) the existence of a valid contract; (2) performance or tendered performance by plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the defendant's breach. E.g., McLaughlin, Inc. v. Northstar Drilling Tech., Inc., 138 SW.3d 24, 27 (Tex. App.-San Antonio 2004, no
pet.); Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 SW.3d 631 636
(Tex. App.-Houston [1 st Dist.] 2002, pet. denied); Lewis v. Bank of Am. NA, 343 F.3d 540, 544-45 (5th Cir. 2003).24 In this case, the Ranger Indemnitors cannot prove their breach of contract claims against Stonington because they had no contract with Stonington-or any other dealings with Stonington. There is no evidence that privity of contract exists between the Ranger Indemnitors and Stonington. "In a breach of contract action, the plaintiff has the burden to prove that the defendant has obligated himself under the contract. . . . Maintenance of an action for breach of contract requires privity between the damaged party and the party sought to be held liable." Cannon v. ICO Tubular Serv., Inc., 905 S.W.2d 380,392-393 (Tex. App.-Houston [1st Dist.] 1995, no writ), abrogated on other
23 See Exhibit 3, excerpts from Plaintiffs' Excel spreadsheets identifying 4713 Ranger Indemnitors and 2105 Nobel Indemnitors. 24 See Certification Order at 16; Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Ok!. 139 (S,D. Tex, Apr. 25, 2007).
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Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 19 of 28
grounds by Lane Bank Equipment Co. v. Smith Southern Equipment, Inc., 10
S.W.3d 308, 312 (Tex. 2000); see also Texas Interstate Contracting Corp. v. City of Dallas, 135 SW.3d 605, 607 (Tex. 2004) ("Privity of contract, as a necessary predicate to suit on a contract, has a long and settled history in this State."); Mcintosh v. Wiley, 2006 WL 3691109, at *2 (S.D. Tex. Dec. 11,2006) (Plaintiffs breach of contract claim was dismissed against one of the defendants because the defendant was not a party to the contract, and thus there was no privity of contract as required under Texas law).
Transactions between the Ranger Indemnitors and Ranger cannot create contractual obligations between the Ranger Indemnitors and Stonington. It is "a black-letter, axiomatic rule that a contract between other parties cannot create an obligation or duty on a non-contracting party, which non-contracting party was a stranger to the basic underlying ... contract." City of Beaumont v. Excavators & Constructors, Inc., 870 SW.2d 123, 129 (Tex. App.-Beaumont 1993, writ denied) (Telephone company which was not party to contract between excavator and city had no duty arising out of ordinary contract to avoid causing delay or inefficiency in contractor's performance). Because there is no privity of contract between the Ranger Indemnitors and Stonington, the breach of contract claims asserted by the Ranger Indemnitors against Stonington must be dismissed as a matter of law. VI. Aracely Zamora and Juana Zamora individual claims against
Stonington for intentional infliction of emotional distress should also be dismissed. A. Plaintiffs' allegations and factual background.
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According to Plaintiffs, Aracely Zamora is a Mexican national who has resided in the United States since 1982.25 She and her mother, Juana Zamora, live in Mission, Texas. 26 In February of 2000, Aracely was detained by the federal authorities and placed under removal proceedings for helping two young girls enter the U.S. illegally.27 To secure Aracely's release from detention, Juana Zamora contacted Juvencio Pena, Aracely's cousin.28 Mr. Pena, on Juana Zamora's behalf, entered a contract with Aaron Bonding by which Aaron Bonding agreed to post an immigration-surety bond on Aracely Zamora's behalf29 Also, according to Plaintiffs, Aaron Bonding served as the agent of Ranger in contracting with Pena 30
On September 20, 2001, an immigration judge ordered Aracely's removal from the United States, and subsequently the DHS issued a demand on the bond to Aaron Bonding, requiring that Aaron Bonding present Aracely Zamora for an appearance before the DHS on December 12, 2001.31 Plaintiffs allege that
25 See Plaintiffs' Sixth Amended Complaint at 11 82, Zamora-Garcia, et a/. v. Moore, et
a/., No. M-05-331, Okt. No. 114 (S.D. Tex. Oct. 27, 2006). 26 See id. 27 See id.
28 See id. at 11 83.
29 See id. 30 See id.
31 See id at 11 84.
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Aracely was not timely presented to the DHS, and the bond was declared breached by the DHS.32
Moreover, Plaintiffs contend that on April 15, 2002, Defendant Santiago Sol, as agent for Aaron Bonding, went to the home of Juana Zamora in Mission, Texas, looking for Aracely Zamora to turn her into the DHSa3 According to Plaintiffs, Mr. Sol falsely asserted that he had a warrant for Aracely's removal, issued in December 2001, and that he was authorized to arrest her. 34 Plaintiffs further allege that Aracely was not home on April 15, 2002, so Mr. Sol returned to the Zamora home, and to the homes of relatives, over the next few days.35 Even though there is no allegation that Mr. Sol ever in fact detained Araceiy Zamoraor even met or spoke with her-Juana and Aracely Zamora claim Mr. Sol caused them great emotional distress.36 As a result of Mr. Sol and Aaron Bonding's alleged actions, Juana and Aracely Zamora assert a cause of action for intentional infliction of emotional distress. 37 B. The Zamoras' tort claim against Stonington is barred by the two-year
statute of limitations. To the extent that Aracely and Juana Zamora seek to hold Stonington liable for Mr. Sol and Aaron Bonding's alleged tortious conduct, their claim is
32 See id.
33 See id. at 1111146-149. 34 See id. at 11148. 35 See id. at 11 88.
36 See id.
37 See id. at 1111146-155.
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barred by the two-year statute of limitations. See TEX. CIV. PRAC & REM. CODE § 16.003(a) ("[A] person must bring suit for ... personal injury ... not later than two years after the day the cause of action accrues."). "[Tlhe applicable limitations period for a claim of intentional infliction of emotional distress is two years from the accrual of the cause of action." Bhalli v. Methodist Hosp., 896 S.W.2d 207, 211 (Tex. App.-Houston [1st Dist.] 1995, writ denied). According to Plaintiffs' complaint, the alleged actions by Aaron Bonding and Santiago Sol occurred in April 2002, which is when their claim for intentional infliction of emotional distress accrued. See id. at 212 (a cause of action for intentional infliction of emotional distress accrues when the tortious acts have ceased).38 Yet, as previously noted, Stonington was not added as a party to this lawsuit until September 30, 2005, when Plaintiffs filed their Third Amended Class Action Complaint,39 Applying the same analysis for the Indemnitor Notice Class claims, Plaintiffs' Aracely and Juana Zamoras' claim against Stonington for intentional infliction of emotional distress is also barred by the applicable two-year statute of limitations as a matter of law40 Therefore, the Zamoras tort claim against Stonington must be dismissed as a matter of law. C. There is no evidence that Stonington had any involvement in Aaron
38 See id. at 111182-89 and 1111146-155. 39 Compare Plaintiffs' Third Amended Petition for Writ of Habeas Corpus and Class Action Complaint ("Plaintiffs' Third Amended Compiaint"), Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Okt. 2 (S.D. Tex. Sept. 30, 2005) with Plaintiffs' Second Amended Petition for Writ of Habeas Corpus and Class Action Complaint ("Plaintiffs' Second Amended Complaint"), Zamora-Garcia, et al. v. Tromski, et al., No. M-02-144, Dkt. 36 (S.~. Tex. July 31, 2003). 40 See supra at Part IV.
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and Sol's alleged conduct. In addition to the statute of limitations problem, the Zamoras cannot establish the other elements of their tort cause of action. In Texas, to prevail on a claim for intentional infliction of emotional distress, a plaintiff must prove that: (1) the defendant acted intentionally or recklessly; (2) the defendant's conduct was extreme and outrageous; (3) the defendant's actions caused plaintiff emotional distress; and (4) the emotional distress was severe. See Kroger Texas L.P. v. Suberu, 216 SW.3d 788, 795-96 (Tex. 2006). In this case, the Zamoras cannot establish the first, second and third elements of their cause of action because there is no allegation-and no evidence-that Stonington or Nobel had any involvement, or engaged in any conduct, relating to the Zamoras' alleged claims of emotional distress 41 According to Plaintiffs, Aaron Bonding served as the agent of Ranger in contracting with Aracely's cousin, Mr. Pena 42 More importantly, Aracely Zamora's bond file confirms Ranger posted Ms. Zamora's immigration bond, not Nobel or Stonington 43 There is no evidence that Nobel or Stonington posted a bond for Ms. Zamora, or had any other dealings with her44 As such, Nobel and Stonington had no reason or duty to locate Ms.
41 See Plaintiffs' Sixth Amended Complaint at 1111 82-89 and 1111 145-155, Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Okt. No. 114 (S.D. Tex. Oct. 27, 2006).
42 Id. at 11 83.
43 See Exhibit 2, Aracely Zamora bond at SF-056. 44 See generally id.
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Zamora to deliver her to the INS45 Consequently, Aracely and Juana Zamora cannot establish the elements of their cause of action, and their claim against Stonington for intentional infliction of emotional distress must be dismissed as a matter of law. VII. There is no evidence that Alberta Rubio paid any collateral to
Stonington. Alberta Rubio asserts a breach of contract claim against Stonington for its failure to return collateral that she allegedly paid in connection with the bond for her son Miguel Rubio. Specifically, Ms. Rubio contends: The uniform surety contracts ... obligate the Bonding Defendants to return collateral paid under the terms of the contracts to the Indemnitors upon the cancellation of the bond at issue. The Bonding Defendants have failed to return the posted collateral to Alberta Rubio and the members of Indemnitor Collateral Class.46 The foregoing claim against Stonington should be dismissed as a matter of law because there is no evidence that Ms. Rubio ever paid any collateral to Stonington. In Plaintiffs' complaint, Alberta Rubio sought to be the class representative for the so-called "Indemnitor Collateral Class," representing all indemnitors who were allegedly owed a collateral refund by the bond sureties, but never received the refund 47 In its certification order, this Court thoroughly analyzed the relevant evidence, and ultimately denied certification of the
45 See id at BF-057 at 1) G(1) (Under the terms of the bond, the alien's release is conditioned upon the delivery by Ranger of the alien to an immigration officer or judge of the United States as specified in the appearance notice.).
46 See Plaintiffs' Sixth Amended Complaint at mJ 126-127, Zamora-Garcia, et al. v.
Moore, et al., No. M-05-331, Dkt. No. 114 (S.D. Tex. Oct. 27, 2006). 47 Id. at 1) 106.
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Indemnitor Collateral Class 48 The Court concluded that Ms. Rubio could not
maintain such a claim in her own right, much less on behalf of the proposed Indemnitor Collateral Class:
Upon reviewing the evidence submitted, the Court finds that Plaintiffs have failed establish that Ms. Rubio ever made a collateral deposit, much less a deposit reflected by the Promissory Note referenced in Plaintiffs' Motion for Class Certification, or that she is entitled to the return of any collateral on the grounds alleged by the Indemnitor [Collateral] Class. Therefore, Plaintiffs cannot establish that Ms. Rubio's breach of contract claim, or the facts upon which it is based, are common to the proposed class, nor can they show that her claim is typical of the claims of the proposed class members ... Therefore, the Court ORDERS that Plaintiffs' Motion for Class Certification is DENIED with respect to the Indemnitor Collateral Class 49 No additional evidence has been produced in this case that would alter the above
stated findings. Consequently, Alberta Rubio's breach of contract claim against
Stonington for failure to return collateral should be dismissed as a matter of law. VIII. Conclusion
In this case, members of the Indemnitor Notice Class whose breach of
contract claims accrued before September 30, 2001, are barred by limitations.
Moreover, indemnitors with Ranger bonds cannot establish that they had a contractual relationship with Stonington, or that they suffered any injury from
Stonington. Furthermore, Aracely and Juana Zamora's individual claim for intentional
infliction of emotional distress is barred by the applicable two-year statute of
48 See Certification Order at 29-34, Zamora-Garcia, et al. v. Moore, et al., No. M-05-331, Ok!. 139 (S.D. Tex. Apr. 25, 2007). 49 See id. at 33-34.
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limitations. In addition, there is no evidence that Stonington had any involvement in the alleged misconduct relating to the Zamora's tort claim. Similarly, there is no evidence that Albert Rubio paid any collateral in connection with Miguel Rubio's bond, or that she is entitled to a refund for any such collateral. For these reasons, the above noted claims against Stonington must be dismissed as a matter of law.
PRAYER FOR RELIEF Defendant Stonington Insurance Company, f/k/a Nobel Insurance Company ("Fairmont"), requests that the Court grant its motion, and enter a partial summary judgment in its favor; and for such other and further relief, at law and in equity, as the Court deems just and appropriate.
Respectfully submitted,

'Fr~ P. ::r;..J)./J. $' ~

'0.. Bradf aw. Irelan

~ -,r-.

State Bar No.: 10411550 ~ 440 Louisiana Street, Suite 1800 ..

~

Houston, Texas 77002-1652

Telephone: (713) 222-7666

Facsimile: (713) 222-7669

ATIORNEY-IN-CHARGE FOR DEFENDANT, STONINGTON INSURANCE COMPANY, flk/a NOBEL INSURANCE COMPANY

OF COUNSEL: IRELAN .:. HARGIS, P.L.L.C. Susan A. Logsdon
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Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 27 of 28
State Bar No. 00999300 S.D. Tex. !.D. 12364 440 Louisiana Street, Suite1800 Houston, Texas 77002-1652 Telephone: (713) 222-7666 Facsimile: (713) 222-7669
ATLAS & HALL
Dan K. Worthington State Bar No. 00785282 818 Pecan Blvd P.O. Box 3725 McAllen, TX 78501 Telephone: (956) 682-5501 Facsimile: (956) 686-6109
CERTIFICATE OF SERVICE
I hereby certify that on this the 12th day of September, 2007, a true and correct copy of the foregoing, Defendant Stonington's Motion for Partial Summary Judgment, was duly served in accordance with the Federal Rules of Civil Procedure on:
J. Benjamin King Diamond McCarthy Taylor, Bryant & Lee, LLP 1201 Elm Street, 34th Floor, Dallas, Texas 75270-2102 Via CMRRR: 7003 0500 000318158937 and
Email BKing@diamondmccarlhy.com
Rene Carlo Benavides US Attorney's Office, Southern District of Texas 1701 West Highway 83, McAllen, Texas 78501-5176
Via First Class Mail and Email rene.benavides@usdoj.gov
Elisabeth lisa Brodyaga 17891 Landrum Park Road, San Benito, Texas 78586-7197
Via CMRRR: 70030500000318158920 and Emaillisabrodyaga@aol.com
Jason Murray Davis Jason Davis PC
98 San Jacinto Blvd., # 1900, Austin, Texas 78701
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Case 7:05-cv-00331 Document 154 Filed in TXSD on 09/12/07 Page 28 of 28 Via First Class Mail Lisa M. Putman
Department of Homeland Security P. O. Box 1711, Harlingen, Texas 78551-1711
Via First Class Mail Tucker Ronzetti, Esq.
Kozyak Tropin &Throckmorton, PA
2525 Ponce de Leon, Ninth Floor Coral Gables, FL 33134
Via First Class Mail and Email TR@kttlaw.com
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 Case 7:05-cv-00331 Document 258 Filed in TXSD on 09/30/08 Page 1 of 23

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS
MCALLEN DIVISION

ARACELY ZAMORA-GARCIA, et al,
Plaintiffs, VS.
MARC MOORE, et al,
Defendants.

§ § § § CIVIL NO. M-05-331 § § § §

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT FAIRMONT’S MOTION FOR SUMMARY JUDGMENT AND GRANTING IN PART AND DENYING IN PART DEFENDANT STONINGTON’S MOTION FOR
PARTIAL SUMMARY JUDGMENT

I. Introduction

Now before the Court are the Motions for Summary Judgment filed by Defendant

Fairmont f/k/a Ranger Insurance Company and Defendant Stonington f/k/a Nobel Insurance Company, respectively. (Docs. 153, 154).1 The class-wide and individual

claims relevant to these Motions concern alleged misconduct by “Bonding Defendants,”

including Fairmont and Stonington, in administering immigration surety bonds. (Doc.

114). Plaintiffs’ surety bond claims commenced with the filing of Plaintiffs’ First

Amended Complaint in Zamora-Garcia v. Trominski, Southern District of Texas,

McAllen Division, Cause No. M-02-144, the predecessor action to the instant suit.

Zamora-Garcia v. Trominski (Doc. 2). In the amended complaint filed on May 7, 2002,

Plaintiffs first named Aaron Federal Bonding Agency (“Aaron Bonding”) as a defendant against whom they sought relief for the alleged mishandling of surety bonds. Id.2 On

1 Collectively, Fairmont and Stonington have been referred to throughout this litigation as “Insurer Defendants” or “Sureties.” The Court will use the term “Sureties” herein. 2 “Aaron Federal Bonding Agency” and “U.S. Immigration Bonds and Services” were assumed names for Don Vannerson. Vannerson died on March 1, 2004, after the predecessor action was
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September 30, 2005, Plaintiffs filed their Third Amended Complaint in the predecessor action, in which they named Fairmont and Stonington (also referred to herein as “Sureties”) as additional defendants. Id. (Doc. 150). Plaintiffs alleged that Aaron Bonding or its predecessor, U.S. Immigration Bonds and Services, had acted or was acting as an agent for Fairmont/Ranger and Stonington/Nobel in administering the surety bonds at issue; therefore, Plaintiffs sought to hold all three “Bonding Defendants” liable for their surety bond claims. Id. The Court severed Plaintiffs’ Third Amended Complaint into the present cause. Id. (Doc. 151).
On October 27, 2006, Plaintiffs filed their Sixth Amended Complaint, the live complaint in this case. (Doc. 114). For purposes of clarification, the Court sets forth the following summary of the class-wide and individual claims that are pending and relevant to the Motions now before the Court. A. Class-Wide Claims
In its Order Granting in Part and Denying in Part Plaintiffs’ Motion for Class Certification, the Court certified two “Surety Bond Classes,” i.e., classes with claims against “Bonding Defendants,” including Sureties. (Doc. 139). Plaintiff Irma Sandoval represents the “Indemnitor Notice Class,” defined as follows:
(a) those who served or are serving as Indemnitors on a surety bond posted by a Bonding Defendant to secure the release of a Bonded Immigrant detained by the Federal Defendants,3 and (b) who have fully paid their up-front, non-reimbursable fees to the Bonding Defendant pursuant to the terms of the bonding contracts, and
filed. Zamora-Garcia v. Trominski (Doc. 87). In their live complaint, Plaintiffs have named Michael W. Padilla as a defendant in his capacity as Independent Administrator of the Estate of Don Vannerson d/b/a Aaron Federal Bonding Agency. (Doc. 114). 3 “Federal Defendants” are Marc Moore, District Director for Interior Enforcement, Department of Homeland Security; and Michael Chertoff, Secretary, Department of Homeland Security. (Docs. 114, 150). These defendants are sued in their official capacities. (Doc. 114).
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(c) where the Bonding Defendant’s records indicate that on or after April 16, 1998, it received a “Notice to Obligor to Deliver Alien” indicating that the INS/DHS4 had scheduled an appearance for deportation for the Bonded Immigrant, and where the Bonding Defendant did not provide notice of the requested appearance for deportation to either the Indemnitor or the Bonded Immigrant. Id. Sandoval and the Indemnitor Notice Class (collectively, “Indemnitor Plaintiffs”) assert a cause of action for breach of contract against Bonding Defendants. (Docs. 114, 139). More specifically, Indemnitor Plaintiffs claim that Bonding Defendants breached the “Terms and Conditions under Immigration Bond” agreement by failing to give notice to each Indemnitor Plaintiff and bonded immigrant upon receipt of a Form I-340, or “Notice to Obligor to Deliver Alien,” requesting the immigrant’s appearance before INS/DHS for deportation. Id. Indemnitor Plaintiffs seek damages equal to the value of all non-refundable, up-front fees paid to Bonding Defendants when entering into the surety bond contracts. Id. Plaintiff Petra Carranza de Salinas represents the “Bonded Immigrant Class,” defined as follows: (a) those who have been released from custody of the Federal Defendants pursuant to surety bonds posted by the Bonding Defendants, and (b) where the bond is outstanding.
(Doc. 139). De Salinas and the Bonded Immigrant Class (collectively, “Bonded Immigrant Plaintiffs”) assert a cause of action for “equitable relief preventing breach of contract” against Bonding Defendants. (Docs. 114, 139). Bonded Immigrant Plaintiffs seek an injunction requiring Bonding Defendants, directly or through their agents, to make good faith efforts to provide actual, timely, and reasonable notice to Bonded
4 The Immigration and Naturalization Service (“INS”) is the predecessor agency to the Department of Homeland Security (“DHS”) in all respects relevant to the instant case.
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Immigrant Plaintiffs and to the indemnitors on their bonds of any and all demands for performance made on those bonds by Federal Defendants. Id. Bonded Immigrant Plaintiffs also seek corresponding declaratory relief. Id. B. Individual Claims against Bonding Defendants
Plaintiff Juana Zamora and her daughter, Plaintiff Aracely Zamora-Garcia, assert individual claims for intentional infliction of emotional distress against individual Defendant Santiago Sol and Bonding Defendants. (Doc. 114). In doing so, Zamora and Zamora-Garcia seek to hold Bonding Defendants liable for the conduct of Sol, allegedly an agent for Aaron Bonding who attempted, by threats and harassment, to secure the removal of Zamora-Garcia. Id. Plaintiff Miguel Rubio also seeks to hold Bonding Defendants liable for false imprisonment, claiming that an unidentified agent of Aaron Bonding forcibly apprehended Rubio and surrendered him to INS/DHS without legal authority to do so, after which Rubio was forced to remain in detention for nearly five months. Id.
Finally, Plaintiff Alberta Rubio asserts two separate breach of contract causes of action against Bonding Defendants arising from her status as an indemnitor on the bond she secured on behalf of her son, Miguel Rubio. (Doc. 114). The Court declined to allow Ms. Rubio to represent the Indemnitor Notice Class; however, the Court’s order did not dispose of Ms. Rubio’s individual breach of contract claim against Bonding Defendants for failure to provide notice to her or to Miguel Rubio of any INS/DHS request for his appearance. (Docs. 114, 139). The Court also determined that Ms. Rubio was not a proper representative of the proposed “Indemnitor Collateral Class.” (Doc. 139). Still, Ms. Rubio continues to have an individual claim against Bonding Defendants
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for breach of contract arising out of these defendants’ alleged failure, upon the cancellation of Miguel Rubio’s bond, to return the collateral paid by Ms. Rubio on the bond. (Doc. 114). Ms. Rubio claims that this failure constitutes a material breach of the terms of the surety bond contracts and seeks damages equal to the value of all collateral deposited with Bonding Defendants, less any fees or expenses that may be validly charged against the collateral under the contracts’ terms. Id. II. Summary Judgment Standard of Review
A district court will grant summary judgment when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c). A fact is material if it might affect the outcome of the lawsuit under the governing law, and a fact is genuinely in dispute only if a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A party moving for summary judgment has “the initial responsibility of informing the district court of the basis for its motion and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any’ which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-movant to produce evidence or designate specific facts showing the existence of a genuine issue for trial. Allen v. Rapides Parish Sch. Bd., 204 F.3d 619, 621 (5th Cir. 2000). At the summary judgment stage, the court “may not make credibility determinations or weigh the evidence” and must resolve doubts and reasonable inferences regarding the facts in favor of the non-moving party. Reeves v. Sanderson Plumbing
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Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 249; Dean v. City of Shreveport, 438 F.3d 448, 454 (5th Cir. 2006). III. Sureties’ Motions for Summary Judgment A. Fairmont’s Request for Summary Judgment on the Individual Claims of
Plaintiffs Sandoval, de Salinas, Miguel Rubio, and Alberta Rubio and the Claims of the Indemnitor Notice Class and Bonded Immigrant Class The Court first considers Defendant Fairmont’s argument that it is entitled to summary judgment on the individual and class-wide claims against it for breach of contract, equitable relief preventing breach of contract, and false imprisonment on grounds of lack of standing. (Doc. 153). It is well-established that a plaintiff satisfies the standing requirement of Article III of the U.S. Constitution only where he presents a “case” or “controversy”—that is, he has suffered an “injury in fact” that is fairly traceable to the challenged action of the defendant and a likelihood exists that the injury can be redressed by a favorable decision. Consol. Cos., Inc. v. Union Pac. R.R. Co., 499 F.3d 382, 385 (5th Cir. 2007); Kitty Hawk Aircargo v. Chao, 418 F.3d 453, 458 (5th Cir. 2005). If a plaintiff lacks Article III standing to sue, then a federal court lacks jurisdiction to hear the complaint. Delta Commercial Fisheries Ass’n v. Gulf of Mex. Fishery Mgmt. Council, 364 F.3d 269, 272 (5th Cir. 2004)(citing Grant ex rel. Family Eldercare v. Gilbert, 324 F.3d 383, 386 (5th Cir. 2003)). Clearly, Plaintiffs’ contract claims against Fairmont require proof of injury resulting from a breach of contract by this defendant. See, e.g., McLaughlin, Inc. v. Northstar Drilling Tech., Inc., 138 S.W.3d 24, 27 (Tex.App.-San Antonio 2004, no pet.); Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex.App.-Houston [1st Dist.] 2002, pet. denied); Lewis v. Bank of Am. NA, 343 F.3d 540, 544-45 (5th Cir. 2003).
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To recover against Fairmont for false imprisonment, Plaintiff Miguel Rubio must show that this defendant willfully detained him without his consent and without authority of law. See, e.g., Wal-Mart Stores, Inc. v. Rodriguez, 92 S.W.3d 502, 506 (Tex. 2002). Fairmont claims that Plaintiffs Sandoval, de Salinas, Miguel Rubio, and Alberta Rubio cannot demonstrate that they suffered, or will suffer, any injury traceable to Fairmont’s conduct because the evidence shows that they did not contract with Fairmont or its predecessor-in-interest, Ranger. (Doc. 153). Therefore, Plaintiffs lack standing to assert their individual claims for breach of contract, equitable relief preventing breach of contract, and false imprisonment against Fairmont. Id. Fairmont also contends that it is entitled to summary judgment on the claims of the Indemnitor Notice Class and Bonded Immigrant Class because Sandoval and de Salinas lack standing to pursue, on their own behalf, the contract claims of the classes they represent. Id.
The undisputed summary judgment evidence shows that indemnitor Sandoval did not contract with Fairmont or its predecessor-in-interest, Ranger, for the posting of a surety bond to secure the release of bonded immigrant Manuel Sandoval from federal detention. (Doc. 153, Ex. 2 at BF-224, 232, 238, 241; Doc. 168). In addition, indemnitor Juan de la Rosa did not contract with Fairmont as part of his application to post a surety bond to obtain the release of bonded immigrant de Salinas. (Doc. 153, Ex. 5 at BF-315, 318, 320, 334, 342; Doc. 168). Finally, Fairmont was not the surety on the bond obtained by indemnitor Alberta Rubio to secure the release of her son, bonded immigrant Miguel Rubio. (Doc. 153, Ex. 6 at BF-269, 273-74, 287, 296; Doc. 168). To the extent that any of these Plaintiffs contracted with either of the Sureties, they contracted with Nobel, the predecessor-in-interest to Stonington. (Doc. 153, Exs. 2, 3, 5, 6).
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Still, Plaintiffs have drawn the Court’s attention to a “Portfolio Transfer Agreement” (“PTA” or “Agreement”) that Plaintiffs say transfers any and all liability and responsibility Stonington may have had with respect to its “Immigration Bond Business” to Fairmont. (Doc. 168; Doc. 169, Ex. 1). As a general rule, a corporation that acquires the assets of another corporation does not also acquire the liabilities of the predecessor corporation. E.g., Mozingo v. Correct Mfg. Corp., 752 F.2d 168, 174 (5th Cir. 1985). In Texas, an exception to this rule exists where the successor corporation expressly agrees to assume the liabilities of the predecessor. Lockheed Martin Corp. v. Gordon, 16 S.W.3d 127, 135, 139 (Tex.App.-Houston [1st Dist.] 2000, pet. denied); TEX. BUS. CORP. ACT Art. 5.10(B)(2)(purchase of all or substantially all of assets of selling corporation “does not make acquiring corporation…responsible or liable for any liability or obligation of the selling corporation that the acquiring corporation…did not expressly assume”). Although Fairmont does not dispute that this exception exists, it claims that it did not expressly agree to assume Stonington’s liabilities. (Doc. 183). Fairmont instead claims that the PTA represents an agreement by Fairmont to indemnify Stonington, and therefore Stonington remains the proper defendant, if any, to Plaintiffs’ claims. Id.; see Kane v. Magna Mixer Co., 71 F.3d 555, 561 n.1 (6th Cir. 1995)(“Where successor liability is imposed, the person harmed by the seller’s pre-sale conduct may sue the purchaser directly,” whereas “[a] claim of contractual indemnity…exists in favor of the agreed-upon indemnitee, not the…plaintiff.”).
Upon review of the PTA, the Court finds that its language evinces both an express agreement by Fairmont to assume all of Stonington’s liabilities related to its Immigration Bond Business and including the claims in the present litigation, as well as an agreement
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to indemnify Stonington for its liabilities arising from this case. (Doc. 169, Ex. 1 at BF3548; Art. I(A), (B), (D); Arts. IV, VI, XVI).5 At the very least, the contract is ambiguous. Whereas “[t]he interpretation of an unambiguous contract is a matter of law,” “the interpretation of an ambiguous contract through extrinsic evidence of the parties’ intent is a matter of fact.” S. Natural Gas Co. v. Pursue Energy, 781 F.2d 1079, 1081 (5th Cir. 1986); J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). A court “may not grant summary judgment when a contract is ambiguous and the parties’ intent presents a genuine issue of material fact.” Pursue Energy, 781 F.3d at 1081. Here, Fairmont presents no evidence of the parties’ intent. Plaintiffs, however, present the deposition testimony of Rex Ramos, Assistant Vice President of Stonington and its designated corporate representative, and Rick Klimaszewski, designated corporate representative of Fairmont. (Doc. 168; Doc. 170, Exs. 7, 8). Ramos, who helped negotiate the PTA, agreed that the PTA transferred to Fairmont all of Stonington’s liabilities arising out of immigration bonds posted by Aaron Bonding. (Doc. 170, Ex. 7 at pp. 17, 165). He also testified that the PTA was intended to apply to the liabilities arising out of the “Zamora litigation.” Id. at p. 169. Klimaszewski, who also provided some assistance in negotiating the PTA, testified that he “assumed” that the PTA transferred any liability Stonington might have under the notice provision of the contract on which Sandoval’s and de Salinas’s claims are based. (Doc. 170, Ex. 8 at pp. 176, 179-
5 The PTA defines “Immigration Bond Business” as “collectively, all bonds, policies, contracts, binders, certificates or agreements of immigration bond business written or issued by [Stonington] through Agent or Other Agents, prior to the Effective Date of this Agreement.” (Doc. 169, Ex. 1 at Art. I(D)). It further provides that “[Stonington] represents that its officers and directors in place on the Effective Date have no knowledge of any litigation, threatened litigation, or claims against [Stonington] relating to the Immigration Bond Business other than bond breaches and the Zamora Litigation.” Id.
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80). Both Ramos and Klimaszewski agreed that Stonington did not retain any liability arising out of its immigration bond business. (Doc. 170, Ex. 7 at p. 170; Ex. 8 at p. 181). Therefore, even if the PTA is ambiguous, the only evidence of intent indicates that the agreement represents an express assumption of Stonington’s liabilities related to this case. Fairmont is not entitled to summary judgment on Plaintiffs’ individual or classwide claims on the grounds that Plaintiffs have no standing to sue.6 7 B. Stonington’s Request for Summary Judgment on the Individual Claims of
Plaintiffs Zamora and Zamora-Garcia and the Claims of Members of the Indemnitor Notice Class with Fairmont/Ranger Bonds In its Motion for Partial Summary Judgment, Stonington appeals to the argument advanced by Fairmont in support of its request for summary judgment on grounds of lack of standing—that is, that Plaintiffs whose claims are premised on surety bond contracts with one surety cannot assert these claims against the other. (Doc. 154). With respect to Stonington, this argument prevails. In fact, Plaintiffs do not dispute that Plaintiffs Zamora and Zamora-Garcia cannot recover against Stonington for intentional infliction of emotional distress because Stonington was not the surety on Zamora-Garcia’s bond. (Doc. 171 at n.2). In addition, Plaintiffs agree that the members of the Indemnitor Notice Class who contracted with Fairmont/Ranger cannot recover on their breach of contract claims against Stonington. Id. Therefore, Stonington is entitled to summary judgment on these claims.
6 The Court has no need, therefore, to consider whether Sandoval and de Salinas may represent class members with claims against Fairmont even absent the existence of the PTA. 7 Fairmont argues, apparently in the alternative, that “Plaintiffs, being mere incidental beneficiaries, may not bring suit under the PTA between Fairmont and Stonington.” (Doc. 183). Plaintiffs correctly note that this argument is a “red herring,” given that Plaintiffs are not suing under the PTA. (Doc. 190).
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C. Fairmont’s Alternate Request for Summary Judgment on the Individual Claim of Plaintiff de Salinas and the Claims of the Bonded Immigrant Class In its reply brief, but not in its Motion for Summary Judgment, Fairmont makes
the alternate argument that it is entitled to summary judgment on the claims of Plaintiff de Salinas and the Bonded Immigrant Class for “equitable relief preventing breach of contract” because this cause of action is “non-existent.” (Doc. 183). Fairmont also argues that Bonded Immigrant Plaintiffs’ request for declaratory relief is not ripe for review. Id. As Plaintiffs note, the Court considered these arguments and rejected them in its Order Granting in Part and Denying in Part Insurer Defendants’ Motion to Dismiss. (Doc. 106 at pp. 19-21). Fairmont offers no new argument or evidence that would alter the Court’s determination that Plaintiffs may seek injunctive and declaratory relief to enforce their alleged contractual rights under the surety bond contracts. See id. Fairmont also points to no evidence that would indicate that the alleged contractual breach that Plaintiffs seek to prevent—that is, Fairmont’s failure to give adequate notice of INS/DHS requests for appearance—does not present a sufficiently “immediate” or “real” controversy between the parties. (Doc. 183); see Venator Group Specialty, Inc. v. Matthew/Muniot Family, LLC, 322 F.3d 835, 838 (5th Cir. 2003)(“In the declaratory judgment context, whether a particular dispute is ripe for adjudication turns on whether a substantial controversy of sufficient immediacy and reality exists between parties having adverse legal interests.”). Plaintiffs, on the other hand, cite to evidence that immigrants with outstanding bonds posted by Aaron Bonding and now administered by Fairmont rarely receive notice of INS/DHS requests for appearance from Fairmont or the federal government, leading to a high percentage of bonds breached and adverse legal consequences for the bonded immigrants. (Doc. 170, Ex. 8 at pp. 91, 194; Doc. 172, Ex.
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17, Answers to Interrogatories Nos. 9, 10; Doc. 190, Ex. 30 at PTF-VAN 320-21; Ex. 31 at pp. 36-37; Ex. 32; Ex. 33, Answers to Interrogatories Nos. 9, 10). In short, genuine issues of material fact exist regarding the immediacy and reality of the claims of Plaintiff de Salinas and the Bonded Immigrant Class. Therefore, the Court must reject Fairmont’s alternate request for summary judgment on these claims. D. Sureties’ Requests for Summary Judgment on Plaintiff Alberta Rubio’s
Individual Claim for Breach of Contract to Recover Collateral In the alternative to its request for summary judgment on grounds of lack of standing, Fairmont contends that the Court should grant summary judgment on Plaintiff Alberta Rubio’s individual claim that Fairmont breached its contract with her by failing to return collateral because no evidence exists that Ms. Rubio paid any collateral that needs to be returned. (Doc. 153). Stonington moves for summary judgment on Ms. Rubio’s “collateral” claim against it on the same grounds. (Doc. 154). Sureties correctly point out that at the time the Court issued its Order denying Plaintiffs’ request to certify the “Indemnitor Collateral Class,” the evidence presented to the Court did not indicate that Ms. Rubio could properly represent the interests of the class. (Doc. 139 at pp. 2834). The Court discussed this evidence at length in its Order and incorporates that discussion herein. Id. In finding Ms. Rubio to be an improper class representative, the Court noted that [t]he primary difficulty with Plaintiffs’ evidence is that it is derived from documents other than the Promissory Note that Plaintiffs claim is contained in each bond file, and which allegedly obligates Bonding Defendants to return collateral posted by the indemnitor upon the cancellation of the immigrant’s bond. In other words, if the Promissory Note is the document from which Plaintiffs hope to identify each class member and his or her damages, and upon which the breach of contract claim of the Indemnitor Collateral Class is based, that Ms. Rubio’s payment of collateral and entitlement to its return cannot be established by reference to this document makes her an improper class representative.
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(Doc. 139 at p. 31)(internal citation omitted). The Court went on to find that “Plaintiffs have failed to establish that Ms. Rubio
ever made a collateral deposit,” basing this finding primarily on the lack of evidence that Bonding Defendants had identified any payment by Ms. Rubio as “collateral.” Id. at pp. 31-33. However, the evidence submitted then, and now at the summary judgment stage, at least raises genuine issues of material fact regarding whether Ms. Rubio paid $2,500 that Bonding Defendants treated as collateral and were required to return upon the cancellation of Miguel Rubio’s bond. See id.; (Doc. 153, Ex. 6 at BF-268, 279, 289, 30304; Doc. 170, Ex. 7 at pp. 110-11; Ex. 8 at pp. 82-83; Doc. 172, Ex. 27; Ex. 28 at pp. 46, 49-50; Ex. 29 at PTF-VAN 166-67). Although this factual scenario did not demonstrate the “commonality,” “typicality,” or “adequacy” necessary to allow Ms. Rubio to represent the Indemnitor Collateral Class, it is sufficient to defeat summary judgment on Ms. Rubio’s individual breach of contract claim against Fairmont and Stonington. E. Fairmont’s Request for Summary Judgment on the Individual Claims of
Plaintiffs Zamora and Zamora-Garcia and Stonington’s Request for Partial Summary Judgment on the Claims of the Indemnitor Notice Class Finally, both Fairmont and Stonington move for summary judgment on certain of Plaintiffs’ claims against them on the grounds that these claims are barred by the applicable limitations periods. (Docs. 153, 154). More specifically, Fairmont contends that Texas’s statute of limitations for personal injury actions bars the individual claims of Plaintiffs Zamora and Zamora-Garcia for intentional infliction of emotional distress. (Doc. 153).8 Stonington requests partial summary judgment on the claims of members of
8 As explained supra, Stonington is entitled to summary judgment on these claims on other grounds.
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the Indemnitor Notice Class that accrued before September 30, 2001, and thus outside the statute of limitations for breach of contract actions in Texas. (Doc. 154).
In Texas, a suit for intentional infliction of emotional distress must be brought “not later than two years after the day the cause of action accrues.” TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a)(Vernon 2007). The conduct giving rise to the claims of Zamora and Zamora-Garcia for intentional infliction of emotional distress allegedly occurred in or around April 2002, and thus accrued at this time. (Doc. 114); see S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996)(“As a rule, we have held that a cause of action accrues when a wrongful act causes some injury, even if the fact of injury is not discovered until later, and even if all resulting damages have not yet occurred.”). A plaintiff must bring suit for breach of contract in Texas “not later than four years after the day the cause of action accrues.” TEX. CIV. PRAC. & REM. CODE § 16.004(a)(Vernon 2007). Plaintiffs do not dispute that each Indemnitor Plaintiff’s contract claim against Stonington accrued when the alleged breach occurred—that is, when Stonington failed to give notice to the Indemnitor Plaintiff or bonded immigrant of a requested appearance for deportation. Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002)(“It is well-settled law that a breach of contract claim accrues when the contract is breached.”); see also S.V., 933 S.W.2d at 4. Plaintiffs first named Fairmont and Stonington in their Third Amended Complaint filed on September 30, 2005, and thus outside the statute of limitations applicable to Zamora and Zamora-Garcia’s claims for intentional infliction of emotional distress. ZamoraGarcia v. Trominski (Doc. 150). On that date, any claim by an Indemnitor Plaintiff that had accrued before September 30, 2001 was also barred by the applicable statute of limitations. Plaintiffs contend, however, that the claims against Sureties in the Third
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Amended Complaint “relate back” to the filing of Plaintiffs’ First Amended Complaint on May 7, 2002 or, at the very least, to the filing of the Second Amended Complaint on July 31, 2003. (Doc. 171); Zamora-Garcia v. Trominski (Docs. 2, 36).
Rule 15(c) of the Federal Rules of Civil Procedure provides that an amendment changing the party against whom a claim is asserted relates back to the date of the original pleading if:
(a) the amendment asserts a claim that arose from the same conduct, transaction, or occurrence set out—or attempted to be set out—in the original pleading; and
(b) the party to be brought in by amendment, within the time period prescribed by Federal Rule of Civil Procedure 4(m), (i) received notice of the claim such that it will not be prejudiced in defending on the merits; and (ii) knew or should have known that, except for a mistake concerning the identity of the proper party, it would have originally been named as a defendant.
See FED. R. CIV. P. 15(c). The Court finds, and in fact Sureties do not dispute, that Plaintiffs’ claims against
them in the Third Amended Complaint arose out of the conduct, transaction, or occurrence alleged in Plaintiffs’ prior two pleadings. In the First Amended Complaint, Plaintiffs first named Aaron Bonding as a defendant to their allegations of misconduct regarding the administration of surety bonds. Zamora-Garcia v. Trominski (Doc. 2). In that pleading, Plaintiffs detailed the conduct of Santiago Sol that would form the basis of the intentional infliction of emotional distress claims asserted against Aaron Bonding in
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Plaintiffs’ Second Amended Complaint. Id. at Docs. 2, 36.9 In addition, Plaintiffs complained of the kind of lack of notice that served as the basis for the claims of Sandoval and the proposed Indemnitor Notice Class in the Second Amended Complaint. Id. The record also makes clear that Plaintiffs served Aaron Bonding on June 5, 2002, within 120 days of the filing of the First Amended Complaint and therefore within the time period required by Rule 4(m). See FED. R. CIV. P. 4(m); Zamora-Garcia v. Trominski (Docs. 2, 9). The real dispute between the parties thus concerns whether Plaintiffs’ naming of Aaron Bonding as a defendant put Sureties on notice of the claims at issue and, if so, whether Sureties knew or should have known that but for Plaintiffs’ mistake, they would have been named as defendants to these claims in either Plaintiffs’ First or Second Amended Complaints.
Plaintiffs do not attempt to argue that Sureties received actual notice of the claims at issue upon the filing of either the First or Second Amended Complaints. However, as the parties recognize, actual notice is not required. E.g., Jacobsen v. Osborne, 133 F.3d 315, 320 (5th Cir. 1998); Kirk v. Cronvich, 629 F.2d 404, 407 (5th Cir. 1980). As set forth most clearly in Kirk, notice can be imputed to a “new” defendant through service of the original complaint upon its agent, shared counsel between the original defendant and the defendant brought in by amendment, or “identity of interest” between these defendants. Kirk, 629 F.2d at 407-08.10 More specifically, the Fifth Circuit in Kirk explained that
9 Although Plaintiffs added Juana Zamora as a party in the Second Amended Complaint, Plaintiffs’ prior pleading referenced Ms. Zamora and described Defendant Sol’s alleged harassment of her in April 2002. Zamora-Garcia v. Trominski (Docs. 2, 36). 10 In decisions subsequent to Kirk, the Fifth Circuit has indicated that courts may consider shared counsel as a factor in determining whether the requisite “identity of interest” exists. E.g., Jacobsen, 133 F.3d at 320 (sufficient identity of interest established through shared counsel); Moore v. Long, 924 F.2d 586, 587 (5th Cir. 1991)(recognizing application of identity of interest theory where original defendant and defendant sought to be added share counsel); Honeycutt v.
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“where service of the original complaint is perfected upon an agent of a party sought to
be brought in by amendment, there is adequate notice of the action to that party” under
Rule 15(c). Id. at 407. The court then noted that the Fifth Circuit and other courts had
also held that “the requisite notice of an action can be imputed to a new defendant
through his attorney who also represented the party or parties originally sued.” Id. at 408
(citing numerous cases). In a footnote, the Fifth Circuit further explained that a new
defendant can also receive the requisite notice by virtue of the “identity of interest”
between himself and the original defendant. Id. at 408 n.4. The court directed that
“[i]dentity of interest generally means that the parties are so closely related in their
business operations or other activities that the institution of an action against one serves
to provide notice of the litigation to the other.” Id. (internal quotations omitted).
Here, Plaintiffs perfected service of the First Amended Complaint on Aaron
Bonding by personally serving its owner, Don Vannerson. Zamora-Garcia v. Trominski
(Doc. 9). Although the attorneys for Sureties did not represent Aaron Bonding at the time Plaintiffs filed the First or Second Amended Complaints,11 Plaintiffs point to
evidence sufficient to raise genuine fact issues regarding whether Don Vannerson d/b/a
Aaron Bonding was an agent for Sureties in administering surety bonds, and whether
Long, 861 F.2d 1346, 1351 (5th Cir. 1988)(notice could not be imputed to subdivision of Department of Defense that did not share geographical location or counsel with department); Hendrix v. Galveston County, 776 F.2d 1255, 1257-58 (5th Cir. 1985)(sufficient notice where original defendant and new defendant “used the same mailing address, the same counsel, and are located within the same business complex”). However, no decision indicates that shared counsel is required to find constructive notice under Rule 15(c). Rather, a finding of constructive notice can be premised upon any one of the three alternate bases for imputing notice set forth in Kirk. 11 Plaintiffs attempt to argue that Sureties received constructive notice of the prior pleadings through former counsel for Aaron Bonding, who represented Sureties in other proceedings related to bond forfeitures. (Doc. 171). However, Fifth Circuit precedent indicates that notice can be imputed to a new party through the original party’s attorney where that attorney represents both parties in the same proceeding. Jacobsen, 133 F.3d at 320; Moore, 924 F.2d at 588; Honeycutt, 861 F.2d at 1351; Kirk, 629 F.2d at 407-08.
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Bonding Defendants shared an identity of interest sufficient to impute notice to Sureties of the claims in both pleadings. (Doc. 153, Ex. 2 at BF-224-25; Ex. 4 at ¶ 10; Ex. 5 at BF-334; Doc. 170, Ex. 7 at pp. 55, 131-33; Ex. 8 at pp. 39-40, 95-97; Ex. 19 at pp. 29, 44, 47; Doc. 172, Ex. 2 at BF-56; Ex. 9 at ¶ 7; Doc. 190, Ex. 34).
Sureties also cannot establish that they would be prejudiced in defending against the claims at issue. The evidence cited above is sufficient to raise genuine fact issues regarding whether Aaron Bonding had the same interest as Sureties in investigating and defending against the claims of misconduct by Defendant Sol and of failure to give notice of appearances for deportation. In other words, the record contains some evidence that Aaron Bonding’s presence in the case protected Sureties’ interests in developing a defense. See Kirk, 629 F.2d at 408 (new defendant’s agent and his attorneys should have taken steps to investigate claim against original defendant, thus precluding new defendant from claiming prejudice through loss of evidence or by undue surprise). In addition, the Court notes that regardless of the outcome of Stonington’s request for partial summary judgment on limitations grounds, Stonington must still defend against the claims of members of the Indemnitor Notice Class that accrued after September 30, 2001. It has not identified any prejudice unique to the claims that accrued prior to that date.
The Court therefore turns to whether Sureties knew or should have known that, except for a mistake concerning identity, they would have been sued within the limitations period. The Fifth Circuit has made clear that failure to properly name an intended defendant constitutes a “mistake” for purposes of Rule 15(c), whereas lack of knowledge concerning the identity of the defendant does not. Jacobsen, 133 F.3d at 32021 (relying on Barrow v. Wethersfield Police Dep’t., 66 F.3d 466, 470 (2d Cir. 1995),
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modified on other grounds by 74 F.3d 1366 (2d Cir. 1996)(no relation back where plaintiff’s amended complaint identifying “John Doe” defendants by name “did not correct a mistake in the original complaint, but instead supplied information [the plaintiff] lacked at the outset,” i.e., amendments were made “not to correct a mistake but to correct a lack of knowledge”); Worthington v. Wilson, 8 F.3d 1253, 1257 (7th Cir. 1993)(substitution of named defendants for “unknown police officers” “was due to lack of knowledge as to their identity, and not a mistake in their names,” and thus amended complaint did not relate back); Wilson v. United States Gov’t, 23 F.3d 559, 562-63 (1st Cir. 1994)(no mistake but rather lack of knowledge where plaintiff “fully intended to sue [employer], he did so, and [employer] turned out to be the wrong party” because it did not own vessel on which plaintiff was injured)). The Fifth Circuit explained that Rule 15(c) “‘is meant to allow an amendment changing the name of a party to relate back to the original complaint only if the change is a result of an error, such as a misnomer or misidentification.’” Id. at 320 (quoting Barrow, 66 F.3d at 469).
As the parties recognize, other jurisdictions have held that a mistake for purposes of Rule 15(c) can be grounded in “‘law as well as fact.’” Soto v. Brooklyn Corr. Facility, 80 F.3d 34, 36 (2d Cir. 1996)(quoting Woods v. Indiana Univ.-Purdue Univ., 996 F.2d 880, 887 (7th Cir. 1993)). Citing to a prior decision, Cornwell v. Robinson, 23 F.3d 694 (2d Cir. 1994), the Second Circuit in Soto characterized a “legal mistake” as a plaintiff’s misunderstanding of the legal requirements of a cause of action and a “factual mistake” as a misapprehension of the identity of the party a plaintiff wishes to sue. Id. In Cornwell, the plaintiff had supported her allegations of gender and race discrimination by detailing numerous incidents of harassment and identifying the perpetrators in her
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original complaint. Cornwell, 23 F.3d at 700, 705. After the applicable limitations period had run, she amended her complaint to add as defendants the individuals identified in the original pleading. Id. at 701, 704-05. Based on these facts, the court found no mistake of law or fact, reasoning that the plaintiff was not required to sue the individual defendants of which she had knowledge, and thus “her failure to do so in the original complaint…must be considered a matter of choice, not mistake.” Id. at 705.
In contrast, the plaintiff in Soto was legally required under § 1983 to sue the defendants he had failed to name within the applicable limitations period. Soto, 80 F.3d at 37. In that case, the district court had dismissed the pro se plaintiff’s § 1983 suit against a corrections facility for failure to allege that the conduct of which he complained was part of that defendant’s official policy or custom. Id. at 34-35. In the absence of any institutional custom or policy, the plaintiff’s only recourse under § 1983 was to sue the individual corrections officers involved. Id. Finding that “but for his mistake as to the technicalities of constitutional tort law,” the plaintiff would have named the proper parties, the court determined that the plaintiff’s mistake fell within the contours of Rule 15(c). Id. at 37.
The Fifth Circuit has not expressly recognized the distinction between “legal” and “factual” mistakes. However, the plaintiff’s error in Kirk, supra, could be characterized as legal in nature, in that he first brought suit against an institutional entity not capable of being sued. Kirk, 629 F.2d at 405. More specifically, the plaintiff asserted claims against the Jefferson Parish Sheriff’s Office under § 1983. Id. Upon dismissal of the complaint as to that defendant, the plaintiff amended her complaint to substitute the sheriff, individually and in his official capacity, in lieu of the sheriff’s office. Id. The court
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found that the plaintiff’s substitution of the sheriff satisfied the mistake requirement of Rule 15(c), given that the sheriff had the requisite notice of the action against the sheriff’s office and thus knew or should have known that he was the party who should have been sued. Id.
Here, Plaintiffs do not argue that they made a mistake in naming Aaron Bonding as a defendant, and they continue to pursue the claims at issue against this defendant. In other words, this is not a case of factual “misnomer” or “misidentification” of the intended defendant(s). In addition, counsel for Plaintiffs attests in an affidavit submitted to the Court that “[a]t the time I filed the First and Second Amended Complaints, I understood that Aaron Bonding was the agent for one or more sureties, whom I now know to be [Nobel] and [Ranger], for the posting of immigration bonds,” and that “the relief plaintiffs sought in the First and Second Amended Complaints would have a direct impact on the sureties.” (Doc 172, Ex. 26)(emphasis added). Standing alone, these statements would appear to place the case squarely within Jacobsen, as Plaintiffs’ lack of knowledge concerning the identities of Fairmont or Stonington does not constitute a mistake under Rule 15(c). Plaintiffs attempt, however, to frame their mistake as a legal one. Counsel’s affidavit also attests that the failure to name the “sureties” as additional defendants within the limitations period stemmed from her belief that “by bringing claims against the sureties’ agent, Aaron Bonding, Plaintiffs had in effect brought claims against the sureties themselves.” Id. Counsel further explains:
My practice is exclusively an immigration/human rights law practice. In my practice, I frequently bring claims against a government organization (such as the DHS) by bringing a claim against an agent for the organization (such as Marc Moore or Alberto Gonzales). Similarly, I believed that by suing a private organization’s agent (Aaron Bonding), plaintiffs in the predecessor action had in effect brought claims against the private organizations (Nobel and Ranger).
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Id. These allegations do not present the kind of factual scenario that supported a
finding of legal mistake in the decisions cited above—that is, Plaintiffs’ mistake does not consist of counsel’s failure to properly name the only known defendant(s) against whom Plaintiffs could assert their chosen causes of action. Limiting the scope of legal mistake in this way corresponds with Rule 15(c)’s additional requirement that the defendant “knew or should have known” that but for the mistake, it would have been sued. In other words, a potential defendant to a plaintiff’s claims is less likely to meet this requirement than one who is the clear legal substitute for the defendant originally named. Again, Plaintiffs continue to assert claims against Aaron Bonding, also a proper defendant to Plaintiffs’ claims. Although the Court at this time makes no explicit finding concerning the nature of the relationship between Aaron Bonding and Sureties, it cannot ignore that no party has produced evidence or argument that Plaintiffs were legally required to sue Sureties to recover on the claims at issue. The record does not support a finding that Fairmont and Stonington knew or should have known that, but for counsel’s mistake in assuming that Plaintiffs’ claims against Aaron Bonding constituted claims against unidentified “sureties,” Fairmont and Stonington would have been named earlier as defendants to Plaintiffs’ chosen causes of action. For these reasons, the claims of Plaintiffs Zamora and Zamora-Garcia against Fairmont for intentional infliction of emotional distress are barred by the applicable statute of limitations. For the same reasons, Indemnitor Plaintiffs’ claims against Stonington that accrued before September 30, 2001 are barred by the applicable limitations period.
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IV. Conclusion For the foregoing reasons, it is hereby ORDERED that Sureties’ Motions for
Summary Judgment are both hereby GRANTED IN PART AND DENIED IN PART. (Docs. 153, 154). To the extent that Sureties request summary judgment on the individual claims of Plaintiffs Zamora and Zamora-Garcia for intentional infliction of emotional distress, their Motions are hereby GRANTED. Id. To the extent that Stonington requests summary judgment on the claims of members of the Indemnitor Notice Class with Fairmont/Ranger bonds and/or with claims that accrued before September 30, 2001, its Motion is hereby GRANTED. (Doc. 154). All other relief requested by Sureties’ Motions is hereby DENIED. (Docs. 153, 154).
SO ORDERED this 30th day of September, 2008, at McAllen, Texas. ___________________________________ Randy Crane United States District Judge
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 Case 7:05-cv-00331 Document 167 Filed in TXSD on 01/24/08 Page 1 of 1

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS
MCALLEN DIVISION

ARACELY ZAMORA-GARCIA, et al,
Plaintiffs, VS.
MARC MOORE, et al,
Defendants.

§ § § § CIVIL NO. M-05-331 § § § §

ORDER CLARIFYING SCOPE OF FEDERAL CLASSES

Now before the Court for consideration is Federal Defendants/Respondents’

Motion to Clarify the Court’s Order Granting in Part and Denying in Part

Plaintiffs/Petitioners’ Motion to Certify Federal Classes. (Doc. 141).

For the reasons stated on the record at the hearing before this Court on January

18, 2007, the Court hereby ORDERS that the Federal Classes be defined as district-wide,

and that “district” be defined as the San Antonio District of the Department of Homeland

Security as it is currently comprised.

SO ORDERED this 24th day of January, 2008, at McAllen, Texas.
___________________________________ Randy Crane United States District Judge

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 Case 7:05-cv-00331 Document 179 Filed in TXSD on 02/27/08 Page 1 of 49

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS McALLEN DIVISION

ARACELY ZAMORA-GARCIA, et aI.,

)

in their own name and right, and on

)

behalf of all others similarly situated,

)

Petitioners/Plaintiffs,

)

)

v.

)

)

MARC MOORE, DISTRICT

)

DIRECTOR FOR INTERIOR

)

ENFORCEMENT, DEPARTMENT OF

)

HOMELAND SECURITY, et aI.,

)

Respondents/Defendants.

)

---------------------------------)

C.A. No. M-05-331 JURY DEMAND

PLAINTIFF IRMA SANDOVAL'S MOTION FOR PARTIAL SUMMARY JUDGMENT ON HER CLAIMS AND THE INDEMNITOR NOTICE CLASS CLAIMS AGAINST STONINGTON AND FAIRMONT

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Case 7:05-cv-00331 Document 179 Filed in TXSD on 02/27/08 Page 2 of 49

TABLE OF' CONT~NTS

Page

INTRODUCTION .............................................................................................................. 1

STATEMENT OF FACTS ................................................................................................. 3

ARGUMENT .................................................................................................................... 10

I. A PLAINTIFF MAY SUCCESSFULLY OBTAIN PARTIAL SUMMARY JUDGMENT ON LIABILITY WHERE SHE CAN DEMONSTRATE THAT THERE IS NO GENUINE ISSUE OF MATERIAL FACT AND THAT SHE IS THUS ENTITLED TO JUDGMENT AS A MATTER OF LAW................................................................ 10

II. THE SURETIES ARE BOUND BY THE NOTICE PROVISION......................... 11

A. The Sureties Ratified the Terms and Conditions Agreement.. ........................ 12

B. Because Vannerson was the Sureties' Agent and Acted Within the Scope of his Authority in Entering the Terms and Conditions Agreement, the Sureties are Bound by the Notice Provision......................................................................................................... 15

1. Under Texas insurance law, Vannerson had power coextensive with that of the Sureties themselves to bind the Sureties................................................................................................... 16

2. Even apart from Vannerson's status as their Local Recording Agent, under general agency principles Vannerson was the agent of the Sureties for the purposes of contracting with the Indemnitors....................................................... 18

a. Vannerson did the business of the Sureties in executing and administering their admittedly approved documents ......................................................................... 18

b. Vannerson did the business of the Sureties in entering the Terms and Conditions agreements ............................................. 20

c. The Sureties had the power to control Vannerson in contracting with the Indemnitors..................................................... 22

1. Nobel's contractual power to control Vannerson....................... 23

11. Ranger's contractual power to control Vannerson..................... 26

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iii. The Sureties' control over Vannerson conclusively establishes that he was their agent for the purposes of contracting with the Indemnitors................................................................................ 28
3. Vannerson acted within the scope of his actual authority in entering the Tenns and Conditions agreements and the Notice Provision..................................................................................... 29 a. The Sureties had actual knowledge that Vannerson was using the Tenns and Conditions agreement.. ............................ 30 b. Vannerson's knowledge that he used the Tenns and Conditions agreement should be imputed to the Sureties............................................................................................. 33
III. PLAINTIFF AND THE CLASS MEMBERS PERFORMED THEIR CONTRACTUAL OBLIGATIONS BY PAYING FEES ....................................... 35
IV. THE NOTICE PROVISION REQUIRES NOTICE TO THE ALIEN AND THE INDEMNITOR OF ALL APPEARANCES REQUESTED BY THE INS, INCLUDING DEPORTATION DATES ..................................................................................................................... 35
V. THE SURTIES BREACHED THE NOTICE PROVISION BY FAILING TO GIVE THE INDEMNITORS AND THE ALIENS NOTICE OF DEPORTATION DATES .................................................................. 38
VI. THE INDEMNITORS SUFFERED DAMAGE IN AN AMOUNT TO BE TO BE DETERMINED AT TRIAL. ........................................................... 39
VII. MS. SANDOVAL AND ALL THE MEMBERS OF THE INDEMNITOR NOTICE CLASS MAY RECOVER FROM FAIRMONT............................................................................................................. 40
CONCLUSION ................................................................................................................. 41
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TABLE OF AUTHORITIES Cases

Page

Alfano v. BDO Seidman, 925 A.2d 22 (N.J. App. Div. 2007) .......................................... 16

Am. Nat 'I Life Ins. Co. o/Tex. v. Montgomery, 640 S.W.2d 346 (Tex. Ct. App. 1982) .................................................................................................................. 18

Bellefonte Underwriters Ins. Co. v. Brown, 663 S.W.2d 562 (Tex. Ct. App. 1984), rev'd in part on other grounds, 704 S.W.2d 742 (Tex. Feb 19, 1986) ........................................................................................................................... 33

Blakely v. Am. Employers' Ins. Co., 424 F.2d 758 (5th Cir. 1970)................................... 17

Coleman v. Klockner & Co. AG, 180 S.W.3d 577 (Tex. App. 2005) ......................... 18,22

Comind, Companhia de Seguros v. Sikorsky Aircraft Div. of United Technologies Corp., 116 F.R.D. 397 (D. Conn. 1987) ............................................... 16

Dallas Nat. Bankv. Peaslee-Gaulbert Co., 35 S.W.2d 221 (Tex. Ct. Civ. App. 1931) .................................................................................................................. 26

DeWitt County Elec. Coop., Inc. v. Parks, 1 S.W.3d 96 (Tex. 1999) ......................... 36,37

Esso Int 'I, Inc. v. SS Captain John, 442 F.2d 1144 (5th Cir. 1971)............................ 30,32

Farrell v. Greater Houston Transp. Co., 908 S.W.2d 1 (Tex. App. 1995) ..................... 22

First Nat. Acceptance Co. v. Bishop, 187 S.W.3d 710 (Tex. App. 2006) ........................ 18

Hanover Fire Ins. Co. v. BlockJewelry Co., 435 S.W.2d 909 (Tex. Civ. App. 1968) .................................................................................................................. 28

Krumtum v. Burr, 487 P.2d 435 (Ariz. Ct. App. 1971)............................................... 15, 16

Kadhum v. Homecomings Fin. Network, Inc., -- S.W.3d --, 2006 WL 1125240 (Tex. App.-Houston [1st Dist.] Apr. 27, 2006) ........................................... 2

L-3 Comms. Corp. v. OSI Sys., Inc., No. 02 Civ. 9144 (PAC), 2006 WL 988143 (S.D.N.Y. Apr. 13,2006) ............................................................................... 33

Liberty Mut. Ins. Co. v. Enjay Chem. Co., 316 A.2d 219 (Del. Sup. ct. 1974) ........................................................................................................................... 30

Magnum Corp.)). Lehman Bros. KuhnLoeb,lnc.,_79AF.2d198(5thCir. 1986) ........................................................................................................................... 28

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Maryland Ins. Co. v. Head IndustriaL Coatings and Servs., inc., 906 S.W.2d 218 (Tex. Ct. App. 1995) ......................................................................... 33,34
Montgomery v. Achenbach, C.A. No. 04C-11-048 WLW, 2007 WL 3105812 (Del. Sup. Ct. July 26,2007) ........................................................................ 30
Morante v. Am. Gen. Fin. Center, 157 F.3d 1006 (5th Cir. 1998).............................. 22,29 Preferred Risk Mut. Ins. Co. v. Rabun, 561 S.W.2d 239 (Tex. Ct. Civ.
App. 1978) .................................................................................................................. 18 Principal Life Ins. Co. v. Renaissance Healthcare Sys., Inc., Civ. Case No.
H-06-2973, 2007 WL 3228103 (S.D. Tex. Oct. 30, 2007) ......................................... 10 Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527 (Tex. 1987) ............................................ 38 Robles v. Consolidated Graphics, Inc., 965 S.W.2d 552 (Tex. Ct. App.
1997) ........................................................................................................................... 28 Royal Mortg. Corp. v. Montague, 41 S.W.3d 721 (Tex. Ct. App. 2001).................... 22, 28 Sanger v. Warren, 44 S.W. 477 (Tex. 1898) .................................................................... 16 Schaefer v. GulfCoast Reg'l Blood Ctr., 10 F.3d 327 (5th Cir.1994) ........................ 10,30 Shaller v. Comm. Standard Ins. Co., 309 S.W.2d 59 (Tex. 1958) .............................. 17, 18 Sims v. Callihan, 39 S.W.2d 153 (Tex. Ct. Civ. App. 1931) ............................................ 16 S. Pac. Co. v. Us., 192 F.2d 438 (3d Cir. 1951) .............................................................. 16 Warburton v. Wilkinson, 182 S.W. 711 (Tex. Ct. Civ. App. 1916) .................................. 14 Willis v. Donnelly, 118 S.W.3d 10 (Tex. Ct. App. 2003) ................................................. 12 Zamora-Garcia v. Moore, Civ. A. M-05-331, 2006 WL 2663802 (S.D.
Tex. Sept. 15, 2006) .................................................................................................... 35 Zamora-Garcia v. Moore, Case No. M-05-331 (S.D. Tex. Apr. 25, 2007),
Order Granting in Part and Denying in Part Plaintiffs' Motion to Certify Surety Bond Classes ................................................................... 1, 9, 35, 38, 39
Statutes and Rules Fed. R. Civ. Proc. 56 ..................................................................................................... 1, 10 Tex. Ins. Code (2001, 2002) § 21.14................................................................................. 17
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Treatises 3 Tex. Jur. 3d Agency § 13 ......................................................................................... 22,28 3 Tex. Jur. 3d Agency § 58 ............................................................................................... 30 3 Tex. Jur. 3d Agency § 127 ............................................................................................ 13 3 Tex. Jur. 3d Agency § 128 ............................................................................................. 14 3 Tex. Jur. 3d Agency § 143 ............................................................................................. 12 3 Tex. Jur. 3d Agency § 144 ............................................................................................. 14 3 Tex. Jur. 3d Agency § 238 ............................................................................................. 15 CJS Agency § 45 ............................................................................................................... 30 Restatement (Second) of Agency § 149 ............................................................................ 15 Restatement (Third) of Agency § 2.02.............................................................................. 30 Restatement (Third) of Agency § 6.02.............................................................................. 15 Restatement (Third) of Agency § 6.01 ........................................................................ 11, 15 Restatement (Third) of Agency § 6.03 ........................................................................ 11, 15
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NOW COMES Plaintiff Irma Sandoval Ibarra Valencia, on her own behalf and on behalf of the Indemnitor Notice Class, to move this honorable Court, pursuant to Federal Rule of Civil Procedure 56(a), (c), and (d), for an order granting judgment on liability against Defendants Fairmont Specialty Insurance Company and Stonington Insurance Company, and for such other relief as this Court finds just and equitable.
INTRODUCTION Aaron Federal Bonding Company ("Aaron Bonding"), on behalf of Ranger Insurance Company ("Ranger") and Nobel Insurance Company ("Nobel") (collectively, the "Sureties"), 1 contracted with individuals (known herein as "Indemnitors") for the posting of immigration surety bonds that secured the release from INS2 detention of alleged illegal aliens. Plaintiff is one such Indemnitor, as are all members of the Indemnitor Notice Class.3 The bonding contracts Plaintiff and the Indemnitors entered contained the following provision (the "Notice Provision"):
PRINCIPAL and INDEMNITOR will be notified by AGENCY of all appearances requested by the U.S. IMMIGRATION AND NATURALIZATION SERVICE of which AGENCY receives notice.4 Plaintiff and the Class members claim the Sureties breached this contract provision. Texas law establishes the following elements for breach of contract claims: (i) the
1 Ranger is now known as Fairmont Specialty Insurance Company ("Fairmont"). Nobel is now known as Stonington Insurance Company ("Stonington"). 2 The Immigration and Naturalization Service was formerly the government agency charged with detention and deportation of aliens. That responsibility is now handled by the Department of Homeland Security. Both organizations are referred to herein as the "INS." 3 See Order Granting in Part and Denying in Part Plaintiffs' Motion to Certify Surety Bond Classes (Apr. 25, 2007) ("Surety Bond Class Order") at 28 (Dkt. # 139). 4 See, e.g., Sandoval Bond File at BF-0000238 (Ex. 1). Unless otherwise specified, all exhibits to this motion are attached to the February 27, 2008, Declaration of 1. Benjamin King, submitted herewith.
1

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plaintiff and defendant had a valid, enforceable contract; (ii) the plaintiff performed or tendered performance; (iii) the defendant breached the contract; and (iv) the defendant's breach caused the plaintiffs injuries.s Plaintiff will demonstrate herein that there is no disputed issue of material fact on any of these elements, and Plaintiff and the Class members are entitled to the entry of summary judgment on liability in their favor, leaving only the calculation of damages for trial.
First, the Notice Provision is a contractual term between the Sureties and the Indemnitors. Aaron Bonding was a "d/b/a" for Don Vannerson, and the Sureties gave Vannerson the authority to contract with the Indemnitors on their behalves.6 Within the scope of that authority and on the Sureties' behalves, Vannerson agreed to the Notice Provision. When an agent acting within the scope of his authority makes a contract on behalf of a principal, the principal is a party to the contract. See infra Section II.B. Alternatively, the Sureties, with full awareness of the Notice Provision, willfully ratified the Notice Provision. See infra Section II.A. Either through ratification or agency principles, the Sureties are bound by the Notice Provision.
Second, Plaintiff and the Class members all materially performed their obligations under the bonding contracts. See infra Section III. Third, the Notice Provision required the Sureties to provide notice of appearance dates for deportation to both the Indemnitors and the aliens. See infra Section IV. Fourth, the Bonding Defendants admit that they did not provide notice of appearance dates for deportation to
5 See, e.g., Kadhum v. Homecomings Fin. Network, Inc., -- S.W.3d --, 2006 WL 1125240, at *4 (Tex. App.-Houston [1st Dist.] Apr. 27,2006). 6 Aaron Bonding was briefly operated by Don Vannerson's son, Rodney Vannerson, after Don Vannerson' death. Michael Padilla is now the Independent Administrator of the Vannerson estate. The Sureties, Don Vannerson, Rodney Vannerson, and Mr. Padilla are collectively referred to herein as the "Bonding Defendants."
2

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the aliens, and the Sureties thereby breached their contracts with the Indemnitors. See infra Section V. Fifth, Plaintiff and the Class members were all damaged. All Class members paid for the Bonding Defendants to fulfill the Notice Provision, but the Bonding Defendants failed to do so. Thus, no class member got what he or she paid for. While the parties may present evidence to the jury about the amount of damage, Plaintiff and each Class member suffered damage caused by the breach. See infra Section VI.
Finally, Plaintiff and all Class members may recover against Fairmont, even though their contracts may have been with Nobel/Stonington. As discussed at length in Plaintiffs' Opposition to Fairmont's Motion for Summary Judgment, Fairmont has taken on the liabilities of Stonington and is a proper defendant to the claims of Plaintiff and all Class members. See infra Section VII.
For these reasons and those set forth below, Plaintiff respectfully requests that this Court grant Plaintiff and the Indemnitor Notice Class partial summary judgment against the Sureties on liability. Should this Court determine that a grant of summary judgment is not appropriate, Plaintiff requests that this Court rule that there is no genuine issue of material fact on whatever elements of Plaintiffs and the Class's breach of contract claim as the Court finds established.
STATEMENT OF FACTS The Relationship Between Don Vannerson and Nobel/Stonington 1. Pursuant to a contract between Carl W. Guillory and Nobel dated February 6, 1996, Carl Guillory was authorized as a general agent of Nobel to contract with sub-agents, who would sell Nobel immigration appearance bonds at the retail level. 7
7 See Nobel/Guillory General Agent Bail Agreement, with Addendum #1 (Nov. 24, 1997) at Addendum para. 7 (referring to Feb. 6, 1996, General Agent Bail Agreement with Carl Guillory) (PTF-GUILLORY 00010-19 at 18) (Ex. 2); GuilloryiVannerson Bail Bond Underwriting Agreement (June 14, 1996) at
3

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2. Pursuant to a General Agent Bail Agreement dated November 24, 1997, between
Nobel and Lyle S. Guillory (son of Carl Guillory) and United Surety Services, Inc.
(and the Addendum to that agreement) (the "Nobel/Guillory Agreement"), Lyle Guillory was authorized as a general agent of Nobel. 8

3. Carl W. Guillory, Lyle S. Guillory, and United Surety Services, Inc., are collectively referred to herein as "Guillory."

4. One of the subagents Guillory contracted with was Don Vannerson.9 Vannerson and

Guillory entered a Bail Bond Underwriting Agreement (June 14, 1996) and an

Addendum to Existing Bail Bond Underwriting Agreement (Sept. 18, 1996)

(collectively the "Guillory/Vannerson Agreement").

Pursuant to the

GuilloryNannerson Agreement, Vannerson had the authority to contract with persons

for the posting of immigration bonds on which Nobel served as a surety. 10

5. Pursuant to the Nobel/Guillory Agreement, Nobel provided Guillory with powers of attorney which allowed the sub-agents to post bonds with the INS on which Nobel served as surety. The sub-agents would solicit persons at the retail level to contract for the posting of a Nobel bond with the INS. ll

6. The Nobel surety bonds posted by Guillory's sub-agents, including Vannerson,
exposed Nobel to potential financial liability. Nobel could become liable to the
federal government for the full amount of the bond in the event the government
breached the bond. The government could breach the bond if Nobel or Aaron Bonding failed to surrender the alien on the bond as directed by the INS. 12

7. Between October 1996 and June 1999, pursuant to his contract with Guillory and Guillory's contracts with Nobel, Vannerson posted with the INS 3,742 immigration

Addendum to Existing Bail Bond Underwriting Agreement (Sept. 18, 1996) at para. 5 (referring to Carl Guillory's agreement with Nobel) (PTF-GUILLORY 00040-53, at 52) (Ex.3).
8 Nobel/Guillory Agreement (Ex. 2); Plaintiffs Original Complaint and Application for Injunctive Relief, Nobel Insurance Company v. Lyle Steven Guillory, 3-00 CV 0141-H (N.D. Tex. Jan. 21,2000), at ~~ 5-9 (PTF-GUILLORY 00001-4) (Ex. 4).
9 See Ramos Dep. at 44:16-19 (Ex. 7 to the January 25, 2008 Declaration of Elisaveta Dolghih (Dkt. # 170, under seal)).
10 See GuilloryNannerson Agreement (Ex. 3); Motion for Leave to Intervene filed by Don Vannerson, Nobel Insurance Co. v. Guillory, Cause No. 3-00 CV 0141-H (N.D. Tex. Feb. 1, 2000), at ~ 2 (PTFGUILLORY 00020-24) (Ex. 5); NobelNannerson Agreement Regarding Immigration Bonds (June 28, 2000) at BF-0000389 (WHEREAS, Vannerson has previously been a subagent of Lyle Steven Guillory of United Surety Services, Inc. (collectively, "Guillory") pursuant to which relationship, he produced a substantial number of immigration bonds which were issued by Nobel under Guillory'S agreements with Nobel.") (Ex. 6).
II Nobel/Guillory Agreement at ~~ 2, 4 (Ex. 2); Plaintiffs Original Complaint and Application for Injunctive Relief, Nobel Insurance Company v. Lyle Steven Guillory, 3-00 CV 0141-H (N.D. Tex. Jan. 21, 2000), at ~~ 5-9 (Ex. 4).
12 See, e.g., Sandoval Bond File at BF 0000206, 215 (invoice from government to Nobel for breach of Manual Sandoval's bond; notice of immigration bond breach) (Ex. 1).

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Case 7:05-cv-00331 Document 179 Filed in TXSD on 02/27/08 Page 11 of 49
bonds on which Nobel was the suretyY In doing so, Vannerson exposed Nobel to approximately $15,000,000 in liability.14
8. Nobel ceased writing immigration bonds on June 30, 1999/5 at which time Vannerson ceased writing Nobel immigration bonds. 16
9. After Vannerson and Guillory terminated their relationship, Nobel and Vannerson entered a direct contractual relationship in a June 28, 2000 Agreement Regarding Immigration Bonds (the "NobelNannerson Agreement,,).17 This Agreement acknowledged that Vannerson had written Nobel bonds as a subagent of Guillory and that Vannerson would not write any new Nobel immigration bonds. 18
The Relationship Between Don Vannerson and Ranger/Fairmont
10. On June 29, 1999, Vannerson and Ranger entered an Agent Underwriting Agreement ("RangerNannerson Agreement,,).19
11. Pursuant to this Agreement, Vannerson contracted with indemnitors for the posting of immigration bonds and posted with the INS immigration bonds on which Ranger served as surety. 20
12. After Vannerson's death on March 1, 2004, Aaron Bonding continued to be run by his son, Rodney Vannerson, until July 2004.21 Aaron Bonding posted a total of 6,574 Ranger bonds for a total penal amount of about $35.9 million.22 During the period
13 See February 26,2008, Declaration of Jodie Mow at ~ 3.a (Ex. 7). 14 See id. at ~ 3.b. 15 Original Complaint in Intervention and Application for Injunctive Relief, Nobel Ins. Co. v. Guillory, (N.D. Tex. Feb. 2,2000) at ~ 8 (PTF-GUILLORY 00076-87) (Ex. 8); Ramos Dep. at 52:l8-2l(Ex. 7 to the January 25,2008 Declaration of Elisaveta Dolghih (Dkt. # 170, under seal)). 16 Intervenor's Response to Defendant's Counterclaim, Nobel Ins. Co. v. Guillory (N.D. Tex. Mar. 10, 2000) at ~ 5 (PTF-GUILLORY 00228-233) (Ex. 9). 17 NobeliVannerson Agreement (BF-0000389-394) (Ex. 6). 18 Id. atBF-0000389. 19 See RangeriVannerson Agreement (BF-0000381-387) (Ex. 10). 20 See RangeriVannerson Agreement at ~ 4 (BF-000038l); Zamora-Garcia Bond File at BF-0000056-58 (Ranger bond posted by Vannerson) (Ex. 11). 21 See Supplemental Aff. of Rick Klimaszewski, In the Estate ofDon Vannerson, Cause No. 345,829-401 (Harris County Probate Court, July 5, 2005) at PTF-VAN 00322 ("After Don Vannerson's death, I met with Rodney Vannerson about continuation of Aaron's business.") (Ex. 12); Motion to Delegate Managerial Duties to Ranger Ins. Co., In the Estate of Don Vannerson, Cause No. 345,829-402 (Harris County Probate Court, Aug. 23, 2004) at PTF-VAN 00580 (noting that Aaron Bonding ceased doing business in July 2004) (Ex. 13). 22 See id. at ~ 3.c, d.
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March-July 2004 after Vannerson's death, Aaron Bonding posted 313 Ranger bonds.23
The Vannerson Probate Proceedings
13. Don Vannerson died on March 1, 2004.24 His will was submitted to probate in Harris County, Texas, Probate Court.25
14. Ranger and Nobel each filed claims for millions of dollars in the Vannerson Probate Proceedm· gs. 26
15. Ranger and Nobel settled with the heirs of the Vannerson Estate. Ranger/Fairmont assumed responsibility for administering any outstanding Nobel or Ranger bonds.27 All of Aaron Bonding's files are now in the possession of Ranger/Fairmont.28
16. As part of the settlement, Ranger/Fairmont's employee, Michael Padilla, was appointed Independent Administrator of the Estate of Don Vannerson.29
Nobel/Stonington and Ranger/Fairmont Enter the Portfolio Transfer Agreement
17. On December 1, 2005, Nobel/Stonington and Ranger/Fairmont entered into a Portfolio Transfer Agreement.30 This Agreement, produced under seal in this case, is discussed at length in prior briefing in this matter.3
23 See id. at ~ 3.e. 24 See Suggestion of Death (Ex. 22 to the January 25,2008 Declaration of Elisaveta Dolghih (Dkt. # 172)). 25 See Application for Probate of Will and for Letters Testamentary, Estate of Don Vannerson (Harris County Probate Court) (PTF-VAN 00072-76) (Ex. 14). 26 Claim of Ranger Ins. Co., In the Estate ofDon Vannerson (Harris County Probate Court, Feb. 24, 2005) (without attachments) (PTF-VAN 00094-96) (Ex. 15); Claim of Stonington Ins. Co., In the Estate ofDon Vannerson (Harris County Probate Court, Oct. 31, 2005) (without attachments) (PTF-VAN 000209-11) (Ex. 16). 27 See Padilla Dep. at 44: 15-45:3; 47:3-10 (Ex. 17). 28 See id. at 53:1-4. 29 See id. at 29:17-23; Agreed Order Approving Resignation of Dependent Co-Executors and Order Appointing Independent Administrator with Will Annexed, In the Estate ofDon Vannerson (Harris County Probate Court, April 7, 2006) (PTF-VAN 00005-9) (Ex. 18); Settlement Agreement and Mutual Release, In the Estate ofDon Vannerson (Harris County Probate Court, signed March 30-April 7, 2006) at ~ 5.2 (PTFVAN 4349) (Ex. 19). 30 See Ex. 1 to the to the January 25, 2008 Declaration of Elisaveta Dolghih (Dkt. # 169), filed under seal. 31 Plaintiffs' Opposition to Fairmont's Motion for Summary Judgment (Jan. 24, 2008) at 5-15 (Dkt. # 168, under seal).
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Nobel's and Ranger's Immigration Bond Rate Filings
18. On April 24, 1998, Nobel filed a rate of20% of the penal amount of the immigration bond with the Texas Department of Insurance ("Texas DOl"). When filing this rate, Nobel informed the Texas DOl that "[i]t is the judgment of our management that the proposed rates are adequate, non-excessive, not unfairly discriminatory and comply with the laws of the State of Texas.,,32 Nobel's proposed 20% rate was approved by the Texas DOL33
19. In its rate filing, Nobel sought to have approved the same 20% rate that the Texas DOl had already approved for Ranger's immigration bonds.34 Ranger had previously sought approval of a 20% rate on its immiration bonds.35 Ranger believed 20% was an adequate rate to charge for its product. 3
20. Aaron Bonding charged Ms. Sandoval a rate of 60% for the Nobel immigration bond she purchased.37 Aaron Bonding routinely charged the indemnitors rates of 40% or more. 38
The Documents the Bonding Defendants Used in Contracting With Ms. Sandoval and the Indemnitors
21. The Bonding Defendants provided copies of the following documents to the Indemnitors in contracting with them:
• A Nobel/Ranger Receipt for Collateral Deposited. The Nobel and Ranger versions of the Receipt are identical in every meaningful respect.39 A copy of the Nobel Receipt is in the Sandoval bond file.
• A Nobel/Ranger Application for U.S. Immigration Bond. The Nobel and Ranger versions of the Receipt are identical in every meaningful respect. 40 A
32 April 24, 1998 Letter from Nobel to Texas DOl (PTF-VAN 4566) (Ex. 20); June 16, 1998 Letter from Nobel to Texas DOl (PTF-VAN 4552-53) (Ex. 21). 33 Sept. 3, 1998 Letter from Texas DOl to Nobel (PTF-VAN 4548) (Ex. 22). See also Ramos Dep. at 150:7-9. 34 See April24, 1998 Letter from Nobel to Texas DOl (PTF-VAN 4566) (Ex. 20). 35 See Ranger Insurance Co., Exception Page (BF 0003565) (Ex. 23); Klimaszewski Dep. at 167:22-168:4 (Ex. 8 to the to the January 25,2008 Declaration of Elisaveta Dolghih (Dkt. # 170), filed under seal). 36 See Klimaszewski Dep. at 173:19-174:8. 37 See Sandoval Bond File at BF-0000244 (Ex. 1). 38 See Klimaszewski Dep. at 93:3-7; Ranger Insurance CO.'s First Amended Petition, In the Estate ofDon Vannerson (Cause No. 345,829-401) (Aug. 20, 2004) at PTF-VAN00591, 592 (admitting Vannerson charged "40% or more of the penal liability of the bond") (Ex. 24). 39 Sandoval Bond File at BF-0000232 (Nobel); Zamora-Garcia Bond File at BF-0000061 (Ranger) (Ex. 11). 40 Sandoval Bond File at BF-0000232 (Nobel); Zamora-Garcia Bond File at BF-0000061 (Ranger).
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copy of the Nobel Application is in the Sandoval bond file.

• A Nobel/Ranger U.S. Immigration Bond Indemnity Agreement (the
"Nobel/Ranger Indemnity Agreement,,).41 The Nobel and Ranger versions of the Indemnity Agreements are virtually identical. Ms. Sandoval signed a copy of the Nobel Indemnity Agreement.

• A Promissory Note, obligating the Indemnitor to make monthly collateral
payments to Aaron Bonding. Spanish versions of the same were sometimes provided in addition to the English version, and sometimes instead of the English version. Both versions are in the Sandoval bond file.42

•

A Promissory Note obli§ating the Indemnitor to pay the full amount of the bond upon its breach.4 Spanish versions of the same were sometimes

provided in addition to the English version, and sometimes instead of the English version.44 An English version is in the Sandoval bond file.

• A U.S. Immigration Bonds & Services Indemnity Agreement, obligating the
Indemnitor to indemnify the Surety in the event of a breach of the immigration bond.45 A Spanish version was sometimes provided in addition to the English version, and sometimes instead of the English version.46 An English version is in the Sandoval bond file.
• A Nobel/Ranger Consent to Rate Application.47 The Nobel and Ranger
versions are identical in every respect but for the name of the Surety. Ms. Sandoval signed a Nobel version.
• A Terms and Conditions Under Immigration Bond.48 These are identical
whether used in connection with Ranger or Nobel bonds. Ms. Sandoval signed a copy.
22. These documents were provided to the Indemnitors in one packet.49 The documents

41 Sandoval Bond File at BF-0000241 (Nobel); Zamora-Garcia Bond File at BF-0000129 (Ranger) (Ex. 11). 42 See Sandoval Bond File at BF-0000236 (English), BF-00002336 (Spanish). 43 See Sandoval Bond File at BF-0000239. 44 See Salinas Bond File at BF-0000319 (Ex. 25). 45 See Sandoval Bond File at BF-0000240. 46 See Salinas Bond File at BF-0000317. 47 See Sandoval Bond File at BF-0000237 (Nobel); Zamora-Garcia Bond File BF-0000140 (Ranger). 48 See Sandoval Bond File at BF-0000238 (used in connection with a Nobel bond); Zamora-Garcia Bond File at BF-OOOO 170 (used in connection with a Ranger bond). 49 See LopezDep. at 67:4-23 (Ex. 26).
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were not provided to the Indemnitors until after they had paid their fees. 50
23. The Sureties have brought counterclaims in this litigation against Ms. Sandoval based on the Nobel Indemnit(' Agreement and the U.S. Immigration Bonds & Services Indemnity Agreement.5 They have sought leave of Court to bring counterclaims against all members of the Indemnitor Notice Class based on the Nobel/Ranger Indemnity Agreement and the U.S. Immigration Bonds & Services Indemnity Agreement. 52
The Bonding Defendants' Practice ofnot Providing Notice ofSurrender Dates for Deportation
24. The Bonding Defendants may receive notice from the INS in a Form 1-340 that an alien released on a surety bond is to be surrendered to the INS for deportation.53 On June 6, 2002, Aaron Bonding received an 1-340 for the surrender of Mr. Sandoval for deportation. 54
25. The Bonding Defendants historically did not provide notice of their receipt of an 1340 for deportation of an alien to, at least, the alien.55 If an alien asked Aaron Bonding whether a notice for deportation had been issued, Aaron Bonding would inform them that no notice had been issued, regardless of whether that was true. 56
26. The Bonding Defendants did not provide notice of Mr. Sandoval's appearance date for deportation to either Mr. or Ms. Sandoval.57
50 See B. Manzano Dep. (In the Estate ofDon Vannerson, Cause No. 345,829-402 (Harris County Probate Court, Sept. 13, 2005) at 14 (under questioning by Mr. Irelan, testifying that she worked in "almost every department there has been" at Aaron Bonding and that she worked there from 1997 to her deposition), 97 (contract documents not provided to Indemnitors until after they paid their fees) (Ex. 27). 51 See Sureties' First Amended Answer at ~ 113 (Dkt. # 174). 52 See Defendants, Fairmont and Stonington's, [Proposed] First Amended Answer and Counterclaims to Plaintiffs' Sixth Amended Petition for Writ of Habeas Corpus and Class Action Complaint at ~~ 115, 11819 (Dkt. # 145, Attachment # 1). 53 See, e.g., Sandoval Bond File at BF-0000217 (Ex. 1). 54 See id. 55 See Surety Bond Class Order at 20; Petition for Leave to File an Interlocutory Appeal Under Fed. R. Civ. P. 23(f) at 1 ("The bonding 'agency' concedes it followed a policy of withholding notice of deportation from the alien.") (Ex. 28). 56 See CuayahuitlDep. at 68:9-22 (Ex. 10 to the January 25,2008 Declaration of Elisaveta Dolghih, Dkt. # 172). 57 See Manuel Sandoval Declaration (Sept. 20, 2002) (Ex. 16 to the January 25, 2008 Declaration of Elisaveta Dolghih, Dkt. # 172).; Irma Sandoval Declaration (Sept. 20, 2002) (Ex. 14 to the January 25, 2008 Declaration of Elisaveta Dolghih, Dkt. # 172).
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27. Fairmont, currently operating what remains of Aaron Bondinrfs immigration bond business, does not provide notice of deportation dates to aliens.5 ARGUMENT
I. A PLAINTIFF MAY SUCCESSFULLY OBTAIN PARTIAL SUMMARY JUDGMENT ON LIABILITY WHERE SHE CAN DEMONSTRATE THAT THERE IS NO GENUINE ISSUE OF MATERIAL FACT AND THAT SHE IS THUS ENTITLED TO JUDGMENT AS A MATTER OF LAW. "Rule 56 of the Federal Rules of Civil Procedure mandates the entry of summary
judgment, after adequate time for discovery and upon motion, if 'the pleadings, depositions, answers to interrogatories, and admissions on :file, together with any affidavits :filed in support of the motion, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.",59 Once the moving party has satisfied her burden of proof on an issue, the nonmovant "may not rest on mere allegation or denials in its pleadings, but must instead produce affirmative evidence and specific facts" showing that there is a genuine issue for trial. 60
The Federal Rules specifically provide for adjudication ofliability on a motion for partial summary judgment, leaving the adjudication of damages for another time.61 Moreover, the Federal Rules provide that "[i]f summary judgment is not rendered on the whole action, the court should, to the extent practicable, determine what material facts are not genuinely at issue" and issue an order establishing those facts for the action.62
58 See Klimaszewski Dep. at 194:18-21(Ex. 8 to the to the January 25,2008 Declaration of Elisaveta Dolghih (Dkt. # 170), filed under seal). 59 Principal Life Ins. Co. v. Renaissance Healthcare Sys., Inc., Civ. Case No. H-06-2973, 2007 WL 3228103 at *1 (S.D. Tex. Oct. 30,2007) (granting summary judgment for plaintiff on breach of contract action) (quoting Fed.R.Civ.P. 56(c)). 60 Schaefer v. Gulf Coast Reg'l Blood Ctr., 10 F.3d 327,330 (5th Cir.1994). 61 Fed. R. Civ. Proc. 56(d)(2). 62 Fed. R. Civ. Proc. 56(d)(1).
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II. THE SURETIES ARE BOUND BY THE NOTICE PROVISION. The bonding contracts between the Bonding Defendants and the Indemnitors
consist of a variety of materially uniform documents, all presented to the Indemnitors in a single bundle of documents.63 These documents included documents the Sureties agree they are bound by (such as the Nobel/Ranger Indemnity Agreements and the Nobel/Ranger Receipts) and other documents they contend were side-agreements between Aaron Bonding and the Indemnitors to which they were not parties, including the Terms and Conditions agreement. Plaintiffs demonstrate herein that either through ratification or agency principles, the Sureties are bound by the Terms and Conditions agreement and are liable for any breach of the Notice Provision.
Ratification: The Sureties have willingly taken on the responsibility of administering the outstanding bonds posted by Vannerson, have retained the benefits of the bonding contracts, and have neither repudiated the bonding contracts nor any portion thereof. In fact, they have brought a counterclaim against Plaintiff Sandoval under the bonding contracts, and they have sought to bring counterclaims against all Class members under the bonding contracts. 64 The undisputed evidence in this case demonstrates that the Sureties have ratified the bonding contracts-including the Notice Provision-and are bound by them. See infra Section II.A.
Agency: When an agent acting within the scope of his authority makes a contract on behalf of a principal, the principal is a party to the contract and is bound by its provisions.65 The undisputed facts in this case demonstrate that Vannerson acted within
63 See Statements of Fact 21-22, supra. 64 See Statement of Fact 23, supra. 65 Restatement (Third) of Agency § 6.01, § 6.03 (Ex. 29A-B).
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the scope of this authority and on behalf of the Sureties in entering the bonding contracts-including the Notice Provision-and thus the Notice Provision is a contractual term binding the Sureties, the breach of which the Sureties are liable for. See infra Section ILB.
A. The Sureties Ratified the Terms and Conditions Agreement. "Ratification is the adoption or confirmation by a person with knowledge of all material facts of a prior act that did not then legally bind him and that he had the right to repudiate. Such approval can be given through act, word, or conduct. ... 'One may ratify the acts or contracts of another . . . whether the other was his agent and exceeded his authority as such or was not his agent at all. ",66 Here, the Sureties ratified the bonding contracts, including the Terms and Conditions agreement, in two ways. First, the Sureties have brought suit against Ms. Sandoval under the Nobel Indemnity Agreement, and they have attempted to bring suit against the absentee Class members.
One of the most unequivocal methods of showing a ratification of an agent's unauthorized act is where the principal brings a suit on a contract made by an agent. If the principal, with full knowledge of all the material facts of the case, attempts to enforce a contract made by the agent without authority, by commencing an action against the third party involved, this action constitutes a ratification of the agreement.67 The Sureties cannot sue on those parts of the bonding contracts they like-the Nobel/Ranger Indemnity Agreements-and avoid those parts they do not like-such as
66 Willis v. Donnelly, 118 S.W.3d 10,26 (Tex. Ct. App. 2003) (citations omitted). 67 3 Tex. Jur. 3d Agency § 143 (Ex. 29C).
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the Tenns and Conditions Agreement.68 Because all the documents the Bonding Defendants used in contracting with the 1ndemnitors were provided to the 1ndemnitors in one packet, they should all be treated together as one contract.
Second, the Sureties have purposefully taken on the immigration bond business of Aaron Bonding with full knowledge that Vannerson used the Tenns and Conditions agreements in contracting with the 1ndemnitors. As a result of a settlement reached between Fainnont, Stonington, and Vannerson's heirs, Fainnont (which has succeeded to all ofthe interest Nobel/Stonington had in its immigration bond business69) handles every aspect of the administration of the bonds and the bonding contracts, including both Nobel and Ranger bonds. According to Michael Padilla, the independent administrator of the Vannerson estate and an employee of Fainnont/o Fainnont is currently responsible for administering the outstanding bonds posted by Vannerson.71 Fainnont currently has possession of all of Aaron Bonding's :files.72 The federal government sends 1-340 notices (the notice at issue in this case) to Fainnont, not to Aaron Bonding.73 Whether or not the aliens and 1ndemnitors are provided with any notice of an 1-340 is an issue handled by Fainnont. 74 Aaron Bonding's mail has been forwarded to Fainnont, as well as Aaron Bonding's phone lines.75 There are currently 615 immigration bonds outstanding/6 and
68 3 Tex. Jur. 3d Agency § 127 (Ex. 29D). 69 See Plaintiffs' Opp. to Fainnont's Motion for Summary Judgment (Jan. 24,2008) at 5-15 (Dkt. # 168). 70 See Padilla Dep. at 29:17-23 (Ex. 17). 71 See id. at44:15-45:3; 47:3-10. 72 See id. at 53: 1-4. 73 See id. at 53:11-54:3. 74 See id. at 54:4-55:7. 75 See id. at 57:4-12. 76 See February 26,2008, Declaration of Jodie Mow at ~~ 4,5 (192 + 423) (Ex. 7); February 27,2008 Declaration of J. Benjamin King at ~ 3.
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the Tenns and Conditions document was used in the vast majority of the bonding contracts relating to those bonds.77 After taking on Aaron Bonding's business, Fainnont did nothing to repudiate the Tenns and Conditions agreement. It has not contacted the Indemnitors to infonn them that a portion of their agreements is unenforceable, and it has not attempted to return to the Indemnitors the fees they paid Aaron Bonding-not even the portion of the fees Vannerson passed along to the Sureties.78 Having retained the benefits of Aaron Bonding's contracts with the Indemnitors with full knowledge of the tenns of those contracts/9 and having willfully taken on the responsibility of administering the bonding contracts, Fainnont has ratified and is bound by the bonding contracts.
"Ratification is equivalent to prior authority and operates retroactively. In other words, a principal's ratification of its agent's act relates back to the inception of the transaction and renders it valid, as though the agent had been fully authorized in the first instance.,,8o Thus, Fainnont's ratification of the bonding contracts operates retroactively so that Fainnont is bound by both the Notice Provisions it has already breached and those it has yet to breach. 8! There is no genuine issue of material fact on any of these issues.
77 See February 26, 2008, Declaration of Jodie Mow at ~~ 4, 5. 78 Ranger/Vannerson Agreement at BF 0000535, ~ 7 (setting forth portion of fees to be paid to Ranger) (Ex. 10); Klimaszewski Dep. at 126:19-127:5; Ranger Insurance Co.'s First Amended Petition, In the Estate of Don Vannerson (Cause No. 345,829-401) (Aug. 20, 2004) at PTF-VAN00591 (describing Ranger's fee) (Ex. 24). 79 3 Tex. Jur. 3d Agency § 144 (Ex. 29E). 80 3 Tex. Jur. 3d Agency § 128 (Ex. 29F). 81 See Warburton v. Wilkinson, 182 S.W. 711 (Tex. Ct. Civ. App. 1916) (holding undisclosed principal bound by ratification of contract entered by agent so that principal was liable for the breach of the contract).
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B. Because Vannerson was the Sureties' Agent and Acted Within the Scope of his Authority in Entering the Terms and Conditions Agreement, the Sureties are Bound by the Notice Provision.
When an agent acting within the scope of his authority makes a contract on behalf of a principal, the principal is a party to the contract and is bound by its provisions. This is true whether or not the contract counterparty knows of the agency relationship82 and whether or not the identity of the principal is known to the counterparty.83 It is irrelevant whether the contract specifically binds the principal, so long as it binds the agent: "a contract negotiated by the agent in the agent's own name but within the scope of the agent's authority is generally treated as the principal's contract.,,84 In fact, the law presumes that the principal is a party to the agreement unless explicitly excluded. 85
For example, in Krumtum v. Burr, an agent entered a contract with a third-party by which the agent agreed to perform some paving work.86 The contract was signed only by the agent and the third-party; the principal was not listed anywhere on the contract.87 When the principal failed to perform the contract, the third-party brought a claim for breach of contract. The principal claimed it was not liable on the contract, his name being nowhere on it. 88 The court rejected this argument, citing to the Restatement (Second) of Agency § 149:
82 See Restatement (Third) of Agency § 6.01 (disclosed principal bound by agent's contracts) (Ex. 29A); Restatement (Third) of Agency § 6.03 (undisclosed principal bound by agent's contracts) (Ex. 29B). 83 See Restatement (Third) of Agency § 6.02 (unidentified principal bound by agent's contracts) (Ex. 29G). 84 See 3 Tex. Jur. 3d Agency § 238 (Ex. 27H); Restatement (Second) of Agency § 149 (Ex. 291). 85 See Restatement (Third) of Agency § 6.03 (principal a party to a contract made by an agent "unless excluded by the contract") (Ex. 29B). 86 487 P.2d 435, 435-36 (Ariz. Ct. App. 1971). 87 Id. at 436. 88 Id. at 436.
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A disclosed or partially disclosed principal is subject to liability upon an authorized contract in writing, if not negotiable or sealed, although it purports to be a contract of the agent, unless the principal is excluded as a party by the terms of the instrument or by agreement of the parties. 89 Numerous cases stand for the same proposition.9o Here, Vannerson entered into the Terms and Conditions agreement on behalf of the Sureties and within the scope of his authority. First, Vannerson was the Sureties' "Local Recording Agent" under Texas law and had the plenary authority to bind the Sureties. This fact alone binds the Sureties to the Notice Provision. Second, even apart from his status as their Local Recording Agent, under general principles of agency law, Vannerson was the agent of the Sureties for the purposes of contracting with the Indemnitors. Third, Vannerson did the business of the Sureties in entering the Terms and Conditions agreement. Fourth, Vannerson operated within the scope of his actual authority in agreeing to the Terms and Conditions document and the Notice Provision. Like the principal in Krumtum, the Sureties are bound by the contracts their agent entered, and the Sureties are liable if the notice promised in the Notice Provision was not provided. 1. Under Texas insurance law, Vannerson had power co-extensive
with that of the Sureties themselves to bind the Sureties. Vannerson was licensed as a Local Recording Agent with the Texas Department of Insurance.91 Nobel and Ranger both appointed Vannerson as their agent with the
89 Id. at 436 (quotation marks omitted). 90 See Comind, Companhia de Seguros v. Sikorsky Aircraft Div. of United Technologies Corp., 116 F.R.D. 397, 407 (D. Conn. 1987); Alfano v. BDO Seidman, 925 A.2d 22, 27 (N.J. App. Div. 2007); Sanger v.
Warren, 44 S.W. 477, 478 (Tex. 1898); s. Pac. Co. v. Us., 192 F.2d 438, 440 (3d Cir. 1951); Sims v.
Callihan, 39 S.W.2d 153,155 (Tex. Ct. Civ. App. 1931). 91 See Texas Dep. of Ins., License Certificate (BF 0003645) (Vannerson licensed as Local Recording Agent) (Ex. 30).
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Texas Department of Insurance.92 Indeed, Ranger's contract with Vannerson required
him to "remain a duly licensed and qualified Local Recording Agent in Texas as required
by law.,,93
The Texas Insurance Code historically provided a statutory category of insurance
agents, as follows:
"Local Recording Agent" means a person or firm engaged in soliciting and writing insurance, being authorized by an insurance company or insurance carrier, including fidelity and surety companies, to solicit business and to write, sign, execute, and deliver policies of insurance, and to bind companies on insurance risks, and who maintain an office and a record of such business and the transactions which are involved, who collect premiums on such business and otherwise perform the customary duties of a local recording agent representing an insurance carrier in its relation with the public ....,,94
The Fifth Circuit held that this provision "'vest[ed] local recording agents with authority
co-extensive with that of the company insofar as writing insurance is concerned and to
remove all questions of the local agent's actual or apparent authority from the field of
cavil or dispute. ",95 "There seems little doubt that the Texas courts, as well as this Court,
have construed Article 21.14 and its predecessors as vesting the local recording agent
with authority as extensive as that which the company possesses under its charter.,,96
Because Local Recording Agents had authority co-extensive with that of the
insurer, an insurer would be bound by risks underwritten by the Local Recording Agent,
92 Texas Dep. ofIns., Individual Information Inquiry (Feb. 12,2008), listing Don Vannerson as appointed agent of Stonington beginning Aug. 26, 1996, and of Fairmont beginning Feb. 14, 1996 (PTF-VAN 04617619) (Ex. 31). 93 RangeriVannerson Agreement at ~ 2 (Ex. 10). 94 Tex. Ins. Code (2001) § 21.14 (Ex. 32). Compare Tex. Ins. Code (2002) (Ex. 32). 95 Blakely v. Am. Employers' Ins. Co., 424 F.2d 758, 732 (5th Cir. 1970) (quoting Shaller v. Comm. Standard Ins. Co., 309 S.W.2d 59, 63 (Tex. 1958)) (emphasis added). 96 Blakely, 424 F.2d at 732.
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even if the insurer expressly forbid him from underwriting the risk.97 Similarly, a Local
Recording Agent could waive stipulations and conditions in an insurance policy and thereby bind the insurer by the waiver.98 Here, Vannerson had "plenary authority to
bind" the Sureties,99 and he bound them to the Terms and Conditions agreement.
2. Even apart from Vannerson's status as their Local Recording Agent, under general agency principles Vannerson was the agent of the Sureties for the purposes of contracting with the Indemnitors.
"An agent is one who is authorized by a person or entity to transact business or
manage some affair for the person or entity. . .. The critical element of an agency
relationship is the right to control, and the principal must have control of both the means
and details of the process by which the agent is to accomplish his task in order for an
agency relationship to exist."IOO Whether or not a principal-agent relationship exists under established facts is a question oflaw for the Court to decide. 101
a. Vannerson did the business of the Sureties in executing and administering their admittedly approved documents.
The Sureties agree that Vannerson had authority to use the documents they
admittedly approved of: the RangerlNobel Indemnity Agreements, the Nobel/Ranger
Receipt, the Nobel/Ranger Application, and the Nobel/Ranger Power of Attomey.102
97 See Shaller v. Comm. Standard Ins. Co., 309 S.W.2d 59, 62-63 (Tex. 1958) (although insurer's Local Recording Agent had been specifically instructed not to write the risk at issue, insurer was bound by policy issued covering risk). 98 See Preferred Risk Mut. Ins. Co. v. Rabun, 561 S.W.2d 239,244-45 (Tex. Ct. Civ. App. 1978). 99 Am. Nat 'I Life Ins. Co. ofTex. v. Montgomery, 640 S.W.2d 346,351 (Tex. Ct. App. 1982). 100 Coleman v. Klockner & Co. AG, 180 S.W.3d 577,588 (Tex. App. 2005). 101 First Nat. Acceptance Co. v. Bishop, 187 S.W.3d 710, 714 (Tex. App. 2006). 102 See Klimaszewski Dep. at 140:14-17 (Ex. 8 to the January 25,2008 Declaration of Elisaveta Dolghih (Dkt. # 170, under seal»; Ramos Dep. at 85:11-20 (Ex. 7 to the January 25, 2008 Declaration of Elisaveta Dolghih (Dkt. # 170, under seal».
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Vannerson perfonned all the business of the Sureties relating to these admittedly
approved documents:
• The Nobel/Ranger Indemnity Agreements state that "[c]redit checks are made on all indemnitors.,,103 Vannerson perfonned those credit checks. 104
• The Nobel/Ranger Indemnity Agreements state that the Indemnitors will pay the Surety "the annual premium for such suretyship as billed by SURETY."105 The Sureties depended on Vannerson to collect those premiums and communicate the amount of the premium to the Indemnitors. 106
• The Nobel/Ranger Indemnity Agreements state that the Indemnitors will pay the Surety for any loss the Surety may incur by reason of the suretyship. 107 The Sureties depended on Vannerson to collect these indemnity payments. !OS
• The Nobel/Ranger Indemnity Agreements state that the Sureties may cancel the bond if the Indemnitor furnishes "incorrect infonnation to SURETY" or fails "to furnish infonnation when requested by SURETY."109 The Sureties depended on Vannerson to collect all infonnation from the Indemnitors and dePtended on Vannerson for all necessary interaction with the Indemnitors. 1 0
• The Nobel/Ranger Indemnity Agreements state that the Indemnitors would provide updated contact infonnation. 111 The Sureties expected that the Indemnitors would provide this infonnation to Vannerson, not directly to them. I 12
103 NobellRanger Indemnity Agreements, top of page. See Sandoval Bond File at BF-0000241 (Nobel) (Ex. 1); Zamora-Garcia Bond File at BF-0000129 (Ranger) (Ex. 11). 104 See, e.g., Sandoval Bond File at BF-0000234 (credit report run for Aaron Bonding). 105 NobellRanger Indemnity Agreements at ~ 1(b). 106 See Klimaszewski Dep. at 93:12-94:4; Ramos Dep. at 130:11-13. 107 Nobel/Ranger Indemnity Agreements at ~ l(a). 108 See Klimaszewski Dep. at 97:15-98:10; Ramos Dep. at 133:3-13. 109 Nobel/Ranger Indemnity Agreements at ~ 8. 110 See Klimaszewski Dep. at 39:15-40:5, 95:7-19, 96:17-97:14; Ramos Dep. at 55:9-14, 131:16-23, 132:20-133:2. 111 Nobel/Ranger Indemnity Agreements at ~ 9. 112 See Klimaszewski Dep. at 99:16-22; Ramos Dep. at 133:17-134:13.
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• The Nobel/Ranger Receipts would memorialize the Indemnitor's obligation to make collateral payments. l13 The Sureties depended on Vannerson to collect these collateral payments. 114
• Although the Sureties had the authority to direct Vannerson not to post bond for an alien, Vannerson generally determined whether a Ranger or Nobel bond would be posted for particular aliens. I IS
Thus, Vannerson was no mere clearinghouse for bonds or wholesaler of the Sureties'
paper. Rather, he transacted their business and performed every task relating to the
Sureties' admittedly approved documents.
b. Vannerson did the business of the Sureties in entering the Terms and Conditions agreements.
As demonstrated above, Vannerson did the business of the Sureties in using and
administering the Nobel/Ranger Indemnity Agreements. Vannerson also did the business
of the Sureties in entering the Terms and Conditions agreements. In the Terms and
Conditions agreement, Aaron Bonding and the Indemnitors agreed to certain procedures
designed to help fulfill the requirements set forth in the Nobel/Ranger Indemnity
Agreements:
• The Terms and Conditions agreement required the aliens and the Indemnitors to check in with Aaron Bonding once every thirty days. See T&C Agr. 'Il 1 (Sandoval Bond File at BF-0000238). This provision is obviously designed to help Aaron Bonding keep tabs on the aliens and the Indemnitors so that the bond will not be breached.
• The Terms and Conditions agreement required the alien and the Indemnitor to provide updated contact information. The Terms and Conditions document also required updated contact information for the Indemnitor's and alien's employer and attorney, as well as information on the alien's immigration status and any departure from the United States. See T&C Agr. 'Il2. This requirement is more detailed and extensive than the related requirement in the Nobel/Ranger
113 See, e.g., Sandoval Bond File at BF-0000232. 114 See Klimaszewski Dep. at 97:15-98:14. 115 See Nobel/Guillory Agreement at ~5, sentence 1 (Ex. 2); Guillory/Vannerson Agreement at ~5, sentence 1; at ~ 5, sentence 1 (Ex. 3); Klimaszewski Dep. at 122:2-12.
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Indemnity Agreements that the Indemnitor "notify the surety in writing within forty-eight (48) hours when there is a change of address and/or change of names." Nobel/Ranger Indemnity Agreement at ,-r 9. Again, this provision is obviously designed to help the Bonding Defendants keep tabs on the aliens and the Indemnitors so that the bond will not be breached.
• The Notice Provision itself is designed to ensure that the alien and the Indemnitor have information regarding requested INS appearances, so that they can ensure the alien's appearance and avoid any breach of the bond. See T&C Agr. ,-r 4. There is no other way the Indemnitor can "absolutely guarantee the appearance" of the alien without this notice. See Nobel/Ranger Indemnity Agreement at,-r 10.
• Under the Terms and Conditions document, Aaron Bonding also agreed to notify the alien's attorney of "all appearances requested" by the INS. See T&C Agr. at ,-r 5. Again, this paragraph is clearly designed to allow the Indemnitor to effectively "absolutely guarantee the appearance" of the alien. See Nobel/Ranger Indemnity Agreement at ,-r 10.
• "AGENCY and SURETY" had the ability to verify all information given to them to determine the Indemnitor's and alien's eligibility for a bond and to determine either's whereabouts. See T&C Agr. at,-r 8. This provision is thus similar to yet broader than the provision in the Nobel/Ranger Indemnity Agreement providing for credit checks on the Indemnitors.
The Terms and Conditions document gave the Sureties additional rights designed
to help them protect their interest in not paying on the bond:
• The Terms and Conditions agreement gave the Sureties the ability to "require[] the PRINCIPAL and INDEMNITOR to appear in AGENCY'S office." See T&C Agr. at,-r 6.
• The Terms and Conditions agreement purported to give "AGENCY and SURETY" the right, under certain conditions, "to enter the PRINCIPAL'S and/or INDEMNITOR'S horne, place of employment, or any other location where the PRINCIPAL may be found in order to effect the PRINCIPAL'S rearrest, with or ' without warrant." T&C Agr. at,-r 9.
• The Terms and Conditions agreement purported to release "AGENCY and SURETY of any and all liability or damages as a direct and/or indirect result of the PRINCIPAL'S rearrest." T&C Agr. at,-r 9.
• In case these rights were not enough, the Terms and Conditions document purportedly gave Aaron Bonding and the Sureties the right to issue additional "term and conditions" not set forth in the document. See T&C Agr. at second unnumbered paragraph.
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Thus, all of the provisions in the Terms and Conditions document are geared toward preventing a breach of the bond and protecting the rights of the Sureties, and many of the provisions are extensions of provisions found in the Nobel/Ranger Indemnity Agreements. Vannerson was thus doing the business of the Sureties and acting on their behalves in entering the Terms and Conditions agreement.
c. The Sureties had the power to control Vannerson in contracting with the Indemnitors.
"The critical element of an agency relationship is the right to control, and the principal must have control of both the means and details of the process by which the agent is to accomplish his task in order for an agency relationship to exist.,,1l6 The right of control is the critical issue, not whether control was actually exercised. l17 "[A] a person may be an independent contractor under some circumstances yet may be an agent or employee in connection with other work or activities.,,118
Here, as discussed below, the contracts between the Sureties and Vannerson gave the Sureties extensive control over how Vannerson contracted with the Indemnitors and how he administered the bonding contracts. This just makes sense. According to Vannerson's electronic records, Vannerson posted nearly $15 million in Nobel bonds and $35.9 million in Ranger bonds-over $50 million in potential liability.119 It just makes sense that the Sureties would make sure they retained the power to exercise control over Vannerson as they thought necessary.
116 Coleman v. Klockner & Co. AG, 180 S.W.3d 577,588 (Tex. App. 2005). 117 See Farrell v. Greater Houston Transp. Co., 908 S.W.2d 1, 3 (Tex. App. 1995); Morante v. Am. Gen. Fin. Center, 157 F.3d 1006, 1009 (5th Cir. 1998). 118 Royal Mortg. Corp. v. Montague, 41 S.W.3d 721,733 (Tex. Ct. App. 2001); 3 Tex. Jur. 3d Agency § 13 ("A party who contracts to act on behalf of another and is subject to the other's control except with respect to his or her physical conduct is an agent and also an independent contractor.") (Ex. 29J). 119 See February 26,2008, Declaration of Jodie Mow at ~ 3.b, d (Ex. 7).
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In fact, the Sureties agree that they had the power to control Vannerson. In the

Vannerson Probate Proceedings, Ranger filed a "Motion to Delegate Managerial Duties

to Ranger Insurance Company." There, in attempting to convince the probate court that

Ranger should be placed in charge of the run-off business of Aaron Bonding, Ranger

claimed: "Under the terms of [its contract with Vannerson], Ranger enjoys broad powers

and authority with respect to the business of Aaron.,,120 Nobel had the same ability to

control Vannerson as did Ranger, and thus the same "broad powers and authority."

i.

Nobel's contractual power to control Vannerson.

Nobel's relationship with Vannerson was governed by three principal documents:

(i) the Nobel/Guillory Agreement (Ex. 2); (ii) the Guillory/Vannerson Agreement (Ex. 3);

and (iii) the Nobel/Vannerson Agreement (Ex. 6). Nobel contracted with the Indemnitors

through a general agent (Guillory) and a subagent (Vannerson). Nobel ceased writing

immigration bonds on June 30, 1999,l21 and on June 28, 2000, Nobel and Vannerson

entered the Nobel/Vannerson Agreement. Although Vannerson would not produce any

new Nobel bonds under the Nobel/Vannerson Agreement, Nobel retained extensive

control over Vannerson's business.

Throughout their relationship, Nobel had the power to control Vannerson in his

contracting with the Indemnitors:

1. Nobel could control the number and amount of bonds Guillory and his subagents, including Vannerson, could issue. 122

120 Motion to Delegate Managerial Duties to Ranger Ins. Co., In the Estate ofDon Vannerson, Cause No. 345,829-402 (Harris County Probate Court, Aug. 23,2004) (PTF-VAN 00580-588, at 581) (Ex. 13). 121 See Statement of Fact 8, supra. 122 See Nobel/Guillory Agreement at ~4, sentence 1, ~5, sentence 2; GuillorylVannerson Agreement at ~ 4, sentence 1.
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2. Guillory had the power to require Vannerson to return any unused "Powers of Attorney" (the documents that gave Vannerson the authority to post bonds) to Guillory upon his request. 123
3. Nobel could control which forms Guillory and the sub-agents would use in contracting with Indemnitors. 124
4. Nobel had the power to direct Vannerson, through Guillory, to not bond out particular aliens. 125
5. Nobel had the power to direct Vannerson, through Guillory, to collect such collateral as Nobel "shall authorize and/or direct from time to time.,,126
6. Vannerson's business accounts were an open book to Nobel. While Vannerson was actively writing Nobel bonds, Nobel had the authority to inspect immediately all of Guillory's collateral accounts, "along with any general business account(s).,,127 Guillory had a corresponding authority over Vannerson. 128 The Nobel/Vannerson Agreement gave this power directly to Nobel. 129
7. Nobel had the authority to set the rates Vannerson could charge the public. 130
8. While Vannerson was writing Nobel bonds, Guillory was required to "maintain such documents and records and deliver to [Nobel] such documents, records and/or reR0rts as shall from time to time be authorized and/or directed by [Nobel]." 31 Vannerson was subject to a corresponding requirement. 132 The Nobel/Vannerson Agreement made this an obligation owed directly by Vannerson to Nobel. 133
9. While Vannerson was writing Nobel bonds, Guillory was required to keep his files "open and available for inspection by [Nobel] at all times.,,134 Vannerson
123 See Guillory/Vannerson Agreement at ~4, sentence 3. 124 See GuilloryNannerson Agreement at ~4, sentence 2; Ramos Dep. at 81 :23-82: 11, 83:5-17, 85:11-86:5, 91:24-92:24 (Ex. 7 to the January 25, 2008 Declaration of Elisaveta Dolghih (Dkt. # 170, under seal)). 125 See Nobel/Guillory Agreement at ~5, sentence 1; GuilloryNannerson Agreement at ~5, sentence l. 126 See Nobel/Guillory Agreement at ~6, sentence 1; Guillory/Vannerson Agreement at ~6, sentence 1. 12? See Nobel/Guillory Agreement at ~6, sentence 4. 128 See Guillory/Vannerson Agreement at ~6, sentence 3. 129 See Nobel/Vannerson Agreement at ~ 4, sentence 4. 130 See Nobel/Guillory Agreement at ~7; GuilloryNannerson Agreement at ~7. 131 See Nobel/Guillory Agreement at ~12, sentence 1. l32 See Guillory/Vannerson Agreement at ~12, sentence l. 133 See Nobel/Vannerson Agreement at ~ 9, sentence 1. 134 See Nobel/Guillory Agreement at ~12, sentence 2.
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was required to keep his files open and available to Guillory. 135 The NobellVannerson Agreement made this an obligation owed directly to Nobel. 136
10. Guillory recognized Nobel's "superior claim" to Guillory's files. 137 Vannerson likewise recognized Guillory's superior claim to Vannerson's files.138 He subsequently recognized Nobel's direct and superior claim to his files. 139
11. Nobel had the authority to direct Guillory in the conduct of his business: "Agent shall comply with any and all procedural directions, rules, regulations and the like from time to time given and/or adopted by [Nobel].,,14o Guillory had the exact same authority over Vannerson. 141 Once they entered the NobelNannerson Agreement, Nobel had the same control directly over Vannerson. 142
12. Guillory was forbidden from making any "alteration, modification or amendment of any obligation or document of [Nobel].,,143 Likewise, Vannerson was similarly forbidden. 144 Under the Nobel/Vannerson Agreement, Nobel had the same control directly.145
The similarities between the provisions in the Nobel/Guillory Agreement and the
GuilloryNannerson Agreement are no coincidence. Under the Nobel/Guillory
Agreement, Nobel had control over the language of Guillory's contracts with the sub-
agents: "[Nobel] and [Guillory] will jointly establish and maintain a direct contractual
relationship with Sub Agents using contract wording acceptable to [Nobel].,,146 Whether
135 See GuilloryNannerson Agreement at 'Il12, sentence 1. 136 See NobellVannerson Agreement at 'Il9, sentence 2. 137 See Nobel/Guillory Agreement at 'Il12, sentence 3. 138 See Guillory/Vannerson Agreement at 'Il12, sentence 2. 139 See NobellVannerson Agreement at 'Il9, sentence 3. 140 See Nobel/Guillory Agreement at 'Il14, sentence 1. 141 See Guillory/Vannerson Agreement at 'Il14, sentence 1. 142 See NobelNannerson Agreement at 'Ill1, sentence 1. 143 See Nobel/Guillory Agreement at 'Il14, sentence 1. 144 See GuilloryNannerson Agreement at 'Il14, sentence 1. 145 See NobellVannerson Agreement at 'Il 'Il'II, sentence 1. 146 GuilloryNannerson Agreement at 'Il34.
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Vannerson was Nobel's agent or subagent is irrelevant because where a principal
authorizes an agent to appoint a subagent, the principal will be bound by the acts of the subagent within the scope of his authority.147
ii. Ranger's contractual power to control Vannerson.
On June 29, 1999, Ranger and Vannerson entered the Ranger/Vannerson Agreement (Ex. 10). Ranger's power to control Vannerson was nearly identical to Nobel's:
1. Ranger could control the number and amount of bonds Vannerson sold. 148 2. Ranger had the power to require Vannerson to return any unused powers of
attorney on demand. 149 3. Ranger could control which forms Vannerson could use in contracting with
the Indemnitors. 150 4. Vannerson was prohibited from posting Ranger bonds without obtaining
sufficient collateral first. lSI 5. Ranger had the power to direct Vannerson not to post bond for particular
aliens. 152 6. The Ranger/Vannerson Agreement provided specific requirements as to how
much collateral Vannerson must deliver to Ranger on each bond. IS3 7. Ranger had the right to inspect on demand Vannerson's collateral account and
any other business accounts. 154
147 See Dallas Nat. Bank v. Peaslee-Gaulbert Co., 35 S.W.2d 221, 225 (Tex. Ct. Civ. App. 1931). 148 See RangeriVannerson Agreement at ~ 4, sentence 4; see also Klimaszewski Dep. at 120:15-121 :7. 149 See Ranger/Vannerson Agreement at ~ 4, sentence 7; see also Klimaszewski Dep. at 121 :16-122:1. 150 See RangerNannerson Agreement at ~ 4, sentence 1; see also Klimaszewski Dep. at 41:21-42:13, 45:525,51:24-52:5. 151 See RangeriVannerson Agreement at ~ 4, sentence 5-6. 152 See RangerNannerson Agreement at ~ 5, sentence 1; see also Klimaszewski Dep. at 122:2-12. 153 See RangerNannerson Agreement at ~ 6, sentence 1-2. 154 See Ranger/Vannerson Agreement at ~ 6, sentence 6.
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8. Ranger controlled what sort of collateral receipt forms Vannerson would provide the indemnitors. 155
9. Ranger had the power to fix the rates Vannerson would charge the public. 156
10. Vannerson was required to "maintain all files and records concerning each and every [Ranger] bond which has been executed by Agent." "Such records shall include, but not be limited to, Applications and Contracts for Immigration Bonds, Indemnity Agreements, Promissory Notes, receipts for collateral taken on bonds, complete description of the collateral, statement of the value of collateral at the time of receipt, documents showing the current location and condition of such collateral, and any form or written communication associated with the writing of [Ranger] bonds (hereinafter '[Ranger] files,).,,157
11. Ranger had the power to inspect the "[Ranger] files" at any time. 158 12. Vannerson recognized Ranger's superior claim to the "[Ranger] files.,,159
13. Ranger had the power to issue further directives to Vannerson not covered by their agreement: "Agent will comply with any and all procedural directions, rules, and regulations distributed by [Ranger] for adoption by Agent."160
14. Vannerson was forbidden from making any "alteration, modification or amendment to any obligation or document" of Ranger. 161
15. Ranger had the right to demand Vannerson to provide personal financial information at the Company's request, and Ranger had the right to perform credit checks on Vannerson. 162
16. Finally, for the first three years of their relationship, Vannerson could only write Ranger immigration bonds. 163
155 See RangerNannerson Agreement at 'Il6, sentence 11. 156 See Ranger/Vannerson Agreement at 'Il7; see also Klimaszewski Dep. at 125:8-16. 157 See Ranger/Vannerson Agreement at 'Il12, sentence 1-2. 158 See id. at 'Il12, sentence 3. 159 See id. at 'Il12, sentence 4. 160 See id. at 'Il14, sentence 1. 161 See id. at 'Il14, sentence 2. 162 See id. at 'Il 23. 163 See id. at 'Il33(a).
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iii. The Sureties' control over Vannerson conclusively establishes that he was their agent for the purposes of contracting with the Indemnitors.
As noted above, under Texas law a person can be an agent of a person or organization for some purposes but an independent contractor for other purposes. "[A] a person may be an independent contractor under some circumstances yet may be an agent or employee in connection with other work or activities.,,164 For example, while a client may not control a broker's movements, a broker may be "recognized as an agent employed to make or negotiate bargains or contracts.,,165 Similarly, a traveling diamond salesman, over whom the principal had control of the price of the goods but not the hours of his work, was a "semi-independent agent.,,166
Here, the Sureties controlled every significant aspect of Vannerson's contracting with the indemnitors, including the following:
• The Sureties controlled the number and amount of bonds Vannerson could sell.
• The Sureties could withdraw any and all Powers of Attorney that it issued Vannerson before he used them to post a bond.
• The Sureties could control which forms Vannerson used in contracting with the Indemnitors.
• The Sureties could set the rate Vannerson would charge for the bonds. • The Sureties could prevent Vannerson from posting bonds for particular
aliens.
164 Royal Mortg. Corp. v. Montague, 41 S.W.3d 721,733 (Tex. Ct. App. 2001); 3 Tex. Jur. 3d Agency § 13 (Ex. 29J). 165 Robles v. Consolidated Graphics, Inc., 965 S.W.2d 552, 557 (Tex. Ct. App. 1997). See also Magnum Corp. v. Lehman Bros. Kuhn Loeb, Inc., 794 F.2d 198, 200 (5th Cir. 1986) ("The relationship between a securities broker and its customer is that of principal and agent."). 166 Hanover Fire Ins. Co. v. Block Jewelry Co., 435 S.W.2d 909,915 (Tex. Civ. App. 1968).
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• The Sureties had the right to keep tabs on Vannerson by reviewing his books at any time.
• The Sureties controlled what records of the contracts with the Indemnitors Vannerson would keep.
• The Sureties had the right to view Vannerson's files on demand. • The Sureties each included a "catch-all" provision that allowed them to
regulate Vannerson's business in any way they saw fit: Vannerson agreed to "comply with any and all procedural directions, rules, and regulations" promulgated by the Sureties for him to adopt. Thus, Vannerson was not an "independent contractor" as the contracts with the Sureties claim-at least not with respect to the business of contracting with Indemnitors. 167 He was their agent, and they are bound by any contracts he enters on their behalves within the scope of his agency.
3. Vannerson acted within the scope of his actual authority in entering the Terms and Conditions agreements and the Notice Provision.
Vannerson was the Sureties' agent for the purposes of contracting with the Indemnitors. See supra Section II.B.1-2. He acted on behalf of the Sureties in using both the documents admittedly approved by the Sureties (see supra Section II.B.2.a) and in using the Terms and Conditions agreement (see supra Section II.B.2.b). As discussed below, he also acted within the scope of his actual authority in entering the Terms and Conditions agreement.
First, Vannerson was the Sureties' Local Recording Agent, and as such he had plenary authority to bind the Sureties. He had the authority, under Texas law, to enter any agreements that the Sureties could enter. Thus, as a matter of Texas law, agreeing to the Notice Provision was within the scope of his authority. See supra Section II.B.I.
167 A written contract describing the agent as an independent contractor is not conclusive; the key inquiry is the principal's right to control the agent. Morante, 157 F.3d at 1009.
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Second, even apart from the authority of a Local Recording Agent, the scope of
an agent's actual authority includes those actions necessary or incidental to achieving the principal's objectives that have been implied by the principal's manifestations. 168 A
principal may communicate actual authority by acquiescence-by failing to object to the agent's conduct when the principal knew or should have known of the agent's conduct. 169
The Sureties had either actual or imputed knowledge that Vannerson used the Terms and
Conditions agreement, and by allowing Vannerson to contract with the Indemnitors using
this document, they gave him actual authority to use the documents in contracting with
the Indemnitors (even if they did not expressly communicate their authority to him).
a. The Sureties had actual knowledge that Vannerson was using the Terms and Conditions agreement.
Over a span of six years or more, Vannerson used the Terms and Conditions
agreement in thousands of bonding contracts he entered on behalf of the Sureties that
exposed the Sureties to over fifty million dollars in potential liability to the federal
government. The Sureties had the absolute contractual authority to review the files
Vannerson maintained on the Indemnitors whenever they wished. 170 The Sureties had the
"superior claim" to the files, and, in fact, the Ranger/Vannerson Agreement referred to
168 See Restatement (Third) of Agency § 2.02 (Ex. 29K); 3 Tex. Jur. 3d Agency § 58 (Ex. 29L); CJS Agency § 45 ("Agency may be implied where the principal recognizes and acquiesces in the act done by the agent, or has recognized and acquiesced in the doing of previous similar acts by him or her.") (Ex. 29M); Esso Int'l, Inc. v. SS Captain John, 442 F.2d 1144, 1146 (5th Cir. 1971) ("An express agency is an actual agency created as a result of the oral or written agreement of the parties, and an implied agency is also an actual agency, the existence of which as a fact is proved by deductions or inferences from the other facts and circumstances of the particular case, including the words and conduct of the parties.") (quotation marks and citation omitted). 169 See Esso Int'l, 443 F.2d at 1148; Liberty Mut. Ins. Co. v. Enjay Chern. Co., 316 A.2d 219, 222 (Del. Sup. Ct. 1974) (holding that implied authority "may be proved by evidence of acquiescence with knowledge of the Agent's acts, and such knowledge and acquiescence may be shown by evidence of the Agent's course of dealing for so long a period of time that acquiescence may be assumed"); Montgomery v. Achenbach, c.A. No. 04C-11-048 WLW, 2007 WL 3105812, at *2 (Del. Sup. Ct. July 26, 2007) (same). 170 See supra footnotes 131-39 and 157-59, and accompanying text.
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the files maintained by Vannerson as "the Company's [Ranger's] files.,117l It is unreasonable to believe that the Sureties did not, in fact, review Vannerson's files. When they did, they discovered Vannerson's use of the Terms and Conditions document, apparent in the vast majority of files. 172
Documentary evidence demonstrates that Ranger did, in fact, review the files. On June 28, 1999, right before the parties entered the Ranger/Vannerson Agreement, David Grobmeier, Assistant Vice-President for Ranger, wrote Vannerson as follows:
Dear Don: It was good seeing you again on Friday and I appreciate you taking the time needed for me to do a file review. You and your staff are to be commended for the meticulous condition in which you keep the files. 173 Even a cursory review ofVannerson's files would have demonstrated the existence of the Terms and Conditions document, let alone a "meticulous review." Plaintiffs' expert, Jerry Watson, is one of the foremost national authorities on surety appearance bonds. Mr. Watson has provided an expert report in this case opining that, in light of the risks presented by the immigration bond business and other factors, the Sureties would have exercised their authority over Vannerson and conducted an audit of Vannerson' s files and become aware of the documents Vannerson used in contracting with the Indemnitors. 174 Moreover, the evidence establishes that, for a three-month period after Vannerson' s death, Ranger was well aware that Vannerson' s son continued to use the
171 See id. 172 See February 26, 2008, Declaration of Jodie Mow at ~~ 2, 4, 5 (Ex. 7). 173 June 28, 1999 Letter from Grobmeier to Vannerson (BF-0003632) (emphasis added) (Ex. 33). 174 See Amended Expert Report of Jeny Watson at 5 (Ex. 34).
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Terms and Conditions document, and Ranger acquiesced in his use of the document. After Vannerson died on March 1, 2004, his son, Rodney Vannerson, continued to write Ranger immigration bonds until July 6,2004. Rodney Vannerson's continued writing of Ranger immigration bonds was done with Ranger's full knowledge, consent, and participation. 175 According to Ranger: "Upon Don Vannerson's death in March of 2004, Ranger personnel participated in the day-to-day operations of Aaron.,,176 During the period March-August 2004, Ranger's corporate representative "personally performed" an "extensive investigation of Aaron Federal Bonding.,,177 Despite Ranger's participation during this March-July 2004 time period, Rodney Vannerson continued to use the Terms and Conditions agreement in contracting with the Indemnitors. 178 Ranger thus acquiesced in Vannerson's use of the Terms and Conditions agreement, conclusively demonstrating that Vannerson's entering the Notice Provision was within the scope of his authority. 179
Finally, there is no admissible evidence in this case that the Sureties did not know of Vannerson' s use of the Terms and Conditions document. The Sureties' Rule 30(b)(6) witnesses testified that their Companies did not know of Vannerson's use of the Terms and Conditions document, but a party's own 30(b)(6) testimony is inadmissible hearsay against an opposing party unless the 30(b)(6) witness was testifying as to his or her own
175 See Supplemental Aff. of Rick Klimaszewski, In the Estate ofDon Vannerson, Cause No. 345,829-40 I (Harris County Probate Court, July 5, 2005) at PTF-VAN 00322 (Ex. 12). 176 Motion to Delegate Managerial Duties to Ranger Ins. Co., In the Estate ofDon Vannerson, Cause No. 345,829-402 (Harris County Probate Court, Aug. 23, 2004) (PTF-VAN 00580-588, at 581) (Ex. 13). 177 Supplemental Aff. of Rick Klimaszewski at PTF-VAN 00319 (Ex. 12). 178 See February 26, 2008, Declaration of Jodie Mowat 'tl6 (Ex. 7). 179 See Esso Int'l, 443 F.2d at 1147-48 (where ship owner knew company was contracting with vendor on owner's behalf, ship owner was bound by contracts, even though owner did not expressly approve company's acting on its behalf).
32

Case 7:05-cv-00331 Document 179 Filed in TXSD on 02/27/08 Page 39 of 49
knowledge. 1HU Stonington's corporate representative, Rex Ramos, did not become an
employee of Stonington until January 2004, long after Vannerson had ceased writing
Nobel immigration bonds.18l Fairmont's corporate representative, Rick Klimaszewski,
began working for Ranger in 2000,182 but he can only testify as to his own awareness of
the Terms and Conditions document.
Where a party moving for summary judgment has carried its burden of proof on
an issue, and the opposing party has presented no contrary evidence, there is no genuine issue of material fact as to that issue. 183 Because the evidence in this case demonstrates
that the Sureties knew of Vannerson's use of the Terms and Conditions document,
Vannerson had implied actual authority to use the document.
b. Vannerson's knowledge that he used the Terms and Conditions document should be imputed to the Sureties.
Even if the Sureties did not know directly of Vannerson's use of the Terms and
Conditions document, Vannerson's knowledge must be imputed to them.
After a determination of agency is made, the general principles of agency law apply. The pertinent general principles are that acts of a local agent, which are within the scope of his delegated duties, are, as a matter of law, acts of the principal; that the principal is charged, as a matter oflaw, with knowledge of the agent's acts within his official duties; and conversely, that any knowledge acquired by or given to the agent in the performance of those duties is, as a matter of law, imputed to the prm. cl.pa1. 184
180 See L-3 Comms. Corp. v. OSI Sys., Inc., No. 02 Civ. 9144 (PAC), 2006 WL 988143, at *1 (S.D.N.Y. Apr. 13,2006). 181 See Ramos Dep. at 20: 17-23. 182 See Klimaszewski Dep. at 32. 183 Schaefer v. Gulf Coast Reg'I Blood Ctr., 10 F.3d 327,330 (5th Cir.1994). 184 Bellefonte Underwriters Ins. Co. v. Brown, 663 S.W.2d 562, 585-85 (Tex. Ct. App. 1984), rev'd in part on other grounds, 704 S.W.2d 742 (Tex. Feb 19, 1986) (emphasis added); see also Maryland Ins. Co. v.
33

Case 7:05-cv-00331 Document 179 Filed in TXSD on 02/27/08 Page 40 of 49
Here, as discussed above, Vannerson was not merely the Sureties' agent for the purposes of contracting with the Indemnitors; he was also the Sureties' agent for the purposes of maintaining the bond files. I8S In the course of fulfilling his duties as the keeper-of-records, Vannerson included copies of the Terms and Conditions document in thousands of bond files, and his knowledge of those documents must be imputed to the Sureties. A contrary ruling would allow the Sureties to willfully tum a blind eye to the conduct of their agent, keeping the controls over him necessary to protect themselves while allowing him to run roughshod over the Sureties' own customers-the Indemnitors.
* * *
As demonstrated above, Vannerson was the Sureties' agent for the purposes of contracting with the Indemnitors. See supra Section II.B.1-2. In using the Terms and Conditions agreement as well as the documents the Sureties admit they approved, Vannerson was acting on the Sureties' behalves and doing the Sureties' business. See supra Section ILB.2.a-b. Vannerson's use of the Tenns and Conditions document was within the scope of his agency. See supra Section ILB.3. It is black-letter law that when an agent acting within the scope of his authority makes a contract on behalf of a principal, the principal is bound by the contract. See supra footnotes 82-90, and accompanying text. Thus, the Terms and Conditions agreement sets forth contractual terms between the Sureties and the Indemnitors, and the Sureties are liable for their breach of the Notice Provision.
Head Industrial Coatings and Servs., Inc., 906 S.W.2d 218, 228-29 (Tex. Ct. App'. 1995) (discussing imputation ofknow1edge ofa local recording agent). 185 See NobeVGuillory Agreement at ~ 12 (Ex. 2); GuilloryNannerson Agreement at ~ 12 (Ex. 3); Nobe1Nannerson Agreement at ~ 9 (Ex. 6); RangerNannerson Agreement at ~ 12 (Ex. 10).
34

Case 7:05-cv-00331 Document 179 Filed in TXSD on 02/27/08 Page 41 of 49
III. PLAINTIFF AND THE CLASS MEMBERS PERFORMED THEIR CONTRACTUAL OBLIGATIONS BY PAYING FEES. The evidence is undisputed that Ms. Sandoval paid $900 in fees. 186 This Court
defined the Indemnitor Notice Class to include only those Indemnitors "who have fully paid their up-front, non-reimbursable fees to the Bonding Defendants pursuant to the terms of the bonding contracts.,,187 Thus, the only persons in the Class are those who have fulfilled their contractual obligation to pay fees. In fact, Aaron Bonding would not even send the contract documents to the Indemnitors until after they had paid their fees. 188 The Indemnitors having paid their fees, the Bonding Defendants were bound to fulfill their contractual obligations under the Notice Provision. IV. THE NOTICE PROVISION REQUIRES NOTICE TO THE ALIEN AND
THE INDEMNITOR OF ALL APPEARANCES REQUESTED BY THE INS, INCLUDING DEPORTATION DATES. The Notice Provision provides as follows: "PRINCIPAL and INDEMNITOR will be notified by AGENCY of all appearances requested by the U.S. IMMIGRATION AND NATURALIZATION SERVICE of which AGENCY receives notice." This Court already has familiarity with this provision. The Sureties moved to dismiss Plaintiff s contract claims on the grounds that a deportation date is not an "appearance.,,189 This Court rejected this argument, ruling that the "Insurer Defendants' argument that this type of a demand on a bond does not request an 'appearance' before DHS/INS is not a reasonable interpretation of that term.,,190 Plaintiff demonstrates below that the only
186 See Sandoval Bond File at BF-0000244, BF-0000251 (Ex. 1). 187 Surety Bond Class Order at 28. 188 See Statement of Fact 22, supra. 189 Zamora-Garcia v. Moore, Civ. A. M-05-331, 2006 WL 2663802 at *8 (S.D. Tex. Sept. 15,2006). 190 !d.
35

Case 7:05-cv-00331 Document 179 Filed in TXSD on 02/27/08 Page 42 of 49

reasonable interpretation of the Notice Provision includes appearances for deportation,

and she and the Indemnitor Notice Class are entitled to summary judgment on this issue.

First, a common understanding of the term "appearances" requires interpreting

the Notice Provision to include deportation dates. The main thing the INS wants when it

issues an 1-340 is for the alien to appear before it, either for deportation or another reason.

"The language in an agreement is to be given its plain grammatical meaning unless to do

so would defeat the parties' intent.,,191

Second, the term "appearance" is found elsewhere in the Terms and Conditions

document in a context where it must include deportation dates. The first paragraph reads:

WHEREAS the undersigned,

, hereinafter

called the INDEMNITOR, whether one of more or do now

make application to Aaron Federal Bonding Agency, of an

Immigration Bond in the sum of $

on behalf

of

, hereinafter called PRINCIPAL, in

favor of the U.S. IMMIGRATION AND

NATURALIZATION SERVICE, guaranteeing the

faithful appearance of PRINCIPAL at any time, and from

time to" time, as the U.S. IMMIGRATION AND

NATURALIZATION SERVICE may direct. 192

Thus Aaron Bonding agreed to post an immigration bond with the INS, "guaranteeing the

faithful appearance" of the alien. The majority of situations in which the INS directs the alien to appear are when the INS issues an 1-340 for deportation. 193 Both corporate

representatives of the Sureties recognized that "appearances" in this first paragraph

191 DeWitt County Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 101 (Tex. 1999). 192 See Sandoval Bond File at BF-0000238 (emphasis added) (Ex. 1). 193 See Klimaszewski Dep. at 91:11-23 (Ex. 8 to the January 25,2008 Declaration of Elisaveta Dolghih (Dkt. # 170, under seal)).
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Case 7:05-cv-00331 Document 179 Filed in TXSD on 02/27/08 Page 43 of 49
includes deportation dates. 194 There is no reason why "appearances" should not have the
same meaning in the Notice Provision as in this paragraph. 195
Third, the term appearances is likewise used in the Nobel/Ranger Indemnity
Agreement, and it must there include appearances for deportation:
The undersigned co-obligor(s), guarantor(s), and indemnitor(s) to surety for value received, does (do) hereby absolutely guarantee the appearance and full performance of the principal Applicant/Defendant in connection with the charged offense for which surety has been induced to act as bail according to the terms and conditions or rules and/or regulations of this one Indemnity Agreement. 196
Both corporate representatives of the Sureties admitted that "appearance" here includes appearances for deportation. 197 In fact, the Sureties have brought counterclaims against
Ms. Sandoval because Mr. Sandoval's bond breached when he did not appear.198 There
is no reason why appearances would mean something different in the Notice Provision
than in Nobel/Ranger Indemnity Agreements. 199
Fourth, the whole structure of the relationship between the Indemnitor, the alien,
the INS, and Aaron Bonding means "appearance" has to include appearances for
deportation. The Indemnitors agreed in the Nobel/Ranger Indemnity Agreement to
indemnify the Surety in the event the bond is breached. It is impossible for the
194 See Ramos Dep. at 140: 17-142:20 (Ex. 7 to the January 25,2008 Declaration of Elisaveta Do1ghih (Dkt. # 170, under seal)); Klimaszewski Dep. at 108:11-109:2. 195 The term "appearance" also is found in the first paragraph of the Ranger Indemnity Agreement, and it there also includes appearances for deportation. See Klimaszewski Dep. at 90:20-92:8. 196 See Sandoval Bond File at BF-0000241, ~ 10 (Nobel) (emphasis added) (Ex. 1); Zamora-Garcia Bond File at BF-0000129, ~ 10 (Ranger) (Ex. 11). 197 See Ramos Dep. at 134:14-136:6; Klimaszewski Dep. at 90:20-92:8, 99:23-101:4. 198 See Sureties' First Amended Answer at ~ 113. 199 DeWitt County, I S.W.3d at 102 ("Under generally accepted principles of contract il1terpretation, all writings that pertain to the same transaction will be considered together, even if they were executed at different times and do not expressly refer to one another.").
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Case 7:05-cv-00331 Document 179 Filed in TXSD on 02/27/08 Page 44 of 49
Indemnitor to "guarantee the appearance,,200 of the alien unless the Indemnitor and the alien have notice of the appearance. The Notice Provision is plainly designed to help the Indemnitor protect his or her interest in not having the Surety incur a loss on the bond so that the Indemnitor does not have to pay on the indemnity. Interpreting the Notice Provision to exclude appearances for deportation would simply be unreasonab1e.201 V. THE SURTIES BREACHED THE NOTICE PROVISION BY FAILING TO
GIVE THE INDEMNITORS AND THE ALIENS NOTICE OF DEPORTATION DATES. It is undisputed that the Bonding Defendants did not give notice to the aliens of their receipt of an 1-340 for deportation. Counsel for the Bonding Defendants so admitted in a hearing before this Court.202 The Bonding Defendants reaffirmed Aaron Bonding's failure to provide notice in their petition to the Fifth Circuit for interlocutory review: "The bonding 'agency' concedes it followed a policy of withholding notice of deportation from the a1ien.,,203 Certainly the Sureties themselves did not provide any notI·ce to th enI d emm'tors or theal'lens.204 The Independent Administrator for the Vannerson Estate has left all responsibility for providing notice to the aliens and the Indemnitors to Fairmont,205 and Fairmont concedes that it currently does not provide notice of deportation dates to a1iens.206 The evidence in this case demonstrates that
200 Sandoval Bond File at BF-0000241, ~ 10 (Nobel); Zamora-Garcia Bond File at BF-0000129, ~ 10 (Ranger). 201 See Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 530 (Tex. 1987) (holding that, where possible, courts will avoid giving a contract an unreasonable interpretation). 202 See Surety Bond Class Order at 20. 203 See Petition for Leave to File an Interlocutory Appeal Under Fed. R. Civ. P. 23(f) at 1 (Ex. 28). 204 See Klimaszewski Dep. at 73:18-74:7. 205 See Padilla Dep. at 54:4-55:7 (Ex. 17). 206 See Klimaszewski Dep. at 194:18-21.
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Case 7:05-cv-00331 Document 179 Filed in TXSD on 02/27/08 Page 45 of 49
Aaron Bonding did not provide notice of deportation dates to the Indemnitors, either/o7 but there is no dispute that notice was not and is not given to the aliens.
The Notice Provision requires notice of all appearances to both the alien and the Indemnitor. By failing to provide notice to the aliens, the Sureties breached the Notice Provision. VI. THE INDEMNITORS SUFFERED DAMAGE IN AN AMOUNT TO BE TO
BE DETERMINED AT TRIAL. In granting certification of the Indemnitor Notice Class, this Court ruled that "Plaintiffs may seek to recover the difference between what they paid and what they received.,,208 The evidence is undisputed that the Indemnitors suffered damage. First, as discussed above, the Notice Provision had value to the Indemnitors because it provided them with protections against the breach of the bond. There is no evidence in this case that the Notice Provision was valueless. Here, no Indemnitor got what he or she paid for, and so each has suffered at least some damage. Second, the evidence in this case is clear that the value of what the Indemnitors received is less than what they paid. The Sureties were required to seek approval from the Texas DOl of the rates or premiums they would charge the Indemnitors for the immigration bonds Vannerson posted.209 These filed rates reflect the rate that the Surety believed is a fair price for the customer to pay and for the Surety to receive.2l0 Indeed, when Nobel filed its rate with the Texas DOl, it wrote: "It is the judgment of our management that the proposed rates are adequate, non-excessive, not unfairly
207 See Plaintiffs' Opposed Motion for Class Certification at 7-14 (Dkt. # 112). 208 Surety Bond Class Order at 25. 209 See Amended Expert Report of Jerry Watson at 3-4 (Ex. 34); Klimaszewski Dep. at 166:23-167:12; Ramos Dep. at 81:5-9. 210 See Amended Expert Report of Jerry Watson at 3-4.
39

Case 7:05-cv-00331 Document 179 Filed in TXSD on 02/27/08 Page 46 of 49
discriminatory and comply with the laws of the State of Texas.,,211 Ranger's corporate representative admitted that Ranger believed 20% was an adequate rate.212 Both Nobel and Ranger filed rates of 20%, meaning they would charge the public a premium of 20% of the penal amount of the bond.213 However, the Bonding Defendants charged the Indemnitors 40-50% of the bond, or more.214 Thus, whereas the Sureties told the Texas Department of Insurance that 20% was a fair rate for their products, they charged far more than that, and the value of what the Indemnitors received (at most 20% ofthe bond) was necessarily lower than the value of what they paid (40-50% of the bond, or more).
Because the undisputed evidence in this case is that the Indemnitors did not get what they paid for, Plaintiff and the Class are entitled to a judgment that they have suffered damage, the exact amount of which to be determined at trial. VII. MS. SANDOVAL AND ALL THE MEMBERS OF THE INDEMNITOR
NOTICE CLASS MAY RECOVER FROM FAIRMONT. Stonington transferred all of its liability associated with its immigration bondsincluding liability associated with Mr. Sandoval's bond and all the members of the Indemnitor Notice Class-to Fairmont. Fairmont willing took on that liability. As discussed at length in Plaintiffs' Opposition to Fairmont's Motion for Summary Judgment, Fairmont is now answerable to Ms. Sandoval and the Class members for any damages they suffered in connection with immigration bonds on which Nobel was the
211 Apr. 24, 1998 Letter from Nobel to Texas DOl (Ex. 20). 212 See Klimaszewski Dep. at 173:19-174:8. 213 See id. at 167:22-168:4. 214 See id. at 92:19-93:22; Ranger Insurance CO.'s First Amended Petition, In the Estate ofDon Vannerson (Cause No. 345,829-401) (Aug. 20,2004) at PTF-VAN00591, 592 (admitting Vannerson charged "40% or more of the penal liability of the bond") (Ex. 24).
40

Case 7:05-cv-00331 Document 179 Filed in TXSD on 02/27/08 Page 47 of 49

surety. To avoid needless repetition, Plaintiff incorporates by reierence PlaintitIs' prior briefing on this topiC.215

CONCLUSION

For all the reasons stated above, Plaintiff respectfully requests that this Court

grant Plaintiff and the Class partial summary judgment against Fairmont and grant the

Plaintiff and the Class members who contracted with Nobel partial summary judgment

against Stonington. In the alternative, Plaintiff requests that this Court rule that there is

no genuine issue of material fact on whatever elements of Plaintiffs and the Class's

breach of contract claim as the Court finds established.

Date: H~. k 1 ,2008.

Respectfully submitted,

a .8~ L..J
J. Jrenjamin King

Lisa S. Brodyaga (Attorney In Charge) State Bar No. 03052800 Southern District ID No. 1178
REFUGIO DEL RIO GRANDE 17891 Landrum Park Rd. San Benito, TX 78586 Phone: (956) 421-3226
Attorney for all Plaintiffs

J. Benjamin King State Bar No. 24046217 Southern District ID No. 605914
Diamond McCarthy LLP Renaissance Tower 1201 Elm Street, 34th Floor Dallas, Texas 75270 Phone: (214) 389-5300 Fax: (214) 389-5399

William T. Reid, IV State Bar No. 00788817 Southern District ID No. 17074
Diamond McCarthy LLP 6504 Bridgepoint Pkwy., Suite 400 Austin, Texas 78730 Phone: (512) 617-5200 Fax: (512) 617-5299

215 See Plaintiffs' Opposition to Fainnont's Motion for Summary Judgment (Jan. 24,2008) at 5-15 (Dkt. # 168, under seal).

41

Case 7:05-cv-00331 Document 179 Filed in TXSD on 02/27/08 Page 48 of 49
Tucker Ronzetti Kozyak Tropin & Throckmorton, PA 2525 Ponce de Leon Ninth Floor Coral Gables, FL 33134 Phone: (305) 377-0667 Attorneys for Plaintiffs Aracely ZamoraGarcia, Juana Zamora, Irma Sandoval IbarraValencia, Manuel Sandoval, Petra Carranza de Salinas, and Miguel Rubio Flores
42

Case 7:05-cv-00331 Document 179 Filed in TXSD on 02/27/08 Page 49 of 49
CERTIFICATE OF SERVICE
I hereby certify that on February~? 2008, I caused a copy of the foregoing
document to be sent via electronic mail to: Brad Irelan (irelan@irelanhargis.com); Barrie Beer (beer@irelanhargis.com); Courtney Ebeier (ebeier@irelanhargis.com); Marc Tittlebaum (tittlebaum@irelanhargis.com); Howard Close (close@wrightbrownclose.com); Thomas Wright (wright@wrightbrownclose.com); Andrew Love (love@wrightbrownclose.com); Stacey Young (Stacey.Young@USdoj.gov); Benjamin Zeitlin (Benjamin.zeitlin@USdoj.gov); Tucker Ronzetti (tr@kttlaw.com); Lisa Brodyaga (lisabrodyaga@aol.com).
1. Ife11jamin King
43

 
 Case 7:05-cv-00331 Document 180 Filed in TXSD on 02/27/08 Page 1 of 15

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS McALLEN DIVISION

ARACELY ZAMORA-GARCIA, et aI.,

)

in their own name and right, and on

)

behalf of all others similarly situated,

)

Petitioners/Plaintiffs,

)

)

v.

)

)

MARC MOORE, DISTRICT

)

DIRECTOR FOR INTERIOR

)

ENFORCEMENT, DEPARTMENT OF

)

HOMELAND SECURITY, et aI.,

)

Respondents/Defendants.

)

-------------------------------)

c.A. No. M-05-331
JURY DEMAND

PLAINTIFF/COUNTER-DEFENDANT IRMA SANDOVAL'S MOTION FOR SUMMARY JUDGMENT AGAINST
STONINGTON AND FAIRMONT'S COUNTERCLAIMS

Case 7:05-cv-00331 Document 180 Filed in TXSD on 02/27/08 Page 2 of 15
TABLE OF CONTENTS
Page
INTRODUCTION ............................................................................................................... 1
STATEMENT OF FACTS ..................................................................................................2
ARGUMENT .......................................................................................................................4
I. BECAUSE NOBEL MATERIALLY INCREASED THE RISK THAT THE INDEMNITY OBLIGATION WOULD BE TRIGGERED, MS. SANDOVAL'S INDEMNITY OBLIGATION IS DISCHARGED...................................................................................................4
II. NOBEL'S FAILURE TO PROVIDE NOTICE OF MR. SANDOVAL'S SURRENDER DATE TO BOTH MR. SANDOVAL AND MS. SANDOVAL WAS A PRIOR MATERIAL BREACH OF CONTRACT THAT EXCUSED MS. SANDOVAL'S FURTHER PERFORMANCE.....................................................8
III. NOBEL'S INEQUITABLE CONDUCT PRECLUDES IT FROM OBTAINING AN AWARD OF SETOFF OR RECOUPMENT. ...........................9
CONCLUSION .................................................................................................................. 10

Case 7:05-cv-00331 Document 180 Filed in TXSD on 02/27/08 Page 3 of 15

TABLE OF AUTHORITIES Cases

Page

Am. Casualty Co. of Reading, Penn. v. Idaho First Nat'! Bank, 328 F.2d 138 (9th Cir. 1964).........................................................................................................4

Buder v. Us., 436 F.3d 936 (8th Cir. 2006) ........................................................................9

Citizens Indus. Bank of Austin v. Oppenheim, 118 S.W.2d 820 (Tex. Ct. Civ. App. 1938) .............................................................................................................9

Davis v. Us., No. CA 4-2430, 1977 WL 1172 (N.D. Tex. Apr. 12, 1977).........................9

F.D.I.C. v. Bank ofAm. Nat. Trust and Sav. Ass'n, 701 F.2d 831 (9th Cir. 1983) .............................................................................................................................. 9

F.D.I.C. v. Texarkana Nat 'I Bank, 874 F.2d 264 (5th Cir. 1989) ........................................9

Gen. Ins. Co. ofAm. v. Fleeger, 389 F.2d 159 (5th Cir. 1968)............................................7

Hiern v. St. Paul Indem. Co., 262 F.2d 526 (5th Cir. 1959) ............................................... .4

In re Cascade Roads, Inc., 34 F.3d 756 (9th Cir. 1994) ......................................................9

Neely v. Bankers Trust Co. of Tex., 757 F.2d 621 (5th Cir. 1985) ......................................8

New Amsterdam Casualty Co. v. Lundquist, 198 N.W.2d 543 (1972) .............................. .4

Potcinske v. McDonald Prop. Invs., Ltd., -- S.W.3d --, 2007 WL 1717002 (Tex. App.-Houston June 15, 2007) ..............................................................................8

Rochelle Bail Agency, Inc. v. Maryland Nat 'I Ins. Co., 484 F.2d 877 (7th Cir. 1973) .......................................................................................................................7

Shen v. Leo A. Daly Co., 222 F.3d 472 (8th Cir. 2000) .......................................................9

Zamora-Garcia v. Moore, Case No. M-05-331 (S.D. Tex. Apr. 25, 2007), Order Granting in Part and Denying in Part Plaintiffs' Motion to Certify Surety Bond Classes ..........................................................................................3

Rules

Federal Rule of Civil Procedure 56(c) .................................................................................4

ii

Case 7:05-cv-00331 Document 180 Filed in TXSD on 02/27/08 Page 4 of 15

=-----' - -=---- ----

-- -

--- ---=- -~--

NOW COMES Plaintiff and counter-defendant Inna Sandoval Ibarra Valencia to

move this honorable Court, pursuant to Federal Rule of Civil Procedure 56(b) and (c), for

judgment against Fainnont Specialty Insurance Company and Stonington Insurance

Company's counterclaims and claims of recoupment and setoff, and corresponding

claims for attorney's fees (collectively, the "Counterclaims"), and for such other relief as

this Court finds just and equitable.

INTRODUCTION

There are a variety of legal reasons, set forth herein, why this Court must enter

judgment against Fainnont Specialty Insurance Company and Stonington Insurance

Company's (the "Sureties") Counterclaims against plaintiff/counter-defendant Inna

Sandoval. However, before addressing those reasons, it is worthwhile to consider the

Sureties' Counterclaims in broader context. The undisputed evidence is that Ms.

Sandoval has already paid the Bonding Defendants! $1650-$900 in fees and $750 in collateral.2 The penal amount of the bond Ms. Sandoval paid to have posted was $1500.3

Thus, Ms. Sandoval has already paid $150 more than the full amount of the bond. Now

the Sureties seek even more from Ms. Sandoval. They have not specified how much they

want to recover from Ms. Sandoval, but they note that the government billed them on Mr.

Fairmont Specialty Insurance Company ("Fairmont") was formerly known as Ranger Insurance Company ("Ranger"). Stonington Insurance Company ("Stonington") was formerly known as Nobel Insurance Company ("Nobel"). Aaron Federal Bonding Agency was a d/b/a for Don Vannerson. Don Vannerson's immigration bonding business was briefly run by his son, Rodney Vannerson, after his death. Michael Padilla is the Independent Administrator of the Estate of Don Vannerson. Aaron Federal Bonding Agency, Don Vannerson, Rodney Vannerson, and Michael Padilla are collectively referred to herein as "Aaron Bonding." Aaron Bonding and the Sureties are collectively referred to herein as the "Bonding Defendants."
2 See Sandoval Bond File at BF-0000251 (receipt for fees), BF-0000252-65 (receipts for collateral), BF0000244 (sheet summarizing fees paid) (Ex. 1); Irma Sandoval Dep. at 29:2-30:8, 41 :23-42:23 (Ex. 35). Unless otherwise noted, all exhibits are attached to the February 27,2008, Declaration of J. Benjamin King, submitted herewith.
3 See Sandoval Bond File at BF-0000244, BF-0000224-25 (Immigration bond for Manuel Sandoval).

1

Case 7:05-cv-00331 Document 180 Filed in TXSD on 02/27/08 Page 5 of 15

-----

__

-=-_-_ -_~O__

-==5:~-_=-=-

-

Sandoval's breached bond for $1500 plus late fees.4 Ms. Sandoval having paid $750 in

collateral already, presumably the Sureties want at least an additional $750 for a total of

$2400 on a $1500 bond-plus attorney's fees. That is just outrageous.

However, Ms. Sandoval has no obligation to pay the Sureties a dime for two

independent reasons. First, the Sureties failed to give notice of Mr. Sandoval's surrender

date to either Ms. Sandoval or Mr. Sandoval, thereby materially increasing the risk that

the indemnity obligation would be triggered. For this reason alone, Ms. Sandoval is

relieved of the indemnity obligation. See infra Section I. Second, Nobel contractually

agreed to provide Ms. Sandoval and Mr. Sandoval with notice of any surrender date.

Nobel failed to provide notice ofMr. Sandoval's surrender date to either Ms. Sandoval or

Mr. Sandoval, and its prior material breach excuses Ms. Sandoval's performance under

the indemnity agreements. See infra Section II.

Finally, even if the Court does not grant Plaintiff judgment against the Sureties'

Counterclaims, the equitable remedies of setoff and recoupment are not available to the

Sureties because of their inequitable conduct. See infra Section III.

STATEMENT OF FACTS

1. Nobel contracted with Ms. Sandoval for the posting of a surety bond securing the release of her father, Manuel Sandoval, from INS detention, using the following documents:
• A Nobel Receipt for Collateral Deposited.s
• A Nobel Application for U.S. Immigration Bond.6

• A Nobel U.S. Immigration Bond Indemnity Agreement (the "Nobel Indemnity

4 See Sureties' First Amended Answer and Counterclaim at 17-18 (Dkt. # 174). 5 See Sandoval Bond File at BF-0000232. 6 See id. at BF-0000232.
2

Case 7:05-cv-00331 Document 180 Filed in TXSD on 02/27/08 Page 6 of 15
Agreement,,).7
• A Promissory Note, obligating Ms. Sandoval to make monthly collateral payments to Aaron Bonding, along with a Spanish version of the Promissory Note. s
• A Promissory Note obligating Ms. Sandoval to pay the full amount of the bond upon its breach.9
• A U.S. Immigration Bonds & Services Indemnity Agreement, obligating Ms. Sandoval to indemnify Nobel in the event of a breach of the immigration bond (the "Additional Indemnity Agreement"). 10
• A Nobel Consent to Rate Application. 11
• A Terms and Conditions Under Immigration Bond (the "Terms and Conditions agreement"). 12 This document contained the following provision (the "Notice Provision"): "PRINCIPAL and INDEMNITOR will be notified by AGENCY of all appearances requested by the U.S. IMMIGRATION AND NATURALIZATION SERVICE of which AGENCY receives notice."
2. The Sureties have brought counterclaims in this litigation against Ms. Sandoval based on the Nobel Indemnity Agreement and the U.S. Immigration Bonds & Services Indemnity Agreement. 13
3. On June 6, 2002, Aaron Bonding received an 1-340 for the surrender ofMr. Sandoval for deportation on July 5, 2002. 14
4. The Bonding Defendants historically did not provide notice of their receipt of an 1340 for deportation to, at least, the alien. IS Neither Nobel nor Aaron Bonding provided notice of Mr. Sandoval's appearance date for deportation to either Mr. or
7 See id. at BF-0000241. 8 See id. at BF-0000236 (English), BF-00002336 (Spanish). 9 See id. at BF-0000239. 10 See id. at BF-0000240. 11 See id. at BF-0000237. 12 See id. at BF-0000238. 13 See Sureties' First Amended Answer at 't(113 (Dkt. # 174). 14 See id. 15 See Order Granting in Part and Denying in Part Plaintiffs' Motion to Certify Surety Bond Classes (Apr. 25, 2007) ("Surety Bond Class Order") at 20 (Dkt. # 139); Petition for Leave to File an Interlocutory Appeal Under Fed. R. Civ. P. 23(f) at 1 ("The bonding 'agency' concedes it followed a policy of withholding notice of deportation from the alien.") (Ex. 28).
3

Case 7:05-cv-00331 Document 180 Filed in TXSD on 02/27/08 Page 7 of 15
Ms. Sandoval. I6
5. If Mr. Sandoval had received notice of his July 5, 2002, surrender date, he would have timely filed a petition in federal district court to prevent a breach of his bond. I7 If Ms. Sandoval had received notice of her father's July 5, 2002, surrender date, she would have made sure he timely appeared, and his bond would not have been breached. 18
ARGUMENT
Pursuant to Federal Rule of Civil Procedure 56(c), a district court should render
judgment for the moving party "if the pleadings, the discovery and disclosure materials
on file, and any affidavits show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter oflaw." Here, the undisputed facts in
this case demonstrate that Ms. Sandoval is entitled to summary judgment on the Sureties'
Counterclaims.
I. BECAUSE NOBEL MATERIALLY INCREASED THE RISK THAT THE INDEMNITY OBLIGATION WOULD BE TRIGGERED, MS. SANDOVAL'S INDEMNITY OBLIGATION IS DISCHARGED.
"[A]ny act on the part of an indemnitee which materially increases the risk, or
prejudices the rights, of the indemnitor, will discharge the indemnitor under the contract
of indemnity.,,19 Here, on June 4, 2002, the INS informed the Sureties, through Aaron
16 See Manuel Sandoval Declaration (Sept. 20, 2002) (Ex. 16 to the January 25, 2008 Declaration of Elisaveta Dolghih, Dkt. # 172); Manuel Sandoval-Herrera's First Amended Objections and Responses to Defendants' First Set of Interrogatories at Resp. 9 (no notice of his surrender date from Aaron Bonding), Resps. 10-11 (no notice from any source of his surrender date) (Ex. 36); Irma Sandoval Declaration (Sept. 20, 2002) (Ex. 14 to the January 25, 2008 Declaration of Elisaveta Dolghih, Dkt. # 172); Irma Sandoval Ibarra Valencia's First Amended Objections and Responses to Defendants' First Set of Interrogatories at Resp. 8 (Ex. 37) (no notice ofMr. Sandoval's surrender date from Aaron Bonding), Resps. 9-10 (no notice from any source ofMr. Sandoval's surrender date). 17 See Manuel Sandoval Decl. (Sept. 20, 2002) (Ex. 16 to the January 25, 2008 Declaration of Elisaveta Dolghih, Dkt. # 172). 18 See 1. Sandoval Dep. at 45 ("Q: If you had known that he had to go, would you have made sure that he did go? A: Yes. Q: And if you asked your father to go, would he have gone? A. Yes.") (Ex. 35). 19 Hiern v. St. Paul Indem. Co., 262 F.2d 526, 529-30 (5th Cir. 1959); see also Am. Casualty Co. of Reading, Penn. v. Idaho First Nat 'I Bank, 328 F.2d 138, 142-43 (9th Cir. 1964) (same); New Amsterdam Casualty Co. v. Lundquist, 293 Minn. 274, 283-84, 198 N.W.2d 543,549 (1972) (same).
4

Case 7:05-cv-00331 Document 180 Filed in TXSD on 02/27/08 Page 8 of 15

I

-----
Bonding, that the INS had scheduled a surrender date for Mr. Sandoval's deportation for July 5, 2002.20 The evidence is undisputed that the Sureties-whether through Aaron
Bonding or directly-did not provide either Ms. Sandoval or Mr. Sandoval with notice of this surrender date.21 This failure to provide notice is consistent with the Bonding
Defendants' practice of not providing notice of deportation dates to, at least, the aliens released on their appearance bonds.22
It is undisputed that the Sureties depended on Aaron Bonding for any and all
interaction with the Indemnitors and the aliens, including Ms. Sandoval and Mr.
SandovaL The corporate representative for Nobel/Stonington testified as follows:
Q. Did Nobel have any direct interaction with any
other person?
A. With whom?
Q. With indemnitors. So did Nobel rely on Mr. Vannerson to take care of any interaction with the indemnitors?
A. Yes.
Q. Did Nobel rely on Mr. Vannerson to take care of any interaction with the aliens as well? A. Yes. 23
The same was true for Ranger/Fairmont:
Q. Okay. So, Ranger relied on Mr. Vannerson to take
care of any interaction with the indemnitors that was necessary?

20 See Statement of Fact 3, supra. 21 See Statement of Fact 4, supra. 22 See id. 23 See Ramos Dep. at 55:6-14 (Ex. 7 to the January 25, 2008 Declaration of Elisaveta Doighih (Dkt. # 170, under seal)).
5

Case 7:05-cv-00331 Document 180 Filed in TXSD on 02/27/08 Page 9 of 15
A. That was the agreement. Q. And did Ranger also rely on Mr. Vannerson to take care of any interaction with the aliens that was necessary? A. That's a fair statement.24 Nobel's failure-through Aaron Bonding or otherwise-to provide Mr. and Ms. Sandoval of Mr. Sandoval's surrender date "materially increase[d] the risk" that Ms. Sandoval's indemnity obligation would be triggered by a breach of the bond.25 Nobel was provided with the critical information on which Ms. Sandoval's ability to protect herself against the breach of the bond depended-the date Mr. Sandoval was to appear for deportation. Yet Nobel failed to pass this information along to either Ms. Sandoval or her father. It thus increased the risk that the bond would be breached, and Ms. Sandoval's indemnity obligation is discharged. The Sureties may claim that a question of fact exists as to whether Aaron Bonding sent a bounty hunter to apprehend Mr. Sandoval at the address they had for him shortly before Mr. Sandoval's surrender date. Whether or not this happened is irrelevant. Nobel-either directly or through its designated agent-knew of Mr. Sandoval's surrender date for thirty days before that date, and waiting until the day before or the day ofMr. Sandoval's surrender date to try to apprehend him (if in fact Aaron Bonding did so prior to the surrender date), rather than notifying Ms. Sandoval and Mr. Sandoval within a reasonable time after its own notice, "materially increase[d] the risk" that the bond would breach. Not only did failing to provide notice increase the risk of a bond breach, but also failing to do so within a reasonable time after receiving the 1-340 was a failure to
24 See Klimaszewski Dep. at 39: 15-40:5 (Ex. 8 to the January 25, 2008 Declaration of Elisaveta Dolghih (Dkt. # 170, under seal)). 25 See footnote 19, supra, and accompanying text.
6

Case 7:05-cv-00331 Document 180 Filed in TXSD on 02/27/08 Page 10 of 15
no reason why it should just sit on this critical information, rather than passing it along to the Sandovals.
Finally, whether or not the failure to provide notice caused the breach of Mr. Sandoval's bond is irrelevant because the failure to provide notice robbed Ms. Sandoval of the opportunity to prevent a breach of the bond.27 However, even if proof of causation were required to discharge the indemnity obligation, the undisputed evidence here demonstrates that Mr. Sandoval's bond was breached because of the lack of notice.28 Both Mr. and Ms. Sandoval have confirmed this fact, and there is no contrary evidence whatsoever. Thus, to the extent causation is relevant, the failure to provide notice caused the breach of Mr. Sandoval's bond.
As discussed below, Nobel, through its agent Aaron Bonding, contractually agreed to provide notice of Mr. Sandoval's surrender date to Mr. and Ms. Sandoval, the breach of which agreement excused Ms. Sandoval's payment of any indemnity. However, this Court need not even reach the issue of whether Aaron Bonding was Nobel's agent or whether Nobel is bound by the Notice Provision in the Terms and Conditions agreement to resolve this motion for summary judgment. Apart from the
26 Gen. Ins. Co. ofAm. v. Fleeger, 389 F.2d 159, 160-61 (5th Cir. 1968). 27 For example, in Rochelle Bail Agency, Inc. v. Maryland Nat 'I Ins. Co., 484 F.2d 877 (7th Cir. 1973), a bail bondsman obtained an indemnity agree:t;llent from an insurer (Maryland National Ins. Co.) by which the insurer agreed to indemnify the bondsman in the even of a breach of a criminal bond. See id. at 878. (Separately, the bond posted was backed by a surety, Cosmopolitan Mutual Ins. Co. See id.) The bondsman failed to exercise minimal supervision over the criminal released on bond. See id. By failing to exercise minimal supervision, the bondsman "materially increased [the insurer's] risks under the indemnity agreement, thereby discharging [the insurer] from its obligations thereunder." Id. In so ruling, the court did not find that the bondsman's failure to supervise the criminal caused the breach of the bond. Rather, the failure to supervise merely increased the insurer's risk under the indemnity agreement, thereby extinguishing the indemnity obligation. See id. at 878,879. 28 See supra Statement of Fact 5.
7

Case 7:05-cv-00331 Document 180 Filed in TXSD on 02/27/08 Page 11 of 15
Notice Provision, Nobel materially increased the likelihood of a breach of the bond and dealt with Ms. Sandoval in bad faith, and for this reason alone, her indemnity obligation is discharged. II. NOBEL'S FAILURE TO PROVIDE NOTICE OF MR. SANDOVAL'S
SURRENDER DATE TO BOTH MR. SANDOVAL AND MS. SANDOVAL WAS A PRIOR MATERIAL BREACH OF CONTRACT THAT EXCUSED MS. SANDOVAL'S FURTHER PERFORMANCE. Plaintiff demonstrated in her Motion for Partial Summary Judgment on her Claims and the Indemnitor Notice Class Claims Against Stonington and Fairmont that the Sureties are bound by the Notice Provision in the Terms and Conditions agreement and that Nobel breached the Notice Provision in failing to provide Mr. and Ms. Sandoval with notice of his surrender date for deportation.29 Plaintiff incorporates that briefing here by reference. Because of Nobel's prior material breach of the bonding contract between it and Ms. Sandoval, Ms. Sandoval is excused from her payment of any indemnity to Nobel. The breach of a material provision in a contract excuses or discharges the other party from further performance.3o A material contract provision is one "that the parties reasonably regarded, at the time of contracting, as a vitally important ingredient in their bargain.,,31 Here, the Notice Provision is one of the central terms of the bonding contracts-it is the provision that protects the Indemnitor from having to payout on the indemnification obligation. The Notice Provision was thus a "vitally important
29 See Plaintiff Irma Sandoval's Motion for Partial Summary Judgment on her Claims and the Indemnitor Notice Class Claims Against Stonington and Fairmont (Feb. 27, 2008) at Sections II-V. 30 See Surety Bond Class Opinion at p. 22 (noting that, under Texas law, "a party's material breach of contract ... discharges or excuses the other party from further performance" and citing cases). 31 See Neely v. Bankers Trust Co. a/Tex., 757 F.2d 621,628 (5th Cir. 1985); Potcinske v. McDonald Prop. Invs., Ltd., -- S.W.3d --, 2007 WL 1717002, at *5 (Tex. App.-Houston June 15,2007).
8

Case 7:05-cv-00331 Document 180 Filed in TXSD on 02/27/08 Page 12 of 15

- --- --- ------
ingredient" in the bargain between Ms. Sandoval and Nobel, and the breach of that
material provision relieved Ms. Sandoval of any obligation to indemnify Nobel.
III. NOBEL'S INEQUITABLE CONDUCT PRECLUDES IT FROM OBTAINING AN AWARD OF SETOFF OR RECOUPMENT.
Claims of setoff and recoupment are equitable remedies unavailable to a
defendant who comes to court with "unclean hands.,,32 Whether or not setoff and recoupment are available is a decision committed to the discretion of the trial court.33
Because recoupment and setoff are equitable remedies, the Sureties' own
inequitable conduct, discussed at length above and in Plaintiff s companion motion for
partial summary judgment, bars them from benefiting from those remedies.
• Stonington (through its agent, Aaron Bonding) contracted with Ms. Sandoval to provide her and her father with notice of any surrender date for him, knowing that it would not provide that notice.
• Stonington willfully refused to provide notice of Mr. Sandoval's surrender date to Ms. Sandoval and Mr. Sandoval. By so failing, Stonington put at risk Ms. Sandoval's ability to prevent a breach of the bond and Mr. Sandoval's immigration rights. 34
• Stonington charged Ms. Sandoval $900 in fees and $750 in collateral on a $1500 bond. They now seek at least $750 more on Ms. Sandoval's indemnity obligations. Stonington has engaged in predatory overcharging of a poor person in a vulnerable situation.
• Through Aaron Bonding, Stonington charged Ms. Sandoval fees equal to 60% of the penal amount ofMr. Sandoval's bond. However, under Texas law, Stonington could only charge 20% of the penal amount of the bond-

u.s., 32 See Davis v.

No. CA 4-2430, 1977 WL 1172 at *5 (N.D. Tex. Apr. 12, 1977) (recoupment);

F.D.I.C. v. Texarkana Nat'l Bank, 874 F.2d 264, 269 (5th Cir. 1989) (setoff an equitable right); In re

Cascade Roads, Inc., 34 F.3d 756, 762-64 (9th Cir. 1994) (denying setoff where claimant acted

inequitably); F.D.I.C. v. Bank of Am. Nat. Trust and Sav. Ass 'n, 701 F.2d 831, 836-37 (9th Cir. 1983)

(same); Citizens Indus. Bank ofAustin v. Oppenheim, 118 S.W.2d 820,822 (Tex. Ct. Civ. App. 1938).

u.s., 33 Shen v. Leo A. Daly Co., 222 F.3d 472, 478 (8th Cir. 2000); Buder v.

436 F.3d 936, 938 (8th Cir.

2006).

34 See Expert Report of Jodi Goodwin (detailing impact the failure of a bond company to provide notice of a surrender date for deportation on aliens released on surety bonds) (Ex. 38).

9

Case 7:05-cv-00331 Document 180 Filed in TXSD on 02/27/08 Page 13 of 15

-

-

- - - - --

the rate approved by the Texas Department oflnsurance.35

• Fairmont has engaged in materially identical conduct with respect to the other indemnitors with which it contracted.

By participating in this misconduct directly or by employing an agent who did so,

the Sureties have forfeited their right to any sort of equitable relief. Allowing the

Sureties to defeat or reduce Ms. Sandoval's recovery through an equitable doctrine would

be the height of inequity.

CONCLUSION

For all the reasons stated above, Plaintiff respectfully requests that this Court

grant summary judgment against the Sureties' Counterclaims.

Date: _hl_-e_'~._2.._7,--__,2008.

Respectfully submitted,

J. enJamm Kmg

Lisa S. Brodyaga (Attorney In Charge) State Bar No. 03052800 Southern District ID No. 1178
REFUGIO DEL RIO GRANDE 17891 Landrum Park Rd. San Benito, TX 78586 Phone: (956) 421-3226
Attorney for all Plaintiffs

J. Benjamin King State Bar No. 24046217 Southern District ID No. 605914
Diamond McCarthy LLP Renaissance Tower 1201 Elm Street, 34th Floor Dallas, Texas 75270 Phone: (214)389-5300 Fax: (214) 389-5399

William T. Reid, IV State Bar No. 00788817 Southern District ID No. 17074
Diamond McCarthy LLP 6504 Bridgepoint Pkwy., Suite 400 Austin, Texas 78730 Phone: (512) 617-5200 Fax: (512) 617-5299

3S See PlaintiffIrma Sandoval's Motion for Partial Summary Judgment on Her Claims and the Indemnitor Notice Class Claims Against Fairmont and Stonington (Feb. 27, 2008) at Section VI.

10

Case 7:05-cv-00331 Document 180 Filed in TXSD on 02/27/08 Page 14 of 15 Tucker Ronzetti Kozyak Tropin & Throckmorton, PA 2525 Ponce de Leon Ninth Floor Coral Gables, FL 33134 Phone: (305) 377-0667 Attorneys for Plaintiffs Aracely ZamoraGarcia, Juana Zamora, Irma Sandoval IbarraValencia, Manuel Sandoval, Petra Carranza de Salinas, and Miguel Rubio Flores
11

Case 7:05-cv-00331 Document 180 Filed in TXSD on 02/27/08 Page 15 of 15
-
CERTIFICATE OF SERVICE I hereby certify that on February.2 ( 2008, I caused a copy of the foregoing document to be sent via electronic mail to:
Brad Irelan (irelan@irelanhargis.com); Barrie Beer (beer@irelanhargis.com); Courtney Ebeier (ebeier@irelanhargis.com); Marc Tittlebaum (tittlebaum@irelanhargis.com); Howard Close (c1ose@wrightbrownc1ose.com); Thomas Wright (wright@wrightbrownc1ose.com); Andrew Love (love@wrightbrownc1ose.com); Stacey Young (Stacey.Young@usdoj.gov); Benjamin Zeitlin (Benjamin.Zeitlin@usdoj.gov); Tucker Ronzetti (tr@kttlaw.com); Lisa Brodyaga (lisabrodyaga@aol.com).
J. Benjamin King
12

 
 Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 1 of 52

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS
MCALLEN DIVISION

ARACELY ZAMORA-GARCIA,

§

et aI., in their own name and right,

§

and on behalf of all others similarly

§

situated,

§

§

v.

§

§

MARC MOORE, DISTRICT

§

DIRECTOR FOR INTERIOR

§

ENFORCEMENT, DEPARTMENT

§

OF HOMELAND SECURITY, et aI.,

§

C.A. No. M-05-331

BONDING DEFENDANTS' MOTION TO DECERTIFY THE SURETY BOND CLASSES AND MEMORANDUM IN SUPPORT

Howard L. Close Thomas C. Wright Jessica Zavadil Kathleen Rose Andrew Cobb Cook WRIGHT BROWN & CLOSE, LLP Three Riverway, Suite 600 Houston, Texas 77056 Telephone: (713) 572-4321 Facsimile: (713) 572-4320

Brad Irelan IRELAN HARGIS, LLP 440 Louisiana Street, Suite 1800 Houston, Texas 77002-1652 Telephone: (713) 222-7666 Facsimile: (713) 222-7669
Daniel K. Worthington Atlas & Hall, LLP 818 Pecan Blvd. P. O. Box 3725 McAllen, Texas 78501 Telephone: (956) 682-5501 Facsimile: (956) 686-6109

Date: September 24, 2008

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 2 of 52
TABLE OF CONTENTS
I. Introduction .............................................................................................................. 1
II. Applicable Standards of Review for Decertification ............................................... 4
III. Argument and Authorities ........................................................................................ 7
A. The Indemnitor Notice Class should be decertified because individual issues predominate as to the class members and their breach of contract claims....................................................................................... 8
1. The Indemnitor Notice Class should be decertified because there are individual issues on whether each class member paid the upfront fee and was not reimbursed..................................................................... 9
2. The Indemnitor Notice Class should be decertified because the class representative may not be a member of the class as defined, and her claims would not be typical of the class she purports to represent. ......................................................................................................... 13
3. The Indemnitor Notice Class should be decertified because of individual issues on whether Bonding Defendants materially breached a contract or breached it at all ......................................................... 15 a. Whether any alleged lack of notice was a material breach is an issue that will have to be individually tried......................................... 15 b. There are individual issues about the notice the Bonding Defendants provided, and the Bonding Defendants or their independent recovery agents sometimes gave notice to certain indemnitors, certain aliens, or both........................................................... 16 c. There are very few class members who meet the Court's definition of the Indemnitor Notice Class.................................................21
4. The Indemnitor Notice Class should be decertified because there are individual issues on causation and the fact of damages...........................21 a. Notice was often mailed directly to the Alien or the Indemnitor................................................................................................. 22 b. Notices for deportation were often provided to counsel for the alien........................................................................................................... 25
5. The Indemnitor Notice Class should be decertified because many of the potential class members failed to update their contact information with Aaron Federal Bonding, not only making attempted notice futile, but also preventing the Bonding Defendants from performing under the contract. ........................................... 26
6. The Indemnitor Notice Class must be decertified because the bond files do not all contain Terms and Conditions Agreements signed by the Immigrant and Indemnitor. ...................................................... 32
7. The class should be decertified because several individual issues
1

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 3 of 52 exist as to whether the bond was breached or cancelled................................ 33
B. The Bonded Immigrant Class should be decertified............................................ 34 1. The Bonded Immigrant Class should be decertified because there is a conflict of interest between the class representative and one or more members of the class, and thus the class representative is not adequately representing the class.......................................................... 34 2. The Class Representative did not sign the Agreement on which she is suing...................................................................................................... 37 3. The Bonding Defendants did not refuse to act on grounds generally applicable to the class ..................................................................... 38
C. There is a conflict of interest between the two classes which destroys adequate representation of the classes................................................................. 39
IV. Conclusion.............................................................................................................. 40
11

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 4 of 52
TABLE OF AUTHORITIES
Cases
ABB Krajtwerke Aktiengesellschafi v. Brownsville Barge & Crane, Inc., 115 S.W.3d 287,292 (Tex. App.-Corpus Christi 2003, writ denied) ........................ 37
Alliance, Wolff & Munier, Inc. v. Whiting-Turner Contr. Co., 946 F.2d 1003, 1009 (2d Cir. 1991) ............................................................................................. 25
Allied Orthopedic Appliances v. Tyco Healthcare, 247 F.R.D. 156, 177-78 (C.D. Cal. 2007) ............................................................................................................ 35
Amchem Prods. v. Windsor, 521 U.S. 591,624 (1997) ...................................................... 6 Amchem Products v. Windsor, 521 U.S. 591,625 (1997)) ............................................... 34 Auto Ventures v. Moran, 1997 U.S. Dist. Lexis 7037, *13 (S.D. Fla. 1997).................... 35 Bell Atlantic Corp. v. AT&T Corp., 339 F.3d 294, 303-04(5th Cir. 2003) ....................... 26 Berger v. Compaq Computer Corp., 257 F.3d 475,479-80 (5th Cir. 2002)..................... 34 Bieneman v. City ojChicago, 864 F.2d 463,465 (7thCir. 1988) .................................... 35 Blades v. Monsanto Co., 400 F.3d 562, 566 (8th Cir. 2005)(citing Amchem,
521 U.S. at 615) ............................................................................................................. 12 Carpenter v. Boeing Co., 456 F.3d 1183, 1204 (10th Cir. 2006) ..................................... 39 Council 31 v. Sally Ward, 1989 U.S. Dist. Lexis 8972, *9 (N.D. Ill. 1989),
aff'd, 169 F.3d 1068 (7th Cir. 1999) ............................................................................. 39 Craddock v. Greenhut Constr. Co., Inc., 423 F.2d 111, 115 (5th Cir. 1970) ................... 25 Davis v. Small Business Inv. Co., 535 S.W.2d 740, 743 (Tex. Civ. App.-
Texarkana 1976, writ ref'd n.r.e.) ................................................................................. 21 Denney v. Jenkens & Gilchrist, 230 F.R.D. 317, 348 n. 207 (S.D.N.Y.
2005), rev'd in part on other grounds, 412 F.3d 58 (2d Cir. 2005)................................ 4 Edmondson v. Simon, 86 F.R.D. 375, 383 (N.D.Ill. 1980) ............................................... 38 Fedgess Shopping Ctrs., Ltd. v. MNC SSP, Inc., 2007 Tex. App. Lexis
9802, * 8 (Tex. App.-Houston [14th Dist.] Dec. 18,2007, no writ) .......................... 15
Georgine v. Amchem Prod. 83 F.3d 610,630 (3d Cir. 1996), aff'd, 521 U.S. 591 (1997) ..................................................................................................................... 39
Georgine, 83 F.3d at 630 ................................................................................................... 39 Gupta v. Eastern Idaho Tumor Inst., Inc., 140 S.W.3d 747, 756 (Tex.
App.-Houston [14th Dist.] 2004, pet. denied) ............................................................ 27 Hanon v. Dataproducts Corp., 976 F.2d 497,508 (9th Cir. 1992) ..................................... 5 Holmes v. Cont'l Can Co., 706 F.2d 1144, 1155 (11th Cir. 1983) ................................... 38 Hunter v. Exxon Corp., 2005 U.S. Dist. Lexis 228, *13 (W.D. Tex. Jan. 7,
2005) ........................................................................................................................ 20,22 Ideal Lease Serv., Inc., v. Amoco Prod. Co., Inc., 662 S.W.2d 951, 952
(Tex. 1983) .................................................................................................................... 16 In re Bunzl USA, Inc., 155 S.W.3d 202, 209 (Tex. App.-E1 Paso 2004, no
writ) .........................................................:..................................................................... 33
111

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 5 of 52
In re FleetBoston Fin. Corp. Secs. Lit., 2007 U.S. Dist. Lexis 87425, *18 (D.N.J. Nov. 28, 2007) .................................................................................................... 5
In re General Datacomm Ind., 407 F.3d 616,625-26 (3d Cir.), cert. denied, 546 U.S. 1031 (2005) .................................................................................................... 28
In re Managed Care Lit., 209 F.R.D. 678, 686-87 (S.D.F1a. 2002), 538 U.S. 401 (2003) ..................................................................................................................... 38
In re Managed Care Lit., 209 F.R.D. at 687 ..................................................................... 38 In re Methyl Tertiary Butyl Ether Prods. Liab. Lit., 209 F.R.D. 323, 341-42
(S.D.N.Y. 2002) ............................................................................................................ 38 In re Train Derailment Near Amite, Louisiana, 2006 U.S. Dist. Lexis
32839, *45 ..................................................................................................................... 39 In re United States Liquids Secs. Litig., 2002 U.S. Dist. Lexis 26713, * 11
(S.D. Tex. June 12, 2002) ................................................................................................ 9 In re Visa CheckiMastermoney Antitrust Lit., 280 F.3d 124, 136 (2d CiT.
2001) ................................................................................................................................ 6 Kayes v. Pacific Lumber Co., 51 F.3d 1449, 1465 (9th Cir. 1995)................................... 40 Langbecker v. Electronic Data Systems, Inc., 476 F.3d 299, 314-16 (5th
CiT. 2007) ....................................................................................................................... 34 Luskin v. Intervoice-Brite, Inc., 261 Fed. Appx. 697,702 (5th Cir. 2008) ......................... 7 McKnight v. Hill & Hill Exter, Inc., 689 S.W.2d 206,209 (Tex. 1985) ........................... 22 McNamara v. Felderhof, 410 F.3d277, 280 (5th CiT. 2005) .............................................. 5 Metals, Inc. ofAtlanta v. Hinley Indus., 222 F.3d 895, 905 (11th CiT. 2000) .................. 25 Monegain v. Pilkington PLC, 1995 U.S. Dist. Lexis 19938, *3 (B.D.N.C.
Dec. 18, 1995) ............................................................................................................... 29 Moore Bros. Co. v. Brown & Root, 207 F.3d 717,725 (4th Cir. 2000) ............................ 29 National Air Traffic Controllers Assoc. v. Dental Plans, Inc., 2006 U.S.
Dist. Lexis 12544, *13 (N.D. Va. 2006) ....................................................................... 40 Nichols v. Mobile Bd. of Realtors, Inc., 675 F.2d 671, 675-79 (5th Cir.
1982) ................................................................................................................................ 7 Nitram v. Cretan Life, 599 F.2d 1359, 1371 (5th Cir. 1979) ..,......................................... 28 Noble v. 93 Univ. Place Corp., 224 F.R.D. 330, 341-42 (S.D.N.Y. 2004)....................... 26 O'Connor v. Boeing N Am., Inc., 197 F.R.D. 404, 410 (C.D. Cal. 2000) .......................... 5 Officers For Justice v. Civil Servo Comm'n, 688 F.2d 615, 633 (9th Cir.
1982) ................................................................................................................................ 4 O'Neil v. Appel, 165 F.R.D. 479, 499 (W.D. Mich. 1996) ............................................... 26 Oscar Private Equity Inv. v. Allegiance Telecom 487 F.3d 261 (5th Cir.
2007) ................................................................................................................................ 6 Phillips v. Klassen, 502 F.2d 362, 367 (D.C. Cir. 1974) .................................................. 35 Richardson v. Byrd, 709 F.2d 1016, 1019 (5th Cir. 1983).................................................. 4 Saey v. CompUSA, Inc., 174 F.R.D. 448, at *11 (B.D. Mo. 1997) .................................. 12 Sandwich Chef of Tex. v. Reliance Nat 'I Indem. Ins. Co., 319 F.3d 205,218
(5th CiT. 2003) ................................................................................................................. 5
IV

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 6 of 52 Scaife v. Associated Air Ctr. Inc., 100 F. 3d 406,410 (5th Cir. 1996) ............................. 33 Scaife, 100 F.3d at 410 ...................................................................................................... 37 Simmons & Simmons Constr. Co. v. Rea, 155 Tex. 353, 355, 286 S.W.2d
415,417 (Tex. 1955) ..................................................................................................... 33 Valley Drug Co. v. Geneva Farms, 350 F.3d 1181, 1189 (11th Cir. 2003),
cert. denied, 543 U.S. 939 (2004) ................................................................................. 35
v

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 7 of 52 Other Authorities MOORE'S FED. PRAC. § 23.43(2)(b) at 23-195 (3d ed. 2000) ...................................... 38 Rules FED. R. ClY. P. 23(a) ................................................. ................................................. 4, 5, 37
VI

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 8 of 52

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS
MCALLEN DIVISION

ARACELY ZAMORA-GARCIA,

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et aI., in their own name and right,

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and on behalf of all others similarly

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situated,

§

§

v.

§

§

MARC MOORE, DISTRICT

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DIRECTOR FOR INTERIOR

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ENFORCEMENT, DEPARTMENT

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OF HOMELAND SECURITY, et aI.,

§

C.A. No. M-05-331

BONDING DEFENDANTS' MOTION TO DECERTIFY THE SURETY BOND CLASSES AND MEMORANDUM IN SUPPORT
Defendants Fairmont Specialty Insurance Company f/kla Ranger Insurance Company; Stonington Insurance Company £'k/a Nobel Insurance Company; and Michael Padilla, as Independent Administrator for the Estate of Don Varmerson; (collectively referred to as "Bonding Defendants") file this Motion to Decertify the Surety Bond Classes, and respectfully request that the Court revisit and vacate its order of certification entered on April 25, 2007 ("the Certification Order", Docket Entry no. 139) as to these two classes
I. INTRODUCTION This Court certified two classes under Federal Rule Civil Procedure 23 for claims

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 9 of 52
against the Bonding Defendants: the Indemnitor Notice Class! and the Bonded
Immigrant Class.'
Continued developments in Fifth Circuit class action law and fundamental changes
in the facts of this case require a re-evaluation of the class certification decision. Recent
Fifth Circuit cases make it clear that the plaintiffs have the burden of proof on disputed
facts that relate to class certification even if those facts also impact liability issues.
Moreover, during the discovery period that just closed, it became clear that there are
individual issues that predominate over common issues and that the classes certified have
conflicting interests witllln and between the classes. These legal and factual
developments require reassessment-and decertification-of the classes regarding the
Bonding Defendants.
Some of the most important factual developments came as a result of the Motion
The Indemnitor Notice Class is represented by Irma Sandoval and is defmed as follows: (a) those who served or are serving as Indemnitors on a surety bond posted by a Bonding Defendant
to secure the release of a Bonded Immigrant detained by the Federal Defendants, and (b) who have fully paid their up-front, non-reimbursable fees to the Bonding Defendants pursuant to
the terms of the bonding contracts, and (c) where the Bonding Defendant's records indicate that on or after April 16, 1998, it received a
"Notice to Obligor to Deliver Alien" indicating that the INSIDHS had scheduled an appearance for deportation for the Bonded Immigrant, and where the Bonding Defendant did not provide notice of the requested appearance for deportation to either the Indemnitor or the Bonded Immigrant.
,Exh. I, Certification Order at 28. The Bonded Immigrant Class is represented by Petra Carranza de Salinas and is defmed as follows: (a) those who have been released from custody of the Federal Defendants pursuant to surety bonds posted by the Bonding Defendants, and (b) where the bond is still outstanding. Exh. I, Certification Order at 28.
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for Intervention filed in June 2008 by Deanna Arevalo and Dominica Rodriguez. Bonding Defendants conducted discovery as to those putative intervenors. The depositions of these putative intervenors revealed important individual issues as to these persons. When the remainder of the bond files are reviewed with those issues in mind, these individual issues clearly predominate.
The evidence now demonstrates that individual issues of fact predominate over common ones so that the classes should now be decertified. As explained below, individual issues exist on: (a) whether the indemnitor paid the up-front fees complained about-rather than the bonded immigrant or some other third person-and thus has any claim; (b) whether the indenmitor signed the Terms and Conditions Agreement at issueand thus has any rights to assert based upon that agreement; (c) what kind of notice (mail, phone, personal contact, or other) would be most effective to ensure that the immigrants or indemnitors knew of the appearance date in order to increase, rather than decrease, the possibility that the immigrant would appear as ordered; (d) whether the Bonding Defendants actually provided notice of the 1-340 deportation document to some of the bonded immigrants or indenmitors, thereby performing the Terms & Conditions contract even under the class plaintiffs' theory; and (e) whether Aaron Federal Bonding's alleged breach caused, and whether individual class members suffered, any damages because the bond was not breached, or the immigrant knew of the appearance date and had decided not to appear anyway, or it would have been impossible for the immigrant to appear as ordered. Further, numerous individual issues exist on Bonding Defendants' affIrmative
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 11 of 52
defenses such as whether the immigrants' failure to update their contact infonnation impeded Bonding Defendants' ability to provide effective notice.
Finally, pursuant to Court order, the Plaintiffs sent the class notice by certified mail. The results of this mailing are that most of the class has not received notice, confmning what Bonding Defendants have believed all along - that trying to send any notice by mail to bonded immigrants or the indemnitors is unlikely to be effective.'
The Bonding Defendants request that the Court set this matter for an oral hearing in early October at which these issues and the trial plan for the November trial setting may be discussed. There will not be sufficient time to prepare the pretrial order between the date currently set for the hearing on all pending motions-October 17, and the date the pretrial order is due--October 27, nor sufficient time to prepare for the November 5 trial date, absent an earlier hearing and resolution of these issues.
II. APPLICABLE STANDARDS OF REVIEW FOR DECERTIFICATION Federal Rule of Civil Procedure 23(c)(l)(C) provides: "An order that grants or
denies class certification may be altered or amended before fmal judgment.'" The Fifth Circuit has recognized that "[u]nder Rule 23, the district court is charged with the duty of monitoring its class decisions in light of the evidentiary development of the case. The district judge must defme, redefme, subclass, and decertify as appropriate in response to
, The data on the class notice shows that 64% of the letters were returned as "undeliverable." See Exh.
, 3, Declaration of Terry Heuman; see also Exh. 55, Pie Chart. FED. R. CIV. P. 23(c)(1)(C); Officers For Justice v. Civil Servo Comm'n, 688 F.2d 615, 633 (9th Cir. 1982) 4

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 12 of 52
the progression of the case from assertion to facts.'" "[Clertification is always contingent on subsequent events and information that may require the court to revisit its decision.'"
"[T]he litigant's right to seek a Rule 23(c)(I)(C) alteration is not limited to a certain period. An application-by definition-is timely when the factual development within the litigation so changes that the change renders 'the original determination . . . unsound. "'7 In considering the appropriateness of decertification, the standard of review is the same as a motion for class certification: whether the Rule 23 requirements are met.'
Of course, the standards under Rule 23 are well settled. Rule 23(a) requires that class members demonstrate numerosity, commonality, typicality, and adequate representation of the class interest.' Rule 23(b)(3) additionally requires that the Court fmd that "questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy."lO
To determine whether common issues predominate, this Court must consider how
, Richardson v. Byrd, 709 F.2d 1016, 1019 (5th Cir. 1983). Denney v. Jenkens & Gilchrist, 230 F.R.D. 317, 348 n. 207 (S.D.N.Y. 2005), rev'd in part on other grounds, 412 F.3d 58 (2d Cir. 2005). 7 In re FleetBoston Fin. Corp. Sees. Lit., 2007 U.S. Dist. Lexis 87425, *18 (D.N.J. Nov. 28, 2007)
(quoting Advisory Committee Notes to Fed. R. Civ. P. 23(c)(l)); see also McNamara v. Felderhof, 410 F.3d 277, 280 (5th Cir. 2005) (rejecting argument that a motion to reconsider class certification has time limits). O'Connor v. Boeing N Am., Inc., 197 F.R.D. 404, 410 (C.D. Cal. 2000). , FED. R. CN. P. 23(a); Hanan v. Dataproducts Corp., 976 F.2d 497,508 (9th CiT. 1992). 10 FED. R. CN. P. 23(b)(3).
5

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 13 of 52
a trial on the merits would be conducted if a class were certified.11 Class-wide issues predominate only if resolution of some of the legal or factual questions that qualifY each class member's case as a genuine controversy can be achieved through generalized proof, and if these particular issues are more substantial than the issues subject only to individualized proof."
The predominance and superiority requirements are "far more demanding" than the commonality requirement. 13 The predominance requirement demands a rigorous inquiry that "tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation."I' To satisfy this requirement, it is not enough simply that common questions of law or fact exist; predominance is a comparative concept that calls
for measuring the relative balance ofcommon issues to individual ones. I'
The Fifth Circuit has decided two key cases since the certification order that make clear the burden of proof the plaintiff bears. In Oscar Private Equity Investments v. Allegiance Telecom, the court required that a plaintiff bringing a securities class action prove at the class certification stage the element of loss causation in order to rely on the fraud on the market theory to sustain class viability of a securities claim.16 While the instant case is obviously not a securities case, the principle to be derived from Oscar is
11 Sandwich Chefof Tex. v. Reliance Nat'lIndem. Ins. Co., 319 F.3d 205, 218 (5th Cir. 2003). 12 In re Visa ChecklMastermoney Antitrust Lit., 280 F.3d 124, 136 (2d Cir. 2001). 13 Amchem Prods. v. Windsor, 521 U.S. 591, 624 (1997). I. Id. at 623-24. I' See id. 16 Oscar Private Equity Investments v. Allegiance Telecom 487 F.3d 261 (5th Cir. 2007)(vacating class
certification order).
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 14 of 52
that any element of class certification must be established by a preponderance of the evidence at the class certification stage, even if the decision on certification bears on the merits of the case.17 The Fifth Circuit confirmed this decision in Luskin v. IntervoiceBrite, Inc., 18 applying Oscar's holding to another class action decision in a securities case.
As shown below, once the evidence that now exists is reviewed, Plaintiffs cannot establish by a preponderance of the evidence that the class action requirements have been met. Instead, the evidence clearly shows that individual issues in this matter predominate, requiring decertification.
III. ARGUMENT AND AUTHORITIES The Court certified two classes to bring breach of contract claims over the Terms and Conditions Agreement. The Court correctly identified the elements of breach of contract as: (1) existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the defendant's breach.19 Decertification is proper where continuing review establishes individual issues
17 Id. at 269. 18 Luskin v. Intervoice-Brite, Inc.,261 Fed. Appx. 697, 702 (5th Cir. 2008). These authorities are
especially salient here because Plaintiff's Motion for Class Certification supported many of their factual chums by reference only to their complaint. See Exh. 25, Plaintiffs' Opposed Motion for Class Certification (Docket Entry no. 93, filed 7/19/06; without attachments). 19 Exh. I, Certification Order at 16.
7

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 15 of 52
predominate over common issues.20 It is now clear that individual issues on each of these
elements of the class claims will of necessity predominate over common issues.
A. The Indemnitor Notice Class should be decertified because individual issues predominate as to the class members and their breach of contract claims.
As discussed in more detail below, the Indemnitor Notice Class should be
decertified because discovery has revealed the following individual issues that defeat
class commonality and predominance:
• Approximately 31 % percent of the potential class members did not fully pay the up-front, non-refundable fee or did not sign the Terms and Conditions Agreement, and thus lack standing;
• The putative intervenors and the class representatives either did not themselves pay the up-front fee or were reimbursed for that fee by the bonded immigrant-a fact the bond file will not show and about which plaintiffs and class representatives Irma Sandoval and Petra Salinas have refused to provide discovery;
• Not every alleged breach is material, and whether any alleged breach in failing to give notice was material is a fact question under Texas law;
• Aaron Federal Bonding, the receiver for the Estate of Don Vannerson, and Fairmont (at relevant times) in fact provided notice in various ways of the 1-340 notice to appear for deportation to some of the bonded immigrants and to some of the indemnitors;
• Some indemnitors and bonded immigrants received notice of the request to appear for deportation through other means (such as a notice from the Government or through their attorney), and the bonded immigrant still failed to appear, therefore making it impossible to show that any alleged lack of a duplicative notice by Aaron Federal Bonding caused any damages;
• Many class members failed to update their address information with Aaron Federal Bonding (as required under the Terms and Conditions Agreement).
20 Nichols v. Mobile Bd. ofRealtors, Inc., 675 F.2d 671,675-79 (5th CiT. 1982) (emphasis added).
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 16 of 52
Therefore any notice sent to an obsolete address given to Aaron Federal Bonding would have been futile. Also, the indemnitor's failure to update the information hindered, and thereby excused, Aaron Federal Bonding's performance under that Agreement; and • Not all of the bond fIles include the Terms and Conditions Agreement which contains the "notice provision" that is the sole basis for the class members' breach of contract claim. • Not every bond was "breached" (i.e., called upon to pay) by the Government. If a bond was not breached, the indemnitor suffered no harm for any alleged lack of notice for the alien to appear. 1. The Indemnitor Notice Class should be decertified because there
are individual issues on whether each class member paid the upfront fee and was not reimbursed. The Indemnitor Notice Class is defined to include "those who served or are
serving as Indemnitors on a surety bond ... who have fully paid their up-front, non-
reimbursable fees."21 The Court apparently believed, as the parties may have believed,
that one could determine whether an indemnitor fully paid the up-front, non-reimbursable
fee from the bond files. However, new evidence shows that individual proof beyond
documents in the bond files will be required to establish who paid the up-front fee and
whether that person has already been reimbursed. To establish the breach of contract
claim, the class member must establish, inter alia, that he or she in fact ultimately paid
the up-front fees (and was not reimbursed). A class member who was paid back the up-
front money has no more of a claim than a person who did not make the up-front
payment in the first place. Moreover, the Court's definition of the class includes the
21 Exh. 1, Certification Order at 28. The class definition is of critical importance becanse it identifies the
persons (1) entitled to relief, (2), bound by a final judgment, and (3) entitled to notice in a Rule
23(b)(3) action. See In re United States Liquids Sees. Litig., 2002 U.S. Dis!. Lexis 26713, * 11 (S.D.
Tex. June 12, 2002) (citing MANUAL ON COMPLEX LITIGATION, § 30.14 at 217 (1995)). 9

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 17 of 52
requirement that the indemnitor have fully paid the "non-reimbursable" fee. If the fee paid by a particular indenmitor was in fact reimbursed, then that indemnitor does not meet the definition set out by the Court. But individualized discovery and proof will be needed to determine whether an indemnitor has been reimbursed.
The development of this evidence began when Deanna Arevalo and Dominica Rodriguez moved to intervene in June 2008. Defendants took their depositions, which revealed that Arevalo and Rodriguez do not fit the class definition because they did not fully pay-or were repaid-the up-front fee. Arevalo filed a sworn declaration that she paid the up-front fees and never received any refund from Aaron Federal Bonding, but on deposition she testified that she did not expect to be "out" the up-front money, and in fact she was reimbursed some of the amount, but cannot remember how much." She cannot point to any evidence that she has suffered any loss, or how much, and therefore cannot show she has any standing to make a claim. This information, however, is not ascertainable from the bond file-Bonding Defendants only found out about this repayment during Arevalo's deposition." The other potential class representativeDominica Rodriguez- also submitted a declaration that she paid the up-front fee," yet
22 See Exh. 12, Declaration of Deanna Arevalo at 13 (Docket Entry no. 218-9); Exh. 16, Deposition of Deanna Arevalo at 33-34.
23 Indeed, at her deposition, Ms. Arevalo testified that someone perhaps Jorge or Mima Escobar or the immigrant Hernandez was to repay her the full amount of the up-front fee. Exh. 16, Deposition of Deanna Arevalo at 31. When Defendants noticed Mr. Arevalo's deposition, Plaintiffs moved to quash it. Defendants then agreed to pay for Plaintiffs' costs to take the Escobar depositions, and the Escobars pointed to another person-Mirna Escobar's sister-and the girlfriend of the alien-as the possible source of reimbursement for Ms. Arevalo. Exh. 17, Deposition of Jorge Escobar at 18.
24 Exh. 18, Deposition of Dominica Rodriguez at 59.
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upon her deposition she could not recall having done so", and in fact, her husband (who
is not an Indenmitor, and thus not a class member) testified that he paid the fee.26
Arevalo's and Rodriguez's deposition testimony opened up the individual issue of
who actually paid the up-front fees, resulting in a re-review of a statistically relevant
sample of bond files on that issue. The results of that review to date show that out of 428
files reviewed, in 133 cases someone other than the named Indemnitor paid some or all of
the up-front, non-refundable fee.27 The data on the files reviewed can be extrapolated to
the entire population of bond files at issue with a confidence level in excess of 95%.28
Thus, between 29.5% and 31 % of the total bond files will have Indemnitors who did not
fully pay the fee and do not fit the class definition.
In addition, it is very likely that more Indemnitors were reimbursed than will be
shown by the bond files themselves. 29 Indeed, with proposed intervenor Arevalo, the
information was disclosed only by her testimony.3D The issues of who actually paid the
fees, where the funds came from, what agreements were made to repay, who received
" Exh. 18, Deposition of Dominica Rodriguez at 6. 26 See Exh. 19, Deposition of Raymond Acevedo at 2l. 27 See Exh. 2, Spreadsheet Analysis of Sample Bonds; Exh. 9, Declaration of Jessica Zavadil at II
(supporting Spreadsheet Analysis of Sample Bonds); see also Exh. 56, Bar Graph. 28 Exh. 4, Declaration of Financial Expert Jeff Harfenist ofUHY at 15. 29 Other examples of refunds are found in the files attached as Exh. 20-22. The file of immigrant
Ronaldo Delgado-Lopez shows that any money the indemnitor paid to Aaron Federal Bonding was refunded by Aaron Federal Bonding. Exh. 20, Bond File of Ronaldo Delgado-Lopez at BFE520930; see also Exh. 21, Bond File of Miguel Rubio-Flores at BFE6404ll (stating: "Need to refund Alberto Rubio $2500"); Exh. 22, Bond File of Jose Suarez-Sanchez. (file notes that the indemnitor received a refund of $2000 but does not explain the basis of this refund). 3D See Exh. 9, Declaration of Jessica Zavadil at 11 (stating that the bond file reflected that Arevalo paid the up-front fee and did not reflect that she had been reimbursed by the bonded immigrant).
11

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 19 of 52
refunds, and the extent of those refunds are all issues that will requITe individual testimony from each member of the class, and may also require third-party testimony.
The need to analyze whether indemnitors in fact paid the up-front fees as an individual issue is further demonstrated by the recent deposition testimony of Beatriz Manzano, a fonner accounting department employee of Aaron Federal Bonding. Ms. Manzano testified that, in the majority ofcases, the collateral payments on the bond were paid not by the indemnitor but by the bonded immigrant or a third party." While the upfront payment is not the same as the collateral payment, if the immigrant made the collateral payments, which is an obligation of the indemnitor, it stands to reason that, at least in some cases, the immigrant was either the original source of the up-front fees or reimbursed the indenmitor for the up-front payment (as in the case of Deanna Arevalo). This is a key individual issue, on which the proof will vary, that goes to the heart of this case.
It will be necessary for each member of the proposed class to prove that they fully paid the up-front fee, and that they were not reimbursed by the immigrant or a third party to qualify for the class as defined by the Court.32 The Court will have to conduct minitrials just to detennine who fits within the class defmition.33 Because of the large number
" Exh. 23, Deposition of Beatriz Manzano at 133-34; see also Exh. 24, Deposition of Laura Calderon Cuayahuitl at 60-61 (confmning that the immigrant typically made the collateral payments).
32 "If the members of the proposed class need to present evidence that varies from member to member to make a prima facie showing of a given question, then it is an individual question. If the same evidence will suffice for each member to make a prima facie showing, then it is a common question." Blades v. Monsanto Co., 400 F.3d 562,566 (8th Cir. 2005)(citingAmchem, 521 U.S. at 615).
33 See Saey v. CompUSA, Inc., 174 F.R.D. 448, at *11 (E.D. Mo. 1997) (declining to certify class on the basis that if the class was certified, the court would have to conduct mini-trials just to determine who
12

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 20 of 52
of individual indemnitors that do not meet the class definition, common issues will not
predominate and proceeding as a class action will not be superior to other procedures.
Thus the class should be decertified on this basis alone.
2. The Indemnitor Notice Class should be decertified because the class representative may not be a member ofthe class as defined, and her claims would not be typical of the class she purports to represent.
The assumption under which the Court was proceeding when it certified the
classes was, as Plaintiffs repeatedly represented to the Court, that the indemnitors paid
the up-front fee.34 For example, in the original motion for class certification, Plaintiffs
claimed "each of the indemnitors was required to pay an upfront non-refundable fee of
40%-50% of the total bond amount."" In their supplement to this motion, Plaintiffs,
describing Ms. Sandoval, stated: "she wants to recover the money she paid to post the
bond because Aaron Federal Bonding did not notify her or her father of the appointment
with INS."" This supplement also states: "the Bonding Defendants charged indemnitors.
. ."" The Plaintiffs also imply that Irma Sandoval paid the collateral on this bond-this
fact has also been proven false."
fit within the class definition). 34 See Exh. 25, Plaintiffs' Opposed Motion for Class Certification (Docket Entry no. 93, filed 7/19/06;
without attachments), Exh. 26, Plaintiffs' Supplement to Motion for Class Certification (Docket Entry no. 99, filed 8/14/06; without attachments); Exh. 27, Dominica Rodriguez and Deanna Arevalo's Corrected and Opposed Motion for Intervention, for Appointment as Class Representatives (Docket Entry no. 218, filed 7/8/08; without attachments). 35 See Exh. 25, Plaintiffs' Opposed Motion for Class Certification at 7 (Docket Entry no. 93). " See Exh. 26, Plaintiffs' Supplement to Motion for Class Certification at 3 (Docket Entry no. 99). 37 Id. at 2. " Plaintiffs state: " ... the Bonding Defendants as a matter of practice do not return the indemnitors
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Once the discrepancy in the testimony about payment of the up-front fee became apparent, Bonding Defendants asked Irma Sandoval and Petra Salinas, the current class representatives, for documents relating to any reimbursement of the up-front fees that they allege they paid. Production has been refused as irrelevant.39 Not only is this discovery relevant, Plaintiffs should be required to prove that Sandoval was not reimbursed-and not simply "prove" this by one more inconsistent declaration. Sandoval's objection to furnishing information is hardly surprising, given the significant inconsistency in the declarations previously filed, in which she said that she, as indemnitor, agreed with Aaron "that I would give them $750 at the time [that the bonding contracts were entered into];"40 while her father, the bonded immigrant, swore that the agreement was "we would give them $750."41 Prior to the proposed intervention and subsequent depositions of the proposed intervenors, this discrepancy might have seemed minor; the depositions have demonstrated, however, that there is a serious problem about divergent facts among purported class members.
If Ms. Sandoval did not payor was reimbursed the up-front fee, she has no standing to bring the claim on her own behalf and certainly not as a representative (and
collateral absent a demand." Id. at p. 3. On page 25 of the supplemental motion, Plaintiffs describe Irma Sandoval and state: "she also demonstrated knowledge of the basis for her legal claims by stating that she wants to recover the money she paid to post the bond because Aaron Federal Bonding did not notify her or her father of the appointment with INS." Id. at p. 25; see also Exh. 15, Bond File of Manuel Sandoval with receipts from Manuel Sandoval for collateral payments. 39 See Exh. 28, Irma Sandoval's Response to Request for Production No.3, at pg. 2; Exh. 29, Petra Salinas's Response to Request for Production No.3 at pg. 2. 40 See Exh. 13, Declaration of Irma Sandoval at pg. 1 (Docket Entry no. 93-12; emphasis added). 41 See Exh. 14, Declaration of Manue1 Sandoval at pg. 1 (Docket Entry no. 93-11; emphasis added).
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 22 of 52
not even a member) of the class the Court certified. Her claims would not be typical of the claims of the class certified by the Court.
3. The Indemnitor Notice Class should be decertified because of individual issues on whether Bonding Defendants materially breached a contract or breached it at all a. Whether any alleged lack of notice was a material breach is an issue that will have to be individually tried.
Both Plaintiff and putative Intervenors have pleaded that the Bonding Defendants materially breached their agreements by not providing notice to the indenmitor or the alien of the notice to appear for deportation:' Materiality of a breach of contract is a fact issue under Texas law that will require individualized proof."
There is ample proof that any breach was not material to the Terms And Conditions Agreement. The purpose for which the Indemnitor signed that Agreement was to induce Aaron Federal Bonding to post the surety bond to secure the release of the immigrant from detention.44 The materiality of any breach for not receiving one of possibly many notices, if that happened, is an issue that depends on the individual facts and circumstances of each case. Some viewed the bond money as "the cost of doing business"; they never expected to receive the money back and knew that the inunigrant
42 See Exh. 30, Plaintiffs' and Counter Defendant Irma Sandoval's Answer to Fainnont and Stonington's Counterclaims at pg. 2-3. (Docket Entry no. 178); Exh. 27.
" Fedgess Shopping Ctrs., Ltd. v. MNC SSP, Inc., 2007 Tex. App. Lexis 9802, • 8 (Tex. App.-Houston [14th Dist.] Dec. 18,2007, no writ)("[T]he issue of whether a breach rises to the level of a material breach is generally a fact question.").
" See Exh. 16, Deposition of Deanna Arevalo at 40-41.
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was never going to appear for any hearing." Some indemnitors were repaid and thus had
no continuing interest in receiving notice (and no standing to bring a claim). Some
immigrants had no intention of appearing for deportation, or could not have arranged to
appear for deportation because of the travel involved.46 Whether any failure to provide
notice was a "material breach" as Plaintiffs allege is an individual issue.
b. There are individual issues about the notice the Bonding Defendants provided, and the Bonding Defendants or their independent recovery agents sometimes gave notice to certain indemnitors, certain aliens, or both.
The practices of the Bonding Defendants concerning giving notice vary because
during the time period for which Plaintiffs are seeking to hold the Bonding Defendants
responsible, four different entities have had control of the operations.47 First, Aaron
Federal Bonding was a "dba" of Don Vannerson from the inception of the class period
(April 16, 1998) until Vannerson's death in March 2004." After Vannerson's death,
Aaron ceased to exist as a legal entity - because it was neither a corporation, nor a
partnership, but a sole proprietorship.49 For a few months after Don Vannerson's death,
his son Rodney was operating Aaron under an informal and temporary arrangement.
Then the probate court appointed a receiver who conducted the affairs of the estate of
45 Exh. 31, Deposition of Plaintiffs' Immigration Expert Jodi Goodwin at 66. 46 See Exh. 32, Expert Report of Jack Kessell, at 2, and Exh. 8, Declaration in Support of Report. 47 See Exh. 57, Timeline for an explanation of the Relevant Time Periods. 48 Exh. 33, Receiver's fuventory from Vannerson's Estate in Probate at 8 (listing business as a sole
proprietorship). 49 Exh. 34, Order Appointing Glenn Johnson as Receiver. Under Texas law, a sole proprietorship has no
separate legal existence apart from the sole proprietor. Ideal Lease Serv.• Inc., 662 S.W.2d at 951, 952 (Tex. 1983). The law treats the sole proprietor and the sole proprietorship as one and the same person. See id. See also Exh. 35, fuventory and Appraisement, at pg. 8, Schedule D.
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 24 of 52
Don Vannerson and did not give Fairmont control of Aaron's files. so After a settlement agreement in April of 2006, the bond ftles have been maintained and handled by Fairmont.51 The Fairmont employees currently handling the files were not involved in the origination of these contracts and had no information as to who was actually paying these fees in the beginning other than the documents that are contained in the bond ftles.52 This background is important because one key piece of evidence the Court relied on in the Certification Order was a statement of Michael Padilla, a current Fairmont employee, about whether notice was routinely given to immigrants. That evidence relates only to the last time period after Fairmont gained control of the ftles and the operations relating to the bonding business. Plaintiffs still must prove that, uniformly, notice was not given to the immigrants during the eight years of the other regimes that ran the business.
The Court noted in its order certifying the indemnitor notice class: "the excerpts of deposition testimony and affidavits submitted by Bonding Defendants in no way indicate that notice of requested appearance for deportation has ever been provided to the bonded immigrant."" This conclusion puts the burden on the wrong party. Plaintiffs bear the burden of proof by a preponderance of the evidence at the class certification stage and of course at trial.54 Moreover, the deposition of Eluid Salinas, which the Court discusses in its order, specifically says that he gave notice to the alien of deportation
50 See Exh. 34. Order Appointing Receiver Glenn Johnson. 51 Exh. 5, Dec1arationofRickKlimaszewski at 6-7.
52 Id. at 4.
53 Exh. 1, Certification Order at 21. 54 See Oscar, 487 F.3d at 269.
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dates in response to receiving a notice to appear for deportation from the Government." Salinas testified that he would call the immigrant by telephone to let them know of the deportation date.56 The document Salinas was being asked about-page 217 of Exhibit 1 to his deposition-is a notice to appear for deportation (Form 1-340).57
Salinas also confirmed that Abby Lopez-who began working with Aaron Federal Bonding in 2000 and was responsible for the deportation notices-would contact the indemnitors regarding dates because they "could not depend on immigration doing that."" Salinas's testimony is consistent with the testimony taken of two witnesses after the Court's certification order. These two witnesses-recovery agents who performed services for Aaron Federal Bonding, Santiago Sol and Daniel Espinoza-similarly testified that they would call the indemnitor first to try and locate the immigrant and would explain why they were trying to locate the immigrant.59
Indeed, Sol explained that the first action a recovery agent such as himself would take, upon receiving a recovery file, would be to contact the indenmitor and attempt to locate the bonded immigrant.60 Salinas also testified that when the recovery agents such as he, would speak with the indemnitors in trying to find the bonded immigrant, they
" See Exh. 36,_Deposition ofEliud Salinas at 51-52. 56 Id. 57 Id.; Exh. 37,1-340 Form, Exhibit 1 to Eliud Salinas Deposition. " Id. at 59. 59 See Exh. 38, Deposition Santiago Sol at 27; see also Exh. 6, Declaration of Daniel Espinoza at 'U5. 60 Exh. 38, Deposition of Santiago Sol at 9-10,21-30.
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would typically provide the indemnitor with the surrender date as well.6! Espinoza stated that it was his standard practice to call the indemnitor after receiving a file from Aaron Federal Bonding'" If he could not locate the indemnitor, Espinoza would attempt to call the references that the indemnitor listed on the bond application'" Salinas confirms this procedure in his deposition. He testified that the recovery agents such as himself would contact the indemnitors more than eighty percent of the time.6'
Review of the bond files confirms this testimony. The bond files contain handwritten notes showing that contact was attempted but was unsuccessful because the contact information had not been updated by the immigrant or the indemnitor as required by the Terms and Conditions Agreement'" For example, the file of Basilio GuzmanMaldonado shows several attempted contacts with the indemnitor-Marcos Guzman. However, at the number provided by Guzman.66 A woman answered and replied that she did not know him,,7 Another file-Luis Alberto Lopez-Siguencia-notes on the 1-340: "talked to surety [indemnitor] Gloria Calle said will tell def. [immigrant] about court. L.H."68 Despite. that notice, Mr. Lopez-Siguencia did not appear for his deportation
61 See Exh. 36, Deposition ofEliud Salinas at 119. 6' Exh. 6, Declaration of Daniel Espinoza at 15. 6' [d. 6' See Exh. 36, Deposition of Eliud Salinas at 117-119, 122. 65 Exh. 9, Declaration of Jessica Zavadil; Exh. 2, Spreadsheet Analysis of Sample Bond Files. 66 Exh. 39, Bond File of Guzman-Maldonado at 68. 67 Exh. 39, Bond File of Guzman-Maldonado at 68. 68 See Exh. 40, Bond File of Luis Alberto Lopez-Siguencia at 7.
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hearing and the bond was breached.69 These are but a few examples of many possibilities . of situations where contact was attempted by Aaron Federal Bonding or its recovery agents, and where the contact still failed to prevent breach of the bond. These files also show that contact was frequently made through visits from recovery agents-trying to find the immigrant to inform him or her about the deportation hearing, and thereafterunder the words of the 1-340 notice itself-"surrender" the immigrant.70
The Bonding Defendants gave or attempted to give notice of a deportation order to the bonded immigrant or the indemnitor by phone, letter, or through a personal visit from a recovery agent. Thus, whether Aaron Federal Bonding complied with the Terms and Conditions Agreement even as Plaintiffs interpret it, are individual issues which the Bonding Defendants are entitled to have determined by a jury on a case-by-case basis.71 These individual issues predominate over any common issue.
Finally, the Court's certification order at pages 19-21 discusses the then-existing evidence about notice to the indenmitors and apparently concludes that there were too many individual issues about notice to indemnitors, but that notice or lack thereof to the bonded immigrant of requested appearances for deportation could be tried class-wide. If the indemnitor received the notice, how can that indenmitor complain that the bonded immigrant did not receive notice? Such an indemnitor lacks standing to complain about
69 ld. at 42. 70 See Exh. 9, Declaration of Jessica Zavadil, at 14.
71 See Hunter v. Exxon Corp., 2005 U.S. Dist. Lexis 228, *13 (W.D. Tex. Jan. 7, 2005) ("[U]nder the present
certification Order, a 'series of individual trials' will likely be necessary to determine whether each individual royalty interest holder was damaged by Defendant's practices, and in doing this each individual lease will have to be exa:rnmed.").
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 28 of 52
the bonded immigrant's rights. Moreover, there is a serious causation issue about any damage to an indemnitor who got notice but failed to advise the bonded immigrant for whom they signed indemnity papers. Causation is an individual issue requiring a finding as to whether each indemnitor received notice and as to whether the indemnitor told the immigrant about the requested appearance.
c. There are very few class members who meet the Court's definition of the Indemnitor Notice Class.
The Court's Certification Order provides in relevant part, " ... where the Bonding Defendant did not provide notice ... to either the Indemnitor or the Bonded Immigrant." Read literally, this defmition requires that the Bonding Defendants provide notice either to the Indemnitor or to the Bonded Immigrant. As the Certification Order acknowledges, and as more fully explained in this Motion, there is ample evidence that Bonding Defendants provided notice to the Indemnitor. Thus, if the Indemnitor received notice from Bonding Defendants, then the Indemnitor does not meet the class definition.
4. The Indemnitor Notice Class should be decertified because there are individual issues on causation and the fact of damages.
The indemnitor notice class must prove that the breach they complain of caused damages. This point is not about the amount of damages but about the fact of damages. As many Texas courts have put it, "[U]ncertainty as to the amount of damages is not fatal to recovery, but lack of evidence as to the fact of damage will defeat recovery."72 In Davis, the plaintiff sued for failure to make a loan, but the plaintiff arranged alternative
72 Davis v. Small Business Inv. Co., 535 S.W.2d 740,743 (Tex. Civ. App.-Texarkana 1976, writ refd
n.r.e.).
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financing within the time period he claimed the defendant was supposed to loan the money. The court held that there was "no causally related loss in that regard.""
In this case, there are comparable individual issues about the fact of damage, that is, about whether the class members were in fact damaged at all (apart from how much). The class representatives were not damaged in that the immigrants connected with the class representatives were able to exercise all of their rights before the Government and the appropriate courts.74 As for the supposed indemnitor class members, several different scenarios exist: (1) the bond was not breached even after the alien failed to appear; (2) the alien appeared despite allegedly not getting notice from Aaron Federal Bonding; or (3) the bond was breached but the Government reversed itself on appeal and cancelled the bond instead.7' Even if Plaintiffs argue that each Indenmitor has been damaged despite these contrary facts, the Bonding Defendants are entitled to a trial on each of these issues.76
a. Notice was often mailed directly to the Alien or the Indemnitor.
There are instances in which the immigrant or the indemnitor received notice from another source. The Court in its certification order rejected this latter issue as
73 Id. 74 See Exh. 41, Expert Report of Immigration Expert Magali Candler at 57; see also Exh. 7, Declaration
of Magali Candler. 7' Id.
76 See Hunter v. Exxon Corp. 2005 u.s. Dist. LEXIS 228, (W.D. Tex. Jan. 7, 2005), cited in footnote 71,
supra.
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 30 of 52

"irrelevant."77 However, under Texas law, if the plaintiff has suffered no injury caused

by a breach, there is no cause of action.7B Thus, in order to establish liability for breach of

contract, each indemnitor will have to prove that neither they nor the innnigrant for

whom they signed received notice, and that had the notice been received from Aaron

Federal Bonding, there would have been no breach of the bond for which the Indemnitor

became liable.

For example, one of the potential intervenors-Arevalo-admitted that the federal

Government sent an 1-166 notice for the deportation of the innnigrant on whose bond she

was the indemnitor.79 While she does not dispute that this notice came to her home and

was signed for by her husband, she essentially conceded that she as the Indemnitor would

not have taken any steps to notify the immigrant because it was not she, but her husband

that received the notice.B. While Arevalo swore under oath that she would have contacted

the bonded immigrant if Aaron Federal Bonding had provided the required notice, she

could not recall whether she or her husband contacted the immigrant after receiving the

same

notice

from

the

Government.

B !

This issue also led to further file review. In at least 62 of the 428 files reviewed so

77 See Certification Order at 25. 7B McKnight v. Hill & Hill Exler, Inc., 689 S.W.2d 206,209 (Tex. 1985)(Stating that "in order to recover
compensatory damages, a breach-of-contract plaintiff must establish that he or she suffered some loss as a result of the breach".)
79 See Exh. 16, Deposition of Deanna Arevalo at 61-62; 63-651; see also Exh. 52, 1-166 produced from government.
B. See Exh.16, Deposition of Deanna Arevalo at 61-62, 63-65, 68-69, and 98.
B! See Exh.16, Deposition of Deanna Arevalo at 63"64,68-69,98-99, and 101.
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 31 of 52
far, there is evidence that the Government sent 1-166 notices to the last known address of the alien or immigrant.82 This fact, however, will not be in many of the bond files - it was not in Ms. Arevalo's file." The Government's "A" file for each alien will have to be obtained by discovery or FOIA request to ascertain whether, in some cases, an 1-166 notice was sent and signed for by the alien or the immigrant, as in the case of the Arevalos.84
Eluid Salinas' deposition testimony establishes that the Government frequently sent such an 1-166 notice (commonly known as a "run letter") directly to the indemnitor, the bonded immigrant, the immigrant's lawyer, or some combination of the three." Indeed, the Plaintiffs' immigration-lawyer expert, Jodi Goodwin, testified in her deposition that she would sometimes receive 1-166 notices for her clients.86 Furthermore, the Government's representative Marc Moore also testified that the Government sends 1340 notice to the alien (in addition to the obligor) and 1-166 letters to the aliens on a caseby-case basis."
82 See Exh. 2, Spreadsheet Analysis of Sample Bond Files; Exh. 9, Declaration of Jessica Zavadil at 12. " Exh. 9, Declaration of Jessica Zavadil at 12; see also Exh. 42, Bond file of Roberto Jnarez-Hernandez. 84 The Federal Defendants recently produced ten abbreviated Alien Files (A-Files) in response to the
Surety Defendants' request for production. Of these files, 60% contained at least some evidence that notice of appearance for deportation---via either an 1-340 or an 1-166-was provided by the Government to the bonded immigrant, the immigrants attorney, or the indemnitor. See Exh. 52, "A" Files from United States Department of Justice. See Exh. 10, Declaration of Howard Close, at 18. " Exh. 36, Deposition ofEliud Salinas at 81-82. 86 See Exh. 31, Deposition ofJodi Goodwin at 28-29, 42-43. " See Exh. 43. Deposition of Marc Moore at 5, 46-47, 158.
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 32 of 52
b. Notices for deportation were often provided to counsel for the alien.
The immigrant in Ms. Arevalo's case was represented by counsel and this counsel received notice on behalf of the alien of any hearings, including any deportation hearings." The notice that was sent to Arevalo copied the immigrant's lawyerRosemary Deleon-and the notice was sent a month before the immigrant had to appear for deportation in Los Fresnos, Texas." In addition, Petra Carranza de Salinas (the class representative for the Bonded Immigrant Class) testified that her attorney gave her notice of all hearings.'o Irma Sandoval (the class representative for the Indenmitor Notice Class) testified that her father-Manual Sandoval, the bonded immigrant-had a lawyer and the lawyer told her father when to go to court." In 111 of the 428 files reviewed, the immigrant was represented by counsel.92 Whether counsel received and conveyed notice to the immigrant, as seems likely based on the evidence, will require individual proof. If the Government, or an indemnitor, or the immigrant's lawyer notified the immigrant of the order to appear for deportation, then any notice that Aaron Federal Bonding would have given would have been redundant. If the immigrant did not appear for deportation as ordered after receiving notice from another source, it would have been futile for Aaron
" The same is true of many other aliens--they had counsel who may have received notice. Exh. 9, Declaration of Jessica Zavadil at 15; Exh. 2, Spreadsheet Analysis of Sample Bond Files.
" Exh. 52, A-File of Roberto Juarez-Hernandez, at BFE655473. '0 Exh. 44, Deposition of Petra Salinas at 38-39, 45-46, 73-74. 91 See Exh. 45, Deposition of Irma Sandoval at 20-21.
92 See Exh. 2, Spreadsheet Analysis of Sample Bond Files; Exh. 9 Declaration of Jessica Zavadil at 15. 25

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 33 of 52
to send a similar notice by mail for example. The law does not require futile acts.93
Those indemnitors that received notice of the deportation hearing directly from
some source other than Aaron Federal Bonding cannot claim any injury in fact or the
"fact of damages" resulting from Aaron Federal Bonding's alleged failure to provide
duplicate notice. Determining whether each class member actually received notice from
someone, and thereafter did nothing to ensure appearance of the bonded immigrant, will
require trial of individual issues of causation that will predominate over any common
issues among the class."
5. The Indemnitor Notice Class should be decertified because many of the potential class members failed to update their contact information with Aaron Federal Bonding, not only making attempted notice futile, but also preventing the Bonding Defendants from performing under the contract.
To the extent the indemnitor and the bonded immigrants signed the Tenus and
Conditions Agreement, they were bound to these tenus of that Agreement:
l. PRINCIPAL {the bonded inunigrant} and INDEMNITOR must report to AGENCY {Aaron Federal Bonding} every thirty (30) days
93 Alliance, WolfJ & Munier, Inc. v. Whiting-Turner Contr. Co., 946 F.2d 1003, 1009 (2d Cir. 1991 (stating that a party to contract may be excused from complying with a notice requirement if notice would have been a useless gesture (citing Craddock v. Greenhut Constr. Co., Inc., 423 F.2d Ill, 115 (5th Cir. 1970» (emphasis added»; Metals, Inc. ofAtlanta v. Hinley Indus., 222 F.3d 895, 905 (11th Cir. 2000) (stating that the "futility doctrine flows out of the principle that the law does not require the performance of vain or useless things").
" See Bell Atlantic Corp. v. AT&T Corp., 339 F.3d 294, 303-04(5th Cir. 2003)("[W]here fact of damage CatUlot be established for every class member through proof common to the class, the need to establish antitrust liability for individual class members defeats Rule 23(b)(3) predominance."); O'Neil v. Appel, 165 F.R.D. 479, 499 (W.D. Mich. 1996) (denying class certification and stating that "[W]here numerous mini-trials are necessary to resolve individual questions of reliance and causation, the benefits of a class action disappear"); Noble v. 93 Univ. Place Corp., 224 F.R.D. 330, 341-42 (S.D.N.Y. 2004) (rejecting class definition when it requires addressing the central issue of liability in a case and therefore the inqniry into "whether a person is a class member essentially require[s] a mini hearing on the merits of each [plaintiff's] case").
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 34 of 52

commencing the __ day of

. PRINCIPAL and INDEMNITOR

must report between the hours of 9:00 A.M. and 5:00 P.M. CST, Monday

through Friday, or PRINCIPAL and INDEMNITOR may appear in person

at AGENCY'S office during said hours on said days.

2. PRINCIPAL and INDEMNITOR must immediately AGENCY of any change in the following information:
A. PRINCIPAL'S and/or INDEMNITOR'S address. B. PRINCIPAL'S and/or INDEMNITOR'S telephone number. C. PRINCIPAL'S and/or INDEMNITOR'S employer. D. PRINCIPAL'S and/or INDEMNITOR'S attorney. E. PRINCIPAL'S immigration status. F. PRINCIPAL'S departure from the United States.

notify

3. PRINCIPAL must not move from [current address] even temporarily, without the AGENCY'S prior consent.

This Court addressed the factual issue of failure to comply by the Plaintiffs in its

certification order, and concluded that because Aaron treated the contracts as ongoing,

the Bonding Defendants are not excused from performing despite the Plaintiffs' breach of

the contracts." The legal principle--that the non-breaching party is put to an election of

terminating or continuing the contract-is not so easily applied here, for two reasons.

One potential breach-the failure of the alien or indemnitor to notify Aaron Federal

Bonding of a change in address or phone number-will not be known until after the

notice to appear for deportation is received. Similarly, a breach of the last obligation

quoted above ("Principal must not move . . . without ... prior consent") may not be

known by Bonding Defendants until an attempt is made to contact the Indemnitor to give

the notice Indemnitors are seeking. Bonding Defendants have no obligation to "elect" to

" Exh. 1, Certification Order at 23.
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 35 of 52
continue the contract or declare it terminated until they learn of a breach.% More fundamentally, Bonding Defendants cannot unilaterally cancel the bond agreement with the Government, and it would be illogical for them to cancel all their rights against the indemnitors, including the right to be repaid, while the bond obligation is still outstanding. And because there were separate Bond Defendant entities over the years that could respond in different ways to numerous failures by the class members to comply with their Terms and Conditions Agreements, there are multiple individual issues on the "waiver of material breach" theory.
There is a more fundamental problem with the Indemnitor Notice Class's failure to keep their contractual obligations. As this Court set out in the Certification Order, it is part of a plaintiff's prima facie case for breach of contract to prove that he or she performed or tendered performance". Whether each Indemnitor and immigrant complied with the requirements quoted above will be a jury question, and the proof will vary among class members.
In addition, the law recognizes the defense of prevention of performance where the plaintiff has impaired the defendant's ability to perform. "It is a general principle of contract law that if one party to a contract prevents or makes impossible performance by the other party, the latter's failure to perform will be excused and the offending party will
% Gupta v. Eastern Idaho Tumor Inst., Inc., 140 S.W.3d 747, 756 (Tex. App.-Houston [14th Dist.] 2004, pet. denied) (stating that after one party commits a material breach, the other party must elect between either continuing or ceasing performance).
" Exh. 1, Certification Order at 16.
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 36 of 52
not be permitted to recover damages for nonperformance."" "That doctrine excuses the
performance of a contractual obligation in a case where a party to the agreement has, in
some manner, actively hindered or impeded the attaimnent of a material part of the
bargain."" "[It] is as effective an excuse of performance of a condition that the promissor
has hindered performance as that he actually prevented it."100
There is ample evidence that the class members failed to notify Aaron Federal
Bonding of changes in address, and in fact hid their actual addresses from Aaron and
from the federal authorities. Abigail Lopez was an employee with Aaron Federal
Bonding from December 1989 to September 2005 and was responsible for updating the
bonded immigrants' files with current contact information whenever either the immigrant
or indemnitor provided it,I°I Ms. Lopez testified that it was very common for the
indemnitors and immigrants to falsify their applications, and it was very difficult to locate
the immigrant at a later time because of the wrong information. 102
" Nitram v. Cretan Life, 599 F.2d 1359, 1371 (5th CiT. 1979) (affirming district court's finding that the party's failure to provide an accurate tally of cargo because of the other party's speed of loading); In re General Datacomm lnd., 407 F.3d 616,625-26 (3d Cir.), cert. denied, 546 U.S. 1031 (2005) (J. Pollack, concurring) (stating that"[T]he prevention doctrine states that it is a principle of fundamental justice that if promissor is himself the cause of the failure of performance, either of an obligation due him or of a condition upon which his own liability depends, he cannot take advantage of the failure. (quoting 5 WILLISON ON CONTRACTS 3D, sec. 677, at 224).
" Monegain v. Pilkington PLC, 1995 U.S. Dist. Lexis 19938, *3 (E.D.N.C. Dec. 18, 1995) (internal quotations omitted).
100 Moore Bros. Co. v. Brown & Root, 207 F.3d 717, 725 (4th CiT. 2000) (holding that Brown & Root
hindered performance by misleading lenders about design changes, thereby making it less likely that the lenders would arrange additional financing to cover the changes) (citing, inter alia, 5 WILLISTON ON CONTRACTS 3D, sec. 677A).
101 See Exh. 46, Deposition of Abigail Cavos Lopez at 8, 19-20, 123. 102 ld. at 56.
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 37 of 52
Michael Padilla, the Loss Mitigation Specialist for Fairmont Specialty Insurance Company has been in charge of dealing with the recovery efforts for Fairmont since April of 2006.103 He confirms in his declaration that the addresses given by indenmitors and aliens are not correct in most cases.IO'
The testimony of Marc Moore-the field office director for the San Antonio of Immigration Customs Enforcement Agency (ICE)-further demonstrates the difficulty in contacting an immigrant who has failed to update his or her contact information. In the San Antonio division of ICE alone there are currently over 77,000 fugitive aliens that four teams consisting of eight people each have been unable to capture for deportation.105 It is apparent from the Government statistics that a number of the aliens, including aliens that are the subject of the bonds in this case, deliberately tried to avoid capture from either the bonding company or ICE.106 If they are avoiding ICE, they are not going to voluntarily tum themselves in if one of the Bonding Defendants were to call or write asking them to "please appear."
Whether an immigrant would rather show up for deportation or take some other action depends on whether the immigrant has any legal basis to stay in the United States or to seek relief from removal. This issue will vary from case to case. I07 The results of the
103 See Exh. 53, Declaration of Michael Padilla. 10. Id. 105 See id.; see also Exh. 43, Deposition of Marc Moore at 120-125. 106 Id. 107 See Exh. 41, Expert Report ofhnmigration Expert Magali Candler at 3-5, and Exh. 7, Declaration in
Support.
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 38 of 52
recent pilot program in which ICE gave immigrants subject to a [mal deportation order the right to voluntarily depart the United States show the true situation:
"Of almost 500,000 who were eligible nationwide, including about 30,000 in the five pilot cities, only eight showed up, according to U.S. Immigration and Customs Enforcement, which sponsored the three-week program."IOS If only eight of thirty thousand actually show up to voluntarily deport, then Plaintiffs' contention that the bonded immigrants in this case would individually, or on a class-wide basis, voluntary appear for deportation if given notice has serious flaws. The inability to give notice due to bad addresses has been dramatically demonstrated, class-wide, by the attempt to send notice to the class members. Of the 7607 notices that were sent out by certified mail pursuant to the Court's order, the majority, 4849 (64%) have been returned as "undeliverable"109 to the class member. Had the envelope contained instead a letter from Aaron Federal Bonding enclosing the "notice to appear for deportation," a like non-receipt percentage would exist. This exercise has demonstrated the ineffectiveness, if not the futility, of sending written notice to the alien or indemnitor of the demand to appear for deportation and the hollowness of Plaintiff's claim that receipt of notice was or is material on anything approaching a classwide basis. In sum, the issues about whether sending advance written notice of the demand to appear for deportation would be effective in reaching the immigrant and would be
lOB See Exh. 47, Miriam Jordan, "Voluntary Deportation Program Attracts Few Participants," Wall Street Journal (August 14,2008).
109 See Exh. 3, Declaration of Terry Hewnan.
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 39 of 52
effective in causing the immigrant to appear so the bond would not breach are highly individualized inquiries relevant to the issues of causation and the fact of damage that cannot simply be assumed against the Bonding Defendants. Plaintiffs bear the burden of proof at this stage (and also at trial) to demonstrate that advance notice to the last contact information given by the immigrant would (1) reach the immigrant and (2) even if received, cause him or her to appear as ordered or take other proper steps to avoid a breach of the bond. Based on this record, these individual issues predominate over any common Issue.
6. The Indemnitor Notice Class must be decertified because the bond files do not all contain Terms and Conditions Agreements signed by the Immigrant and Indemnitor.
The uncertainties raised by the recent depositions led to the highlighting of additional individual issues that are critical to this case. The notice provision on which Plaintiffs rely is found in a "Terms and Conditions" agreement between Aaron Federal Bonding and (sometimes, but not always) the indemnitor. The sole basis for certification of the Surety Bond Classes arises from an alleged breach of that notice provision. The bond files reveal that the indemnitor was not consistently the person who signed the Terms and Conditions, meaning, the person who claims in this action to have paid for the alleged promise by Aaron Federal Bonding to him/her to notify the immigrant did not receive the promise and is not party to the agreement. 110 Persons in that situation are clearly not entitled to relief. An example is found in the file of bonded immigrant Maria
110 Exh. 9, Declaration of Jessica Zavadil at 16.
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 40 of 52
Ana Arevalo-Velasquez: the indemnitor on the bond application (and the one that appears to have made the up-front payment), was Santos Sarto, while the Terms and Conditions
Agreement was signed by Gloria Lucana." 1 This issue of "who was the real prornissee" is yet another issue that will have to be individually tried.
Moreover, 42 of the bond files reviewed do not contain a "Terms and Conditions" agreement, or the signature line was blank. 112 Therefore, no notice was required under
those bonds because there was no cOntract requiring notice. Each potential class member will have to prove that he or she signed a Terms and Conditions Agreement in order to
prevail at trial. Finally, most of the Terms and Conditions Agreements have no signature of the
bonded immigrant, although there is a blank for that signature. 113 Whether a written
contract must be signed to be binding is an individual question of the parties' intent."'
7. The class should be decertified because several individual issues exist as to whether the bond was breached or cancelled.
During the Bonding Defendants' review of the bond files, another important individual issue arose. In 101 of the 428 files reviewed, the bond was not breached at all,
III See Exh. 54, Bond file of Maria Ana Velasquez at BFE141152; BFEI41157. 112 Exh. 9, Declaration of Jessica Zavadil at 17. 113 Id. at 17-18. 114 See Scaife v. Associated Air Ctr. Inc., 100 F. 3d 406,410 (5th Cir. 1996) (holding that signatures were
required where, among other things, contract contained signature block, along with a provision that amendments had to be in signed writings); Simmons & Simmons Constr. Co. v. Rea, 155 Tex. 353, 355, 286 S.W.2d 415, 417 (Tex. 1955) (holding that signatures were required where, among other things, contract had signature block); In re Bunzl USA, Inc., 155 S.W.3d 202, 209 (Tex. App.-El Paso 2004, no writ) (holding that, among other things, the blank signature block is evidence that the parties did not intend to be bound until both parties signed the Agreement).
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 41 of 52
or if it was breached, the breach was nullified when the bond was later cancelled on
appeal by the Government.!!' If the bond was not breached or if it was cancelled, there is
no harm to the inderrmitor or the immigrant. This is an individual issue that will have to
be individually tried.
B. The Bonded Immigrant Class should be decertified. 1. The Bonded Immigrant Class should be decertified because there is a conflict of interest between the class representative and one or more members ofthe class, and thus the class representative is not adequately representing the class.
In many cases, providing advance notice to an immigrant who has been ordered
deported and must appear for deportation is more likely to result in the immigrant's flight
rather than appearing as ordered. This will cause the bond to breach and the indemnitor
to lose the collateral he or she deposited. Thus, the Indemnitor Notice class
representative is taking a position that will ultimately be detrimental to the members of
the class, and the Bonded Immigrant class representative is seeking injunctive relief that
might be detrimental to the members of the Inderrmitor Notice Class. This conflict of interest is fatal to the maintenance of class action status. "It is
axiomatic that a putative representative cannot adequately protect the class if his interests
are antagonistic to or in conflict with the objectives of those he purports to represent."116
115 See Exh. 2, Spreadsheet Analysis of Sample Bond Files; Exh. 9, Declaration of Jessica Zavadil at 19.
116 Wright & Miller, 7A FEDERAL PRACTICE & PROCEDURE, § 1768, p. 326 (2d ed. 1986); see also
Berger v. Compaq Computer Corp., 257 F.3d 475, 479-80 (5th Cir. 2002) ('The adequacy requirement also 'serves to uncover conflicts of interest between the named plaintiffs and the class they seek to represent.' Furthennore, because absent class members are conclusively bound by the judgment in any class action brought on their behalf, the court must be especially vigilant to ensure that the due process rights of all class members are safeguarded through adequate representation at all
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As the Eleventh Circuit held in Pickett v. Iowa Beef Processors, "[a] class cannot be
certified when its members have opposing interests or when it consists of members who
benefit from the same acts alleged to be harmful to other members of the class."I17
Relying on Pickett, the Eleventh Circuit elaborated: "A fundamental conflict exists where
some party members claim to have been harmed by the same conduct that benefitted
other members of the class. In such a situation, the named representatives cannot
vigorously prosecute the interests of the class through qualified counsel because their
interests are actually or potentially antagonistic to, or in conflict with, the interests and
objectives of other class members."118 The Pickett analysis fits this case exactly - it is
obvious that sometimes physically picking up the immigrant without advance notice will
benefit the indemnitor. How then is there a class of all indernnitors suing for failure to
times.) (citing Amchem Products v. Windsor, 521 U.S. 591, 625 (1997)); Langbecker v. Electronic Data Systems, Inc., 476 F.3d 299, 314-16 (5th Cir. 2007) ("[T]he Rule 23 adequacy inquiry also uncovers conflicts of interest between tbe named plaintiffs and the class they seek to represent. Substantial conflicts exist among the class members, raising questions about the adequacy of tbe lead Plaintiffs' ability to represent the class." ... Indeed, intraclass problems can present problems of constitutional magnitude.") (citations omitted). 117 209 F.3d 1276, 1280 (11 tb Cir. 2000).
118 Valley Drug Co. v. Geneva Farms, 350 F.3d 1181,1189 (1lth Cir. 2003), cert. denied, 543 U.S. 939
(2004) (collecting cases; internal quotations omitted). In fact, "no circuit has approved of class certification where some class members derive a net economic benefit from the very same conduct alleged to be wrongful by the named representatives of the class." ld. at 1190; see also Bieneman v. City ojChicagQ, 864 F.2d 463,465 (7ili Cir. 1988) (affirming denial of class certification to a group of property owners surrounding O'Hare Allport because some putative class members "undoubtedly derive great benefit" and otbers were harmed from the airport); Phillips v. Klassen, 502 F.2d 362,367 (D.C. Cir. 1974) (affirming refusal to certify class where the defendant's conduct "may be taken as conferring economic benefits or working economic harm, depending on tbe circumstances of the individual."); Allied Orthopedic Appliances v. Tyco Healthcare, 247 F.R.D. 156, 177-78 (C.D. Cal. 2007) ("[N]o circuit approves of class certification where some class members derive an economic benefit from the very same conduct alleged to be wrongful by tbe named representative of the class."; refusing to certify class where tbe alleged anticompetitive benefited some hospitals but not otbers); Auto Ventures v. Moran, 1997 U.S. Dis!. Lexis 7037, *13 (S.D. Fla. 1997) (refusing to certify a class of Toyota dealers because "tbe class collapses into distinct groups of winners and losers.").
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 43 of 52
give advance notice? In contrast, apprehension of the immigrant without advance notice in many if not
most. cases best protects the indemnitor's financial interest, which is to preserve the indemnitor's collateral rather than having it forfeited by the bond being breached. Not surprisingly then, this procedure is standard in the immigration bond industry, given the high likelihood that the bonded immigrant will flee rather than report for deportation if given advance notice. '19
The recent testimony of Marc Moore, the San Antonio field office director for the Immigration and Customs Enforcement Agency, confirms that sending advance notice to the alien to appear for deportation-as the class representatives desire--commonly results in the failure of the alien's appearance, and therefore puts the Indemnitors at risk rather than protecting their interests. l2o The Court acknowledged this problem in its Order dated May 19, 2005.'21
While Mr. Sandoval'22 expressed a desire to appear every time the Government asked for him, the evidence is that attitude is atypical. Indeed, Plaintiff's immigration expert, Jodi Goodwin, when asked why there were so many breaches of these
119 See Exh. 48, Deposition of Michael Padilla at 30 (testifying that in at least 90 percent of the cases when an immigrant under deportation order received advance notice, they would not be at home when Padilla arrived as a recovery agent); Exh. 49, Deposition of Recovery Agent Expert Jack Kessell at 118 (testifying that there is a high likelihood of immigrant fleeing if given advance notice of 1-340).
120 See Exh. 43, Deposition of Expert Marc Moore at 138-139. 121 See Exh. 50, Court's Memorandum Opinion and Order dated May 19, 2005 at 5 (Docket Entry no.
135-2). 122 Mr. Sandoval is Irma Sandoval's father and the inunigrant for whom she signed the indemnity
agreement.
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immigration bonds testified "People didn't want to go home . .. And I believe that people breach the bonds because it's ... it's a cost of doing business ..."123 In addition, many aliens have no legal basis for remaining in the United States, so providing notice to them cannot help them "preserve" any legal rights. 124
If the immigrant would rather flee than appear, then giving advance notice of a deportation is counterproductive to the indemnitor's financial interest. Before binding every class member to a ruling that might well be very detrimental to them, the Court should ensure that each class member wants the advance notice to the immigrant for which the Plaintiffs are asking.
2. The Class Representative did not sign the Agreement on which she is suing.
The class representative-Petra Carranza de Salinas-did not sign the Terms and Conditions Agreement she is seeking to enforce.125 As stated above, when the party fails to sign the agreement, the question of whether a written contract must be signed to be binding is a question of the parties' intene26
The issue of whether Ms. Salinas as well as all of the other bonded immigrants that failed to sign the terms and conditions agreement intended for this agreement to be a binding agreement will have to be individually tried as a question of fact.
123 Exh. 31. Deposition of Jodi Goodwin at 66-67. 124 Id. at 112-13, 141-44, 149-50. 12' See Exh. 51, Bond File of Petra de Carranza Salinas at BFE640450. 126 See, e.g., Scaife, 100 F.3d at 410; ABB Kraftwerke Aktiengesellschaft v. Brownsville Barge & Crane,
Inc., 115 SW.3d 287, 292 (Tex. App.-Corpus Christi 2003, writ denied).
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3. The Bonding Defendants did not refuse to act on grounds generally applicable to the class.
Rule 23(b)(2) requires that the Bonding Defendants "acted or refused to act on grounds generally applicable to the class."127 "The term 'generally applicable' has been interpreted to mean that the party opposing the class has acted in a consistent manner towards members of the class so that his actions may be viewed as part of a pattern of activity, or to establish a regulatory scheme, to all members."128 "What is necessary is that the challenged conduct or lack of conduct be premised on a ground that is applicable to the entire class."129
Rule 23(b)(2) is satisfied only where class treatment is clearly called for, for example, "in situations where a court, through a single injunction or declaration, can redress 'group, as opposed to individual, injuries ....'''130 "A Rule 23(b)(2) action cannot resolve individualized issues of fact, nor provide different types of relief required to redress individual injuries."13I In the instant case, no such "generally applicable" activity exists. As discussed above, not every immigrant signed a Terms and Conditions Agreement, the only agreement providing for notice to the bonded immigrant. Indeed, Petra Salinas, representative of this class, did not sign a Terms and Conditions
127 FED. R. ClY. P. 23(b)(2). 128 In re Managed Care Lit., 209 F.R.D. 678, 686-87 (S.D.Fla. 2002), rev'd on other grounds, 538 U.S.
401 (2003). {Find a case that was not reversed} 129 Edmondson v. Simon, 86 F.R.D. 375, 383 (N.D.Ill. 1980). 130 In re Methyl Tertiary Butyl Ether Prods. Liab. Lit., 209 F.R.D. 323, 341-42 (S.D.N.Y. 2002) (quoting
HolmesV. Cont'l Can Co., 706 F.2d 1144, 1155 (11th Cir. 1983». 131 In re Managed Care Lit., 209 F.R.D. at 687 (citing 5 James Wm. Moore, et aI., MOORE'S FED.
PRAC. § 23.43(2)(b) at 23-195 (3d ed. 2000».
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AgreementI32. And there is no showing that the Bonding Defendants unifonnly failed to
provide that notice. To the contrary, as illustrated above, in Section A.2, the Bonding Defendants have provided notice to the bonded immigrant (through several different means), including through the most effective type of notice-through a recovery agent.
C. There is a conflict of interest between the two classes which destroys adequate representation ofthe classes.
In addition, as discussed above, it is not clear that it is in the best interest of every indemnitor that Bonding Defendants provide advance notice to the bonded immigrant as such notice will likely cause him or her to flee. This divergence in interests between the two classes raises a serious question about the adequacy of representation. Under the
adequacy requirement, "class counsel must be qualified and must serve the interests of the entire class."1l3 To establish adequacy, "counsel representing the class must be qualified and capable and must advance the interests of the entire class, not just a group of one or another."I34
The conflict between the two classes, and within the classes destroys the ability of the class representatives and class counsel to adequately represent the classes. "The existence of a conflict of interest affects class counsel's ability to conduct the litigation
I32 See Exh. 51, Bond ftle of Petra Salinas, at BFE640450.
Il3 Georgine v. Amchem Products, 83 F.3d 610,630 (3d Cir. 1996), aff'd, 521 U.S. 591 (1997). 134 In re Train Derailment Near Amite, Louisiana, 2006 U.S. Dist. Lexis 32839, *45 (emphasis in
original; citing Georgine, 83 F.3d at 630); see also Council 31 v. Sally Ward, 1989 U.S. Dist. Lexis 8972, *9 (N.D. Ill. 1989), aff'd, 169 F.3d 1068 (7th CiT. 1999) ("[T]he court must be assured that counsel will not face conflicts in representing the interests of the entire class."); Carpenter v. Boeing Co., 456 F.3d 1183,1204 (10th CiT. 2006) ("Resolution of two questions detennines legal adequacy: (1) do the named plaintiffs and their counsel have any conflicts of interest with other class members . . . . ") (internal quotations omitted).
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 47 of 52
zealously and competently. Accordingly, [c]lass counsel must act with unwavering and
complete loyalty to the class members they represent, and the responsibility of class
counsel to absent class members whose control over their attorneys is limited does not
permit even the appearance of divided 10yalties."135
The conflict within each class and between the two classes mandates
decertification.
IV. CONCLUSION In sum, the Indenmitor Notice Class and the Bonded Immigrant Class should be
decertified because the Court will have to try these individual issues in order to reach a
resolution of this case on the merits:
1. Whether the indenmitor signed the Terms and Conditions Agreement; 2. Whether the indenmitor fully paid the up-front fee; 3. Whether the indemnitor was partially or totally reimbursed by anyone for
the up-front fee; 4. Whether the addresses provided to Bonding Defendants by the indemnitor
and the immigrant were correct at the time an 1-340 Notice to Deliver Alien for deportation was received by Bonding Defendants; 5. Whether Bonding Defendants gave any notice to the indemnitor or the immigrant of the 1-340 appearance date; 6. Whether the indemnitor or the immigrant received notice of the appearance date from any other source - e.g., the Government or a lawyer; 7. Whether the bond was breached or cancelled by the Government; 8. Whether the immigrant could have appeared in compliance with the notice (i.e., whether the inunigrant was still living in the United States at the
135 National Air Traffic Controllers Assoc. v. Dental Plans, Inc., 2006 U.S. Dist. Lexis 12544, *13 (N.D.
Va. 2006) (quoting Kayes v. Pacific Lumber Co., 51 F.3d 1449,1465 (9th Cir. 1995)).
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 48 of 52 time);
9. Whether the immigrant would have appeared in compliance with the notice had he received it;
10. Whether any breach by Bonding Defendants was material; and II. What the value is, if any, to each Indemnitor of what he received by posting
the bond (including the immigrant's freedom), if the measure of damages is the difference between what the Indemnitor paid and what he received, as the Court has suggested. Bonding Defendants have established that numerous individual issues exist within the class on the basic elements of their contract claim. These issues predominate over any common issue. In addition, there is a lack of adequate class representation of both classes. Therefore the Court should decertify the two classes.
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 49 of 52

OF COUNSEL:
Bradford W. Irelan State Bar No. 10411550 Irelan Hargis, PLLC 440 Louisiana, Suite 1800 Houston, Texas 77002-1652 Telephone: (7l3) 222-7666 Facsimile: (7l3) 222-7669

Thomas C. Wright State Bar No. 22059400 S.D. Tex. ID No. 2729 Wright Brown & Close, LLP Three Riverway, Suite 600 Houston, Texas 77056 7l3.572.432l Telephone 7l3.572.4320 Facsimile close@wrightbrownclose.com wright@wrightbrownclose.com
Lead Counsel for Defendants Fairmont Specialty Insurance Company, ftk/a Ranger Insurance Company, and Stonington Insurance Company, ftk/a Nobel Insurance Company

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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 50 of 52

aniel K. Wo . gton

Atlas & Hall, LLP

818 Pecan Blvd. P. O. Box 3725 McAllen, Texas 78501

WI .IY

Telephone: (956) 682-5501

Facsimile: (956) 686-6109

V/8;-I II•A/~

Lead Counsel for Defendants Michael Padilla, as Independent Administrator for the Estate of Vannerson, and Santiago Sol

43

Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 51 of 52 CERTIFICATE OF CONFERE CE
I certify that I have conferred with Plaintiffs' c motion.
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Case 7:05-cv-00331 Document 249 Filed in TXSD on 09/24/08 Page 52 of 52
CERTIFICATE OF SERVICE I certify that this filing has been served on all counsel of record by electronic service, email, fax, federal express, and/or U.S. mail on September 24,2008 as follows:
Via Federal Express and Electronic Service
1. Benjamin King Diamond McCarthy Taylor, Bryant & Lee, LLP 1201 Elm Street, 34th Floor Dallas, Texas 75270-2102
Dan K. Worthington Atlas & Hall P. O. Drawer 3725 McAllen, TX 78502
Tucker Ronzetti, Esq. Kozyak Tropin & Throckmorton, PA 2525 Ponce de Leon, Ninth Floor Coral Gables, FL 33134
Rene Carlo Benavides US Attorney's Office, Southern District of Texas 1701 West Highway 83 McAllen, Texas 78501-5176
Elisabeth Lisa Brodyaga 17891 Landrum Park Road San Benito, Texas 78586-7197
Stacey YounglBenj amin Zeitlin U.S. Department of Justice P.O. Box 878, Ben Franklin Station Washington DC, 20044
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 Case 7:05-cv-00331 Document 281 Filed in TXSD on 10/30/08 Page 1 of 9

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS
MCALLEN DIVISION

ARACELY ZAMORA-GARCIA, et al,
Plaintiffs, VS.
MARC MOORE, et al,
Defendants.

§ § § § CIVIL NO. M-05-331 § § § §

ORDER DENYING PLAINTIFF SANDOVAL’S MOTIONS FOR SUMMARY JUDGMENT AND BONDING DEFENDANTS’ MOTION TO DECERTIFY

I. Introduction

Now before the Court are Plaintiff Irma Sandoval’s Motion for Partial Summary

Judgment on Her Claims and the Indemnitor Notice Class Claims against Stonington

Insurance Company f/k/a Nobel Insurance Company (“Stonington”) and Fairmont Specialty Insurance Company f/k/a Ranger Insurance Company (“Fairmont”)(Doc. 179)1;

Plaintiff/Counter-Defendant Irma Sandoval’s Motion for Summary Judgment against

Stonington and Fairmont’s Counterclaims (Doc. 180); and the Motion to Decertify the

Surety Bond Classes filed by Defendants Fairmont, Stonington, and Michael Padilla in

his capacity as Independent Administrator of the Estate of Don Vannerson d/b/a Aaron Federal Bonding Agency (Doc. 249).2

In its Order Granting in Part and Denying in Part Plaintiffs’ Motion for Class

Certification entered on April 25, 2007, the Court certified two “Surety Bond Classes,”

i.e., classes with claims against Bonding Defendants. (Doc. 139). Plaintiff Irma

Sandoval represents the “Indemnitor Notice Class,” defined as follows:

1 Stonington and Fairmont are referred to collectively as “Sureties.” 2 Sureties and Padilla are referred to collectively as “Bonding Defendants.”
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(a) those who served or are serving as Indemnitors on a surety bond posted by a Bonding Defendant to secure the release of a Bonded Immigrant detained by the Federal Defendants,3 and (b) who have fully paid their up-front, non-reimbursable fees to the Bonding Defendant pursuant to the terms of the bonding contracts, and (c) where the Bonding Defendant’s records indicate that on or after April 16, 1998, it received a “Notice to Obligor to Deliver Alien” indicating that the INS/DHS4 had scheduled an appearance for deportation for the Bonded Immigrant, and where the Bonding Defendant did not provide notice of the requested appearance for deportation to either the Indemnitor or the Bonded Immigrant.
Id. Sandoval and the Indemnitor Notice Class (collectively, “Indemnitor Plaintiffs”)
assert a cause of action for breach of contract against Bonding Defendants. (Docs. 114,
139). More specifically, Indemnitor Plaintiffs claim that Bonding Defendants breached
the “Terms and Conditions under Immigration Bond” agreement (“Terms and Conditions
agreement”) by failing to give notice to each Indemnitor Plaintiff and bonded immigrant
upon receipt of a Form I-340, or “Notice to Obligor to Deliver Alien,” requesting the
immigrant’s appearance before INS/DHS for deportation. Id. Indemnitor Plaintiffs seek
damages equal to the value of all non-refundable, up-front fees paid to Bonding
Defendants when entering into the surety bond contracts. Id.
Plaintiff Petra Carranza de Salinas represents the “Bonded Immigrant Class,”
defined as follows:
(a) those who have been released from custody of the Federal Defendants pursuant to surety bonds posted by the Bonding Defendants, and (b) where the bond is outstanding.
(Doc. 139). De Salinas and the Bonded Immigrant Class (collectively, “Bonded
Immigrant Plaintiffs”) assert a cause of action for “equitable relief preventing breach of
3 “Federal Defendants” are Marc Moore, District Director for Interior Enforcement, Department of Homeland Security; and Michael Chertoff, Secretary, Department of Homeland Security. (Docs. 114, 150). 4 The Immigration and Naturalization Service (“INS”) is the predecessor agency to the Department of Homeland Security (“DHS”) in all respects relevant to the instant case.
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contract” against Bonding Defendants. (Docs. 114, 139). Bonded Immigrant Plaintiffs seek an injunction requiring Bonding Defendants, directly or through their agents, to make good faith efforts to provide actual, timely, and reasonable notice to Bonded Immigrant Plaintiffs and to the indemnitors on their bonds of any and all demands for performance made on those bonds by Federal Defendants. Id. Bonded Immigrant Plaintiffs also seek corresponding declaratory relief. Id.
Upon being granted leave to do so, Fairmont and Stonington amended their Answer to assert counterclaims for indemnity, recoupment, setoff, and attorneys’ fees against Plaintiff Sandoval. (Docs. 166, 174).5 More specifically, Sureties claim that Sandoval entered into two agreements that obligate her to indemnify Sureties for losses resulting from her father’s breach of his surety bond. (Doc. 174). Sureties therefore assert a counterclaim for the affirmative relief of indemnity from Sandoval for these losses as well as reasonable attorneys’ fees incurred while enforcing the indemnity provisions of the agreements. Id. Sureties also assert the defensive counterclaims of recoupment and/or set-off against Sandoval. Id. II. Analysis A. Motions for Summary Judgment 1. Standard of Review
A district court will grant summary judgment when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c). A fact is material if it might affect the outcome of the lawsuit under the governing law, and a fact is genuinely in dispute only if a reasonable jury could return a
5 The Court reserved ruling on whether to allow Sureties to assert these counterclaims against the individual members of the Indemnitor Notice Class. (Doc. 166).
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verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A party moving for summary judgment has “the initial responsibility of informing the district court of the basis for its motion and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any’ which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-movant to produce evidence or designate specific facts showing the existence of a genuine issue for trial. Allen v. Rapides Parish Sch. Bd., 204 F.3d 619, 621 (5th Cir. 2000). At the summary judgment stage, the court “may not make credibility determinations or weigh the evidence” and must resolve doubts and reasonable inferences regarding the facts in favor of the non-moving party. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 249; Dean v. City of Shreveport, 438 F.3d 448, 454 (5th Cir. 2006). 2. Plaintiff Sandoval’s Motion for Partial Summary Judgment
Plaintiff Sandoval, on her own behalf and on behalf of the Indemnitor Notice Class, moves for partial summary judgment on the issue of Sureties’ liability for their alleged breach of contract. (Doc. 179); see FED. R. CIV. P. 56(d)(2). In order to prevail on the motion, Sandoval must demonstrate that no genuine issues of material fact exist regarding the following elements of Indemnitor Plaintiffs’ breach of contract claims: (1) the existence of a valid contract between the parties; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the defendant’s breach. E.g., McLaughlin, Inc. v. Northstar Drilling Techs., Inc., 138 S.W.3d 24, 27 (Tex.App.-San Antonio 2004, no
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Case 7:05-cv-00331 Document 281 Filed in TXSD on 10/30/08 Page 5 of 9
pet.); Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex.App.-Houston [1st Dist. 2002, pet. denied); Lewis v. Bank of Am. NA, 343 F.3d 540, 544-45 (5th Cir. 2003). Upon review of Sandoval’s motion and the parties’ briefing and evidence (Docs. 179, 181, 199, 201, 205, 213, 273), the Court finds that genuine issues of material fact exist with respect to (1) whether a valid contract exists between Indemnitor Plaintiffs and Sureties through the application of ratification or agency principles; (2) whether Indemnitor Plaintiffs performed their obligations under the Terms and Conditions agreement; and (3) what type of notice was required under the Terms and Conditions Agreement and whether Sureties breached the notice provision in the agreement by uniformly failing to give the required notice, thereby causing damage to Indemnitor Plaintiffs.6 For these reasons, the Court must deny Sandoval’s Motion for Partial Summary Judgment. 3. Plaintiff/Counter-Defendant Sandoval’s Motion for Summary Judgment
Plaintiff/Counter-Defendant Sandoval moves for summary judgment on Sureties’ counterclaims against her. (Doc. 180). Upon review of Sandoval’s motion and the parties’ briefing and evidence (Docs. 180, 181, 198, 207), the Court finds that genuine issues of material fact exist regarding whether Sureties can be held responsible for any breach of the notice provision of the Terms and Conditions agreement, and therefore whether Sandoval is excused from her obligations under the indemnity agreements. For these reasons, the Court must deny Sandoval’s Motion for Summary Judgment.
6 If the responsible parties uniformly failed to provide the required notice to either Indemnitor Plaintiffs or the bonded immigrants, then Indemnitor Plaintiffs may recover what they paid to receive a service, i.e. notice, that was not provided. (Doc. 139). However, genuine issues of material fact exist regarding whether any Bonding Defendant provided the required notice.
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B. Motion to Decertify 1. Standard of Review
Bonding Defendants move to decertify the Surety Bond Classes, claiming that developments in Fifth Circuit law and evidentiary developments in the case since the issuance of the Court’s class certification order require reexamination of that order. (Doc. 249). Federal Rule of Civil Procedure 23(c)(1)(C) provides that “[a]n order that grants or denies class certification may be altered or amended before final judgment.” Pursuant to this rule, the district court “remains free to modify [a class certification order] in the light of subsequent developments in the litigation.” Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160 (1982). The Fifth Circuit has more specifically directed that
[u]nder Rule 23 the district court is charged with the duty of monitoring its class decisions in light of the evidentiary development of the case. The district judge must define, redefine, subclass, and decertify as appropriate in response to the progression of the case from assertion to facts. Richardson v. Byrd, 709 F.2d 1016, 1019 (5th Cir. 1983). 2. Legal Developments Bonding Defendants first attempt to argue that two recent Fifth Circuit decisions require the Court to again evaluate its decision to certify the Surety Bond Classes. (Doc. 249). According to Defendants, the decisions in Oscar Private Equity Invs. v. Allegiance Telecom, Inc., 487 F.3d 261 (5th Cir. 2007) and Luskin v. Intervoice-Brite, Inc., 261 Fed.Appx. 697 (5th Cir. 2008), both issued after the Court’s certification order, clarified that a party seeking certification must establish all requirements for class certification by a preponderance of the evidence even if those requirements bear on the merits of the case. Id. Oscar and Luskin, both securities fraud cases, held that a court may not rely upon the “fraud-on-the market” theory to presume that each class member has satisfied the reliance
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element of his claim for the purpose of determining whether common issues predominate. Oscar, 487 F.3d at 264; accord Luskin, 261 Fed.Appx. at 700-01. Rather, the court must determine that this “loss causation” element of each class member’s substantive claim has been shown by a preponderance of the evidence in order to find that the “predominance” requirement of Federal Rule of Civil Procedure 23(b)(3) has been met. See id. Defendants maintain that these cases stand for the proposition that a district court must hold a party seeking certification to its burden regardless of whether the carrying of that burden implicates the merits of the case. (Doc. 249). However, the Court already recognized in its certification order that Plaintiffs bear the burden of establishing all of the applicable Rule 23 requirements. (Doc. 139 at p. 3). Defendants do not argue that the Court excepted Plaintiffs from this burden to avoid reaching the merits of the case. (Doc. 249). 3. Evidentiary Developments
The remainder of Bonding Defendants’ motion to decertify consists of arguments related to the establishment of the “predominance” requirement—that is, the requirement under Rule 23 that “questions of law or fact common to class members predominate over any questions affecting only individual members.” FED. R. CIV. P. 23(b)(3). Defendants claim that evidentiary developments in the case now mandate decertification of the Surety Bond Classes for failure to meet this requirement. (Doc. 249).
“The predominance inquiry requires a court to consider ‘how a trial on the merits would be conducted if a class were certified.’” E.g., Gene & Gene LLC v. BioPay LLC, 541 F.3d 318, 326 (5th Cir. 2008)(quoting Bell Atl. Corp. v. AT&T Corp., 339 F.3d 294, 302 (5th Cir. 2003)). “This, in turn, ‘entails identifying the substantive issues that will
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Case 7:05-cv-00331 Document 281 Filed in TXSD on 10/30/08 Page 8 of 9
control the outcome, assessing which issues predominate, and then determining whether the issues are common to the class, a process that ultimately prevents the class from degenerating into a series of individual trials.’” Id. Although similar to the “commonality” requirement of Rule 23(a)(2), the predominance requirement is “‘far more demanding’” because it “‘tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation.’” Id. (quoting Anchem Prods., Inc. v. Windsor, 521 U.S. 591, 623-24 (1997)).
Given the above, a determination of whether the predominance requirement has been met requires an examination of the underlying cause of action. Again, the breach of contract cause of action asserted by each Surety Bond Class consists of the following elements: (1) the existence of a valid contract between the parties; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the defendant’s breach.7 Upon review of Defendants’ motion and the parties’ briefing and evidence (Docs. 249, 269), the Court finds that many of the individual issues raised by Defendants appear to be irrelevant to the establishment of the elements of Plaintiffs’ causes of action. Moreover, to the extent that the issues raised by Defendants are relevant, they do not render trial on a class-wide basis unworkable at this time. However, the Court may alter or amend its certification decision at any time before judgment. Therefore, should the evidence at trial demonstrate that individual issues relevant to Plaintiffs’ causes of action predominate, the Court may reevaluate its certification decision at that time. See In re Mounce, 390 B.R. 233, 256 (Bankr. W.D.Tex. 2008)(citing FED. R. CIV. P. 23(c)(1)(C)).
7 For purposes of clarification, the Court notes that the Bonded Immigrant Class seeks equitable relief to prevent the breach and damages elements of this cause of action.
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Case 7:05-cv-00331 Document 281 Filed in TXSD on 10/30/08 Page 9 of 9 III. Conclusion
For the foregoing reasons, it is hereby ORDERED that Plaintiff Sandoval’s Motions for Summary Judgment (Docs. 179, 180) and Bonding Defendants’ Motion to Decertify (Doc. 249) are hereby DENIED.
SO ORDERED this 30th day of October, 2008, at McAllen, Texas. ___________________________________ Randy Crane United States District Judge
9 / 9

 
 Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 1 of 44

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS
McALLEN DIVISION

ARACELY ZAMORA-GARCIA, eta!.,

)

in their own name and right, and on

)

behalfofall others similarly situated,

)

Petitioners/Plaintiffs,

)

)

v.

)

)

MARC MOORE, DISTRICT

)

DIRECTOR FOR INlERIOR

)

ENFORCEMEN~DEPARTMENTOF

)

HOMELAND SECURITY, eta!.,

)

__R_e_sp_on_de_nt_s!D_e_fe_nd_an_ls_. __________

)
)

C.A. No. M-05-331

AGREEMENT OF SETTLEMENT This agreement of settlement is entered into between: (I) Irma Sandoval-Valencia, Dominica Rodriguez, and Deanna Arevalo ("Indemnitor Plaintiffs''), individually and on behalf of the Indemnitor Notice Class (defmed herein), and Fairmont Specialty Insurance Company ("Fainnont"), Stonington Insurance Company ("Stonington''), and Michael Padilla, in his capacity as the Independent Adrninisn11tor of the Estate of Don Varmerson (the "Varmerson Estate'') (collectively, "Defendants"); and (2) Petra Carranza de Salinas ("Ms. de Salinas''), individually and on behalf of the Bonded Immigrant Class (defined herein) and Defendanls. WHEREAS: A. All capitalized words or terms not otherwise defmed herein shall have the meaning for those words or tenns as set forth in the section below entitled "Definitions";

,
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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 2 of 44
B. By Orders dated April 25. 2007, and October 30, 2008, the Honorable Randy Crane of the United States District Court for the Southern District of Texas (the "Court") appointed the Indemnitor Plaintiffs to serve as representatives of the Indemnitor Notice Class;
C. By Order dated April25, 2007, the Court appointed Ms. de Salinas to serve as the representative ofthe Bonded Immigrant Class;
D. By Order dated April25, 2007, the Court appointed Class Counsel (defined herein) to represent the Inderunitor Notice Class and the Bonded Immigrant Class;
E. The Sixth Amended Petition for Writ of Habeas Corpus and Class Action Complaint ("Sixth Amended Complaint") and the Complaint in Intervention on file in this case assert claims against Defendants;
F. Defendants, Fairmont and Stonington's, First Amended Answer and Counterclaims to Plaintiffs' Sixth Amended Petition for Writ of Habeas Corpus and Class Action Complaint ("Defendants' Answef') asserts counterclaims against Irma SandovalValencia;
G. Class Counsel and Defense Cmmsel have engaged in arms-length negotiations to resolve the claims of the Class Representatives against Defendants, and to resolve the certified claims of the Indemnitor Notice Class and the Bonded Inunigrant
Class against Defendants, and the counterclaims against Ms. Sandoval-Valencia, and have
now a,greed to settle those claims on terms that include financial and non-financial benefits to both classes, as set forth herein;
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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 3 of 44
H. Based upon their independent investigation, the discovery in this case, the relevant substantive law, and the rulings of the Court, Class Connsel and the Indemnitor Plaintiffs have concluded that the terms and conditions of this Settlement Agreement are fair, reasonable, and adequate to the Indemnitor Plaintiffs and the Indemnitor Notice Class, and they have agreed to settle their individual claims and the certified claims of the Indemnitor Notice Class;
I. Based upon their independent investigation, the discovery in this case, the relevant substantive law, and the rulings of the Court, Class Connsel and Ms. de Salinas have concluded that the tenus and conditions of this Settlement Agreement are fair, reasonable, and adequate to Ms. de Salinas and the Bonded Immigrant Class, and they have agreed to settle Ms. de Salinas' individual claims and the certified claims of the Bonded Immigrant Class;
J. The determinations by the Class Representatives and Class Counsel that the terms and conditions ofthis Settlement Agreement are fair, reasonable, and adequate to the Indemnitor Notice Class and the Bonded Immigrant Class are based on: (a) the substantial benefits that the classes will receive from the Settlement; (b) the attendant risks of litigation; and (c) their desire that the Settlement to be consnnnnated as provided by the terms ofthis Settlement Agreement; and
K. Defendants, on their own behalf and their respective parents, subsidiaries and/or affiliates, deny that they have breached any contractual obligation, violated any law, or engaged in any wrongful conduc~ and are entering this Settlement Agreement to avoid the burden, expense, and risk offurther litigation.
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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 4 of 44
NOW THEREFORE, without any concession by the Class Representatives and Class Counsel tlmt the claims raised in the Sixth Amended Complaint and the Complaint in Intervention lacked meri~ or that the counterclaim against Ms. Sandoval-Valencia had merit, and without any concession by Defendants of any liability or wrongdoing or lack of merit in their defenses, or that the counterclaim against Ms. Sandoval-Valencia lacked merit, it is hereby AGREED, by and among the Parties to this Settlement Agreemen~ through their respective attorneys, subject to approval by the Court pUIBuant to Rule 23(e) of the Federal Rules of Civil Procedure, in consideration of the benefits flowing to the Parties hereto, that all Settled Claims against Defendants shall be compromised, seltled, released and dismissed with prejudice, and without costs, upon and subject to the followh1g terms and conditions: I. DEFINITIONS
As used hereinafler in this Settlement Agreemen~ the following terms shall have the following meanings:
A. "Aaron Bonding" means Aaron Federal Bonding Agency, a business name for Don Vannerson.
B. "Additional Notice and Administration Expenses" means any Notice and Administration Expenses incurred that exceed $25,000.00.
C. "Approved Claimant" means an Indemnitor Class Member whose claim is approved pursuant to the process described in Section IX.
D. "Bonded Immigrant Class" means all persons who fit within the Court's definition ofthe Bonded Immigrant Class, set forth in its April25, 2007, Order:
4

Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 5 of 44
(a) those who have been released from custody of the Federal Defendants pursuant to surety bonds posted by the Bonding Defendants, and (b) and where the bond is still outstanding. E. "Bonding Defendant" includes Aaron Bonding, Fainnont, and Stonington, as well as their respective parents, subsidiaries, affiliates, agents, employees past and present, and future, including Michael Padilla. F. "Claims Administrator" means the finn to be retained jointly by Defense Counsel and Class Counsel, subject to Court approval, which shall process Claims Forms and otherwise assist in administering the Net Indemnitor Fund. G. "Claims Form" means the form which Indemnitor Class Members shall be required to complete and return to the Claims Administrator in order to substantiate their entitlement to a payment out of the Indemnitor Fund. A copy of the Claims Fonn is attached hereto as Exhibit I and is to be mailed along with the Indemnitor Notice and the Opt-Out Fonn to the Indemnitor Class Members. H. "Class Counsel" means Diamond McCarthy LLP ("Diamond McCarthy"), Kozyak Tropin and ThrockmoriOn P.A. ("KTT'), and Lisa S. Brodyaga. I. "Class Counsel's Fees and Expenses" means the amount of fees and expenses, if any, approved by tl1e Court and/or any appellate court for payment to Class Counsel, up to $1,700,000.00 (one million and seven-hundred thousand dollars).
J. "Class Representatives" means the Indemnitor PlaintiffS and Ms. de Salinas. K. "Deadline for Submission of Claims Forms" means: postmarked 90 days
after, and received 100 days after, the Mailing of Notice of Proposed Settlement and Claims Forms.
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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 6 of 44
L. "Defendants" has the meaning set forth above, and it specifically does not include the Federal Defendants to this action and Santiago Sol.
M. "Defense Counsel" means Wright Brown & Close, LLP, Irelan Hargis, PLLC, and Atlas & Hall, LLP.
N. "Effective Date" means the date upon which Final Settlement Approval
occurs.
0. "Fees and Expenses Approval Date" means the later of the Effective Date or the date on which the Court approves Class Counsel's Fees and Expenses, if any, or any appellate court approves Class Counsel's Fees and Expenses, whichever is later, and the time for any appeal of the last order addressing Class Counsel's Fees and Expenses has expired.
P. "Immigrant Class Members" means any member ofthe Bonded Immigrant Class.
Q. "Immigrant Equitable Relief' means Defendants' agreement to provide notice of their receipt of a Notice to Obligor to Deliver Alien for Deportation to the members ofthe Bonded Immigrant Class who request such notice, as described in Section XII.
R. "Immigrant Fund" means the $125,000.00 (one hundred and twenty-five thousand dollars) Defendants will contribute to the Immigrant Fund Cy Pres Beneficiaries as provided in Section II.
S. The "Immigrant Fund Cy Pres Beneficiaries" are named in § XIII and will receive payments as set forth in that section.
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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 7 of 44
T. The "Immigrant Notice" is the Notice of Proposed Settlemen~ Motion for Attorneys' Fees, Motion for Service Awards, and Fairness Hearing, to be mailed to the Inunigrant Class Members, attached hereto as Exhibit 2.
U. "Indenmitor Class Member" means any person who is a member of the
Indemnitor Notice Class and who does not opt out from the Indemnitor Notice Class. V. "Indemnitor Debt Reduction" means the $2,000,000.00 (two million
dollars) reduction of the total amount of debt allegedly owed by the Indemnitor Notice Class to the Defendants for indemnity payments on breached bonds.
W. The "Indemnitor Disbmsements Approval Date" means the date on which the list ofApproved Claims is finalized, as set forth in § IX.G.l2.
X. "Indemnitor Fund" means the $1,450,000.00 (one million and four-hundred and fifty thousand dollars) Defendants will pay into the Indemnitor Fund Account as provided in Section II.
Y. "Indemnitor Fund Account" means the account maintained by Fainnont into which the Indemnitor Fund shall be deposited. This account shall be maintained by Fairmont separately from any other accounts Faiimont may have, and Class Counsel will have the ability to review the status of the account (although not the ability to transfer funds into or out ofthe account, or otherwise manage the account).
Z. The "Indemnitor Fund Cy Pres Beneficiaries" are named in § XI.B and may receive payments as set forth in that section.
AA. The "Indemnitor Notice" is the Notice of Proposed Settlemen~ Motion for Attomeys' Fees, Motion for Service Awards, and Fairness Hearing, attached hereto as
7

Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 8 of 44
Exhibit 3 and to be mailed to the Indemnitor Class Members along with the Opt-Out Form and the Claims Form.
BB. "Indemnitor Notice Class" means all persons who fit within the Court's definition of the Indemnitor Notice Class, set forth in its April25, 2007, Order:
(a) Those who served or are serving as Indemnitors on a surety bond posted by a Bonding Defendant to secure the release of a Bonded Inunigrant detained by the Federal Defendants, and (b) who have fully paid their upfron~ non-reimbursable fees to the Bonding Defendants pursuant to the terms of the bonding contracts, and (c) where the Bonding Defendant's records indicate that on or after Aprill6, 1998, it received a "Notice to Obligor to Deliver Alien" indicating that the INSIDHS had scheduled an appearance for the Bonded Immigran~ and where the Bonding Defendant did not provide notice of the requested appearance for deportation to either the Indemnitor or the Bonded Immigrant. CC. "INS" refers to the Immigration and Naturalization Service and its successor in relevant respects, the Department ofHomeland Security ("DHS"). DD. "Master" means the Court's Magistrate Judge or Master appointed by the Court. EE. ''Net Indemnitor Fund" means the Indemnitor Fund less (i) any Service Awards; and (ii) any Additional Notice and Administration Expenses. FF. "Notice and Administration Expenses" means all expenses incurred in the translation of the Notice and Claims Form into Spanish; the physical preparation and printing ofthe Notice and Claims Form; providing notice to the members of the Indemnitor Notice Class by mail; and all expenses incurred by the Claims Administrator, including in receiving and reviewing Claims Forms, in making those Claims Forms available to Class
8

Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 9 of 44
Counsel and counsel for Defendants, and in corresponding with any Indemnitor Class Members. ''Notice and Administration Expenses" do not include any attorney's fees.
GG. ''Notice and Preliminary Approval Order'' means the order preliminarily approving tl1e Settlement and directing notice to the Indemnitor Notice Class and the Bonded Immigrant Class ofthe Settlement.
HH ''Notice Option Letters" means those letters Defendants will send to pe1~ons who are members ofthe Bonded Immigrant Class as ofNovember 3, 2008, providing tl1em with the option ofreceiving notice ofDefendants' receipt of a Notice to Obligor to Deliver Alien for Deportation.
II. The "Opt Out Form" means the Opt-Out Form attached hereto as Exhibit 4 and to be mailed to the Indemnitor Class Members along with the Indemnitor Notice and the Claims Form.
JJ. "Released Parties" means Defendants and Inna Sandoval-Valencia. KK. "Service Awards" means any awards made by the Court, and/or any appellate cowt, in recognition ofthe Class Representatives' service as class representatives, the risk they incurred in serving as class representatives, and the need to provide incentive to persons to serve as class representatives. Any such Service Awards will not exceed $10,000.00 per Class Representative. LL. The "Service Awards Approval Date" means tl1e date on which the Coutt and/or any appellate coutt approves any Service Awards to the Class Representatives, if any, and the time for any appeal ofthe last order addressing Service Awards has expired.
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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 10 of 44
MM. "Settled Claims" means: (1) all claims of the Class Representatives, whether known or unknown, against Defendants, (2) all claims of the Indenmitor Notice Class certified by the Court, and (3) all claims of the Bonded Imntigrant Class certified by the Court.
NN. "Zamora Action" means Aracely Zamora-Garcia v. Moore, No. 05-331 (S.D. Tex.), pending in the United States District Court for the Southern District ofTexas. II. THE SETTLEMENT CONSIDERATION
A. In full settlement of the Settled Claims of the Indenmitor Plaintif!S and tl1e Indenmitor Notice Class, Defendants shall:
(l) create tl1e $I,450,000.00 (one million and four-hundred fifty thousand dollars) Indemnitor Fund, from which:
(a) Approved Claimants may seek a monetary award, (b) any Additional Notice and Administration Expenses will be
paid, (c) a payment of up to $200,000.00 (two hundred thousand
dollars) to the Indemnitor Fund Cy Pres Beneficiaries may be made, and
(d) any Service Awards to the Class Representatives will be
paid; and (2) provide the $2,000,000.00 (two million dollars) Indemnitor Debt
Reduction; and (3) pay Class Counsel's Fees and Expenses up to $1,700,000.00 (one
million and seven-hundred thousand dollars). This amount is separate from the $1,575,000.00 (one million five-hundred seventyfive thousand dollars) million settlement funds for both classes provided by this Settlement Agreement and from the payment of up
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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 11 of 44

to $25, 000 (twenty-five thousand dollars) for notice and claim administration expenses.

The payment obligations under this paragraph are joint and several an10ng the

Defendants. Upon payment by any Defendant, all other Defendants will be released from

any and all payments.

B. In full settlement of the Settled Claims of the Bonded Immigrant Class and

ce1tified by the Court, and of all claims Ms. de Salinas brought or may have brought

(whether known or unknown), Defendants shall:

(I) pay $125,000.00 (one hundred twenty-five thousand dollars) to the Immigrant Fund Cy Pres Beneficiaries, as directed in §XIII;
(2) provide the Immigrant Equitable Relief, as directed in§ XII; and
(3) pay Class Counsel's Fees and Expenses up to $1,700,000.00 (one million seven-hundred thousand dollms), as allowed by the Court. This amollllt covers settlement for both classes. The total amount of attorney's fees and expenses to be paid in this settlement shall, in no event, exceed, $1,700,000.00 (one million seven-hundred thousand dollms).
The obligations under this paragraph are joint and several mnong the Defendants. Upon

payment by any Defendant, all other Defendants will be released from any and all

payments. C.

Swnmary Schedule ofPayments and Other Consideration:

I. Within ten business days after the Effective Date, Defendants will:

(a) fund the Indemnitor Fund (see§ XVI); (b) provide the Indemnitor Debt Reduction (see

§X); (c) make the $125,000.00 (one hundred twenty-five thousand dollms) payments to

the Immigrant Fund Cy Pres Beneficiaries (see § XIII) and (d) send the Notice Option

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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 12 of 44
Letters to the members of the Bonded Immigrant Class; and thereafter provide notice of their receipt of a Notice to Obligor to Deliver Alien to Immigrant Class Membet' who request notice (see § XII).
2. Within ten business days after the Service Awards Approval Date, Defendants will pay any Service Awards approved by the Court (see § VJI). These payments will be made from the Indemnitor Fund and are not to exceed $10,000.00 (ten thousand dollars) per Class Representative. Within ten business days of the Indemnitor Disbursements Approval Date, Defendants will: (I) pay the Approved Claims out of the Indemnitor Fund (see § IX); (2) make the agreed payments, if any, to the Indemnitor Fund Cy Pres Beneficiaries out of the Indemnitor Fund (see §XI); and (3) pay any Additional Notice and Claims Administration Expenses out of the Indemnitor Fund (see § IX). Any monies remaining in the Indemnitor Fund after these payments will become the sole property of Defendants, unencumbered by any claim of Class Counsel, the Class Representatives, the Indemnitor Notice Class, or the Bonded Immigrant Class or any obligation imposed by this Settlement Agreement.
3. Until all Notice and Claims Administration Expenses and Additional Notice and Claims Administration Expenses are paid, Defendants will be responsible for making those payments as they come due.
4. Within ten business days of the Fees and Expenses Approval Date, Defendants will pay Class Counsel's Fees and Expenses, as allowed by the Court, and, in no event, shall exceed $1,700,000.00 (one ntillion seven-hundred thousand dollars). This
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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 13 of 44
payment will not be made from either the Indemnitor Fund, or the Immigrant Fund and Defendants will make such payment directly to Class Counsel as set forth in section VII (B) infra.
ill. RELEASES A. The obligations incnrred pursnant to this Settlement Agreement are in full and fmal disposition of the Settled Claims and the counterclaim against Ms. SandovalValencia. B. As of the Effective Date, the Class Representatives, the Indemnitor Notice Class Members, and the Bonded Immigrant Class, and each oftl1eir respective successors, heirs, executors, trustees, and administrators, by operation ofthe Final Judgment and Order of Dismissal, do release and forever discharge each and every Settled Claim, as against each and every Bonding Defendant, and shall forever be barred and enjoined from commencing, instituting or maintaining any of the Settled Claims against any of the Defendants. C. As of the Effective Date, Defendants, on behalf ofthemselves and each and every of the Defendants, and each of their respective successors, parents, subsidiaries, affiliates, heirs, executors, trustees, and administrators, by operation of the Finai Judgment and Order of Dismissal, do release and forever discharge Ms. Sandoval-Valencia of the counterclaim brought against her and shall forever be barred and enjoined from commencing, instituting or maintaining any claim against her relating to any alleged failure to make indemnity payments.
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IV. PRELIMINARY APPROVAL By November 17, 2008, Class Cotmsel and counsel for Defendants shall apply to
the Court for an Order ofPreliminary Approval that will: A. Preliminarily approve this Settlement Agreement as sufficiently fair and
reasonable as to wanant sending the Immigrant Notice to the Immignmt Class Members and sending tl1e Indemnitor Notice, the Opt-Out Form, and the Claims Form to the Indemnitor Class Members;
B. Schedule tl1e Fairness Hearing to be held on such date as the Court may direct to consider the fairness, reasonableness, and adequacy of the proposed Settlement and whether it should be approved by the Court;
C. Require each Indemnitor Class Member who wishes to object to the fairness, reasonableness or adequacy of this Settlement Agreement to deliver to Class Cotmsel and Defense Counsel and to file with the Court by the date specified in the Notice of Proposed Settlement, which will be no less than 21 days before the Fairness Hearing, or at such other time as the Court may direct, a statement of such objection, as well as the specific reasons for each objection, including any legal support tl1e Indemnitor Class Member wishes to introduce in support of each such objection, or be forever barred from objecting. The Indemnitor Class Members will also have an opportunity to "opt" out of the
class by submitting an Opt-Out Form to the Claims Administrator 21 days before the
Fairness Hearing. D. Require any Indemnitor Class Member or Immignmt Class Member who
files and serves a written objection and who intends to make an appearance at the Fairness
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Hearing, either in person or through counsel at that Class Member's expense, to deliver to Class Counsel and Defense Counsel and file with the Court by the date specified in the Indemnitor Notice and the Immigrant Notice, which will be no less than 14 days before the Fairness Hearing, or as the Court may othenvise direct, a notice ofintention to appear and a statement identifying any documents the Class Member will seek to intrnduce or witnesses the Class Member will seek to call at the Fairness Hearing;
E. Direct Class Counsel and Defense Counsel to promptly fbmish each other with copies of any and all objections to the Settlement Agreement that might come into their possessions and that are not filed with the Court;
F. Find that the Immigrant Notice, the Notice Option Letters, the Indemnitor Notice, the Opt-Out Form, and the Claims Form and the notice methndology implemented pursuant to the Settlement Agreement to distribute these documents constitutes notice that is reasonably calculated, under the circumstances, to apprise the Indemnitor Class Members and the Immigrant Class Members of the tenus of the Settlement Agreement, their right to object or to opt out from the proposed Settlement Agreement, and their right to appear at the Fairness Hearing, and that the Immigrant Notice, the Notice Option Letters, the Indemnitor Notice, the Opt-Out Fonn, and the Claims Form and the notice methodology met all applicable requirements of the Federal Rules of Civil Procedure and the United States Constib.Ition;
G. Approve the retention of the Claims Administrator; H. Direct Defendants to proceed with the Notice Program, detailed herein, no less than 56 days before the Fairness Hearing; and
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I. Direct Class Counsel to cause the Immigrant Notice, the Indemnitor Notice, the Chillns Form, and the Opt-Out Form to be posted on the Class Website (www.INSBondclassaction.com) no later than 56 days before the Fairness Hearing. V. NOTICE TO CLASS MEMBERS OF PROPOSED SETTLEMENT AND
DISTRIBUTION OF CLAIMS FORM A The Claims Administrator will send the following notices and forms to the
Indemnitor Class Members in English and Spanish: • The Indemnitor Notice, attached hereto as Exhibit 3; • The Opt-Out Fonn, attached hereto as Exhibit 4 and • The Claims Fonn, attahced hereto as Exhibit I. B. The Claims Administrator will send the Immigrant Notice to the Immigrant
Class Members in English and Spanish. C. The forms of the documents refurred to in subsections A and B have been
agreed to by the parties. After preliminary approval of the Settlement Agreement, Defendants will have official Spanish translations of these docwnents prepared.
D. These documents have blanks for dates that will depend on the date set by the Court for the Fairness Hearing. Defendants will complete the Immigrant Notice, the Indemnitor Notice, the Claims Form, and the Opt-Out Form, with the addition of the dates derived from the date for the Falmess Hearing as set by the Court. The dates to be set are as follows:
• Fairness Hearing • Deadline for Notice of Appearance by Objecting Class Member or Class
Member's Counsel: 14 days prior to Fairness Hearing
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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 17 of 44
o Deadline for Objections to Settlement Agreement or opting out of the class: 21
days prior to Fairness Hearing o Deadline for Mailing Notices, Claims Fonns, and Opt-Out Forms: 56 days
prior to Faitness Hearing o Deadline for Submission of Claims Forms: postmarked 90 days after, and
received 100 days after, the Mailing of Notice of Proposed Settlement and Claims Forms E. No later than 56 days before the Fairness Hearing, the Claims Administrator will send a copy of the Indemnitor Notice, the Opt-Out Fonn, and the Claims Form, in English and Spanish, via U.S. Mail to each Indemnitor Class Member at the last known address as found in Defendants' records, for each Indemnitor Class Members. No later than 56 days before the Fairness Hearing, the Claims Administrator will send a copy of the Immigrant Notice, in English and Spanish, via U.S. Mail to each Immigrant Class Member at the last known address, as found in Defendants' records, for each hnmigrant Class Member. No later than 56 days before the Fairness Hearing, Class Counsel will post a copy of the Notice of Proposed Settlement and the Claims Fonn, in English and Spanish, on the Class Website (www.INSBondclassaction.com). F. No party or lawyer will engage in any public communication to encourage or discourage the making ofclaims other than as set forth in the notice: provided however, notwithstanding anything to tl1e contrary if the class counsel are contacted by the class members they are free to assist them in any way they feel appropriate. VI. CLAIMS ADMINISTRATOR A. Subject to approval by the Court, the parties have agreed that they will retain _ _ _ _ _ _.as a neutral Claims Administrator.
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B. The Claims Administrator may assist with various administrative tasks, including, without limitation: (I) mailing the Immigrant Notice, the Indemnitor Notice, the Claims Fonns, and the Opt-Out Fonn; (2) handling returned mail not delivered to Class Members; (3) forwarding written inquiries from Class Members to Class Counsel or their designee(s); (4) receiving and retaining any correspondence from Class Members; (5) receivh1g and maintaining Claims Fonns from Indemnitor Class Members; (6) making available to Class Counsel and Defense Counsel copies of Claims Fonns and correspondence received from Indemnitor Class Members; and (7) reviewing Claims Fonns to make an initial detennination as to whether the claim should be an Approved Claim and the amount ofcompensation the claimant should receive. VII. ATTORNEYS' FEES AND EXPENSES AND SERVICE AWARDS
A Class Counsel shall apply to the Court for an award of attomeys' fees and expenses in the amount of $1,700,000.00 (one million seven-hundred thousand dollars). Class Counsel shall make tl1eir application at least 30 days in advance of the Fairness Hearing. After arms-length negotiations, Defendants have agreed to pay, subject to Cmnt approval, Class Counsel's fees and expenses up to $1,700,000.00 (one million sevenhundred thousand dollars). Any award of attorneys' fees and expenses will not be paid from the Indemnitor Fund or the Immigrant Fund.
B. Defendants will pay the Attorneys' Fees and Expenses awarded by the Court by wire transfer, to the following account:
AmegyBank ofTexas Houston, TX 77002 ABA# 113011258
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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 19 of 44

FOR TilE BENEFIT OF:

Diamond McCarthy LLP IOLTA Client Trust Account Two Houston Center 909 Fannin; Suite 1500 Houston, TX 77010

Account# 0000166073

C. Defendants will pay the Attomeys' Fees and Expenses awarded by the

Court within ten business days after the Fees and Expenses Approval Date.

D. Class Counsel will share the attomeys' fees and expenses with the Law

Offices of Christopher Nolland (''Nolland"), who served as settlement counsel in this

litigation and negotiated this Settlement Agreement on behalf oftl1e Class Representatives,

the Indemnitor Notice Class, and the Bonded Immigrant Class. Class Counsel will

distribute any payment of attorneys' fees and expenses among themselves and Nolland as

follows:

1. Class Counsel's expenses will be paid first out of Class Counsel's

Fees and Expenses. As of November 14, 2008, Class Counsel had incurred expenses

(including expenses incurred hiring temporary workers to review files) totaling $482,358

($401,367 by Diamond McCarthy; $79,967 by KTT; and $811 by LisaBrodyaga).

2. From the amount of Class Counsel's Fees and Expenses remaining

after accounting for expenses (presently $1,217,856), 5% (presently $60,893) will be paid

to Nolland and $25,000.00 to Ms. Brodyaga.

3. l11e amount remaining after the preceding reductions (presently

$1,131,963) will be split between Diamond McCarthy and KTT based on the an1ount of

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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 20 of 44
fees each has incurred. As of November 14, 2008, Diamond McCarthy has incurred $1,461,863 in fees, and KIT has incurred $173,004.80 in fees. Under the current fees incurred, Diamond McCarthy would receive 89.42% of the amount remaining in fees (or $1,012,201), and KTT would receive 10.58% (or $119,762).
4. Although the methodology described above will not change, the amounts may change as additional expenses and fees are incurred.
E. The Class Representatives will apply for Service Awards in the amount of $10,000.00 (ten thousand dollars) each. Defendants will not oppose the application for Service Awards so long as the Class Representatives do not seek more than $10,000.00 each. The Class Representatives will make their application at least 30 days in advance of the Fairness Hearing. These awards will be paid out of the Indemnitor Fund.
F. Defendants will pay the Service Awards by check made out to the
recipients and mailed to the recipients c/o Class Counsel at the address below:
J. Benjamin King Diamond McCarthy LLP 1201 Ehn St., Suite 3400 Dallas, TX 75270 G. Defendants will pay the Service Awards within ten business days after the Service Awards Approval Date. TI1e obligation to make the payments of the Service Awards is a joint and several obligation of the Defendsnts. Upon payment by any Defendant, all other Defendsnts will be released from any other payments of Service Awards.
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Vill OBJECTIONS TO THE PROPOSED SETTLEMENT AGREEMENT AND TO REQUESTS FOR ATTORNEYS' FEES AND EXPENSES AND SERVICE AWARDS A. Any Class Member who wishes to object to the fairness, reasonableness or
adequacy of this Settlement Agreement, or to Class Counsel's Motion for Attorneys' Fees and Expenses, or to the Class Representatives' Motion for Service Awards mus~ by the date specified in the Immigrant Notice and the Indemnitor Notice (which will be no later than 21 days before the Fairness Hearing or such other time as the Court may direct) deliver to Class Counsel and Defense Counsel and file witl1 the Court a statement of such objection, as well as the specific reasons for each objection, including any legal support the Class Member wishes to bring to the Court's attention or any evidence the Class Member wishes to introduce in support of each such objection. Class Members may object on their own or through counsel hired at their own expense. Indemnitor Class Members also have the option to opt out ofthe class settlement.
B. Any Class Member who files and serves a written objection and who intends to make an appearance at the Fairness Hearing, either in person or through counsel at that Class Member's expense, must deliver to Class Counsel and Defense Counsel and file with the Court by the date specified in tl1e Notice of Proposed Settlemen~ which will be no later than 14 days before the Fairness Hearing, or as the Court may otherwise direct, a notice of intention to appear and a statement identifying any documents the Class Member will seek to introduce or witnesses the Class Member will seek to call at the Fairness Hearing.
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C. Any Class Member who fails to comply with subsections A and B of this § VIII shall waive and forfeit any and all rights that Class Member may have to appear separately or object, or to take any appeal of tl1e orders ofjudgment in this action, and shall be bound by all terms of this Settlement Agreement, should fuere be a Final Settlement Approval.
D. Class Counsel and Defense Counsel will promptly furnish each oilier wifu copies of any and all objections to fue Settlement Agreement that might come into their possessions and fuat are not filed wifu fue Court. IX. CLAIMS PROCESS
A. As noted above, Defendants will mail a copy of tl1e Claims Form, in English and Spanish, along wifu fue Indemnitor Notice and fue Opt-Out Form, to fue Indemnitor Class Members no later fuan 56 days prior to fue Painless Hearing. Defendants will also include a pre-addressed, postage-prepaid envelope that fue Indemnitor Class Members may use to return fueir Claims Forms or Opt-Out Forms.
B. All Indemnitor Class Members who wish to claim any portion of fue recovery under this Settlement Agreement must retum a Claims Fonn by the Deadline for Submission of Claims Any Indemnitor Class Member who fails to timely submit a valid Proof of Claim will not be entitled to receive any of the proceeds of the Net Indemnitor Fund but will be ofuerwise bound by the terms of the Settlement Agreemen~ including the
terms ofany Final Judgment and Order of Dismissal entered in the Zamora Action and the
releases provided for herein, and will be barred from bringing any action against Defendants conceming the Settled Claims, unless that Indemnitor Class Member opts out.
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C. The Notice ofProposed Settlement, the Claims Form, and the pre-addressed envelope will encourage the Indemnitor Class Members to return the Claims Forrn to the Claims Administrator. However, ifan Indemnitor Class Member returns a Claims Form to Class Counsel, Class Counsel will forward that Claims Form to tl1e Claims Administrator, which will treat the Claims Form as if it were sent to the Claims Administrator by the Indemnitor Class Member as ofthe date received by tl1e Class Counsel.
D. The following persons will be eligible to receive an award: l. Persons who were indemnitors on bonds posted by Aaron Bonding;
and 2. Where the up-front fees on the bonding contract were paid in full;
and 3. Where the Defendants' records indicate that on or after April 16,
1998, and on or before November 3, 2008, any of the Defendants received a "Notice to Obligor to Deliver Alien" (I-340) indicating that the INS/DHS had scheduled an appearance for deportation for the immigrant on the bond.
E. In detennining which claimants are eligible, the following apply: I. Class Counsel will provide Defense Counsel and the Claims
Administrator with spreadsheets that are agreed to by the parties and that set forth the nan1es ofthe indemnitors, the amount ofup-froot fees paid, the percentage ofthe bond paid as up-front fees, whether Aaron Bonding's files indicate that it received a Notice to Obligor to Deliver Alien for the immigrant on each bond, and the date Aaron Bonding received any such Notice to Obligor to Deliver Alien. The Claims Administrator will use these
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spreadsheets in making an initial determination as to whether a claimant is eligible. However, the underlying bond files maintained by Aaron Bonding will control the ultimate detennination of which claimants are eligible in the event of a disagreement between the parties as to eligibility.
2. To detennine tl1e amount of up-front fees charged, the following apply:
a. If, according to the spreadsheets provided by Class Counsel, the amount offees paid is equal to 40% or more ofthe bond, the Claims Administrator will assume that the fees paid were the fees charged.
b. If either party decides to look beyond the spreadsheets to determine the amount of fees charged and the amount offees paid, the following apply:
1. The prin1a1y document the parties will look to in determining the amount of up-front fees charged is the "Billing Analysis" document found in most bond files. For files in which the "Billing Analysis" document is not found, the parties will look to the percentage ofthe bond charged as a fee set forth in the "Consent to Rllte" applications, also found in most files. For files in which neither a Billing Analysis nor a Consent to Rllte docnment is found, the parties may review the file generally to determine the amount ofup-front fees charged.
11. The up-fi-ont fees charged by Aaron Bonding are separate from the processing fees charged by Aaron Bonding. l11e processing fees charged are irrelevant to the claims process.
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m. In determining whether the up-front fees were paid, the parties will look to the Western Union transfer records, the handwritten receipts in the files, and any other evidence found in the files.
3. In determining whether and when Aaron Bonding received a Notice to Obligor to Deliver Alien for deportation, the Claims Administrator will look frrst to the spreadsheets agreed to by the parties and provided by Class Counsel. If either party decides to look beyond the spreadsheets and examine the bond file with regard to whether and when Aaron Bonding received a Notice to Obligor to Deliver Alien, the party will look first for the actual Notice to Obligor to Deliver Alien. However, ifthe actual form is not in the file, the parties may consider other documents in the file which may evidence Aaron Bonding's receipt of a Notice to Obligor to Deliver Alien requiring the surrender of the immigrant for his or her deportation.
4. In detennining who is the indemnitor on a bond, the Claims Administrator will look to the spreadsheets provided by Class Counsel. If either party decides to look beyond the spreadsheets and examine the bond file with regard to who is an indemnitor on a bond, the critical inquiry is who signed the contract documents with Aaron Bonding and Fairmont or Stonington.
5. Defendants may only be required to make one award per bond. In the event that there are two indemnitors on a single bond file, and both indemnitors file claims, the parties will confer to reach an equitable determination as to which indemnitor will receive an award, and in what amount. Should the parties not be able to reach an agreement. they agree that the Court should submit this dispute to a Master.
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F. In determining the amount ofan award, the following apply: I. The Billing Analysis documents found in most files contain the
following line item: "MONITORING PROGRAM INCLUDING CHECK-INS, COURT DA1E NOTIFICATIONS, ETC." A portion of the up-front fee is attributed to this line item. That portion is known herein as the "Monitoring Fee." On files where no Billing Analysis document is found, the Monitoring Fee will be 41% ofthe up-front fee.
2. Eligible claimants on bond files where a Defendant received a Notice to Obligor to Deliver Alien for deportation between April 16, 1998, and September 30, 2001, may receive an award of20% ofthe Monitoring Fee. Eligible claimants on bond files where a Defendant received a Notice to Obligor to Deliver Alien for deportation between October I, 2001, and November 3, 2008, may receive an award of 80% of the Monitoring Fee. In the event there is no Billing Analysis sheet in a particular bond file, the parties will stipulate as to the amount as 41 % of the upfront fee paid for that particular bond.
3. The spreadsheets agreed to by the parties will also contain infonnalion regarding the amount of the Monitoring Fee on each bond file. The Claims
Administrator will refer to these spreadsheets in assessing the amount of an award. However, in the event of a dispute between the parties about the amount of an award, the
underlying bond files and not the spreadsheet will control the detennination. G. The following protocol shall apply to the claims and payment process: I. Each Indemnitor Class Member shall be required to submit a
Claims Form signed under penalty of perjury and to provide identification or evidence
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indicating that the person submitting the Claims Form IS tl1e person named as an Indemnitor Class Member in the Claims Fonn.
2. Each Indemnitor Class Member shall be required to identifY by name and other infonnation (such as birthdate, "A-number," relationship to the immigrant, etc.) regarding the irrunigrant on the bond the Indemnitor Class Member indemnified.
3. The Clainls Administrator will make available each Clainls Fonn and suppmting information to Class Counsel and Defense Cmmsel, preferably by posting such documents on a secured web site accessible to counsel.
4. 1l1e Claims Administrator will review the Claims Forms and
supporting infonnation to detennine in the first instance, in accordance with this Settlement
Agreement and infonnation regarding the IndeiTlllitor Class Members furnished by the parties, which clainls should be approved and which should be rejected.
5. Claims Form that do not meet the submission requirements may be rejected. Prior to detennining that a Clainls Fonn should be rejected, the Claims Administrator shall submit these fonns to the counsel of the respective parties for further detennination as to whether such claim can be cured or whether the claim shall be rejected.
6. Thirty (30) business days after the Deadline for Submission of Claims Forms, the Claims Administrator will submit to Class Counsel and Defense Counsel a list of claims the Claims Administrator recommends approving and a list ofclaims the Claims Administrator recommends rejecting. For the clainlants in both lists, the Claims Administrator will make an initial determination as to the amount of the clainlant's award
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in accordance with Section IX.F, should the claim ultimately be approved. These lists are

'•

referred to herein as the "Administrator's Initial Delenninations."

7. Within fifteen (15) business days of the submission of the

Administrator's Initial Determinations to the parties, either party may contact the other and

the Claims Administrator via electronic mail to note any objection to the Administrator's

Initial Detenninations. All detenninations in the Administrator's Initial Detenninations

that neither party objects to within fifteen (15) business days will be final and binding.

8. After the exchange of objections, if any, to the Administrator's

Initial Determinations, the parties will wmk in good faith to resolve the objections. If the

parties agree to alter any initial determination by the Claims Administrator, tl1e alteration

will be made. Where a claimant's Claims Form is defective, Class Counsel may attempt to

obtain more infonnation from the claimant through communication, but may not

encourage or discourage the claimant from making a claim.

10. Should Class Counsel and Defense Counsel be unable to resolve any objections to the Administrator's Initial Determinations, either party may petition the Court for the appointment of a Master who will hear the positions of both parties and mal<e a binding determination as to whether the Administrator's Initial Determination should be altered. The parties will worl< with the Master to establish a protocol that will result in an efficient resolution of the objections. If the party lodging an objection fails to petition the Court for the appoinbnent of a Master within 30 business days of the Claims Administrator's submission to the parties ofthe Administrator's Initial Determinations, the
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objection will be deemed waived and the Administrator's Initial Determination as to any such claim will be binding.
11. Within 5 business days of the resolution of any objections by either agreement of the parties or ruling by a Master, the Claims Administrator will prepare an Excel spreadsheet listing the Approved Claims, the amount of each Approved Claim, the name of the claimant, and the address to which payment should be sent. This list will be known herein as the "Approved Claims List."
12. Within 10 business days of the Claims Administrator's preparation of the Approved Claims List, the Claims Administrator will prepare an invoice for its unpaid fees and expenses and a binding estimate of fees and expenses the Claims Administrator will incur in distributing awards to the Approved Claimants. This invoice and this binding estimate will be included by the parties in their calculation of the Net Indemnitor Fund. The "Indemnitor Disbursements Approval Date" will be 10 business days from the day the Claim Administrator provides its fmal invoice and binding estimate ofremaining fees and expenses.
13. If the Net Indemnitor Fund exceeds the total mnount of Approved Claims, then within I0 bnsiness days ofthe Indemnitor Disbursements Approval Date, the Claims Administrator and Defendants will pay the full amount ofthe Approved Claims. If the total mnount of Approved Claims exceeds the Net Indemnitor Fund, the parties will reduce each Approved Claim on a pro rata basis so that the total Approved Claims equals the Net Indemnitor Fund, and the Claims Administrator and Defendants will pay tl1e
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adjusted amount of the Approved Claims within 10 business days of the Indemnitor Disbursements Approval Date.
H. Class Counsel and Defense Counsel shall be responsible for supervising the administration ofthe Settlement Agreement and disbursement ofthe Net Indemnitor Fund.
I. Class Counsel and Defense Counsel shall work together in good faith in an attempt to resolve any disputes regarding the administration of the Settlement Agreement and disbursement of the Net Indemnitor Fund. Should a dispute arise regarding the administration of the Settlement Agreement and disbursement of the Net Indemnitor Fund arise that Class Counsel and Defense Counsel crumot resolve, they will submit their dispute to a Master, to be appointed by the Court, who will resolve the dispute and whose decision will be binding on tl1e parties. X. INDEMNITOR DEBT REDUCTION
A Many of the bonds on which the Indemnitor Class Members served as indemnitors breached, and many of these persons have not paid in full the indemnity Defendants claim is owing on these bonds. As part of the consideration for the release of claims, Defendants will provide $2,000,000.00 (two million dollars) in debt reduction to the Indemnitor Class Members to be applied pro rata across to every Member. This debt reduction will be referred to herein as the "Indenmitor Debt Reduction."
B. The Indemnitor Class Members do not need to submit Claims Forms in order to receive this benefit. Defendants will provide the Indemnitor Debt Reduction regardless ofwhether an Indemnitor Class Member submits a Claims Form.
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C. Defendants will provide Class Counsel with a spreadsheet listing all of the Indemnitor Class Members, the amount of indemnity each allegedly owes absent the Indemnitor Debt Reduction, and the amount of indemnity each allegedly owes after adjustment for the Indeimiitor Debt Reduction (the "Adjusted Indemnity Obligations").
D. Ten business days after the Effective Date, Defendants may only collect indemnity payments from the Indemnitor Class Members up to each Indemnitor Class Member's Adjusted Indemnity Obligation, plus any fees, costs, or interest as may be provided by contract or by law. XI. INDEMNITOR FUND CY PRES BENEFICIARIES AND REVERSION
A. Any fi.mds remaining in the Indemnitor Fund after: (i) the payment of any Approved Claims; (ii) the payment ofany Additional Notice and Athninistration Expenses; and (iii) the payment of any Service Awards will be referred to herein as the "Indemnitor Fund Remainder."
B. Up to $200,000.00 ofany of the "Indemnitor Fund Remainder" will be paid to the Immigrant Cy Pres Fund Beneficiaries in the following way:
I. l11e first $50,000.00 (fifty-thousand dollars) ofany Indenmitor Fund Remainder will be paid to ProBar for that organization's bond fi.md.
2. The second $50,000.00 (fifty thousand dollars) of any Indemnitor Fund Renlainder will be paid to the Texas Lawyers' Committee on Hllfilan Rights.
3. The third $50,000.00 (fifty thousand dollars) of any Indemnitor Fund Remainder will be paid to. Texas Rural Legal Aid.
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4. The fourth $50,000.00 (fifty thousand dollars) of any Indemnitor Fund Remainder will be paid to Texas Catholic Charities' Texas Center for Immigrant Legal Assistance.
C. To receive the payments set forth in §XI.B, the Indemnitor Fund Cy Pres Beneficiaries must provide proof to Class Counsel and Defense Counsel of their status as non-profit organizations. Their ability to receive payments is subject to Court approval.
Should any party determine that any Indemnitor Cy Pres Fund Beneficiary should not
receive a payment for any reason, that party may petition the Court to have that Beneficiary removed, and the remaining ammmt will be allocated among the remaining Beneficiaries will be eligible for payments as if the removed Beneficiary had never been listed in this Settlement Agreement.
D. Defendants will make the payments to the Indemnitor Fund Cy Pres Beneficiaries within ten business days ofthe Indemnitor Disbursements Approval Date.
E. The "Closing Date" will be the day after the payments described in the preceding subsections ofthis § XI are made.
F. After tl1e Closing Date, any remainder in the Indemnitor Fund will revert to Defendants. XIL NOTICE TO IMMIGRANTS
A Within ten bnsiness days of the Effective Date, Defendants will send a letter, in English and Spanish (the "Notice Option Letter"), to the last known address to each Immigrant Class Member. The letter will be sent via U.S. Mail. A copy of the letter
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is attached hereto as Exhibits 5 . Defendants will include with the letter a form, attached hereto as Exhibits 6, and a pre-addressed, postage-prepaid envelope.
B. The letter will inform the Immigrant Class Member that Defendants will provide the Immigrant Class Member with notice of their receipt of a Notice to Obligor to Deliver Alien (1-340) for deportation, if the Immigrant Class Member fills out and returns the form provided.
C. For each Immigrant Class Member who elects to have notice sent, Defendants will send such notice to the Class Member within 3 business days of their receipt ofa Notice to Obligor to Deliver Alien for deportation.
D. For those Immigrant Class Members who do not elect to have notice sent. Defendants will proceed as they see fit with respect to providing notice of their receipt of a Notice to Deliver Alien for deportation.
E. Defendants will maintain records of which Immigrant Class Members request notice, which Immigrant Class Members Defendants provide with notice, and all
Notices to Obligor to Deliver Alien Defendants receive after Final Settlement Approval. Xlll. IMMIGRANTFUNDCYPRESPAYMENTS
A. Within I0 business days of the Effective Date, Defendants will make the following payments, totaling $125,000.00 (one-hundred twenty-five thousand dollars), to the Immigrant Cy Pres Beneficiary: St. Mmy's University School of Law, Clinical Education Progrmn, hnmigrant and Human Rights Clinic.
B. To receive the payments set forth in §XII.A, the Immigrant Fund Cy Pres Beneficiary must provide proof to Class Counsel and Defense Counsel of its status as a
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non-profit organization. Its eligibility to receive payments is also subject to Court approval. If the Court detennines that the hnmigrant Fund Cy Pres Beneficiary should not receive a payment for any reason, a substitute Beneficiary will be nominated by Class Counsel for approval by the Court. XN. MOTION FOR FINAL JUDGMENT AND ORDER OF DISMISSAL
If the Settlement contemplated by this Settlement Agreement is preliminarily approved by the Court, Class Counsel and Defense Counsel shall jointly request that the Court enter a Final Judgment and Order of Dismissal. Class Counsel and Defense Counsel shall request that such Final Judgment and Order ofDismissal shall:
A. Include a provision pennanently barring and enJommg the Class Representatives from filing, commencing, prosecuting or maintaining, either directly or indirectly, in any court, forum, or tribunal, any Settled Claim;
B. Include a provision permanently baning and enjoining Defendants from filing, commencing, prosecuting or maintaining, either directly or indirectly, in any cow1, forum, or tribunal, the counterclaim against Ms. Sandoval-Valencia;
C. Approve this Settlement Agreement as fair, reasonable, and adequate, and in the best interests ofthe Indenmitor Class Members;
D. Dismiss the claims of the Class Representatives, the Indemnitor Notice
Class, and the Bonded lnanigrant Class with prejudice, without fees or costs to any party except as provided in this Settlement Agreement;
E. Dismiss the counterclaim against Ms. Sandoval-Valencia with prejudice, without fees or costs to any party except as provided in this Settlement Agreement;
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F. Without affecting the fmality ofthe Final Judgment and Order ofDismissal, retain jurisdiction as to all matters relating to the administration, consununation, enforcement, and interpretation of this Settlement Agreement and the Final Order and Judgment Approving Settlemen~ and for any other necessary purpose; and
G. Incorporate any other provisions that the Court deems necessary and just. XV. FINAL SETILEMENT APPROVAL
This Settlement Agreement shall become fmal, and Final Settlement Approval shall be had, upon the occunence of all the following events without the prior termination ofthis Settlement Agreement: (i) the final approval of this Settlement Agreement in all material respects by the Court; and (ii) expiration of the time for further judicial review, or the time to seek pennission for further judicial review, of the Comt's approval of this Settlement Agreement, and the Court's entry of the Final Judgment and Order of Dismissal, without the filing of a request for further judicial review, or, if such further judicial review or effort 1D seek permission for such further judicial review is sought, (A) such further judicial review or effort to seek pennission for such judicial review has been dismissed and the time to seek any further judicial review has expired, or (B) approval of this Settlement Agreement and the Final Judgment and Order of Dismissal have been affinned in their entirety by the court of last resort from which further judicial review has been sought and such affinnance has become no longer subject to the possibility of further judicial review. For avoidance of doubt, Final Settlement Approval may occur notwithstanding the actual or potential filing of any request for further judicial review that concerns only an award of attorneys' fees and expenses by the Court, any request for Service Awards 1D the Class
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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 36 of 44
Representatives, and/or any issues regarding the allocation of the Net Indemnitor Fund among claimants to that fund. XVI. THE INDEMNITOR FUND
A. Defendants will fund t11e Indemnitor Fund within ten business days of tl1e Effective Date. The Indemnitor Fund will be held in the Indemnitor Fund Account.
B. After the Closing Date, this Settlement Agreement will impose no restrictions on Defendants' use ofany monies remaining in the Indemnitor Fund.
C. If there are any reductions or disbursements from the Indemnitor Fund prior to the Closing Date other than those provided for in this Settlement Agreemen~ Defendants are solely responsible for replenishing the Indemnitor Fund to make up for any such reductions or disbursements. By way of example, should the Indemnitor Fund be reduced because of embezzlement or bank failure, Defendants must replenish the Indemnitor Fund to the level it would have had absent embezzlement or bank failure. If any Defendant incurs tax liability because of interest earned on tl1e Indemnitor Fund, Defendants must pay that tax liability; it may not be paid from the Indemnitor Fund. XVII. MISCELLANEOUS
A. Best Efforts to Effectuate this Settlement. Class Counsel and Defense Counsel agree to cooperate fully with one another in seeking Preliminary Approval and Final Settlement Approval, and to promptly agree upon and execute all such other documentation as reasonably may be required to obtain fmal approval by the Court of the Settlement Agreement.
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B. Termination of the Settlement Agreement.
I. The terms and provisions of this Settlement Agreement will
tenninate at the sole option and discretion ofDefendants or the Class Representatives ifthe Court, or any appellate court(s), rejects, modifies, or denies approval of any portion of the Settlement Agreement. The tenninating party must exercise the option to withdraw from and tenninale this Settlement Agreement no later than 7 days after receiving notice of the event prompting the termination.
2. Notwithstanding the preceding subsection, tl1e Class Representatives may not tenninate this Settlement Agreement solely because of the amount of Class Counsel's Fees and expenses awarded by the Court or any appellate court(s).
3. If this Settlement Agreement is tenminated pursuant to this Section, then (a) except for this subsection, this Settlement Agreement shall be null and void and shall have no force or effect; (b) this Settlement Agreement. all of its provisions, and all negotiations, statements, and proceedings relating to it shall be without prejudice to the rights of Defendants, the Class Representatives, the Indemnitor Notice Class, or the Bonded l!mnigrant Class, all of whom shall be restored to their respective positions existing inunediately before the execution of this Settlement Agreement; and (c) neither this Settlement Agreement, nor the fact of its having been made, shall be admissible or entered into evidence in the Zamora Action or in any other case.
C. Entire Agreement. No representations, wananties, or inducements have been made to any of the patties to this Settlement Agreement. other than those
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representations, warranties, and covenants expressly set forth in this Settlement Agreement.
This Settlement Agreement and the exhibits attached hereto constitute the entire agreement between the parties wilh regard to lhe subject matter contained herein, and all prior negotiations and understandings between the pwties shall be deemed merged into this Settlement Agreement The parties agree that they are not relying on any representation olher than those in this Settlement Agreement
D, Governing Law. This Settlement Agreement shall be governed by and interpreted according to lhe law ofthe State ofTexas.
E. Computation of Time. All time periods set forlh in this Settlement Agreement shall be computed in calendar days unless otherwise expressly provided. In computing any period of time prescribed or allowed by this agreement or by order of Court, lhe day of lhe ac~ or default from which the designated period of time begins to run shall not be included. The last day of tl1e period so computed shall be included, unless it is a Saturday, a Sunday or a legal holiday, or, when lhe act to be done is lhe filing of a paper
in court, a day in which weather or other conditions have made the office of the Clerk of
the Court inaccessible, in which event the period shall run until the end of the next day that is not one of lhe aforementioned days. Each of lhe parties reserves the right, subject to the
Court's approval, to seek any reasonable extensions oftime lhat might be necessary to carry out any of the provisions of this agreement, and to modifY or supplement any notice
contemplated hereunder. F. Notice. Except as olherwise set forlh herein, whenever this agreement
requires or contemplates that the parties, or any of them, shall or may give notice to the
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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 39 of 44
other, notice shall be provided as follows:
Ifto plaintiffs or to a class member, then to: Tucker Ronzetti Kozyak Tropin & Throckmorton 2525 Ponce de Leon Blvd. 9tll Floor Coral Gables Fl33134 Email: tr@kttlaw.com and J. Benjamin King Diamond McCarthy LLP 120 I Elm St., Suite 3400 Dallas, TX 75270 bking@diamondmccarthy.com
and
William T. Reid, IV Diamond McCarthy LLP 6504 Bride Point Parkway Suite 400 Austin, TX 78730 breid@diamondmccarthy.com
Ifto Defendants, then to:
Howard Louis Close Thomas C. Wright Wright Brown & Close, LLP Three Riverway, Suite 600 Houston, Texas 77056 713.572.4321 Telephone 713.572.4320 Facsimile close@wrightbrownclose.com wright@wrightbrownclose.com
and
Bradford W. Irelan Irelan Hargis, PLLC 440 Louisiana, Suite 1800
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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 40 of 44
Houston, Texas 77002-1652 Telephone: (713) 222-7666 Facsimile: (713) 222-7669
and Daniel K. Worthington Atlas & Hall, LLP 818 Pecan Blvd. P. 0. Box 3725 McAllen, Texas 78501 Telephone: (956) 682-5501 Facsimile: (956) 686-6109
G. Authority of Signatories. The person signing this agreement on behalf of each party represents, warrant-;, and covenants that he or she has the authority to sign this agreement on behalf of the party and bind the party to the agreement. Each signer further represents that his or her signature binds the party to the terms and conditions of this agreement.
H. Attorneys Consulted. The parties have fully discussed the terms of and meaning of the signing of tllis agreement with their respective attorneys and fully understand all of the provisions and effects ofthis agreement.
I. No Admission or Waiver. The parties enter into this agreement solely to
terminate all controversies regarding the matters settled and compromised, and to avoid
expenses, inconvenience, and further litigation, without any admission of any liability
whatsoever by Defendants. Neither this Settlement Agreement, any exhibit or document referenced herein, and/or attached hereto (all of which are an integral part of the Settlement Agreement and are hereby incorporated in their entirety by reference), nor any action taken
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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 41 of 44
to reach, effectuate, or further this Settlement Agreement are, may be construed as, or may be used as an admission by or against the parties or any ofthem, or any fault, wrongdoing or liability whatsoever as a waiver or limitation of any defenses othetwise available to the parties or any of them, or as an admission, recognition or statement as to the proper calculation ofdamages.

By: lnna Sandoval-Valencia

Date:

Dominica Rodriguez

Date:

Deanna Arevalo

Date:

Petra Carranza de Salinas

Date:

Date: J. Benjamin King Diamond McCarthy LLP 1201 Elm St., Suite 3400 Dallas, TX 75270 Phone: (214) 389-5300 bking@diamondmccarthy.com Attorneyfor the Class Representatives, the Indemnitor Notice Class, and the Bonded Immigrant Class
Date: Tucker Ronzetti Kozyak Tropin & Throckmorton, PA 2525 Ponce de Leon
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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 42 of 44 Ninth Floor Coral Gables, FL 33134 Phone: (305) 377-0667 tr@kttlaw.com Attorneyfor the Class Representatives,
the Indemnitor Notice Class, and the Bonded Immigrant Class
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Lisa S. Brodyaga REFUGIO DEL RIO GRANDE 17891 Lanchum Park Rd. San Benito, TX 78586 Phone: (956) 421-3226 Attorneyfor the Class Represenlatives, the Indemnitor Notice Class, and the Bonded Immigrant Class

Date:

Authorized Representative for Fairmont Specialty Insurance Company
Howard Louis Close Attorney in Charge State Bar No. 04406500 S.D. Tex.ID No. 13362 Thomas C. Wright State Bar No. 22059400 S.D. Tex. ID No. 2729 Wright Brown & Close, LLP Three Riverway, Suite 600 Houston, Texas 77056 713.572.4321 Telephone 713.572.4320 Facsimile close@wrightbrownclose.com wright@wrightbrownclose.com
Lead Counsel for Defendants Fairmont Specialty Insurance Company, f/IUa Ranger Insurance Company, and Stonington Insurance Company, f/k/a Nobel Insurance Company

Bradford W. Irelan State Bar No. I0411550 Irelan Hargis, PLLC 440 Louisiana, Suite 1800 Houston, Texas 77002-1652 Telephone: (713) 222-7666 Facsimile: (713) 222-7669

Daniel K. Worthington Atlas & Hall, LLP

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Case 7:05-cv-00331 Document 294-1 Filed in TXSD on 11/17/08 Page 44 of 44 818 Pecan Blvd. P. 0. Box 3725 McAllen, Texas 78501 Telephone: (956) 682-5501 Facsimile: (956) 686-6109
Lead Counsel for Defendants Michael Padilla, as Independent Administrator for the Estate ofVannerson, and Santiago Sol
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS
MCALLEN DIVISION

ARACELY ZAMORA-GARCIA, et al, Plaintiff,
VS. MARC MOORE, et al,
Defendant.

§ § § § CIVIL ACTION NO. M-05-331 § § § §

ORDER GRANTING IN PART AND DENYING IN PART INSURER DEFENDANTS' MOTION TO DISMISS

I. Introduction Now before this Court is Defendants’ Motion to Dismiss Plaintiffs’ Fifth Amended Petition
for Writ of Habeas Corpus and Class Action Complaint for Damages, Injunctive, Declaratory and Other Relief. (Doc. 75).1 Defendant Fairmont Specialty Insurance Company (“Fairmont”), f/k/a Ranger Insurance Company, and Defendant Stonington Insurance Company (“Stonington”), f/k/a Nobel Insurance Company, filed the instant motion pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Id. After carefully reviewing Plaintiff’s live pleading and considering Defendants’ Motion in light of relevant case law, the Court has determined that Defendants’ Motion should be granted in part and dismissed in part, as discussed below. II. Background
The present case involves numerous claims by Plaintiffs against Federal Defendants,

1 Defendants incorporate by reference in their entirety, as if fully set forth in this Motion, Defendants’ Motion to Dismiss Plaintiffs’ Fourth Amended Petition for Writ of Habeas Corpus and Class Action Complaint (Doc. 34) and Defendants’ Supplement to their Motion to Dismiss Plaintiffs’ Fourth Amended Petition and Complaint (Doc. 54). (Doc. 75). The Court also will consider Defendants’ Reply to Plaintiffs’ Opposition to Defendants’ Motion to Dismiss (Doc. 53) and Plaintiffs’ submissions in opposition to Defendants’ Motion. (Docs. 38, 58, 66, 76).

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2 Bonding Defendants (which include Defendants Fairmont and Stonington),3 and Defendant
Santiago Sol arising out of these Defendants’ alleged mishandling of surety and cash bonds
secured by immigrants during the pendency of their removal proceedings. (Doc. 72). As to
Defendants Fairmont and Stonington (“Insurer Defendants”), Plaintiffs assert class-wide causes
of action for breach of contract, fraud, negligent misrepresentation/gross negligence, and unjust
enrichment and restitution arising out of Insurer Defendants’ alleged breach of surety contracts
entered into by the indemnitor Plaintiffs with Insurer Defendants for the benefit of the surety bonded immigrant Plaintiffs. Id. at ¶¶ 112-76.4 5 More specifically, Plaintiffs allege that Insurer
Defendants enter into surety contracts with the indemnitors, wherein Insurer Defendants agree to
post surety bonds for the surety bonded immigrants with the Department of Homeland Security
(“DHS”)(or its predecessor entity in relevant respects, the Immigration and Naturalization
Service, or “INS”) to enable the surety bonded immigrants to leave confinement while their
removal proceedings are pending. Id. at ¶ 2. According to Plaintiffs, Insurer Defendants
contractually agree to provide notice to both the indemnitors and surety bonded immigrants of all
appearances scheduled by DHS but “never, or almost never, provide advance notice of DHS-
scheduled appearances” to either, thus resulting in bond breaches. Id. at ¶¶ 2-5. Plaintiffs claim
that this alleged misconduct “causes the [indemnitors] and the [surety bonded immigrants] to
forfeit collectively millions of dollars and compromises the [surety bonded immigrants’] 2 Federal Defendants include Marc Moore, Director for Interior Enforcement, Department of
Homeland Security; and Alberto Gonzales, U.S. Attorney General, the United States of America. (Doc. 72 at ¶¶ 11-13). Plaintiffs sued Federal Defendants in their official capacity. Id.
3 In addition to Fairmont and Stonington, Bonding Defendants include Michael W. Padilla, in his capacity as independent administrator with will annexed of the estate of Don Vannerson, d/b/a Aaron Federal Bonding Agency (“Aaron Bonding”). (Doc. 72 at ¶¶ 1, 14-16).
4 Plaintiffs allege that Insurer Defendants enter into the surety contracts through Insurer Defendants’ agent, Aaron Bonding, or its predecessor, U.S. Immigration Bonds and Services. (Doc. 72 at ¶¶ 1-2).
5 Plaintiffs also bring individual, non-class claims against Insurer Defendants for intentional infliction of emotional distress and false imprisonment arising out of the mishandling of surety bonds, as discussed infra. (Doc. 72 at ¶¶ 200-224).
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immigration rights.” Id. at ¶ 1. III. Insurer Defendants’ Motion to Dismiss A. Fed.R.Civ.P. 12(b)(1)
Insurer Defendants first move to dismiss Plaintiffs’ claims against them on the grounds that this Court lacks subject matter jurisdiction over these claims. (Doc. 34). Rule 12(b)(1) of the Federal Rules of Civil Procedure authorizes the dismissal of a case for lack of subject matter jurisdiction when the district court lacks the statutory and constitutional power to adjudicate the case. Fed.R.Civ.P. 12(b)(1); see also Home Builders Ass’n of Mississippi, Inc. v. City of Madison , 143 F.3d 1006, 1010 (5th Cir. 1998)(quoting Nowak v. Ironworkers Local 6 Pension Fund , 81 F.3d 1182, 1187 (2d Cir. 1996)). A court may base its disposition of a motion to dismiss for lack of subject matter jurisdiction on any one of three bases: (1) the complaint alone; (2) the complaint supplemented by undisputed facts in the record; or (3) the complaint supplemented by undisputed facts plus the court’s resolution of disputed facts. Ramming v. U.S. , 281 F.3d 158, 161 (5th Cir. 2001)(citing Barrera-Montenegro v. U.S. , 74 F.3d 657, 659 (5th Cir. 1996)). A motion made pursuant to Rule 12(b)(1) “should be granted only if it appears certain that the plaintiff cannot prove any set of facts in support of his claim that would entitle him to relief.” Home Builders Ass’n , 143 F.3d at 1010 (citing Benton v. U.S. , 960 F.2d 19, 21 (5th Cir. 1992)).
Insurer Defendants claim that this Court cannot exercise subject matter jurisdiction over Plaintiffs’ claims against them because Plaintiffs’ Complaint fails to present a federal question or invoke jurisdiction under the U.S. Constitution, and diversity of citizenship does not exist. (Doc. 34). The Court agrees that Plaintiffs’ claims against these particular Defendants are state law claims, and it is undisputed that diversity of citizenship does not exist. However, at issue here is
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whether this Court may exercise supplemental subject matter jurisdiction over Plaintiffs’ claims against Insurer Defendants pursuant to 28 U.S.C. § 1367.
Section 1367 provides that this Court “shall have supplemental jurisdiction over all other claims that are so related to claims in the action within [the Court’s] original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C. § 1367(a)(emphasis added). Claims form part of the same case or controversy when they “‘derive from a common nucleus of operative fact,’ such that ‘the relationship between [the federal] claim and the state claim permits the conclusion that the entire action before the court comprises but one constitutional ‘case.’” City of Chicago v. Int’l Coll. of Surgeons , 522 U.S. 156, 164-165 (1997); see State Nat’l Ins. Co. Inc. v. Yates , 391 F.3d 577, 579 (5th Cir. 2004).
The Court may in its discretion decline to exercise supplemental jurisdiction over pendent state law claims if:
(1) the claim raises a novel or complex issue of State law, (2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction, (3) the district court has dismissed all claims over which it has original jurisdiction, or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction. 28 U.S.C. § 1367(c); see also City of Chicago , 522 U.S. at 533-34.6 The Court also considers the relevant factors of “judicial economy, convenience, fairness, and comity” in determining whether to exercise its discretion in favor of retaining jurisdiction over pendent state law claims. Carnegie-Mellon Univ. v. Cohill , 484 U.S. 343, 350 (1988); Smith v. Amedisys Inc. , 298 F.3d 434, 446 (5th Cir. 2002). As indicated by Plaintiffs in their response to Defendants’ Motion to Dismiss, Plaintiffs’ allegations concerning the mishandling of immigration bonds commenced with the filing of the 6 “Supplemental” and “pendent” are interchangeable terms. See Yates , 391 F.3d at 579 n.9.
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predecessor action to this case on April 16, 2002. (Doc. 38); see Zamora-Garcia v. Trominski , Southern District of Texas, McAllen Division, Case No. M-02-144 (Doc. 1). In the predecessor action, this Court found that it had jurisdiction over Plaintiffs’ “non-habeas” bond claims against Federal Defendants. Zamora-Garcia v. Trominski (Docs. 20, 61, 124).7 The Court eventually held that Federal Defendants were not contractually or constitutionally required to provide notice to the bonded immigrant of demands on surety bonds. Zamora-Garcia v. Trominski (Doc. 135). In addition, the Court found that Plaintiffs had no standing to assert procedural due process claims against Federal Defendants regarding the handling of cash bonds, as none of the named Plaintiffs could show that the injury at issue (bond breach) was traceable to Federal Defendants’ challenged conduct (ignoring the obligor Plaintiffs’ attempts to change their addresses with Federal Defendants). Id. As such, the Court dismissed Plaintiffs’ bond claims against Federal Defendants. Id. Although Plaintiffs also brought allegations in the predecessor action against Defendant Aaron Federal Bonding Company (“Aaron Bonding”) for the alleged mishandling of surety bonds, Defendant Aaron Bonding did not challenge this Court’s exercise of jurisdiction over the claims against it, nor did Defendant move for dismissal of Plaintiffs’ claims. ZamoraGarcia v. Trominski (Doc. 36).8
Insurer Defendants were made party to these proceedings at the time this Court rendered all decisions in the predecessor action final and appealable and severed Plaintiffs’ Third Amended Petition and Class Action Complaint into the present action. Zamora-Garcia v. Trominski (Docs. 150, 151). In its order severing the present case from the predecessor action, the Court expressly
7 The Court also found that it had jurisdiction over Petitioners’ habeas claims against Federal Defendants arising out Federal Defendants’ refusal to issue Orders of Supervision (“OOS”) to Petitioners. Petitioners continue to seek class-wide relief with respect to these claims. Zamora-Garcia v. Trominski (Doc. 124); (Doc. 72 at ¶ 192).
8 The representative of the estate of Don Vannerson has since been substituted for Defendant Aaron Bonding. (Docs. 2, 27, 72).
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noted that Plaintiffs “are now asserting new claims against new entities as well as reasserting claims against current parties.” Zamora-Garcia v. Trominski (Doc. 151). In short, the present action essentially is a continuation of the predecessor action, and Plaintiffs’ allegations regarding the mishandling of surety and cash bonds remain pending, as to Insurer Defendants as well as to other Defendants. (Doc. 72). Notably, the Court has denied Federal Defendants’ Motion to Dismiss Plaintiffs’/Petitioners’ live Petition and Complaint, specifically finding that it has subject matter jurisdiction over Plaintiffs’ current bond claims against Federal Defendants. (Doc. 100). As such, Plaintiffs’ constitutional claims against Federal Defendants arising out of said Defendants’ alleged lack of adequate notice to obligors of demands on cash bonds and alleged differing treatment of sureties and obligors remain pending. (Docs. 72 at ¶¶ 193-99, 100).
The Court agrees with Plaintiffs that the “case or controversy” that has evolved to encompass Insurer Defendants essentially challenges Federal Defendants’ system of immigrant detention and bonding. (Doc. 38). As noted by Plaintiffs, immigrants may bond out from DHS detention by either obtaining a cash bond (posted with DHS by an obligor for the benefit of a detained immigrant) or a surety bond (posted with DHS by a surety, who has contracted with an indemnitor, for the benefit of a detained immigrant). Id.; (Docs. 38, 72 at ¶¶ 36, 38). Plaintiffs complain of Federal Defendants’ lack of adequate notice to obligors, and Insurer Defendants’ lack of adequate notice to indemnitors and surety bonded immigrants, of DHS demands on bonds, which alleged misconduct results in bond breaches that have negative consequences for the obligors, indemnitors, and bonded immigrants involved. (Doc. 72 at ¶¶ 36-55). In addition, Plaintiffs claim that Federal Defendants treat sureties, or bonding companies, more favorably than obligors, in violation of Plaintiffs’ equal protection rights under the U.S. Constitution. Id. at ¶¶ 59-61, 196-97. Specifically, Plaintiffs allege that “[i]n practice, [Federal Defendants] exhibit
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a great deal of restraint and flexibility with respect to surety bonds, in some cases permitting cancellation, and full exoneration of liability, even when the [bonded immigrant] is surrendered long after the grace period...has expired, and in others, sending out more than one demand letter, years apart, and only taking steps to breach the bond if the immigrant is not produced in response to the second demand letter.” Id. at ¶ 59. Upon information and belief, Plaintiffs allege that the flexibility shown by Federal Defendants to sureties is meant “to achieve the earliest possible removal of [the bonded immigrant]...with the least possible liability on the bond to the [surety]....” Id. at ¶ 60. Where cash bonds are posted by individuals, however, Plaintiffs claim that Federal Defendants “manipulate the bond system, by failing to make good faith attempts to provide actual notice to...the obligor..., so as to be able to breach the bond and thus keep the collateral posted....” Id. at ¶ 61.
The Court recognizes that the current claims against Federal Defendants over which this Court has original jurisdiction relate to cash bonds, whereas Plaintiffs’ claims against Insurer Defendants involve surety bonds. However, the claims against Federal Defendants and Insurer Defendants clearly comprise but one constitutional case, as they derive from Federal Defendants’ bonding practices and the alleged lack of adequate notice of calls on bonds involved in such practices. As such, the Court finds that Plaintiffs’ claims against Insurer Defendants are so related to claims over which this Court has original jurisdiction that they form part of the same case or controversy. See 28 U.S.C. § 1367(a).
As explained supra , the Court must now consider whether any of the factors articulated in 28 U.S.C. § 1367(c) weigh in favor of declining to exercise supplemental jurisdiction over Plaintiffs’ claims against Insurer Defendants. Insurer Defendants do not argue that the state law claims against them “[raise] a novel or complex issue of State law,” and indeed it does not appear
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that Plaintiffs’ claims against Insurer Defendants implicate novel or complex state law issues. See 28 U.S.C. § 1367(c)(1); (Doc. 72). Neither does it appear that the state law claims “predominate” over the federal claims over which this Court has original jurisdiction. See 28 U.S.C. § 1367(c)(2). Rather, as discussed supra , the state and federal claims are intertwined so as to form but one constitutional case. Unlike the case of Garro v. Connecticut , 23 F.3d 734 (2d Cir. 1994), which Defendants cite in their Motion, the Court cannot say that “all but an insubstantial federal claim” remains. Garro , 23 F.3d at 737; (Doc. 34). Rather, Plaintiffs continue to assert both due process and equal protection claims against Federal Defendants arising out of said Defendants’ bond practices. Furthermore, this Court clearly has not dismissed all claims over which it has original jurisdiction, and the Court cannot ascertain the presence of any “exceptional circumstances” or “compelling reasons” that would weigh in favor of declining to exercise supplemental jurisdiction. See 28 U.S.C. § 1367(c)(3), (4).
Finally, the Court’s consideration of the principles of “judicial economy, convenience, fairness, and comity” does not persuade it to decline its exercise of supplemental jurisdiction in the present case. The Fifth Circuit found these principles to weigh heavily toward retaining jurisdiction where: (1) the case had been pending for almost three years; (2) the parties had taken numerous depositions; (3) the matter had progressed to the advanced stages of litigation; and (4) the district court had devoted many hours to reviewing the parties’ memoranda, the attached exhibits, and the record in the case; researching the legal issues involved; and reaching decisions in a summary judgment ruling and, thus, had substantial familiarity with the merits of the case. Smith , 298 F.3d at 447; see also Batiste v. Island Records , 179 F.3d 217, 227-28 (5th Cir. 1999)(finding that factors of judicial economy, convenience, and fairness strongly pointed toward retaining supplemental jurisdiction where case had been pending in district court for
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almost three years; record was extensive; case had involved numerous depositions and discovery disputes; and district court had considered multiple motions to dismiss or for summary judgment).
Here, almost four years have passed between the commencement of the predecessor action and the date of Defendants’ filing of their initial Motion to Dismiss. Zamora-Garcia v. Trominski (Doc. 1); (Doc. 34). Discovery has been conducted and the Court has invested a substantial amount of time in reviewing the various parties’ contributions to the extensive record in both the predecessor and present actions. The Court also has disposed of several motions to dismiss and a motion for reconsideration and has granted habeas relief to individual Petitioners, thus gaining substantial familiarity with the merits of the case in the process. Zamora-Garcia v. Trominski (Docs. 20, 61, 124, 131, 135); (Doc. 100). Although Insurer Defendants entered the present case several years after the commencement of the predecessor action, the pending claims against Insurer Defendants clearly grew out of the original claims against Federal Defendants and prior Defendant Aaron Bonding and the discovery conducted with respect to those claims. Specifically, Insurer Defendants entered the case only after Plaintiffs asked for leave to amend their Complaint based on discovery received. In their request for leave, Plaintiffs explained that “when [Plaintiffs] finally obtained discovery from the non-federal defendants..., they discovered that the [surety bond contracts] were between [Insurer Defendants] and the indemnitors, and that those contracts contain clauses whereby [Insurer Defendants] promise to give notice to both the indemnitor and the bonded immigrant of any demands made on the bonds by the federal Defendants.” Zamora-Garcia v. Trominski (Doc. 141). Insurer Defendants cannot therefore claim that their entrance into the present case bears no relation to the predecessor case over which this Court presided for several years; rather, they are now Defendants in the present action
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because of the developments in the predecessor action. The Court also agrees with Plaintiffs that “just as this Court has invested substantial judicial resources in this case, the parties have also invested substantial resources of their own.” (Doc. 38). For these reasons, the Court concludes that the factors of judicial economy, convenience, and fairness weigh in favor of the exercise of supplemental jurisdiction over the claims against Insurer Defendants.
Insurer Defendants attempt to argue that allowing them to remain in the case compromises the principle of fairness, as Plaintiffs’ attempt to assert bond claims against both Insurer Defendants and Federal Defendants in the same action reveals an intent to “inflame the jury against [Federal Defendants] by arguing that the federal government treats the cash bond Plaintiffs differently than the surety bond Plaintiffs.” (Doc. 53). However, the equal protection claim against Federal Defendants will proceed whether Insurer Defendants remain in the action or not; therefore, Insurer Defendants cannot argue that Federal Defendants will be prejudiced because of Insurer Defendants’ presence in the case. With respect to comity, the Court reiterates that Plaintiffs’ federal and state claims arising out of the mishandling of bonds together form a unified challenge to the federal system of detention and bonding of immigrants. In addition, the present case does not involve any novel or complex issues of state law. See Batiste , 179 F.3d at 227 (indicating no violation of principle of comity where there was “absence of any difficult state-law questions”); see also Parker & Parsley Petroleum Co. v. Dresser Indus. , 927 F.2d 580, 589 (5th Cir. 1992)(interests of federalism and comity point strongly toward dismissal where only difficult state law issues remain).
As the Court’s consideration of the factors set forth in 28 U.S.C. § 1367(c) and the interests of judicial economy, convenience, fairness, and comity does not persuade it to decline its exercise of supplemental jurisdiction over Plaintiffs’ state law claims against Insurer Defendants,
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the Court rejects Plaintiffs’ 12(b)(1) challenge. B. Fed.R.Civ.P. 12(b)(6)
Insurer Defendants also move to dismiss Plaintiffs’ breach of contract, fraud, negligent misrepresentation/gross negligence, intentional infliction of emotional distress, and false imprisonment claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Doc. 34).9 A Rule 12(b)(6) motion to dismiss for failure to state a claim should be granted only if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson , 355 U.S. 41, 45-46 (1957); Chiras v. Miller , 432 F.3d 606, 610-11 (5th Cir. 2005); Lowrey v. Texas A&M Univ. Sys. , 117 F.3d 242, 247 (5th Cir. 1997); see also Test Masters Educ. Servs., Inc. v. Singh , 428 F.3d 559, 570 (5th Cir. 2005), cert. denied , 126 S.Ct. 1662 (2006)(stating that “[m]otions to dismiss are viewed with disfavor and are rarely granted”). Thus, in determining whether dismissal should be granted, the Court must accept all well-pleaded facts as true and construe all reasonable inferences in the light most favorable to the plaintiff. Chiras , 432 F.3d at 610-11; Lowrey , 117 F.3d at 247; Norman v. Apache Corp. , 19 F.3d 1017, 1021 (5th Cir. 1994). To avoid dismissal, however, a plaintiff must plead specific facts, rather than conclusory allegations. Chiras , 432 F.3d at 611 (citing Guidry v. Bank of LaPlace , 954 F.2d 278, 281 (5th Cir. 1992)); Kane Enters. v. MacGregor (USA), Inc. , 322 F.3d 371, 374 (5th Cir. 2003). 1. Breach of Contract
Insurer Defendants move to dismiss Plaintiffs’ breach of contract claims on a number of grounds. (Docs. 34, 54). The elements of a breach of contract claim under Texas law are (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach
9 Insurer Defendants do not advance any arguments in support of the dismissal of Plaintiffs’ unjust enrichment/restitution claim.
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of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the defendant’s breach. E.g., McLaughlin, Inc. v. Northstar Drilling Tech., Inc. , 138 S.W.3d 24, 27 (Tex.App.-San Antonio 2004, no pet.); Prime Prods., Inc. v. S.S.I. Plastics, Inc. , 97 S.W.3d 631, 636 (Tex.App.-Houston [1st Dist.] 2002, pet. denied); Lewis v. Bank of Am. NA , 343 F.3d 540, 544-45 (5th Cir. 2003). The language in a contract is to be given its plain grammatical meaning unless to do so would defeat the parties’ intent. Reilly v. Rangers Mgmt., Inc. , 727 S.W.2d 527, 529 (Tex. 1987); DeWitt County Elec. Coop., Inc. v. Parks , 1 S.W.3d 96, 101 (Tex. 1999); REO Indus., Inc. v. Natural Gas Pipeline Co. of Am. , 932 F.2d 447, 453-54 (5th Cir. 1991). If a contract is worded so that it can be given definite or certain legal meaning, it is not ambiguous and will be construed as a matter of law. Am. Mfrs. Mut. Ins. Co. v. Schaefer , 124 S.W.3d 154, 157 (Tex. 2003); Weir v. Fed. Asset Disposition Ass’n , 123 F.3d 281, 286 (5th Cir. 1997). An ambiguity exists only if the contract language is susceptible to two or more reasonable interpretations. Schaefer , 124 S.W.3d at 157; Valmont Energy Steel, Inc. v. Commercial Union Ins. Co. , 359 F.3d 770, 774 (5th Cir. 2004). Although determining whether a contract is ambiguous is a matter of law, the interpretation of an ambiguous contract becomes an issue of fact. Coker v. Coker , 650 S.W.2d 391, 393-94 (Tex. 1983); U.S. Quest Ltd. v. Kimmons , 228 F.3d 399, 404 (5th Cir. 2000).
Plaintiffs’ Complaint alleges that Insurer Defendants, who enter into surety contracts through Insurer Defendants’ agent, Aaron Bonding, fail to provide notice to indemnitors or surety bonded immigrants of DHS/INS demands on surety bonds, as required by the surety contracts at issue. (Doc. 72). The Complaint alleges, and Insurer Defendants do not dispute, that the surety contract states that “[BONDED IMMIGRANT] and INDEMNITOR will be notified by AGENCY of all appearances requested by the U.S. IMMIGRATION AND NATURALIZATION SERVICE of
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which AGENCY receives notice.” (Docs. 54, 72 at ¶ 47). According to Plaintiffs, Insurer Defendants routinely breach the surety contracts by failing to provide such notice, thus resulting in “severe consequences” for both indemnitors and bonded immigrants. (Doc. 72 at ¶ 40).10
In challenging Plaintiffs’ breach of contract claim under Rule 12(b)(6), Insurer Defendants first argue that any alleged breach of the surety contracts by Insurer Defendants is necessarily preceded by Plaintiffs’ own breaches of the contracts, thus precluding Plaintiffs’ recovery. (Doc. 34). Insurer Defendants claim that the surety contract requires the indemnitor and bonded immigrant to report to the bonding agent every thirty (30) days and immediately notify the agent of any change in the indemnitor and/or bonded immigrant’s address, telephone number, employer, attorney, immigration status, and/or departure from the United States. Id. Insurer Defendants maintain that Plaintiffs’ Complaint does not allege that Plaintiffs complied with these obligations. Id. However, the Court notes that the Complaint specifically alleges that the indemnitors and bonded immigrant Plaintiffs “have performed or, in the alternative, have substantially performed their obligations under the contracts.” (Docs. 38, 72 at ¶¶ 114, 127); see Griffin v. Shamburger , 262 S.W. 144, 146-47 (Tex.Civ.App. 1924)(“In an action to recover upon a contract it is sufficient for plaintiff to allege general compliance with the contract on his part
10 Specifically, Plaintiffs allege as follows: In the event of a breach of the bond, the Bonded Immigrant who is under a final order of removal will be deported if detained and forfeits his rights to pursue any administrative remedies challenging the removal order. In the event of a breach of the bond, Bonded Immigrants not under a final removal order are remanded to detention, forfeit the rights provided to them by the original bond, and may have difficulty obtaining a new bond. The Bonded Immigrant’s money is at stake, too: once the bond is breached, any amount he or she paid into the Build-Up Account is forfeited. As to the Indemnitors, upon the breach of the bond, any collateral that they posted with the Bonding Defendant is in jeopardy, and they are obligated to the Bonding Defendant for whatever amount the Bonding Defendant must pay outof-pocket to the DHS on the bond, plus additional fees charged by the Bonding Defendant. In most cases this amounts to thousands of dollars (on top of the non-refundable fee the Indemnitor previously paid the Bonding Defendant). (Doc. 72 at ¶ 41).
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without alleging specifically and in detail the performance of every act required to be done by him.”).
Insurer Defendants also contend that they do not receive notices of removal hearings and, therefore, “cannot be guilty of breaching any contracts” with the indemnitors and bonded immigrants. (Doc. 34). However, Insurer Defendants seem to ignore the statement in Plaintiffs’ Complaint that “[n]otices of scheduled appearances by DHS (formerly the INS) are not to be confused with notices of removal hearings provided by the Executive Office of Immigration Review (“EOIR”), an agency within the Department of Justice. Notices issued by the EOIR of removal hearings before the EOIR are served directly on the Bonded Immigrant or his/her attorney of record.” (Doc. 72 at ¶ 49). In addition, a plain reading of the notice provision in the surety contract indicates that Insurer Defendants must provide notice of “all appearances” requested by DHS/INS of which they receive notice. (Docs. 38, 72 at ¶ 47). Given Plaintiffs’ concession that “all appearances” do not include removal hearings, Insurer Defendants’ reading of the notice provision as requiring only notices of removal hearings is not reasonable. As such, the Court rejects Insurer Defendants’ argument.11
Insurer Defendants also argue that Plaintiffs have failed to identify a breach of the surety contract on the part of Insurer Defendants. (Doc. 54). According to Insurer Defendants, any demand on the bond typically is made by DHS/INS after removal proceedings have concluded and an order of removal has been entered. Id. Therefore, at this point DHS/INS does not require any more “appearances” before DHS/INS. Id. Rather, DHS/INS’s demand on the bond is
11 Insurer Defendants also posit that Plaintiffs’ Complaint in effect admits that Plaintiffs breach the surety contracts by failing to appear after demands on surety bonds have been made. (Docs. 34, 53 (citing Plaintiffs’ Complaint at ¶ 40)). Although Plaintiffs allege that “[u]nfortunately, in thousands of....Surety Bond cases, the Bonded Immigrant does not appear for a DHS appearance after a demand on the bond, resulting in a breach of the bond,” Plaintiffs also allege that the bonded immigrant’s failure to appear directly stems from Insurer Defendants’ alleged breach of the surety contract–that is, their failure to notify the indemnitor and bonded immigrant of any demand on the bond. (Doc. 72 at ¶ 40 (emphasis in original)). As such, Insurer Defendants’ argument is without merit.
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simply a demand that the surety surrender the bonded immigrant to custody. Id. Plaintiffs counter that a plain reading of the notice provision in the surety contract indicates that if DHS/INS requests that a bonded immigrant make an appearance before DHS, for whatever reason, and the surety receives notice of this request, it will notify both the indemnitor and the bonded immigrant of the request. (Doc. 66).
The Court recognizes that Plaintiffs’ Complaint alleges as follows: The DHS has the right to issue a call-in on the bond for any reason. Although such demands are most common when the DHS has decided to execute an administratively final order of removal, they are not limited to such situations. For example, in the case of Plaintiff Miguel Rubio, who was in deportation proceedings, and had never failed to appear before a hearing before an immigration judge, the demand was issued for the purpose of placing him under removal proceedings and detaining him without bond. (Doc. 72 at ¶ 50). The Court finds that Plaintiffs have sufficiently alleged that the notice provision’s use of the term “all appearances” reflects the reality that DHS/INS can make demands on Plaintiffs’ surety bonds for a variety of reasons. (Doc. 66). In addition, even assuming that DHS/INS only makes demands on bonds for the purpose of effecting bonded immigrants’ deportations, Insurer Defendants’ argument that this type of a demand on a bond does not request an “appearance” before DHS/INS is not a reasonable interpretation of that term. The Court further notes that even if Insurer Defendants’ interpretation of the term “appearances” were a reasonable one, and thus sufficient to create an ambiguity in the contract, the interpretation of the ambiguity is a question of fact not to be resolved at this stage. Id. As such, Insurer Defendants’ argument is without merit. Insurer Defendants next claim that even if a demand on a bond is a request for an “appearance,” Plaintiffs receive actual personal notice of the bond demand upon apprehension by Aaron Bonding or one of its agents. (Doc. 54). Insurer Defendants contend that because the
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notice provision does not define the type of notice to be given, notice by apprehension is sufficient. Id. Plaintiffs counter that “[i]t is difficult to imagine a functioning society in which, as the Insurers suggest, one can provide contractual notice to another through physical apprehension.” (Doc. 66).
In support of their argument that apprehension equals actual notice, Insurer Defendants cite to the case of Comeaux v. Suderman , 93 S.W.3d 215 (Tex.App.-Houston [14th Dist.] 2002, no writ). (Doc. 54). In Comeaux , the appellant argued that he did not receive technically sufficient notice of his right of first refusal with respect to property leased by the appellant. Comeaux , 93 S.W.3d at 220-22. The court determined that technical compliance with the contractual notice requirement at issue was not warranted, as the appellant had received written notice of the pending sale of the property, had been reminded of his right of first refusal, and had been invited to contact the lessor or the lessor’s real estate agent to discuss the matter further. Id. at 221-22. In other words, the appellant had received actual notice of the proposed sale of the property and an opportunity to purchase it. Id. at 221. The Court agrees with Plaintiffs that the court’s reasoning in Comeaux does not support the conclusion that apprehension constitutes actual notice of a demand on a bond. (Doc. 66). In addition, such a reading of the term “notice” does not appear to comport with the plain meaning of the term, especially given that the required notice to indemnitors could not possibly be accomplished by apprehension. Even if Insurer Defendants’ interpretation of the term “notice” were a reasonable one, so as to render the notice provision ambiguous, the interpretation of the ambiguity becomes an issue of fact.12 As such, Insurer Defendants’ argument fails.
Insurer Defendants next appear to claim that Plaintiffs have failed to allege a necessary 12 To the extent that Insurer Defendants rely on the full text of the surety bond contract for their authority to give notice by apprehension, the Court notes that reliance on evidence outside the pleadings is improper at this stage of the proceedings. E.g., Baker v. Putnal , 75 F.3d 190, 196 (5th Cir. 1996).
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element of the cause of action for breach of contract–that is, that Plaintiffs suffered damages as a result of any alleged breach. (Doc. 54). More specifically, Insurer Defendants posit that any lack of notice of a demand on a bond does not compromise Plaintiffs’ immigration rights. Id. Insurer Defendants claim that the deadlines to file motions to reopen or reconsider a bonded immigrant’s removal order runs from the date of the removal order rather than the date of the bond demand. Id. In addition, Insurer Defendants claim that whether the order of removal is stayed pending appeal “has nothing to do with the status of the bond.” Id.
The Court recognizes that any lack of notice of a demand on a bond implicates the rights of the indemnitor as well as the bonded immigrant. (Doc. 66). Plaintiffs claim that the indemnitor may be beholden to the surety for the full amount of the bond, plus collection fees, if the bond is breached because the bonded immigrant fails to make a scheduled appearance. Id. As such, the indemnitor Plaintiffs can do little to protect their rights under the bond contracts without knowing the dates of all requested appearances. Id. Plaintiffs also point out that receiving notices of appearances for removal apart from being apprehended for removal is, in fact, critical to the bonded immigrant’s ability to protect his or her immigration rights. Id. More specifically, Plaintiffs’ Complaint alleges that the right to file a motion to reopen or reconsider a bonded immigrant’s removal order is lost if the immigrant is physically removed from the United States before such motion is filed, or if filed, before it is adjudicated. (Docs. 66, 72 at ¶ 53 (citing 8 C.F.R. § 1003.2(d)). In addition, Plaintiffs allege that the Board of Immigration Appeals (“BIA”), as a matter of policy, will not consider an application for a stay of removal unless and until the applicant is in the physical custody of DHS. (Docs. 66, 72 at ¶ 53). Plaintiffs maintain that in the cases of Mexican nationals living near the U.S.-Mexico border, such as the named Plaintiffs in the present action, immigrants can be, and often are, physically removed within
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hours of being taken into custody. Id. This reality therefore renders the stay provisions illusory unless the immigrant has advance notice of a DHS demand on the bond for removal so that the immigrant may prepare to apply for an emergency stay with the BIA before being taken into custody. Id. Moreover, Plaintiffs allege that despite the pendency of an appeal before the BIA and a stay of the removal order, DHS occasionally makes a demand on an immigrant’s bond for removal. (Docs. 66, 72 at ¶ 52). If the removal of the immigrant is accomplished, the immigrant’s appeal before the BIA will be deemed abandoned and the immigrant will have lost the right to judicial review of the resulting BIA decision for failure to exhaust his or her administrative remedies. Id. (citing 8 C.F.R. § 1003.4; 8 U.S.C. § 1252(d)). For all of these reasons, the Court rejects Insurer Defendants’ argument that their alleged failure to provide notice of demands on bonds is unrelated to Plaintiffs’ alleged damages.
Insurer Defendants next claim that Plaintiff Miguel Rubio and Plaintiff Alberta Rubio’s breach of contract allegations are made only upon “information and belief” and do not set forth the factual basis for such belief. (Doc. 54). As such, these Plaintiffs’ allegations are insufficient to state a claim. Id. Although allegations may be based upon information and belief, a complaint must set forth a factual basis for such belief. E.g., U.S. ex rel. Doe v. Dow Chem. Co. , 343 F.3d 325, 329 (5th Cir. 2003). Here, Plaintiffs allege upon information and belief that the bonding company with which Alberta posted a surety bond on Miguel’s behalf was Aaron Bonding, acting as an agent for Insurer Defendants. (Docs. 66, 72 at ¶ 73). Plaintiffs maintain that whether Aaron Bonding was the surety contracted with is a fact within Bonding Defendants’ knowledge and that Plaintiffs should therefore be allowed to obtain discovery to verify whether Aaron Bonding posted the surety bond for Miguel. (Doc. 66). In addition, Plaintiffs claim that their Complaint provides the factual basis for the belief that Aaron Bonding was the surety at
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issue, as Plaintiffs’ Complaint states that all named Plaintiffs live in the Rio Grande Valley and that Aaron Bonding did substantial business in this location. Id. (citing Plaintiffs’ Complaint at ¶¶ 10, 16). Plaintiffs admit that their Complaint also alleges upon information and belief that the bonding company did not apprehend Miguel until after the date of the INS-scheduled appearance, thus causing the bond to be breached. (Docs. 66, 72 at ¶ 75). According to Plaintiffs, Miguel’s scheduled appearance date is also within the knowledge of Bonding Defendants and easily could be verified by them. (Doc. 66). In addition, Plaintiffs indicate that it can be inferred that Aaron Bonding apprehended Miguel after the scheduled appearance date and that the bond was breached from Plaintiffs’ allegation that the bonding company demanded that Alberta pay it the full amount of the bond, plus a collection fee, because the bond had been breached. (Docs. 66, 72 at ¶ 76). The Court agrees that Plaintiffs have set forth a sufficient factual basis for their allegations made upon information and belief with respect to the breach of contract claims of Plaintiffs Miguel and Alberta Rubio. As such, the Court rejects Insurer Defendants’ 12(b)(6) challenge to the Rubios’ breach of contract claims against them.
Finally, Insurer Defendants contend that Plaintiff Petra Carranza de Salinas’s breach of contract claim is not ripe for review, as Plaintiffs’ Complaint admits that Ms. Salinas has suffered no breach of contract or damages resulting therefrom. (Doc. 54 (citing Plaintiffs’ Complaint at ¶ 80)). Specifically, Plaintiffs allege that “[a]lthough, to [Plaintiff Salinas’s] knowledge, the DHS has not yet issued a demand on her bond, should it do so and should the Bonding Defendants continue their practice of breaching their bond contracts by failing to provide notice of DHS demands on Surety Bonds to either the Bonded Immigrant (here, Ms. Salinas) or the Indemnitor (here, Mr. De La Rosa), Ms. Salinas will likely lose the money she has paid into her Build-Up Account with Aaron Bonding.” (Doc. 72 at ¶ 80). As noted supra , a
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plaintiff must show that a contract has been breached and that damages have resulted from the breach in order to maintain a breach of contract cause of action under Texas law. However, Plaintiffs argue that because they seek both damages and injunctive and declaratory relief, Plaintiff Salinas’s claim is not subject to dismissal for lack of ripeness. (Doc. 66). Plaintiffs maintain that “[b]ecause the Bonding Defendants have made it their policy to enter the bonding contracts with the intent that they will not fulfill their obligations under those contracts, and because they routinely and as a matter of policy breach those contracts, Salinas has every reason to believe that the Bonding Defendants will fail to provide her with notice of a call on her bond.” Id. Furthermore, Plaintiffs claim that because a failure to provide notice of a bond demand to Plaintiff Salinas would compromise her ability to remain in the United States and perhaps result in her removal, she has no adequate remedy at law for Insurer Defendants’ breach of contract and, thus, prospective relief is appropriate. Id.
The Court notes that Plaintiffs’ Complaint requests on behalf of the bonded immigrant Plaintiffs, which include Ms. Salinas, an injunction requiring Bonding Defendants, directly or through their agents, to make good faith efforts to provide actual, timely, and reasonable notice to the bonded immigrants and indemnitors of any and all DHS demands on bonds. (Doc. 72 at ¶ 185). Under Texas law, contractual rights generally are not enforced by injunction because inadequate remedy at law and irreparable injury are rarely shown when a breach of contract suit is available. Butnaru v. Ford Motor Co. , 84 S.W.3d 198, 211 (Tex. 2002); Canteen Corp. v. Republic of Texas Props., Inc. , 773 S.W.2d 398, 401 (Tex.App.Dallas 1989, no writ). The available legal remedy must be as “plain and adequate, or in other words, as practical and efficient to the ends of justice and its prompt administration as the remedy in equity.” Brazos River Conservation & Reclamation Dist. v. Allen , 141 Tex. 208, 216 (Tex. 1943); Universal
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Health Servs., Inc. v. Thompson , 24 S.W.3d 570, 577 (Tex.App.-Austin 2000, no pet.). An injury is “irreparable” if the injured party cannot be adequately compensated in damages or if damages cannot be measured by any certain pecuniary standard. Butnaro , 84 S.W.3d at 204; Canteen Corp. , 773 S.W.2d at 401. Here, Plaintiffs have specifically pled that “many members” of the proposed bonded immigrant class to which Ms. Salinas belongs “have been damaged because their ability to remain in the United States has been compromised” and “many have been deported and others unnecessarily confined” due to Bonding Defendants’ alleged breaches of the surety contracts. (Doc. 72 at ¶ 135). Plaintiffs contend that Plaintiff Salinas faces such injuries should Insurer Defendants fail to provide her with notice of a bond demand. (Doc. 66). The Court finds that should Ms. Salinas be removed as a result of Bonding Defendants’ lack of notice of a DHS demand on her bond, she would be without a remedy as practical and efficient to the ends of justice as injunctive relief. In addition, removal and unnecessary confinement are injuries difficult to measure according to any pecuniary standard. As such, Plaintiff Salinas’s request for prospective relief with respect to her breach of contract claim is appropriate.
For the foregoing reasons, Plaintiffs’ breach of contract claims are not subject to dismissal. 2. Fraud and Negligent Misrepresentation/Gross Negligence
Insurer Defendants first move to dismiss Plaintiffs’ fraud and negligent misrepresentation claims on the grounds that Plaintiffs cannot bring tort claims that sound only in contract. (Doc. 34). Plaintiffs counter that Texas law allows a party fraudulently induced to sign a contract to sue in contract or tort; as such, Plaintiffs’ claims are not subject to dismissal. (Doc. 38).
The longstanding rule in Texas is that non-performance under a contract creates liability only for breach of contract. Crawford v. Ace Sign, Inc. , 917 S.W.2d 12, 13 (Tex. 1996); Southwestern Bell Tel. Co. v. DeLanney , 809 S.W.2d 493, 494-95 (Tex. 1991). However, the Texas Supreme
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Court has also found that Texas law has long imposed a tort duty, independent of any contract, to abstain from inducing another to enter into a contract through the use of fraud. Formosa Plastics Corp., USA v. Presidio Eng. & Contr., Inc. , 960 S.W.2d 41, 46 (Tex. 1998)(rejecting application of DeLanney to preclude fraudulent inducement claim). Tort damages are recoverable for a fraudulent inducement claim irrespective of whether the fraudulent representations are later subsumed in the contract or whether the plaintiff suffers an economic loss related to the subject matter of the contract. Formosa , 960 S.W.2d at 47; Benchmark Elecs., Inc. v. J.M. Huber Corp. , 343 F.3d 719, 729-30 (5th Cir. 2003).
In asserting their cause of action for fraud, Plaintiffs specifically allege that Bonding Defendants, “[i]n the course of entering into uniform surety agreements , represented to [indemnitors] that it would provide notice of all appearances requested by the DHS of which Aaron Bonding received notice to [the indemnitors] with which it contracted and to the Bonded Immigrants on the surety contracts.” (Doc. 72 at ¶ 138 (emphasis added)). Plaintiffs further allege that Bonding Defendants “made these representations with no intention of ever providing this notice .” (Doc. 72 at ¶ 142 (emphasis added)). That these allegedly fraudulent representations were subsumed in the surety contract do not preclude Plaintiffs’ fraud claim under Texas law. See Formosa , 960 S.W.2d at 46-47 (fraud claim can be based on promise made with no intention of performing, irrespective of whether promise is later subsumed in contract).13 For the foregoing reasons, the Court finds that Plaintiffs' fraud claim is not subject to dismissal.
Insurer Defendants next argue for the dismissal of Plaintiffs’ negligent misrepresentation
13 In their reply to Plaintiffs’ opposition to the Motion to Dismiss, Insurer Defendants acknowledge the holding in Formosa , supra , but claim that Plaintiffs have not alleged that any misrepresentation by Insurer Defendants induced them to enter into any contract, or that Insurer Defendants made any representations at all to Plaintiffs prior to the execution of any contract. (Doc. 53). Insurer Defendants therefore claim that Plaintiffs have not successfully pled a cause of action for fraudulent inducement. Id. Plaintiffs’ Complaint, however, speaks for itself.
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claim on the grounds that such claim does not involve damages independent of contract damages. (Doc. 53). In D.S.A., Inc. v. Hillsboro Indep. Sch. Dist. , 973 S.W.2d 662, 663 (Tex. 1998), the Texas Supreme Court noted that “the Formosa opinion’s rejection of the independent injury requirement in fraudulent inducement claims does not extend to claims for negligent misrepresentation or negligent inducement.” Therefore, in order to recover on their negligent misrepresentation claim, Plaintiffs must show that they suffered an injury independent of their damages for breach of contract. The Court notes that Plaintiffs’ Complaint requests identical damages for their breach of contract and negligent misrepresentation claims–that is, (1) damages equal to the value of all monies paid or other items given by Plaintiffs to Bonding Defendants as non-refundable, up-front frees when entering the surety contracts; (2) damages equal to the value of all monies paid or other items given by Plaintiffs to Bonding Defendants, including amounts paid into the Build-Up Accounts; and (3) a return of any collateral seized by Bonding Defendants to satisfy the breached bonds. (Doc. 72 at ¶¶ 122, 124, 136, 162-64). As such, the Court finds that Plaintiffs have failed to allege an injury independent of their damages for breach of contract and that their negligent misrepresentation/gross negligence claim is subject to dismissal. 3. Intentional Infliction of Emotional Distress
Insurer Defendants next request the dismissal of the individual, non-class claims for intentional infliction of emotional distress (“IIED”) brought by Plaintiffs Juana and Aracely Zamora and Irma and Manuel Sandoval against Defendant Santiago Sol, acting as an agent for Aaron Bonding. (Doc. 34).
To recover damages for IIED under Texas law, a plaintiff must establish that: (1) the defendant acted intentionally or recklessly; (2) the defendant’s conduct was extreme and outrageous; (3) the defendant’s actions caused the plaintiff emotional distress; and (4) the
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resulting emotional distress was severe. Hoffman-La Roche Inc. v. Zeltwanger , 144 S.W.3d 438, 445 (Tex. 2004). Conduct is “extreme and outrageous” if it is “‘so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.’” Id. (quoting Twyman v. Twyman , 855 S.W.2d 619, 621 (Tex. 1993)). Liability does not extend to mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities. Hoffman-La Roche , 144 S.W.3d at 445. In addition, acts specifically within a defendant’s legal rights cannot constitute outrageous behavior, although the manner in which they are carried out may give rise to liability. See Wornick Co. v. Casas , 856 S.W.2d 732, 735 (Tex. 1993); see also Creditwatch, Inc. v. Jackson , 157 S.W.3d 814, 817 n. 20 (Tex. 2005)(quoting Restatement (Second) of Torts § 46 cmt. g)(“The actor is never liable, for example, where he has done no more than to insist upon his legal rights in a permissible way, even though he is well aware that such insistence is certain to cause emotional distress.”)(emphasis added). Where reasonable minds may differ as to whether the defendant’s conduct is sufficiently extreme and outrageous, the IIED claim is presented to the jury. HoffmanLa Roche , 144 S.W.3d at 445.
Plaintiffs’ Complaint alleges that Defendant Sol went to the home of Plaintiff Juana Zamora in Weslaco, Texas, where he falsely asserted that he had a warrant for the removal of Plaintiff Aracely Zamora. According to Plaintiffs, Defendant Sol also insisted to Aracely’s counsel over the phone that Aracely surrender to Defendant Sol, rather than to the Harlingen INS office, and he threatened both Juana and Aracely’s counsel with criminal charges for harboring a fugitive if they refused. Plaintiffs further allege that despite Aracely’s voluntary surrender to the Harlingen INS office, Defendant Sol returned to the homes of Juana and Aracely and to the homes of other relatives several times over the next two days, even after being advised that Aracely had been
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allowed to leave the Harlingen INS office. Plaintiffs contend that Defendant Sol harassed and scared Juana so severely that she refused any contact with Aracely. In addition, Aracely was forced to spend several days at various locations out of fear for Defendant Sol. Plaintiffs claim that these incidents caused severe emotional distress for both Juana and Aracely Zamora. (Doc. 72 at ¶¶ 200-10).
Plaintiffs’ Petition and Complaint also alleges that Defendant Sol attempted to “pick up” Plaintiff Manuel Sandoval. The following month, Plaintiff Irma Sandoval received a demand from Aaron Bonding for $1,000.00 on the grounds that her father, Manuel, had failed to report for deportation and had therefore breached the bond. Plaintiffs claim that when Manuel later called Aaron Bonding, he was threatened that if he did not pay this amount, an agent of Aaron Bonding would pick him up and physically take him to Mexico, thereby effectuating his deportation. According to Plaintiffs, this threat caused severe emotional distress for both Irma and Manuel Sandoval. (Doc. 72 at ¶¶ 211-17).
Insurer Defendants contend that even if Plaintiffs’ allegations are true, Defendant Sol’s actions were within his legal rights under the bond contract and cannot therefore constitute outrageous behavior as a matter of law. (Doc. 34). In addition, Insurer Defendants argue that the alleged actions of Defendant Sol do not rise to the level of conduct required under Texas law to state a claim for intentional infliction of emotional distress.14 Plaintiffs counter that Defendant Sol did not have the legal right to enforce the contractual terms of the surety contract because Bonding Defendants materially breached the contract first. (Doc. 38). In addition, Plaintiffs argue that even assuming Defendant Sol had the legal right to re-arrest these Plaintiffs, he did not
14 Insurer Defendants also state, without more, that Plaintiffs have not alleged that Insurer Defendants should be held vicariously liable for the conduct of Defendant Sol. (Doc. 53). However, the Court notes that Plaintiffs have alleged the existence of agency relationships between Defendant Sol and Aaron Bonding and between Aaron Bonding and Insurer Defendants. (Doc. 72 at ¶¶ 1, 16, 202, 213).
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have the legal right to lie, harass, and threaten criminal charges and/or their deportation. (Doc. 38).
As a question exists as to whether Defendant Sol had a legal right under the surety contract to re-arrest the individual Plaintiffs, the Court cannot pronounce that Plaintiffs’ IIED claims fail on such basis. In addition, given that Plaintiffs Juana and Aracely Zamora have alleged that in the course of attempting to re-arrest Aracely, Defendant Sol made false statements, threatened criminal charges, and repeatedly harassed Juana and Aracely despite knowing that Aracely had surrendered to the Harlingen INS office and had been released, the Court finds that reasonable minds may differ as to whether Defendant Sol’s conduct was extreme and outrageous. However, the Court cannot say that reasonable minds may differ as to whether Defendant Sol’s alleged conduct with respect to Plaintiffs Irma and Manuel Sandoval constitutes IIED. Although Plaintiffs allege that Aaron Bonding demanded $1,000.00 from Irma due to her father’s breached bond, Plaintiffs do not specify that Defendant Sol made such demand. In addition, Plaintiffs allege that Manuel called Aaron Bonding and “was threatened” during the call but do not allege that Defendant Sol made the threats. Rather, Plaintiffs only allege that Defendant Sol attempted to “pick up” Manuel. Such conduct cannot reasonably be viewed as “so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.” See Hoffman-La Roche , 144 S.W.3d at 445.
For the foregoing reasons, the Court finds that the IIED claims of Plaintiffs Juana and Aracely Zamora survive Insurer Defendants’ Motion to Dismiss. However, the IIED claims of Plaintiffs Irma and Manuel Sandoval are subject to dismissal.
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4. False Imprisonment Finally, Insurer Defendants move to dismiss Plaintiff Miguel Rubio’s individual, non-class
claim for false imprisonment against Aaron Bonding, acting as an agent for Insurer Defendants. (Doc. 34).
The essential elements of a false imprisonment claim in Texas are: (1) willful detention; (2) without consent; and (3) without authority of law. Sears, Roebuck & Co. v. Castillo , 693 S.W.2d 374, 375-76 (Tex. 1985); Gladden v. Roach , 864 F.2d 1196, 1201 (5th Cir. 1989). A detention may be accomplished by any means that restrains a person from moving from one place to another. Randall’s Food Markets, Inc. v. Johnson , 891 S.W.2d 640, 644-45 (Tex. 1995); Reicheneder v. Skaggs Drug Center , 421 F.2d 307, 310 (5th Cir. 1970). Plaintiffs allege that Plaintiff Miguel Rubio’s mother, Alberta Rubio, contracted with Aaron Bonding for the posting of a surety bond on her son’s behalf. According to Plaintiffs, Aaron Bonding did not inform Mr. Rubio or the indemnitor, Alberta Rubio, of a DHS demand on the bond of which it received notice. Plaintiffs further allege that Aaron Bonding did not apprehend Mr. Rubio until after the surrender date, therefore allowing the bond to be breached. Plaintiffs claim that an agent of Aaron Bonding physically detained Mr. Rubio and surrendered him to INS. According to Plaintiffs, Mr. Rubio was forced to remain in detention for nearly five months until he obtained a new surety bond from a different bond company. (Doc. 72 at ¶¶ 218-24).
Insurer Defendants assert that Mr. Rubio’s false imprisonment claim is subject to dismissal because his detention was lawful. (Docs. 34, 53). Insurer Defendants first claim that DHS, not an agent of Insurer Defendants, actually imprisoned Mr. Rubio based on its determination that Mr. Rubio had breached the conditions of his bond. (Doc. 34). Insurer Defendants also claim that even assuming that an agent of Insurer Defendants apprehended Mr. Rubio, his apprehension
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was legal and justified under the bond contract due to Mr. Rubio’s breach of the bond. (Doc. 53). Plaintiffs counter that their Complaint specifically alleges that an agent of Bonding Defendants physically detained Mr. Rubio. (Doc. 38). Plaintiffs further claim that by failing to provide Mr. Rubio with notice of a call on his bond, as required by the surety contract, Bonding Defendants relinquished whatever right they otherwise had to detain Mr. Rubio. Id.
The Court notes that even if the facts alleged by Plaintiffs indicate that an agent for Insurer Defendants physically detained Mr. Rubio for a short time–that is, for the purpose of delivering him into the custody of INS–this means of restraining Mr. Rubio’s movement can form the basis of a false imprisonment claim under Texas law. See Randall’s Food Markets , 891 S.W.2d at 645. In addition, Plaintiffs have stated a claim that the detention to which Mr. Rubio was subjected by Insurer Defendants’ agent was without legal authority, as Mr. Rubio was not required to surrender to Bonding Defendants subsequent to Bonding Defendants’ alleged material breach of the surety contract. See, e.g., Mustang Pipeline Co., Inc. v. Driver Pipeline Co. Inc. , 134 S.W.3d 195, 196 (Tex. 2004)(when one party to a contract commits a material breach of that contract, other party discharged or excused from future performance). As such, the Court rejects Insurer Defendants’ challenge to Plaintiff Miguel Rubio’s false imprisonment claim. IV. Conclusion
For the foregoing reasons, the Court determines that it has supplemental jurisdiction to consider Plaintiffs’ claims against Insurer Defendants. Also for the above stated reasons, the Court hereby GRANTS Insurer Defendants’ Motion to Dismiss Plaintiffs' class-wide claim for negligent misrepresentation/gross negligence and the intentional infliction of emotional distress claims of Plaintiffs Irma and Manuel Sandoval and DENIES Insurer Defendants’ Motion to
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Case 7:05-cv-00331 Document 106 Filed in TXSD on 09/15/06 Page 29 of 29 Dismiss Plaintiffs’ class-wide claims for breach of contract and fraud. The Court further DENIES Insurer Defendants’ Motion to Dismiss the intentional infliction of emotional distress claims of Plaintiffs Juana and Aracely Zamora and the false imprisonment claim of Plaintiff Miguel Rubio.
SO ORDERED this 15th day of September, 2006, at McAllen, Texas.
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 Case 7:05-cv-00331 Document 75 Filed in TXSD on 05/22/06 Page 1 of 4

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS
MCALLEN DIVISION

ARACELY ZAMORA-GARCIA,

§

et al.,

§

in their own name and right, and on

§

behalf of all others similarly situated,

§

Petitioners/Plaintiffs

§

§

v.

§

§

MARC MOORE, DISTRICT

§

DIRECTOR FOR INTERIOR

§

ENFORCEMENT, DEPARTMENT OF

§

HOMELAND SECURITY, et al.,

§

§

Respondents/Defendants.

§

C.A. No. M-05-331

DEFENDANT FAIRMONT SPECIALTY INSURANCE COMPANY AND STONINGTON INSURANCE COMPANY’S
MOTION TO DISMISS PLAINTIFFS’ FIFTH AMENDED PETITION FOR WRIT OF HABEAS CORPUS, AND CLASS ACTION
COMPLAINT FOR DAMAGES, INJUNCTIVE, DECLARATORY AND OTHER RELIEF
COME NOW DEFENDANTS, FAIRMONT SPECIALTY INSURANCE COMPANY, f/k/a
RANGER INSURANCE COMPANY and STONINGTON INSURANCE COMPANY f/k/a
NOBEL INSURANCE COMPANY, hereinafter “Defendants,” and file this Motion to Dismiss
Plaintiffs’ Fifth Amended Petition for Writ of Habeas Corpus, and Class Action Complaint for
Damages, Injunctive, Declaratory and Other Relief (the “Fifth Amended Complaint”) under Federal
Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction and 12(b)(6) for failure to
state a claim upon which relief can be granted, and in support hereof would show the Court as
follows:

Case 7:05-cv-00331 Document 75 Filed in TXSD on 05/22/06 Page 2 of 4

1. Defendants hereby incorporate by reference in their entirety, as if fully set forth herein, the following Motions:
a. Defendants’ Motion to Dismiss Plaintiffs’ Fourth Amended Petition for Writ of Habeas Corpus, and Class Action Complaint for Damages, Injunctive, Declaratory and Other Relief (Docket # 34); and
b. Defendants’ Supplement to their Motion to Dismiss Plaintiffs’ Fourth Amended Petition for Writ of Habeas Corpus, and Class Action Complaint for Damages, Injunctive, Declaratory and Other Relief (Docket # 54).
2. On May 8, 2006, Plaintiffs filed their Fifth Amended Complaint, which was identical to the Fourth Amended Complaint, with the only exception that paragraph no. 16 was changed to add the current representative of the Estate of Don Vannerson as a party to the suit. That amendment to the Complaint did not change any substantive argument set forth in Defendants’ motion to dismiss, supplement to their motion to dismiss, or the reply brief which has been filed in this matter. The diversity of citizenship argument is also not changed (although it does not appear that Plaintiffs are relying upon diversity of citizenship jurisdiction any longer in this case) because it is the citizenship of the decedent before his death that controls, not the citizenship of the representative of the estate. 28 U.S.C. § 1332(c)(2).
3. This motion has been filed to clarify to the Court that Defendants are maintaining their previous arguments set forth in their Motion to Dismiss and Supplement to their Motion to Dismiss as against Plaintiffs’ Fifth Amended Complaint.
WHEREFORE, PREMISES CONSIDERED, Defendants FAIRMONT SPECIALTY INSURANCE COMPANY, f/k/a RANGER INSURANCE COMPANY and STONINGTON INSURANCE COMPANY (f/k/a NOBEL INSURANCE COMPANY) ask the Court to dismiss

Z AMORA VS. F AIRMONT

DEFENDANTS, FAIRMONT AND STONINGTON’S M OTION TO DISMISS FIFTH AMENDED COMPLAINT
PAGE 2 OF 4

Case 7:05-cv-00331 Document 75 Filed in TXSD on 05/22/06 Page 3 of 4
Plaintiffs’ suit with prejudice, assess costs against Plaintiffs, and award Defendants all other relief
to which they are entitled.
Dated: May 22, 2006
Respectfully submitted,
/s/ Bradford W. Ireland By: with permission by Dan K. Worthington
Bradford W. Irelan TSBN 10411550 / SDOTBN ___________
IRELAN  HARGIS, P.L.L.C.
440 Louisiana Street Suite 1800 Houston, Texas 77002-1652 Telephone: (713) 222-7666 Facsimile: (713) 222-7669
ATTORNEYS FOR FAIRMONT SPECIALTY INSURANCE COMPANY, f/k/a RANGER INSURANCE COMPANY

Z AMORA VS. F AIRMONT

DEFENDANTS, FAIRMONT AND STONINGTON’S M OTION TO DISMISS FIFTH AMENDED COMPLAINT
PAGE 3 OF 4

Case 7:05-cv-00331 Document 75 Filed in TXSD on 05/22/06 Page 4 of 4

CERTIFICATE OF SERVICE

I hereby certify that on this the 22nd day of May, 2006, a true and correct copy of the foregoing, Defendant Fairmont Specialty Insurance Company and Stonington Insurance Company’s Motion to Dismiss Plaintiffs’ Fifth Amended Petition for Writ of Habeas Corpus, and Class Action Complaint for Damages, Injunctive, Declaratory and Other Relief, was duly served upon the following counsel in accordance with the Federal Rules of Civil Procedure.

Ben King Diamond McCarthy Taylor, Bryant & Lee, LLP 1201 Elm Street, 34th Floor Dallas, Texas 7570-2102 Via CM,RRR and Via facsimile: (214) 389-5399

Javier N. Maldonado Lawyer’s Committee for Civil Rights Under Law of Texas 118 Broadway Street Suite 502 San Antonio, Texas 78205-2074 Via facsimile: (210) 225-3958

Rene Carlo Benavides US Attorney’s Office Southern District of Texas 1701 West Highway 83 McAllen, Texas 78501-5176 Via facsimile: (956) 618-8016

Elisabeth Lisa Brodyaga 17891 Landrum Park Road San Benito, Texas 78586-7197 Via Certified Mail, Return Requested

Receipt

Jason Murray Davis Jason Davis PC 5945 Broadway Street San Antonio, Texas 78209-5235 Via facsimile: (210) 930-3815

Jeffrey S. Boyd Andrew Maebius Thompson & Knight, LLP 98 San Jacinto Boulevard Suite 1900 San Antonio, Texas 78701 Via facsimile: (956) 421-3423
Lisa M. Putman Department of Homeland Security P. O. Box 1711 Harlingen, Texas 78551-1711 Via facsimile: (956) 389-7057

/s/ Dan K. Worthington Dan K. Worthington

Z AMORA VS. F AIRMONT

DEFENDANTS, FAIRMONT AND STONINGTON’S M OTION TO DISMISS FIFTH AMENDED COMPLAINT
PAGE 4 OF 4

 
 Case 7:05-cv-00331 Document 286 Filed in TXSD on 11/04/08 Page 1 of 9

UNITED STATES DISTRICT COURT

United States District Court Southern District of T~;as
FILED

SOUTHERN DISTRICT OF TEXAS McALLEN DIVISION

:vov 0 4 2008

Michael N. Milby, Clerk

ARACELY ZAMORA-GARCIA, et al.,

)

in their own name and right, and on

)

behalf of all others similarly situated,

)

PetitionersIPlaintiffs,

)

) CA. No. M-05-331

v.

) JURY DEMAND

)

MARC MOORE, DISTRICT

)

DIRECTOR FOR IN1ERIOR

)

ENFORCENmNT,DEPARTMENTOF

)

HOMELAND SECURITY, et al.,

)

RespondentslDefendants.

)

)

Settlement Terms Sheet 1. This is an agreement of settlement. "Defendants" is defined as all
Defendants other than the Government in the above-captioned matter. "Plaintiffs" are Irma Sandoval, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez and the classes they represent as defined by the Court's order.
~ I-v 2. Defendants will give a $2 million debt reduction to the members of the r', L. _ ()r /Jl>f Z - - Indemnitor Notice Class ("INC") as defined below whethe~ they make a ~ :-v-- claim, to be applied pro-rata to the remaining debt owed by members of 1.1 the INC.
3. Defendants will contribute $1.575 million to a settlement fund for both of the certified classes, allocated $1.45 million to the Indemnitor Notice

Case 7:05-cv-00331 Document 286 Filed in TXSD on 11/04/08 Page 2 of 9
Class ("the Indemnitor Notice Class Fund" or "INC Fund") and $125,000 to the Bonded Immigrant Class.
4. As to the Indemnitor Notice Class:
a. Members of the Indemnitor Notice Class will return a claims form declaring that they were an indemnitor and providing the name and other information (e.g. "A-number," date of birth, or other sufficient information) as to the identity of the bonded immigrant whose bond they indemnified.
b. Members of the INC whose claim accrued on or after September 30, 2001, shall have a claim for 80% of the notice portionI of the up-front fee on the bond on which they were an indemnitor.
c. Members of the INC whose claim accrued before September 30, 2001, shall have a claim for 20% of the notice portion2 of the upfront fee on the bond on which he or she was an indemnitor.
d. If approved INC Claims exceed the INC Fund, said claims will be paid pro-rata to the total amount of approved INC Claims so that the total amount paid in respect of the INC Claims does not exceed
I "Notice portion" as used in this term sheet refers to the line on the billing analysis in Vannerson's bond files entitled "monitoring program including check-ins, court date notification, etc." In the event there is no billing analysis sheet in a particular bond file, the parties will stipulate as to the amount as 41 % of the upfront fee paid for that particular bond. 2 "Notice portion" as used in this term sheet refers to the line on the billing analysis in Vannerson's bond files entitled "monitoring program including check-ins, court date notification, etc." In the event there is no billing analysis sheet in a particular bond file, the parties will stipulate as to the amount as 41 % of the upfront fee paid for that particular bond.

Case 7:05-cv-00331 Document 286 Filed in TXSD on 11/04/08 Page 3 of 9
the amount remammg in the INC Fund after the payment of expenses from such fund for notice, claims administration, and service awards contemplated by this settlement.
e. If approved INC Claims plus notice and claim expenses in excess of $25,000, if any, plus any service awards are less than the $1.45 million INC Fund, then the amount of $200,000 or what remains in the INC Fund (if less than $200,000) will be paid to an existing or to be established nonprofit organization(s) concerning immigrant rights to be selected by the Plaintiffs and approved by the Court ("the INC cy pres payment"). In no event will the total of approved INC Claims, the notice and claim expenses in excess of $25,000, if any, the service awards, and the "INC cy pres payment" exceed $1,450,000.
f. Any amount remaining in the INC Fund after payment of the sum of the approved INC Claims plus "the INC cy pres payment" plus notice and claim process expenses plus the service awards contemplated in this settlement will revert to Fairmont.
5. As to the Bonded Immigrant Class:
a. An agreed upon letter and form will be sent to the last known address via regular mail including a postage prepaid return envelope to immigrants who are part of the Bonded Immigrant Class as of November 3, 2008, asking the immigrant to elect

Case 7:05-cv-00331 Document 286 Filed in TXSD on 11/04/08 Page 4 of 9
whether or not to have notice of an 1-340 request for appearance for deportation sent to said immigrant by U.S. Mail. If the immigrant elects to have notice sent, Defendants will send such notice to the immigrant within 3 business days of receipt of the 1340 from the federal government. The form will ask for a current address for the immigrant, and the notice will be sent to that address or the most recent address provided to the Defendants by the immigrant or the indemnitor on the bond at the time the notice goes out. For those Bonded Immigrant Class members who do not respond, or who do not elect to have notice sent, Fairmont will proceed as it sees fit.
."---~ b. The $125,000 paid with respect to the Bonded Immigrant Class
~ ~ /4-.1 will be used to fund an existing or to be established nonprofit ft~
!:.r ~ organization(s) concerning immigrant rights to be selected by
the Plaintiffs and approved by the Court ("the Bonded Immigrant Class cy pres Payment").
6. Defendants will pay to Plaintiffs' Counsel, and neither Plaintiffs nor their Counsel will seek any greater amount from Defendants, for all Plaintiffs' attorneys' fees, costs, and expenses, the amount of $1.7 million. This amount is in addition to the payments of $1.575 million settlement funds for both classes, and the payment of up to $25,000 for notice and claim administration expenses referred to in paragraph 7m. Attorneys' fees will

Case 7:05-cv-00331 Document 286 Filed in TXSD on 11/04/08 Page 5 of 9
be payable upon the Court's order approving this settlement becoming final and non-appealable.
7. Claims process.
a. All notices and letters will be in English and Spanish as agreed upon by the parties.
b. The settlement is subject to Court approval, which class representatives, class counsel and defendants and their counsel will support.
c. Once a preliminary approval of the settlement has been obtained from the Court, the Defendants will send out by regular mail an agreed upon notice to the entire class of the preliminary approval and that there is an opportunity to file objections as provided in such notice.
d. The Parties will endeavor to have a final approval hearing in or around January of 2009.
e. Class members seeking to object to the settlement must file their objection 21 days before the final approval hearing or such other time as the Court requires.
f. Following the Court's order approving the settlement becoming final and non-appealable, the amounts provided for in Paragraph 3

Case 7:05-cv-00331 Document 286 Filed in TXSD on 11/04/08 Page 6 of 9
will be funded into an escrow account to be held separately by Fairmont (unless otherwise ordered by the Court) and the claims process will take place.
g. Notice for the claims process for the INC will be sent out by regular mail. It will include a claim form and a postage prepaid addressed return envelope. The parties will attempt in good faith to agree upon a single notice to be sent after preliminary court approval that includes the claim form and return envelope.
h. The INC claims process will be open for 90 days, or such other time as the Court requires.
1. INC Claim forms will be returned by INC claimants to a neutral party to be agreed upon by the parties or as may be determined by the Court (the "Claims Administrator") who will make the forms available to class counsel and defense counsel. Anyone filing a claim will provide some proof of identification acceptable to the Claims Administrator to verify they meet the criteria set forth in paragraph 8.
J. Class counsel and Defense counsel will try to reach agreement on which claims should be approved.
k. Parties will ask the Court to appoint a master to resolve any disputes on what claims should be approved.

Case 7:05-cv-00331 Document 286 Filed in TXSD on 11/04/08 Page 7 of 9
1. No party or lawyer will engage in any public communication to encourage or discourage the making of claims other than as set forth in the notice: provided however, notwithstanding anything to the contrary if the class counsel are contacted by the class members they are free to assist them in any way they feel appropriate.
m. Defendants will pay up to $25,000 for notice and class administration expenses and the fess and expenses of the master. The remainder of any costs for the claim process or the master will come out of the INC fund.
n. All documents approved by the Court as part of the settlement and claims process will be posted on the website maintained for this case by Class Counsel.
8. Who is qualified to make a claim:
a. For the Indemnitor Notice Class:
1. If the person was an indemnitor; and
ii. On a file where the upfront fees were paid in full; and
iii. Where the Bonding Defendants' records indicate that on or after April 16, 1998 and on or before November 3, 2008 it received a "Notice to Obligor to Deliver Alien" (1-340)

Case 7:05-cv-00331 Document 286 Filed in TXSD on 11/04/08 Page 8 of 9
indicating that the INSIDHS had scheduled an appearance for deportation for the Bonded Immigrant.
IV. There can be only one payment per bond.
9. Release
a. A full and final release from both classes for all breach of contract claims brought and certified as part of the class action against Defendants, their agents, employees, etc (other than the government). Notwithstanding the foregoing, the release will not include a release of any claim for refund or a return of collateral, if any.
b. The fulfillment of the settlement agreement and future contract obligations will not be released.
c. Defendants do not release claims they have against any INC member for amounts owed after the reduction of debt provided for in paragraph 2 of this agreement.
d. Defendants agree not to offset any payments to INC members pursuant to this settlement against any debt owed by any INC member.
10. The parties agree on a "service award" to the class representatives to be paid out of the INC class fund as awarded by the Court not to exceed

Case 7:05-cv-00331 Document 286 Filed in TXSD on 11/04/08 Page 9 of 9

$10,000 per class representative (including the intervenors, total of 4 people).

11. The parties agree that they are entering into this agreement based upon their own knowledge and assessment of its merits. Neither party is relying on any representations or assertions of the other in deciding to enter into this settlement.

12. This term sheet is binding upon the parties unless the court does not approve the settlement. The parties contemplate drafting more thorough and complete settlement documents before the preliminary approval hearing and will act in good faith to draft and finalize the settlement agreement and related documents.

13. The final order of the Court approving the settlement will include a provision dismissing all of the Plaintiffs' and Intervenors' live or certified claims against these Defendants with prejudice. Defendants will dismiss with prejudice their counterclaim against Irma Sandoval individually.

AGREED TO AND APPROVED:

Date: £-(;YDJ/U 2'-6 ----~~-----------------------

Ilkv Date: Lj

2cJ7Y;:{

--~T---~~----~~~~~~~~~

1 Date: ~J t€

Date~ :~.tf('

 
 Zamora-Garcia v. Moore, Not Reported in F.Supp.2d (2006)

2006 WL 3341034 Only the Westlaw citation is currently available.
United States District Court, S.D. Texas,
McAllen Division.
Aracely ZAMORA-GARCIA, et al, Plaintiff, v.
Marc MOORE, et al, Defendant.
Civil Action No. M-05-331. | Nov. 16, 2006.
Attorneys and Law Firms
Elisabeth Lisa S. Brodyaga, Attorney at Law, San Benito, TX, J. Gregory Taylor, John Benjamin King, Diamond McCarthy et al, Dallas, TX, Jason Murray Davis, Jason Davis PC, San Antonio, TX, Sarah Patricia Santos, Diamond McCarthy et al, Austin, TX, for Plaintiff.
Lisa M. Putnam, Department of Homeland Security, Harlingen, TX, Rene Carlo Benavides, U.S. Attorney’s Office, McAllen, TX, Bradford Wald Irelan, Todd Frederick Newman, Irelan Hargis PLLC, Houston, TX, Max Lynn Christenson, Attorney at Law, Odessa, TX, for Defendant.
Opinion
ORDER DENYING INSURER DEFENDANTS’ MOTION TO TRANSFER VENUE
RANDY CRANE, District Judge.
I. Introduction *1 Now before this Court is Insurer Defendants’ Motion to Transfer Venue. (Doc. 79). Defendant Fairmont Specialty Insurance Company (“Fairmont”), f/k/a Ranger Insurance Company, and Defendant Stonington Insurance Company (“Stonington”), f/k/a Nobel Insurance Company, filed the instant motion pursuant to 28 U.S.C. § 1404(b) or, in the alternative, 28 U.S.C. § 1404(a). Id. After carefully considering Defendants’ Motion in light of relevant case law, the Court has determined that Defendant’s Motion should be denied, as discussed

below.
The present case involves both individual and class-wide claims against Federal Defendants,1 Bonding Defendants (which include Defendants Fairmont and Stonington),2 and Defendant Santiago Sol arising out of these Defendants’ alleged mishandling of surety and cash bonds secured by immigrants during the pendency of their removal proceedings. (Doc. 114).3 As against Defendants Fairmont and Stonington (“Insurer Defendants”), Plaintiffs seek individual and class-wide relief for breach of contract. Id. at ¶¶ 112-33. More specifically, Plaintiffs allege that Insurer Defendants, through their agent, Aaron Federal Bonding Agency (“Aaron Bonding”),4 enter into surety contracts with the indemnitor Plaintiffs,5 wherein Insurer Defendants agree to post surety bonds for the surety bonded immigrant Plaintiffs with the Department of Homeland Security (“DHS”)(or its predecessor entity in relevant respects, the Immigration and Naturalization Service, or “INS”) to enable the surety bonded immigrants to leave confinement while their removal proceedings are pending. Id. at ¶¶ 1-2. For these services, the indemnitors pay up-front, non-refundable fees equal to half of the total bond and agree to indemnify Insurer Defendants for the full amount of the bond should the bond be breached for failure of the bonded immigrant to attend a DHS-scheduled appearance. Id. at ¶ 2. Moreover, Insurer Defendants require the indemnitors to pay, or guarantee the payment of, roughly half the amount of the bond in monthly installments into a “Build-Up Fund,” or collateral account, that Insurer Defendants may draw from in paying on the bond to DHS in the event the bond is breached. Id. According to Plaintiffs, Insurer Defendants contractually agree to provide notice to both the indemnitors and bonded immigrants of all appearances scheduled by DHS of which Insurer Defendants receive notice but “never provide advance notice of DHSscheduled appearances” to either, thus resulting in bond breaches. Id. at ¶¶ 2, 5. In addition, Plaintiffs allege that although the surety bond contracts require Insurer Defendants to return the collateral posted after Federal Defendants cancel a bond, Insurer Defendants’ policy is to silently retain the collateral. Id. at ¶ 8. Plaintiffs claim that Insurer Defendants’ failure to provide notice of DHS-scheduled appearances and failure to return the collateral posted in the event of bond cancellation constitute actionable breaches of contract for which Plaintiffs seek damages and equitable relief.

1

Federal Defendants include Marc Moore, District

1

Zamora-Garcia v. Moore, Not Reported in F.Supp.2d (2006)

Director for Interior Enforcement, Department of Homeland Security; and Alberto Gonzales, U.S. Attorney General, The United States of America. (Doc. 114 at ¶¶ 13-15). Plaintiffs sued Federal Defendants in their official capacity. Id.

2

In addition to Defendants Fairmont and Stonington,

Bonding Defendants include Michael W. Padilla, in his

capacity as Independent Administrator with Will

Annexed of the Estate of Don Vannerson, d/b/a Aaron

Federal Bonding Agency. (Doc. 114 at ¶¶ 16-18).

3

As against Federal Defendants, Plaintiffs also seek an

injunction on their own behalves and on behalf of the

class they seek to represent requiring that, upon request

of the class member, and in the absence of individual

factors which would warrant the refusal to do so,

Federal Defendants place said class members under

Orders of Supervision. (Doc. 114 at ¶ 136).

4

Plaintiffs allege that Aaron Bonding is sometimes

known as U.S. Immigration Bonds and Services. (Doc.

114 at ¶ 1).

5

Plaintiffs allege that the indemnitor Plaintiffs are

usually friends or relatives of the immigrants in

removal proceedings. (Doc. 114 at ¶ 2).

*2 Insurer Defendants now assert that the surety bond contracts at issue in the present action all include valid and enforceable forum selection clauses, wherein Plaintiffs agreed that any action seeking enforcement of the contracts must be brought in Harris County, Texas. (Doc. 79). More specifically, the forum selection clause states that “[a]ll obligations of the parties created by this agreement are to be performed in Harris County, Texas and venue of any suit to enforce this agreement shall lie in Harris County, Texas.” (Doc. 79, Exh. A). Insurer Defendants claim that because the surety bonded immigrant Plaintiffs have asserted that they are third party beneficiaries to the surety contracts, they are also bound by the forum selection clause. (Doc. 79). In sum, Insurer Defendants assert that the existence of the forum selection clause militates in favor of transferring the entirety of this case to the Southern District of Texas, Houston Division,

which encompasses Harris County, Texas. Id. Insurer Defendants further argue that the private and public interest factors to be weighed in determining the propriety of a venue transfer, to the extent that they apply, favor a transfer of venue from the Southern District of Texas, McAllen Division to the Houston Division. Id.
Plaintiffs do not dispute the existence or applicability of the forum selection clause. (Doc. 81). Rather, Plaintiffs submit that the Court should decline to transfer venue based on Insurer Defendants’ delay in filing their Motion. Id. In addition, Plaintiffs argue that the balance of factors to be considered by the Court in conducting its analysis under 28 U.S.C. § 1404 weighs in favor of retaining the case in this Division. Id.
II. Analysis and Conclusion Pursuant to 28 U.S.C. § 1404(b), “[u]pon motion, ... any action, suit, or proceeding of a civil nature ... may be transferred, in the discretion of the court, from the division in which pending to any other division in the same district.” In determining whether to exercise its discretion in favor of transfer to another division within this district, the Court will consider the same factors to be applied in determining whether to transfer venue pursuant to 28 U.S.C. § 1404(a). See, e.g., Tapia v. Dugger, 2006 WL 2620530 at *3 (W.D.Tex.2006)(“In choosing whether to exercise the discretion allowed by section 1404(b), the Court will base its decision on the established standard governing section 1404(a) transfers.”); Mohamed v. Mazda Motor Corp., 90 F.Supp.2d 757, 768 (E.D.Tex.2000)(indicating that § 1404 analysis remains the same “regardless whether the litigant moves for inter or intra district transfer”)(emphasis in original). Section 1404(a) provides that “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.”
“Section 1404(a) places discretion in the district court to adjudicate motions for transfer according to an ‘individualized, case-by-case consideration of convenience and fairness.’ “ Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)(quoting Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)). In conducting its § 1404(a) analysis, the court must weigh in balance a number of private and public interest factors, none of which is dispositive. Action Indus., Inc. v. U.S. Fidelity & Guar. Co., 358 F.3d 337, 340 (5th Cir.2004). The private interests include: (1) the relative ease of access to sources
2

Zamora-Garcia v. Moore, Not Reported in F.Supp.2d (2006)

of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make trial of a case easy, expeditious, and inexpensive. Id. at 340 n. 6.6 The public interests include: (1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflict of laws. Id. In addition, the Supreme Court has recognized that the presence of a forum selection clause is a “significant factor that figures centrally in the district court’s calculus,” requiring the court to consider “the convenience of [the forum] given the parties’ expressed preference for that venue, and the fairness of transfer in light of the forum-selection clause and the parties’ relative bargaining power.” Stewart, 487 U.S. at 29.7 The Supreme Court also noted that “[i]t is conceivable in a particular case ... that because of [the private and public interest factors] a district court acting under 1404(a) would refuse to transfer a case notwithstanding the counterweight of a forum-selection clause....” Id. at 30-31. In short, a forum selection clause “should receive neither dispositive consideration ... nor no consideration ..., but rather the consideration for which Congress provided in § 1404(a).” Id. at 31.

6

The Fifth Circuit and district courts within this Circuit

have indicated that the “place of alleged wrong” is also

a private interest factor to be considered. See In Re

Horseshoe Entm’t, 337 F.3d 429, 433 (5th Cir.2003);

Von Graffenreid v. Craig, 246 F.Supp.2d 553, 562

(N.D.Tex.2003); McGinnis v. Eli Lilly & Co., 181

F.Supp.2d 684, 687 (S.D.Tex.2002).

7

Generally, the plaintiff’s choice of forum figures

substantially in the district court’s calculus, as well;

however, district courts within this Circuit have

suggested that this factor is accorded less weight where

a forum selection clause exists. Wiggins v. Carnival

Corp., 2005 WL 2086043 at *2 (W.D.Tex.2005);

Williams v. M/V Jubilee, 431 F.Supp.2d 677, 680

(S.D.Tex.2003); Watson v. John K. Burch Co., 2003

WL 21145744 at *1 (N.D.Tex.2003).

*3 District courts have consistently interpreted Fifth Circuit case law to require a party moving to transfer venue pursuant to § 1404(a) to bear the burden of demonstrating to the court that it should transfer the case.

See, e.g., Fisher v. Nabors Drilling USA, Inc., 2006 WL 2882799 at * 1 (S.D.Tex.2006)(citing Peteet v.. Dow Chem. Co., 868 F.2d 1428, 1436 (5th Cir.1989); Time, Inc. v. Manning, 366 F.2d 690, 698 (5th Cir.1966)); Empty Barge Lines II, Inc. v. Dredge Leonard Fisher, 441 F.Supp.2d 786, 789 (E .D.Tex.2006)(citing same); Borninski v. Williamson, 2003 WL 21468533 at *5 (N.D.Tex.2003)(citing Peteet, 868 F.2d at 1436). As noted by Insurer Defendants, district courts within this Circuit have also reasoned that where a forum selection clause exists, the burden shifts to the non-movant to show that transfer to the selected forum would be inappropriate. See, e.g., Berg v. Sage Envtl. Consulting of Austin, Inc., 381 F.Supp.2d 552, 557 (M.D.La .2005); Watson, 2003 WL 21145744 at *2; Columbia Energy Servs. Corp. v. TDC Energy Corp., 2002 WL 272382 at *3 (E.D.La.2002). However, these courts have not specifically supported such reasoning with Fifth Circuit precedent, and in fact other district courts within this Circuit have declined to shift the burden where the movant relies upon the existence of a forum selection clause in moving to transfer venue. See id.; see also Rossco Holdings, Inc. v. Best Western Int’l Inc., 2006 WL 1007474 at *3 (S.D.Tex.2006); Williams, 431 F.Supp.2d at 679-82; Bonded Inspections, Inc. v. Northrop Grumman Corp., 1998 WL 185518 at *1 (N.D.Tex.1998). As the Fifth Circuit has not addressed this precise issue, the Court declines to disturb the Fifth Circuit’s placement of the burden on the movant to show that transfer is warranted. See Watson, 2003 WL 21145744 at *2 (recognizing that Fifth Circuit has not yet decided whether existence of forum selection clause shifts burden of persuasion in transfer analysis).
A. Delay in Filing Motion to Transfer Venue As an initial matter, the Court considers Plaintiffs’ contention that the Court should decline to transfer venue based on Insurer Defendants’ delay in moving to transfer. (Doc. 81). The Court acknowledges that parties seeking to transfer venue must act with “reasonable promptness.” Peteet, 868 F.2d at 1436 (quoting 15 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3844, at 335-37). Recognizing that “[c]ourts have considered a party’s delay in denying a motion to transfer,” the Court in Peteet noted that a motion to transfer venue filed eighteen months after the remand of the case to the district court “would have caused yet another delay in this protracted litigation.” Id. at 1436. District courts within this Circuit have likewise recognized that a party’s delay in filing a motion to transfer venue, and the ensuing delay
3

Zamora-Garcia v. Moore, Not Reported in F.Supp.2d (2006)

in litigation that could result if transfer is granted, can either constitute a factor in the district court’s transfer analysis or serve as the sole basis for the denial of transfer. Moto Photo, Inc. v. K.J. Broadhurst Enters., Inc., 2003 WL 298799 at *5 (N.D.Tex.2003)(filing of motion to transfer after parties had exchanged initial disclosures, amended their pleadings, and conducted preliminary discovery created possibility of undue delay if case were to be transferred and could be denied on that basis alone); FTC v. Multinet Marketing, LLC, 959 F.Supp. 394, 395-96 (N.D.Tex.1997)(denying motion to transfer filed seven months after plaintiffs’ filing of action where “change in venue now is likely to upset the discovery and trial schedule and waste judicial resources”); Am. Airlines, Inc. v. Rogerson ATS, 952 F.Supp. 377, 384 (N.D.Tex.1996)(denying motion where transfer would disrupt scheduling order and create “substantial possibility of delay ... since this Court has had the case for some time and is already familiar with many of its details”); but see Mohamed, 90 F.Supp.2d at 760 (recognizing that motion to transfer must be made with reasonable promptness but finding that “there is absolutely no reason why a litigant seeking a Section 1404(a) transfer must so move before the original answer”)(emphasis in original).
*4 Here, Plaintiffs’ allegations concerning the mishandling of immigration bonds commenced with the filing of the predecessor action to this case on April 16, 2002. See Zamora-Garcia v. Trominski, Southern District of Texas, McAllen Division, Case No. M-02-144 (Doc. 1). Insurer Defendants were made party to these proceedings on September 30, 2005, at which time the Court rendered all decisions in the predecessor action final and appealable and severed Plaintiffs’ Third Amended Petition and Class Action Complaint into the present action. (Docs.1, 2); Zamora-Garcia v. Trominski (Docs.150, 151). In its order severing the present case from the predecessor action, the Court expressly noted that Plaintiffs “are now asserting new claims against new entities as well as reasserting claims against current parties.” Zamora-Garcia v. Trominski (Doc. 151). In other words, the present action essentially is a continuation of the predecessor action.
Insurer Defendants admit that they have engaged in “some discovery” since their entrance in the case. (Doc. 87). In addition, the record reveals that the parties filed a Joint Discovery Plan, the Court issued a Scheduling Order setting the case for trial in February 2007, and Insurer Defendants moved to dismiss Plaintiffs’ claims against them prior to the June 19, 2006 filing of Insurer

Defendants’ Motion to Transfer Venue. (Docs.32, 36, 75, 79).8 Although Insurer Defendants did not file an answer prior to the filing of their Motion to Transfer, the danger certainly exists that uprooting a case over which this Court has gained substantial familiarity over the course of more than four years and sending it to another division would unreasonably delay the proceedings and waste judicial resources. The Court declines to deny Insurer Defendants’ Motion on this basis alone. However, the Court concludes that the nearly nine month lapse of time between Insurer Defendants’ entrance in the case and the filing of their Motion to Transfer, in addition to the delay and waste of judicial resources that may result if transfer is allowed, undoubtedly factor in the Court’s overall analysis.

8

The Court granted in part and denied in part Insurer

Defendants’ Motion to Dismiss. (Doc. 106).

B. Application of § 1404(a) Balancing Test The Court must now determine whether “convenience” and the “interest of justice” favor transfer to the Houston Division, in light of the private and public interest factors to be considered and the existence of the forum selection clause. See 28 U.S.C. § 1404(a); Stewart, 487 U.S. at 29.
1. Private Interest Factors With regard to the private interest factors, Insurer Defendants contend that the location of the “sources of proof” in the present action favors litigating the case in the Houston Division. (Doc. 79). According to Insurer Defendants, Plaintiffs have sought the production of almost 8,000 bond files, all of which are located in Houston. Id.; (Doc. 79, Exs.B, C). However, the Court recognizes that “[t]echnological advances in copying, storing, and transferring data ... limit the weight to be given the accessibility and location of sources of proof in the § 1404(a) analysis.” Tapia, 2006 WL 2620530 at *4; see also, e.g., FCI USA, Inc. v. Tyco Elecs. Corp., 2006 WL 2062426 at *2 (E.D.Tex.2006); IBEW-NECA Southwestern Health & Benefit Fund v. B & J Purchasing Servs., Inc., 2006 WL 305772 at *3 (N.D.Tex.2006). In other words, such factor is given only “slight” weight or significance. See Tapia, 2006 WL 2620530 at *4; FCI USA, 2006 WL 2062426 at *2. Here, Insurer Defendants have not established that this factor weighs in favor of
4

Zamora-Garcia v. Moore, Not Reported in F.Supp.2d (2006)

transfer.
*5 In arguing that transfer to the Houston Division would be more convenient for the party and non-party witnesses in the present case, Insurer Defendants aver that Defendant Stonington is based in Addison, Texas and Defendant Fairmont is based in Houston; “[t]herefore, [Insurer Defendants’] witnesses will likely be in the Houston and Dallas area. (Doc. 79; Doc. 79, Exs. B, C)(emphasis added). Insurer Defendants further state that Aaron Bonding, the alleged agent of Insurer Defendants, was headquartered in Houston but had a smaller office in Harlingen, Texas. (Doc. 79; Doc. 79, Ex. D). As such, Insurer Defendants submit that “[i]t is conceivable that there could be witnesses with knowledge of [Aaron Bonding’s] bond practices in both locations.” (Doc. 79)(emphasis added). Insurer Defendants do not specifically identify any witnesses who would be unwilling to travel to the McAllen Division for trial or who would find such travel and trial attendance cost-prohibitive.9 In addition, Insurer Defendants offer no evidence that the testimony of any witness could not be secured by compulsory process. Moreover, Insurer Defendants admit that witnesses with knowledge of Aaron Bonding’s bond practices could be located in the Harlingen, Texas area-that is, in closer proximity to the McAllen Division than to Houston. Additionally, Plaintiffs submit that out of the 37 persons listed in Insurer Defendants’ Rule 26(a) disclosures as persons who may have discoverable information, 12 appear to reside in the McAllen area or in other locations within the Rio Grande Valley of Texas, whereas 13 live in or around Houston. (Doc. 81; Doc. 81, Ex. C); see Fed.R.Civ.P. 26(a). Plaintiffs also allege that all of the named Plaintiffs-also listed as persons with knowledge in Insurer Defendants’ Rule 26(a) disclosures-reside in the Rio Grande Valley. (Doc. 81 (citing Doc. 72 at ¶ 10); Doc. 81, Ex. C).10

9

Without more, Insurer Defendants state that one

witness “with some knowledge of [Aaron Bonding’s]

business,” Laura Cuayhuitl, is located in Houston and

was recently deposed at Plaintiffs’ counsel’s office in

Houston. (Doc. 79; Doc. 79, Ex. E).

10

Insurer Defendants submit that Plaintiff Irma Sandoval

testified in her deposition that she would not be

inconvenienced if the case were transferred to Houston.

(Doc. 105; Doc. 105, Ex. F). However, the testimony of

one of more than a dozen named Plaintiffs is not

sufficient to show that transfer would be more convenient for all witnesses concerned.
Here, the Court must also consider that Plaintiffs are bringing claims not only against Insurer Defendants but against other Defendants, as well. Insurer Defendants contend that “Federal Defendants presumably would not have any problem with having witnesses present from the Houston office of [DHS].” (Doc. 79). However, in light of the fact that Federal Defendants have been parties to the predecessor and present actions in the McAllen Division for over four years, and given that “much of the wrongdoing alleged against the Federal Defendants arose out of the Harlingen office [of DHS/INS],” it is unlikely that the Houston Division would be more convenient for Federal Defendants’ witnesses. (Doc. 81 (citing Doc. 72 at ¶¶ 34, 86, 93)). In sum, Insurer Defendants’ general allegations regarding the location and convenience of witnesses add no weight to the balance in favor of transfer. See, e.g., Q West Energy v. Gen. Elec. Co., 1998 WL 872705 at *1 (N.D.Tex.1998)(“A ... party [moving for transfer] ... must do more than merely make general allegations that certain key witnesses are needed” and “must identify the key witnesses and outline the substance of their testimony.”)
*6 Insurer Defendants further argue that the “place of alleged wrong appears to weigh in favor of Houston, or at most would be neutral.” (Doc. 79). Insurer Defendants recognize that Plaintiffs’ claims against them stem from Insurer Defendants’ alleged failure to perform under the surety contracts at issue; as such, Insurer Defendants argue that “[i]t is impossible to say that a non-event occurred at a particular place.” Id. Insurer Defendants further contend that none of Insurer Defendants’ decision-makers is located in the McAllen Division, although they admit that “[i]t is conceivable that there may have been a decision-maker of Aaron Bonding at its Harlingen office....” Id. In response, Plaintiffs submit that the named surety bond Plaintiffs resided in the McAllen area when they entered into the surety contracts at issue and “when the Bonding Defendants misrepresented their intention to fulfill their notice obligations under the terms of [the contracts].” (Doc. 81; Doc. 81, Ex. F). According to evidence submitted by Plaintiffs, certain Plaintiffs executed their bond contracts in Cameron County, Texas-that is, in a county adjacent to that which encompasses McAllen. (Doc. 81, Exs.D, E). Given that Insurer Defendants cannot affirmatively show that the alleged wrongs committed by Insurer Defendants through
5

Zamora-Garcia v. Moore, Not Reported in F.Supp.2d (2006)

their agent, Aaron Bonding, occurred closer in proximity to Houston than McAllen, the Court cannot find that such factor weighs in favor of transfer.
With regard to the Court’s consideration of “all other practical problems that make trial of a case easy, expeditious, and inexpensive,” Insurer Defendants contend that no delay would result should the case be transferred to the Houston Division. (Doc. 79). In support of such argument, Insurer Defendants submit that it is highly unlikely that the case will go to trial as scheduled in February 2007, given that either Plaintiffs or Insurer Defendants will “certainly” appeal an unfavorable class certification determination made by the district court. (Docs.79, 87). Insurer Defendants also aver that Plaintiffs’ amendments to their pleadings and their “lack of diligence” in prosecuting their claims have themselves caused delay, thus rendering suspect Plaintiffs’ allegations of delay in the event of transfer. (Docs.87, 105). The Court is hesitant to find that no delay would result based on the possibility of an appeal. In addition, the Court notes that it has granted Plaintiffs leave to amend their pleading not to aid Plaintiffs in any “lack of diligence,” but to refine and narrow the complicated issues in this case.11 The fact remains that Plaintiffs first brought their immigration bond claims in this Court more than four years ago. Zamora-Garcia v. Trominski (Doc. 1). Shortly after, Plaintiffs named Aaron Bonding, Insurer Defendants’ alleged agent, as a party. Zamora-Garcia v. Trominski (Doc. 2).12 During the course of litigation, Plaintiffs received discovery that prompted them to request the addition of Insurer Defendants as parties. Zamora-Garcia v. Trominski (Doc. 141). As indicated in its discussion of the timeliness of Insurer Defendants’ Motion to Transfer, the Court finds that uprooting a more than four-year-old case and transferring it to another division, given that the Court has already ruled on numerous motions and invested a substantial amount time in reviewing the various parties’ contributions to the extensive record, presents the danger of delay.

11

The Court further notes that Insurer Defendants were

not opposed to Plaintiffs’ most recent amendment, and

in fact such amendment favored said Defendants, as it

eliminated various extra-contractual causes of action

against them. (Docs.108, 114).

12

The representative of the estate of Don Vannerson has

since been substituted for Defendant Aaron Bonding.

(Doc. 72).

*7 Insurer Defendants also argue that no unreasonable increase in costs would occur should the case be transferred to the Houston Division. (Doc. 79). Plaintiffs state, without more, that the cost of trial to Plaintiffs becomes almost prohibitive if they are forced to litigate the case in Houston. (Doc. 81). Plaintiffs also contend that Insurer Defendants have failed to establish how transfer of the case will spare unnecessary expense. Id. As the Court cannot determine from the record the costs associated with transfer, such factor is at best a neutral one.
Finally, although Insurer Defendants further support their argument that transfer to the Houston Division would be convenient by submitting that “[c]ounsel for the parties are located in both divisions at issue,” the Fifth Circuit has explicitly held that “the convenience of counsel is not a factor to be assessed in determining whether to transfer a case under § 1404(a).” In re Volkswagen AG, 37 F.3d 201, 206 (5th Cir.2004).13

13

The Court also notes that Insurer Defendants repeatedly

state that Plaintiffs have offered no “sworn testimony”

that they would be inconvenienced by transfer.

(Docs.87, 105). However, the burden is not on

Plaintiffs to demonstrate that transfer would be

inconvenient. The Court has located no case law

supporting Insurer Defendants’ assertion that Plaintiffs

must provide sworn testimony to defeat Insurer

Defendants’ Motion.

2. Public Interest Factors The parties agree that because Insurer Defendants request transfer to another division within this district, most of the public interest factors are not implicated. (Docs.79, 81). In other words, the McAllen Division is as equipped to apply the law that governs this case as is the Houston Division, and the Houston Division has no apparent “localized interest” in deciding the case. With regard to “the administrative difficulties flowing from court congestion,” neither party offers any statistics regarding the congestion of the Houston Division as opposed to the McAllen Division. As such, the public interest factors add no weight to the balance in favor of transfer.
6

Zamora-Garcia v. Moore, Not Reported in F.Supp.2d (2006)

3. The Forum Selection Clause As explained supra, this Court may decline to transfer venue regardless of the existence of a forum selection clause if the Court determines that the selected forum would be neither convenient nor fair, based on the Court’s analysis of the various § 1404(a) factors. Here, as discussed above, none of the private and public interest factors adds weight to the balance in favor of transfer.14 In addition, the Court has already noted that the nearly nine month lapse of time between Insurer Defendants’ entrance in the case and the filing of their Motion to Transfer, in addition to the delay and waste of judicial resources that may result if transfer is allowed, weigh against transfer. Moreover, the Court cannot ignore that the surety contracts containing the forum selection clause at issue only form the basis of the claims against Bonding Defendants. As against Federal Defendants, Plaintiffs complain of the mishandling of cash bonds and the denial of Orders of Supervision. In addition, Plaintiffs have brought individual claims for intentional infliction of emotional distress against Defendant Sol. The Court has already ruled that Plaintiffs’ cash bond and Order of Supervision claims against Federal Defendants over which this Court has original jurisdiction and Plaintiffs’ state law claims against Bonding Defendants and Defendant Sol clearly comprise but one constitutional case, as they derive from Federal Defendants’ bonding practices and the alleged lack of adequate notice of calls

on bonds involved in such practices. (Docs.106, 109, 110). As such, the Court held that it has supplemental jurisdiction over Plaintiffs’ surety bond claims. Id. Where not all of the claims in this long-pending litigation relate to surety bonds, transferring the entirety of the case based solely on the presence of a forum selection clause in the surety contracts would not serve the interests of convenience or fairness.

14

The Court again notes that it must consider “the

convenience of [the forum] given the parties’ expressed

preference for that venue, and the fairness of transfer in

light of the forum-selection clause and the parties’

relative bargaining power.” Stewart, 487 U.S. at 29. No

affirmative showing has been made that the parties had

unequal bargaining power with respect to the surety

contracts at issue. (Docs.81, 87). However, this factor

does not, in and of itself, mandate transfer.

*8 The Court therefore ORDERS that Insurer Defendants’ Motion to Transfer Venue is hereby DENIED. (Doc. 79).
SO ORDERED this 16th day of November, 2006, at McAllen, Texas.
	  

7

 
 Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 1 of 36
CLOSED, HABEAS, MOTREF
U.S. District Court SOUTHERN DISTRICT OF TEXAS (McAllen) CIVIL DOCKET FOR CASE #: 7:05−cv−00331

Zamora−Garcia, et al v. Marc Moore, et al Assigned to: Judge Randy Crane Related Case: 7:09−cv−00073 Cause: 28:2241 Petition for Writ of Habeas Corpus (federa
Plaintiff

Date Filed: 10/03/2005 Date Terminated: 02/12/2009 Jury Demand: Defendant Nature of Suit: 530 Habeas Corpus (General) Jurisdiction: U.S. Government Defendant

Aracely Zamora−Garcia in their own name and right, and on behalf of all others similarly situated

represented by Elisabeth Lisa S Brodyaga Attorney at Law 17891 Landrum Park Rd San Benito, TX 78586−7197 956−421−3226 Fax: 956−421−3423 Email: lisabrodyaga@aol.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

J Gregory Taylor Diamond McCarthy et al 1201 Elm St 34th Floor Dallas, TX 75270 214−389−5302 Fax: 214−389−5399 ATTORNEY TO BE NOTICED

Jason Murray Davis The Davis Group Attorneys &Counselors, P.C. The Weston Centre 112 E. Pecan Street Suite 900 San Antonio, TX 78205 (210) 853−5882 Fax: (210) 200−8395 Email: jdavis@davisgrouppc.com ATTORNEY TO BE NOTICED

Javier N Maldonado Attorney at Law P O Box 12424 San Antonio, TX 78212 210−277−1603 Fax: 210−587−4000 Email: jmaldonado.law@gmail.com TERMINATED: 01/26/2006 ATTORNEY TO BE NOTICED

John Benjamin King Diamond McCarthy et al 1201 Elm St Suite 3400 Dallas, TX 75270 214−389−5300 Fax: 214−389−5399 Email: bking@diamondmccarthy.com ATTORNEY TO BE NOTICED

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 2 of 36

Plaintiff Juana Zamora in their own name and right, and on behalf of all others similarly situated
Plaintiff Miriam Garrido in their own name and right, and on behalf of all others similarly situated

Sarah Patricia Santos The Davis Group Attorneys &Counselors, P.C. The Weston Centre 112 E. Pecan Street, Suite 900 San Antonio, TX 78205 210−853−5882 Fax: 210−200−8395 Email: ssantos@davisgrouppc.com ATTORNEY TO BE NOTICED
Thomas A Tucker Ronzetti Kozyak Topin and Throckmorton 2525 Ponce de Leon Blvd 9th Floor Miami, FL 33134 305−377−0667 Fax: 305−372−3508 Email: tr@kttlaw.com ATTORNEY TO BE NOTICED
represented by Elisabeth Lisa S Brodyaga (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
J Gregory Taylor (See above for address) ATTORNEY TO BE NOTICED
Jason Murray Davis (See above for address) ATTORNEY TO BE NOTICED
Javier N Maldonado (See above for address) TERMINATED: 01/26/2006 ATTORNEY TO BE NOTICED
John Benjamin King (See above for address) ATTORNEY TO BE NOTICED
Sarah Patricia Santos (See above for address) ATTORNEY TO BE NOTICED
Thomas A Tucker Ronzetti (See above for address) ATTORNEY TO BE NOTICED
represented by Elisabeth Lisa S Brodyaga (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
J Gregory Taylor (See above for address) ATTORNEY TO BE NOTICED
Jason Murray Davis

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 3 of 36

(See above for address) ATTORNEY TO BE NOTICED

Javier N Maldonado (See above for address) TERMINATED: 01/26/2006 ATTORNEY TO BE NOTICED

John Benjamin King (See above for address) ATTORNEY TO BE NOTICED

Sarah Patricia Santos (See above for address) ATTORNEY TO BE NOTICED

Thomas A Tucker Ronzetti (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Manuel Sandoval−Herrera in their own mane and right, and on behalf of all others similarly situated

represented by Elisabeth Lisa S Brodyaga (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

J Gregory Taylor (See above for address) ATTORNEY TO BE NOTICED

Jason Murray Davis (See above for address) ATTORNEY TO BE NOTICED

Javier N Maldonado (See above for address) TERMINATED: 01/26/2006 ATTORNEY TO BE NOTICED

John Benjamin King (See above for address) ATTORNEY TO BE NOTICED

Sarah Patricia Santos (See above for address) ATTORNEY TO BE NOTICED

Thomas A Tucker Ronzetti (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Irma Sandoval Ibarra Valencia in their own name and right, and on behalf of all others similarly situated

represented by Elisabeth Lisa S Brodyaga (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

J Gregory Taylor (See above for address) ATTORNEY TO BE NOTICED

Jason Murray Davis (See above for address) ATTORNEY TO BE NOTICED

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 4 of 36

Plaintiff Adriana Echavarria in their own name and right, and on behalf of all others similarly situated
Plaintiff Jorge Luis Echavarria in their own name and right, and on behalf of all others similarly situated

Javier N Maldonado (See above for address) TERMINATED: 01/26/2006 ATTORNEY TO BE NOTICED
John Benjamin King (See above for address) ATTORNEY TO BE NOTICED
Sarah Patricia Santos (See above for address) ATTORNEY TO BE NOTICED
Thomas A Tucker Ronzetti (See above for address) ATTORNEY TO BE NOTICED
represented by Elisabeth Lisa S Brodyaga (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
J Gregory Taylor (See above for address) ATTORNEY TO BE NOTICED
Jason Murray Davis (See above for address) ATTORNEY TO BE NOTICED
Javier N Maldonado (See above for address) TERMINATED: 01/26/2006 ATTORNEY TO BE NOTICED
John Benjamin King (See above for address) ATTORNEY TO BE NOTICED
Sarah Patricia Santos (See above for address) ATTORNEY TO BE NOTICED
Thomas A Tucker Ronzetti (See above for address) ATTORNEY TO BE NOTICED
represented by Elisabeth Lisa S Brodyaga (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
J Gregory Taylor (See above for address) ATTORNEY TO BE NOTICED
Jason Murray Davis (See above for address) ATTORNEY TO BE NOTICED
Javier N Maldonado

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 5 of 36

(See above for address) TERMINATED: 01/26/2006 ATTORNEY TO BE NOTICED

John Benjamin King (See above for address) ATTORNEY TO BE NOTICED

Sarah Patricia Santos (See above for address) ATTORNEY TO BE NOTICED

Thomas A Tucker Ronzetti (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Cesar Lucio in their own name and right, and on behalf of all others similarly situated

represented by Elisabeth Lisa S Brodyaga (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

J Gregory Taylor (See above for address) ATTORNEY TO BE NOTICED

Jason Murray Davis (See above for address) ATTORNEY TO BE NOTICED

Javier N Maldonado (See above for address) TERMINATED: 01/26/2006 ATTORNEY TO BE NOTICED

John Benjamin King (See above for address) ATTORNEY TO BE NOTICED

Sarah Patricia Santos (See above for address) ATTORNEY TO BE NOTICED

Thomas A Tucker Ronzetti (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Apolinar Torres−Espino in their own name and right, and on behalf of all other similarly situated

represented by Elisabeth Lisa S Brodyaga (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

J Gregory Taylor (See above for address) ATTORNEY TO BE NOTICED

Jason Murray Davis (See above for address) ATTORNEY TO BE NOTICED

Javier N Maldonado (See above for address) TERMINATED: 01/26/2006

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 6 of 36

ATTORNEY TO BE NOTICED

John Benjamin King (See above for address) ATTORNEY TO BE NOTICED

Sarah Patricia Santos (See above for address) ATTORNEY TO BE NOTICED

Thomas A Tucker Ronzetti (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Praxedis Rodriguez−Castro in their own name and right, and on behalf of all other similarly situated

represented by Elisabeth Lisa S Brodyaga (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

J Gregory Taylor (See above for address) ATTORNEY TO BE NOTICED

Jason Murray Davis (See above for address) ATTORNEY TO BE NOTICED

Javier N Maldonado (See above for address) TERMINATED: 01/26/2006 ATTORNEY TO BE NOTICED

John Benjamin King (See above for address) ATTORNEY TO BE NOTICED

Sarah Patricia Santos (See above for address) ATTORNEY TO BE NOTICED

Thomas A Tucker Ronzetti (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Petra Carranza de Salinas in their own name and right, and on behalf of all other similarly situated

represented by Elisabeth Lisa S Brodyaga (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

J Gregory Taylor (See above for address) ATTORNEY TO BE NOTICED

Jason Murray Davis (See above for address) ATTORNEY TO BE NOTICED

Javier N Maldonado (See above for address) TERMINATED: 01/26/2006 ATTORNEY TO BE NOTICED

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 7 of 36

John Benjamin King (See above for address) ATTORNEY TO BE NOTICED

Sarah Patricia Santos (See above for address) ATTORNEY TO BE NOTICED

Thomas A Tucker Ronzetti (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Miguel Rubio−Flores in their own name and right, and on behalf of all others similarly situated

represented by Elisabeth Lisa S Brodyaga (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

J Gregory Taylor (See above for address) ATTORNEY TO BE NOTICED

Jason Murray Davis (See above for address) ATTORNEY TO BE NOTICED

Javier N Maldonado (See above for address) TERMINATED: 01/26/2006 ATTORNEY TO BE NOTICED

John Benjamin King (See above for address) ATTORNEY TO BE NOTICED

Sarah Patricia Santos (See above for address) ATTORNEY TO BE NOTICED

Thomas A Tucker Ronzetti (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Alberta Rubio in their own name and right, and on behalf of all other similarly situated

represented by Elisabeth Lisa S Brodyaga (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

J Gregory Taylor (See above for address) ATTORNEY TO BE NOTICED

Jason Murray Davis (See above for address) ATTORNEY TO BE NOTICED

Javier N Maldonado (See above for address) TERMINATED: 01/26/2006 ATTORNEY TO BE NOTICED

John Benjamin King (See above for address)

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 8 of 36

ATTORNEY TO BE NOTICED

Sarah Patricia Santos (See above for address) ATTORNEY TO BE NOTICED

Thomas A Tucker Ronzetti (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Maria Francisca Arce Cedeno in their own name and right, and on behalf of all others similarly situated

represented by John Benjamin King (See above for address) ATTORNEY TO BE NOTICED

Elisabeth Lisa S Brodyaga (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Norma Pena De Herrera in their own name and right, and on behalf of all other similarly situated

represented by John Benjamin King (See above for address) ATTORNEY TO BE NOTICED

Elisabeth Lisa S Brodyaga (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Isidro Herrera in their own name and right, and on behalf of all others similarly situated

represented by John Benjamin King (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Elisabeth Lisa S Brodyaga (See above for address) ATTORNEY TO BE NOTICED

Plaintiff
Luis Alvarado Narvaez in their own name and right, and on behalf of all others similarly situated

represented by Elisabeth Lisa S Brodyaga (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

John Benjamin King (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff
Juan Larin−Ulloa in their own name and right, and on behalf of all others similarly situated

represented by Elisabeth Lisa S Brodyaga (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

John Benjamin King (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

V.

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 9 of 36

Defendant
Marc Moore District Director for Interior Enforcement , Department of Homeland Security

represented by Lisa M Putnam Department of Homeland Security P O Box 1711 Harlingen, TX 78551 956−389−7048 Fax: 956−389−7057 Email: lisa.putnam@dhs.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED

Rene Carlo Benavides Gutierrez Wymer 7718 Broadway San Antonio, TX 78209 210−225−2299 Fax: 210−225−2266 Email: rbenavides@gutierrezwymer.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Benjamin Zeitlin US Dept of Justice 450 5th Street NW Room 6020 PO Box 878 − Ben Franklin Station Washington, DC 20044 202−305−2807 Email: benjamin.zeitlin@usdoj.gov ATTORNEY TO BE NOTICED

David Louis Guerra Office of the US Attorney 1701 W Hwy 83 Ste 600 McAllen, TX 78501 956−618−8010 Fax: 956−618−8016 Email: david.guerra@usdoj.gov ATTORNEY TO BE NOTICED

Stacey Ilene Young United States Department of Justice Civil Division Office of Immigration Litigation PO Box 868 Ben Franklin Station Washington, DC 20044 202−305−7171 Email: stacey.young@usdoj.gov ATTORNEY TO BE NOTICED

Defendant
Michael Chertoff Secretary, Department of Homeland Security

represented by Lisa M Putnam (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Rene Carlo Benavides (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Benjamin Zeitlin

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 10 of 36

(See above for address) ATTORNEY TO BE NOTICED

David Louis Guerra (See above for address) ATTORNEY TO BE NOTICED

Stacey Ilene Young (See above for address) ATTORNEY TO BE NOTICED

Defendant
The Estate of Don Vannerson (as sole proprietor of Aaron Federal Bonding Agency)

represented by Bradford Wald Irelan Irelan Hargis PLLC 440 Louisiana St Ste 1800 Houston, TX 77002 713−222−7666 Fax: 713−222−7669 Email: irelan@irelanhargis.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Dan K Worthington Atlas Hall LLP 818 Pecan Blvd McAllen, TX 78502 956−682−5501 Fax: 956−686−6109 Email: dkw@atlashall.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Max Lynn Christenson Attorney at Law 314 N Texas Odessa, TX 79761 432−333−5833 TERMINATED: 05/08/2006

Todd Frederick Newman Sheehy Ware &Pappas 909 Fannin Suite 2500 Houston, TX 77010 713−951−1079 Fax: 713−951−1199 Email: tnewman@sheehyware.com

Defendant
Fairmont Specialty Insurance Company (f/k/a Ranger Insurance Company)

represented by Bradford Wald Irelan (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Howard L Close Wright &Close LLP Three Riverway Ste 600 Houston, TX 77056 713−572−4321 Fax: 713−572−4320 Email: close@wrightbrownclose.com ATTORNEY TO BE NOTICED

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 11 of 36

Defendant
Stonington Insurance Company (f/k/a Noble Insurance Company)

Joseph Andrew Love Wright Brown Close LLP Three Riverway Ste 600 Houston, TX 77056 713−572−4321 Fax: 713−572−4320 Email: love@wrightbrownclose.com ATTORNEY TO BE NOTICED
Thomas C Wright Wright and Close LLP Three Riverway Ste 600 Houston, TX 77056 713−572−4321 Fax: 713−572−4320 Email: wright@wrightbrownclose.com ATTORNEY TO BE NOTICED
Todd Frederick Newman (See above for address)
represented by Bradford Wald Irelan (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jeffrey S Boyd Thompson &Knight LLP 98 San Jacinto Blvd Ste 1900 Austin, TX 78701 512−469−6109 Fax: 512−469−6180 Email: jeff.boyd@tklaw.com TERMINATED: 01/19/2006 LEAD ATTORNEY ATTORNEY TO BE NOTICED
Andrew K Maebius Thompson &Knight LLP 98 San Jacinto Blvd Ste 1900 Austin, TX 78701 512−469−6100 Fax: 512−469−6180 TERMINATED: 01/19/2006 ATTORNEY TO BE NOTICED
Howard L Close (See above for address) ATTORNEY TO BE NOTICED
Joseph Andrew Love (See above for address) ATTORNEY TO BE NOTICED
Thomas C Wright (See above for address) ATTORNEY TO BE NOTICED

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 12 of 36

Todd Frederick Newman (See above for address)

Defendant Santiago Sol

represented by Bradford Wald Irelan (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Dan K Worthington (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Max Lynn Christenson (See above for address) TERMINATED: 05/08/2006

Defendant
Rodney Vannerson in their capacities as dependent co−executors of the Estate of Don Vannerson

Defendant
Eleni Papadakis in their capacities as dependant co−executors of the Estate of Don Vannerson

Defendant
Michael W. Padilla in his capacity as Independent Administrator with Will Annexed of the Estate of Don Vannerson, d/b/a Aaron Federal Bonding Agency

represented by Bradford Wald Irelan (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Dan K Worthington (See above for address) ATTORNEY TO BE NOTICED

Todd Frederick Newman (See above for address)

Defendant United States

Intervenor Plaintiff Deanna Arevalo

represented by John Benjamin King (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Intervenor Plaintiff Dominica Rodriguez

represented by John Benjamin King (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Counter Claimant

represented by

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 13 of 36

Fairmont Specialty Insurance Company (f/k/a Ranger Insurance Company)

Bradford Wald Irelan (See above for address) ATTORNEY TO BE NOTICED

Counter Claimant
Stonington Insurance Company (f/k/a Noble Insurance Company)

represented by Bradford Wald Irelan (See above for address) ATTORNEY TO BE NOTICED

V.
Counter Defendant
Irma Sandoval Ibarra Valencia in their own name and right, and on behalf of all others similarly situated

represented by Elisabeth Lisa S Brodyaga (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
J Gregory Taylor (See above for address) ATTORNEY TO BE NOTICED
Jason Murray Davis (See above for address) ATTORNEY TO BE NOTICED
Javier N Maldonado (See above for address) TERMINATED: 01/26/2006 ATTORNEY TO BE NOTICED
John Benjamin King (See above for address) ATTORNEY TO BE NOTICED
Sarah Patricia Santos (See above for address) ATTORNEY TO BE NOTICED
Thomas A Tucker Ronzetti (See above for address) ATTORNEY TO BE NOTICED

Date Filed 09/30/2005 09/30/2005
10/03/2005 10/04/2005 10/04/2005

# Docket Text
1 ORDER of Severance .( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 10/03/2005)
2 Third Amended PETITION for Writ of Habeas Corpus and Class Action Complaint for Damages, Injunctive, Declaratory and Other Relief (Filing fee $ 5) filed by all plaintiffs. (Attachments: # 1 Continuation)(fgarcia, ) (Entered: 10/03/2005)
3 ORDER for Initial Pretrial and Scheduling Conference and Order to Disclose Interested Persons. Initial Conference set for 1/5/2006 at 09:30 AM before Judge Randy Crane.( ) Parties notified.(fgarcia, ) (Entered: 10/03/2005)
4 Amended ORDER for Initial Pretrial and Scheduling Conference and Order to Disclose Interested Persons. Initial Conference reset for 1/11/2006 at 09:30 AM before Judge Randy Crane.( ) Parties notified.(fgarcia, ) (Entered: 10/04/2005)
5 Unopposed MOTION to Correct 2 Petition for Writ of Habeas Corpus by all plaintiffs, filed. Motion Docket Date 10/24/2005. (Attachments: # 1 Proposed Order # 2 Complaint)(Brodyaga, Elisabeth) (Entered: 10/04/2005)

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10/12/2005 10/12/2005 10/17/2005 10/18/2005 10/27/2005 11/14/2005 11/14/2005
11/23/2005
11/25/2005
12/01/2005 12/21/2005
12/22/2005
12/30/2005 01/03/2006
01/04/2006 01/06/2006
01/10/2006

Summons Issued as to Fairmont Specialty Insurance Company.(fgarcia, ) (Entered: 10/17/2005)
Summons Issued as to Stonington Insurance Co.(fgarcia, ) (Entered: 10/17/2005)
6 ORDER granting 5 Motion to Correct Caption of Third Amended Petition for Writ of Habeas Corpus.( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 10/18/2005)
7 CERTIFICATE OF INTERESTED PARTIES by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 10/18/2005)
8 NOTICE of attorney substitution by Marc Moore, Alberto Gonzales. Attorney Rene Benavides added, filed. (Putnam, Lisa) (Entered: 10/27/2005)
9 SUMMONS Returned Executed. Fairmont Specialty Insurance Company served on 10/24/2005, answer due 11/14/2005, filed.(fgarcia, ) (Entered: 11/15/2005)
10 AFFIDAVIT of Service as to Stonington Insurance Company on 11/07/05 re: Summons, 3rd Amended Petition for Writ; Class Action Complaint for Damages, Injunctive, Declaratory &Other Relief, Amended Order for Conference &Disclosure of Parties, filed.(fgarcia, ) (Entered: 11/15/2005)
11 Unopposed MOTION for Extension of Time to Move, Answer, or Otherwise Respond to Plaintiff's Third Amended Complaint by Stonington Insurance Company, filed. Motion Docket Date 12/13/2005. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 11/23/2005)
12 SUPPLEMENTAL Certificate of Conference to 11 MOTION for Extension of Time to Move, Answer, or Otherwise Respond to Plaintiff's Third Amended Complaint by Stonington Insurance Company, filed.(fgarcia, ) (Entered: 11/28/2005)
13 ORDER granting 11 Unopposed Motion for Extension of Time to Move, Answer, or Otherwise Respond to Plaintiffs' Third Amended Complaint.( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 12/01/2005)
14 MOTION to Dismiss Plaintiffs' Third Amended Petition for Writ of Habeas Corpus by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 1/10/2006. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 12/21/2005)
15 MOTION to Postpone/Continue Rule 26(F) Conference and Joint Discovery/Case Management Plan by Aaron Federal Bonding Agency, Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 1/11/2006. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 12/22/2005)
16 NOTICE of Rule 26(f) Meeting of Counsel by all plaintiffs, filed. (Brodyaga, Elisabeth) (Entered: 12/30/2005)
18 Unopposed MOTION for Max I. Christenson to Withdraw as Attorney for Aaron Federal Bonding Agency and Santiago Sol by Aaron Federal Bonding Agency, Santiago Sol, filed. Motion Docket Date forthwith. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 01/04/2006)
17 Unopposed MOTION to Continue initial pretrial conference by Marc Moore, Alberto Gonzales, filed. Motion Docket Date 1/24/2006. (Attachments: # 1 Proposed Order)(Benavides, Rene) (Entered: 01/04/2006)
22 NOTICE of Substitution of Counsel and Clarification of Representation by Aracely Zamora−Garcia, Manuel Sandoval−Herrera, Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio. Attorney J. Benjamin King added, filed. (fgarcia, ) (Entered: 01/11/2006)
19 Amended Order for Initial Pretrial and Scheduling Conference and Order to Disclose Interested Persons. Initial Conference reset for 2/8/2006 at 09:30 AM before Judge Randy Crane.( ) Parties notified.(fgarcia, ) (Entered: 01/10/2006)

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01/10/2006
01/10/2006 01/11/2006
01/13/2006 01/19/2006
01/19/2006 01/19/2006 01/23/2006 01/26/2006 01/30/2006 01/30/2006 01/30/2006 01/31/2006
02/01/2006
02/07/2006 02/08/2006

20 RESPONSE to 18 Unopposed MOTION for Max I. Christenson to Withdraw as Attorney for Aaron Federal Bonding Agency and Santigo Sol, filed by Fairmont Specialty Insurance Company, Stonington Insurance Company. (fgarcia, ) (Entered: 01/11/2006)
21 NOTICE of Mootness of Defendant Fairmont Specialty Company and Stonington Insurance Company's Motion to Dismiss Plaintiffs' Third Amended Petition for Writ of Habeas Corpus by all plaintiffs, filed. (fgarcia, ) (Entered: 01/11/2006)
23 Unopposed MOTION to Amend Pleadings and to File Fourth Amended Petition for Writ of Habeas Corpus and Class Action Complaint by all plaintiffs, filed. Motion Docket Date forthwith. (Attachments: # 1 Proposed Fourth Amended Petition# 2 Proposed Order)(fgarcia, ) (Entered: 01/12/2006)
24 Unopposed MOTION for Thompson &Knight, LLP to Withdraw as Counsel for Defendant by Stonington Insurance Company, filed. Motion Docket Date forthwith. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 01/17/2006)
25 ORDER GRANTING THOMPSON &KNIGHT LLP'S MOTION TO WITHDRAW AS COUNSEL FOR DEFENDANT STONINGTON INSURANCE COMPANY granting 24 Motion to Withdraw as Attorney. Attorney Jeffrey S Boyd and Andrew K Maebius terminated .( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 01/19/2006)
26 ORDER granting 23 Motion to Amend Pleadings.( Signed by Judge Randy Crane ) Parties notified.(bgarces, ) (Entered: 01/19/2006)
27 Fourth Amended PETITION for Writ of Habeas Corpus and Class Action Complaint filed by all plaintiffs. (Attachments: # 1 Continuation)(fgarcia, ) (Entered: 01/20/2006)
28 Unopposed MOTION for Javier N. Maldonado to Withdraw as Counsel for Plaintiff Zamora−Garcia, et al by all plaintiffs, filed. Motion Docket Date forthwith. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 01/24/2006)
29 ORDER granting 28 Motion to Withdraw as Attorney. Attorney Javier N Maldonado terminated .( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 01/26/2006)
30 Amended CERTIFICATE OF INTERESTED PARTIES by all plaintiffs, filed.(Santos, Sarah) (Entered: 01/30/2006)
31 CERTIFICATE OF INTERESTED PARTIES by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed.(bgarces) (Entered: 01/30/2006)
32 JOINT DISCOVERY/CASE MANAGEMENT PLAN, filed.(bgarces, ) (Entered: 01/30/2006)
33 NOTICE of Appearance by Sarah P. Santos on behalf of Aracely Zamora−Garcia, Manuel Sandoval−Herrera, Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio, filed. (Santos, Sarah) (Entered: 01/31/2006)
34 MOTION to Dismiss Plaintiffs' Fourth Amended Petition for Writ of Habeas Corpus, and Class Action Complaint for Damages, Injunctive, Declaratory and Other Relief by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 2/21/2006. (fgarcia, ) (Entered: 02/01/2006)
35 MOTION to Dismiss Plaintiffs' claims against Federal Defendants by Marc Moore, Alberto Gonzales, filed. Motion Docket Date 2/27/2006. (Attachments: # 1 Proposed Order)(Benavides, Rene) (Entered: 02/07/2006)
Minute Entry for proceedings held before Judge Randy Crane. Initial PRETRIAL CONFERENCE and SCHEDULING CONFERENCE held on 2/8/2006. Oral motion to appear by Dan Worthington is granted. The Court announces that the non−appearance of Attorney Max Christenson is excused and the Court will set the pending 18 Motion to Withdraw for hearing at a later time. The Court addressed the pending motions to dismiss. Attorney King announces intent to respond jointly to the [34/35] motions to dismiss. The Court will either set a motions hearing at a

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02/08/2006
02/08/2006 02/28/2006 03/09/2006 03/09/2006 03/10/2006 03/10/2006 03/24/2006 03/24/2006 03/29/2006 03/29/2006 04/04/2006 04/06/2006 04/10/2006
04/10/2006

later time or rule on the briefing. The Court will set a hearing on the issue of class certification in August 2006 and issue a scheduling order setting trial for February 2007. Appearances: John B. King/E. Lisa S. Brodyaga; Rene C. Benavides, AUSA; Dan Worthinton in lieu of Bradford W. Irelan.(ERO:Richard Cortez [9:33−9:47]), filed.(lcervantes) (Entered: 02/08/2006)
36 SCHEDULING ORDER: Amended Pleadings due by 8/28/2006 Joinder of Parties due by 8/28/2006 Pltf Expert Witness List due by 11/2/2006 Deft Expert Witness List due by 11/23/2006 Discovery due by 12/8/2006 Dispositive Motion Filing due by 12/15/2006 Non−Dispositive Motion Filing due by 12/15/2006 Joint Pretrial Order due by 1/22/2007 Pretrial Conference set for 2/5/2007 at 09:30 AM before Judge Randy Crane Jury Selection set for 2/6/2007 at 09:30AM before Judge Randy Crane Motion Hearing set for 1/12/2007 at 09:30 AM before Judge Randy Crane.( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 02/09/2006)
37 ORDER SETTING PRELIMINARY CLASS CERTIFICATION HEARING Class Certification set for 8/9/2006 at 09:30 AM before Judge Randy Crane.( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 02/09/2006)
38 RESPONSE in Opposition to 34 MOTION to Dismiss, 35 MOTION to Dismiss Plaintiffs' claims against Federal Defendants, filed by all plaintiffs. (Attachments: # 1 Proposed Order)(Santos, Sarah) (Entered: 02/28/2006)
39 MOTION to Add Party by all plaintiffs, filed. Motion Docket Date 3/29/2006. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C# 4 Exhibit D# 5 Exhibit E# 6 Proposed Order)(Santos, Sarah) (Entered: 03/09/2006)
Summons Issued as to The Estate of Don Vannerson c/o Rodney Vannerson, Eleni Papadakis.(fgarcia, ) (Entered: 03/13/2006)
40 Supplemental RESPONSE in Opposition to 35 MOTION to Dismiss Plaintiffs' claims against Federal Defendants, filed by all plaintiffs. (Attachments: # 1 Exhibit)(Brodyaga, Elisabeth) (Entered: 03/10/2006)
41 Corrected RESPONSE in Opposition to 35 MOTION to Dismiss Plaintiffs' claims against Federal Defendants, filed by all plaintiffs. (Attachments: # 1 Exhibit)(Brodyaga, Elisabeth) (Entered: 03/10/2006)
42 MOTION for Protective Order by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 4/13/2006. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 03/24/2006)
43 ORDER striking 42 MOTION for Protective Order.( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 03/24/2006)
44 MOTION for Protective Order by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 4/18/2006. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 03/29/2006)
45 SUMMONS Returned Executed. The Estate of Don Vannerson served on 3/16/2006, answer due 4/5/2006, filed.(fgarcia, ) (Entered: 03/30/2006)
46 RESPONSE in Opposition to 44 MOTION for Protective Order, filed by all plaintiffs. (Attachments: # 1 Proposed Order)(Santos, Sarah) (Entered: 04/04/2006)
47 ORDER granting 39 Motion to Add Party.( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 04/06/2006)
48 Second MOTION for Protective Order as to Plaintiffs' First Set of Requests for Production by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 5/1/2006. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Proposed Order)(fgarcia, ) (Entered: 04/10/2006)
49 Opposed Motion for Protection by The Estate of Don Vannerson, filed. Motion Docket Date 5/1/2006. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 04/10/2006)

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04/10/2006 04/11/2006 04/11/2006 04/18/2006 04/18/2006 04/19/2006 04/20/2006 04/21/2006
04/21/2006 04/21/2006 04/24/2006 04/24/2006 04/24/2006 04/25/2006
04/25/2006 04/27/2006 04/28/2006 04/28/2006 05/01/2006

50 Opposed MOTION for Protection Against Plaintiffs' March 31, 2006 Requests for Production by The Estate of Don Vannerson, filed. Motion Docket Date 5/1/2006. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 04/10/2006)
51 RESPONSE in Opposition to 48 MOTION for Protective Order, filed by all plaintiffs. (Attachments: # 1 Proposed Order)(Santos, Sarah) (Entered: 04/11/2006)
52 APPENDIX re: 51 Response in Opposition to Motion by all plaintiffs, filed. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C)(Santos, Sarah) (Entered: 04/11/2006)
53 REPLY to Plaintiffs' Opposition to Defendants' Motion to Dismiss, filed by Fairmont Specialty Insurance Company, Stonington Insurance Company. (fgarcia, ) (Entered: 04/18/2006)
54 SUPPLEMENT to Their Motion to Dismiss Plaintiffs' Fourth Amended Petition for Writ of Habeas Corpus by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed.(fgarcia, ) (Entered: 04/18/2006)
55 Plaintiffs' Exhibit H by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 04/19/2006)
56 Supplemental MEMORANDUM in Opposition to Defendants' 44 MOTION for Protective Order by all plaintiffs, filed.(fgarcia, ) (Entered: 04/20/2006)
57 Unopposed MOTION to Amend Pleadings and to File Fifth Amended Petition for Writ of Habeas Corpus and Class Action Complaint by all plaintiffs, filed. Motion Docket Date forhtwith. (Attachments: # 1 Continuation # 2 Proposed Order)(fgarcia, ) (Entered: 04/21/2006)
58 SURREPLY in Opposition to Stonington and Fairmont's Motion to Dismiss, filed by all plaintiffs. (fgarcia, ) (Entered: 04/21/2006)
59 Plaintiffs' Exhibit "I" by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 04/21/2006)
60 Plaintiffs' Exhibit J by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 04/24/2006)
61 Plaintiffs' Exhibit K by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 04/24/2006)
62 Supplemental RESPONSE in Opposition to 35 MOTION to Dismiss Plaintiffs' claims against Federal Defendants, filed by all plaintiffs. (Brodyaga, Elisabeth) (Entered: 04/24/2006)
63 REPLY to Plaintiffs' Memorandum in Opposition to Defendants' Second Motion for Protective Order as to Plaintiffs' First Set of Requests for Production, filed by Fairmont Specialty Insurance Company, Stonington Insurance Company. (fgarcia, ) (Entered: 04/25/2006)
64 Plaintiffs' Exhibit "L" by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 04/25/2006)
65 Supplemental RESPONSE in Opposition to 35 MOTION to Dismiss Plaintiffs' claims against Federal Defendants, filed by all plaintiffs. (Brodyaga, Elisabeth) (Entered: 04/27/2006)
66 Opposition to Defendants Fairmont and Stonington's Supplement to Their Motion to Dismiss Plaintiffs' Fourth Amended Complaint, filed by all plaintiffs. (fgarcia, ) (Entered: 04/28/2006)
67 Unopposed Amended MOTION for Max L. Christenson to Withdraw as Counsel and to Substitute Counsel by Santiago Sol, filed. Motion Docket Date 5/18/2006. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 04/28/2006)
68 Emergency Opposed MOTION to Quash Subpoena to Appear for Deposition and to Produce Documents Directed to Ms. Laura Cuayahuital and MOTION for Protective Order by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 5/22/2006. (Attachments: # 1 Proposed

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05/02/2006
05/08/2006 05/08/2006 05/08/2006 05/22/2006 05/22/2006 05/22/2006 06/01/2006 06/16/2006 06/16/2006 06/19/2006 06/27/2006 07/03/2006 07/03/2006 07/03/2006
07/03/2006

Order)(fgarcia, ) (Entered: 05/01/2006)
69 RESPONSE in Opposition to 68 MOTION to Quash Subpoena to Appear for Deposition and to Produce Documents Directed to Ms. Laura Cuayahuital MOTION for Protective Order MOTION to Quash Subpoena to Appear for Deposition and to Produce Documents Directed to Ms. Laura Cuayahuital MOTION for Protective Order, filed by all plaintiffs. (Attachments: # 1)(Brodyaga, Elisabeth) (Entered: 05/02/2006)
70 ORDER granting 67 MOTION for Max L. Christenson to Withdraw as Attorney, mooting 18 MOTION for Max I. Christenson to Withdraw as Attorney.( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 05/08/2006)
71 ORDER granting 57 Unopposed Motion to Amend Pleadings and to File Fifth Amended Petition for Writ of Habeas Corpus.( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 05/08/2006)
72 Fifth Amended PETITION for Writ of Habeas Corpus and Class Action Complaint filed by all plaintiffs. (Attachments: # 1 Continuation)(fgarcia, ) (Entered: 05/09/2006)
73 ANSWER to Petition for Writ of Habeas Corpus by The Estate of Don Vannerson, filed.(Worthington, Dan) (Entered: 05/22/2006)
74 ANSWER to Petition for Writ of Habeas Corpus by Santiago Sol, filed.(Worthington, Dan) (Entered: 05/22/2006)
75 MOTION to Dismiss by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 6/12/2006. (Attachments: # 1 Proposed Order)(Worthington, Dan) (Entered: 05/22/2006)
76 Opposition to Defendant Fairmont and Stonington's 75 MOTION to Dismiss, filed by all plaintiffs. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 06/02/2006)
77 MOTION to Dismiss Fifth Amended Petition for Writ and class action complaint by Michael W. Padilla, filed. Motion Docket Date 7/6/2006. (Attachments: # 1 Proposed Order)(bgarces, ) (Entered: 06/19/2006)
78 MOTION to Dismiss Fifth Amended Petition for Writ of Habeas Corpus and Class Action Complaint by Santiago Sol, filed. Motion Docket Date 7/6/2006. (Attachments: # 1 Proposed Order)(bgarces, ) (Entered: 06/19/2006)
79 MOTION to Transfer Venue by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 7/10/2006. (Attachments: # 1 Proposed Order)(bgarces, ) (Entered: 06/19/2006)
80 Opposed MOTION to Compel Discovery by all plaintiffs, filed. Motion Docket Date 7/17/2006. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 06/27/2006)
81 BRIEF in Opposition to Defendants 79 MOTION to Transfer Case by all plaintiffs, filed. (Attachments: # 1 Continuation # 2 Proposed Order)(fgarcia, ) (Entered: 07/03/2006)
82 Consolidated Opposition to Santiago Sol and Michael Padilla's 77 MOTION to Dismiss, 78 MOTION to Dismiss, filed by all plaintiffs. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 07/03/2006)
83 Agreed MOTION for Protective Order by Juana Zamora, Miriam Garrido, Michael W. Padilla, Aracely Zamora−Garcia, Manuel Sandoval−Herrera, Irma Sandoval Ibarra Valencia, Adriana Echavarria, Jorge Luis Echavarria, Cesar Lucio, Apolinar Torres−Espino, Praxedis Rodriguez−Castro, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio, Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 7/24/2006. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 07/05/2006)
84 RESPONSE to Plaintiffs' 80 MOTION to Compel Discovery, filed by Michael W. Padilla. (fgarcia, ) (Entered: 07/05/2006)

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07/10/2006 07/10/2006 07/11/2006 07/11/2006 07/14/2006 07/15/2006 07/16/2006 07/18/2006 07/19/2006
07/22/2006 08/08/2006
08/09/2006 08/11/2006 08/14/2006 08/14/2006 08/16/2006

85 CERTIFICATE of Conference in Support of 83 MOTION for Protective Order by Michael W. Padilla, Fairmont Specialty Insurance Company, Stonington Insurance Company, filed.(fgarcia, ) (Entered: 07/10/2006)
86 ORDER granting 83 Agreed Motion for Protective Order .( Signed by Judge Peter E. Ormsby ) Parties notified.(fgarcia, ) (Entered: 07/11/2006)
87 REPLY to Plaintiffs' Brief in Opposition to Defendants' Motion to Transfer Venue, filed by Fairmont Specialty Insurance Company, Stonington Insurance Company. (fgarcia, ) (Entered: 07/11/2006)
88 TRANSCRIPT of Initial Pretrial / Scheduling Conference held on 2/8/06 before Judge Randy Crane. Court Reporter: Richard Cortez, filed.(rcortez) (Entered: 07/14/2006)
89 Opposed MOTION for Continuance of the Class Certification Hearing by Michael W. Padilla, Marc Moore, Alberto Gonzales, Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 8/3/2006. (Attachments: # 1 Proposed Order)(fgarcia, ) (Entered: 07/14/2006)
90 Plaintiffs' Exhibit "M" by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 07/15/2006)
91 Plaintiffs' Exhibit "N" by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 07/16/2006)
92 RESPONSE in Opposition to 89 MOTION to Continue of the Class Certification Hearing, filed by all plaintiffs. (Attachments: # 1 Proposed Order)(Brodyaga, Elisabeth) (Entered: 07/18/2006)
93 Opposed MOTION to Certify Class by all plaintiffs, filed. Motion Docket Date 8/8/2006. (Attachments: # 1 Affidavit King Declaration re Exhibits# 2 Exhibit Exhibit CC1# 3 Exhibit Exhibit CC2# 4 Exhibit Exhibit CC3# 5 Exhibit Exhibit CC4# 6 Exhibit Exhibit CC5# 7 Exhibit CC6# 8 Exhibit CC7# 9 Exhibit CC8# 10 Exhibit CC9# 11 Exhibit CC10# 12 Exhibit CC11# 13 Exhibit CC12# 14 Exhibit CC13# 15 Exhibit CC14# 16 Exhibit CC15# 17 Exhibit CC16# 18 Exhibit CC17# 19 Exhibit CC18# 20 Exhibit CC19# 21 Exhibit CC20# 22 Proposed Order)(Brodyaga, Elisabeth) (Entered: 07/19/2006)
94 Plaintiffs' Exhibit "O" by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 07/22/2006)
95 RESPONSE in Opposition to 93 Opposed MOTION to Certify Class, filed by Michael W. Padilla, Fairmont Specialty Insurance Company, Stonington Insurance Company. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C# 4 Exhibit D# 5 Exhibit E# 6 Exhibit F# 7 Exhibit G# 8 Exhibit H# 9 Exhibit I# 10 Exhibit J# 11 Exhibit K# 12 Exhibit L# 13 Exhibit M# 14 Exhibit N# 15 Exhibit O# 16 Exhibit P# 17 Affidavit Andrea Cutter# 18 Proposed Order)(Newman, Todd) (Entered: 08/08/2006)
96 ORDER Setting Hearing, Pre Class Certification Hearing set for 8/17/2006 at 09:30 AM before Judge Randy Crane.( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 08/09/2006)
97 Plaintiffs' Exhibit "P" by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 08/11/2006)
98 ORDER Resetting Certification Hearing, Pre Class Certification Hearing reset for 9/15/2006 at 09:30 AM before Judge Randy Crane.( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 08/14/2006)
99 SUPPLEMENT to 93 Opposed MOTION to Certify Class by all plaintiffs, filed. (Attachments: # 1 Affidavit King Declaration# 2 Exhibit CC21# 3 Exhibit CC22# 4 Exhibit CC23# 5 Errata CC24# 6 Exhibit CC25# 7 Exhibit CC26# 8 Exhibit CC27)(King, John) (Entered: 08/14/2006)
100 ORDER denying Federal Defendant's Motion to Dismiss 35 Motion to Dismiss .( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 08/16/2006)

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08/17/2006 08/26/2006 08/28/2006 09/13/2006 09/13/2006 09/15/2006 09/15/2006 09/15/2006
10/11/2006 10/19/2006 10/19/2006 10/20/2006 10/24/2006

101 Plaintiffs' Exhibit "Q" by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 08/17/2006)
102 Plaintiffs' Exhibit "R" by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 08/26/2006)
103 Opposed MOTION to Amend by all plaintiffs, filed. Motion Docket Date 9/18/2006. (Attachments: # 1 Complaint # 2 Proposed Order)(Brodyaga, Elisabeth) (Entered: 08/28/2006)
104 RESPONSE in Opposition to 103 Opposed MOTION to Amend, filed by Michael W. Padilla, Fairmont Specialty Insurance Company, Stonington Insurance Company. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C# 4 Proposed Order Proposed Order)(Newman, Todd) (Entered: 09/13/2006)
105 Supplemental REPLY to Response to 79 MOTION to Transfer Case, filed by Michael W. Padilla, Fairmont Specialty Insurance Company, Stonington Insurance Company. (Attachments: # 1 Exhibit F)(Newman, Todd) (Entered: 09/13/2006)
106 ORDER Granting in Part and Denying in Part Insurer Defendants' Motion to Dismiss 75 MOTION to Dismiss. ( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 09/15/2006)
107 ORDER Resetting Hearing on Pending Motions and Pre−Class Certification, Pre−Class Certification Hearing set for 11/17/2006 at 09:30 AM and Motion Hearing set for 11/17/2006 at 09:30 AM before Judge Randy Crane.( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 09/15/2006)
Minute Entry for proceedings held before Judge Randy Crane. MOTION HEARING held on 9/15/2006. Case called on the docket for hearing on pre−class certification. The Court announced that prior to commencing this hearing, all counsel were tendered with the Court's 29 page order for review. The Court addressed the issue of venue; 103 Opposed Motion to Amend − Denied and directs counsel to file a motion for leave to file new motion, DTPA will be removed. Before class certification Attorney King will file another motion to dismiss. The Court also addressed motion to dismiss by administrator, arguments of counsel. The Court takes the pendings motions under advisement and will issue it's ruling. The Court will set matter for preliminary certification hearing in two months. The Court directs counsel to contact the clerk prior to the hearing and inquire if the Court intends to receive evidence at that time, schedule permitting. Appearances: John B. King/Elisabeth L. S. Brodyaga/Bill Reed; Bradford W. Irelan/Andrea Ketter/Dan Worthington; Rene C. Benavides.(ERO:Richard Cortez [10:20−10:48])(Law Clerk: Samantha Rodriguez), filed.(lcervantes) (Entered: 11/15/2006)
108 Unopposed MOTION for Leave to File Plaintiffs' Sixth Amended Complaint by all plaintiffs, filed. Motion Docket Date 10/31/2006. (Attachments: # 1 Complaint Sixth Amended Complaint# 2 Proposed Order Proposed Order)(King, John) (Entered: 10/11/2006)
109 ORDER granting in part and denying in part Defendant Michael Padilla's 77 Motion to Dismiss .( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 10/19/2006)
110 ORDER granting in part and denying in part Defendant Santiago Sol's 78 Motion to Dismiss .( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 10/19/2006)
111 Plaintiffs' Exhibit "S" by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 10/20/2006)
112 Opposed MOTION to Certify Class by all plaintiffs, filed. Motion Docket Date 11/13/2006. (Attachments: # 1 Proposed Order # 2 Affidavit Dolghih Declaration# 3 Exhibit CC28# 4 Exhibit CC29 part 1# 5 Exhibit CC29 part 2# 6 Exhibit CC30# 7 Exhibit CC31# 8 Exhibit CC32# 9 Exhibit CC33# 10 Exhibit CC34# 11 Exhibit CC35# 12 Exhibit CC35A# 13 Exhibit CC36# 14 Exhibit CC36A# 15 Exhibit CC37# 16 Exhibit CC37A# 17 Exhibit CC38# 18 Exhibit CC38A# 19 Exhibit CC39)(King, John) (Entered: 10/24/2006)

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 21 of 36

10/27/2006 10/27/2006 10/31/2006 11/04/2006 11/09/2006 11/09/2006 11/09/2006 11/13/2006 11/14/2006
11/16/2006 11/16/2006 11/17/2006
11/20/2006 12/06/2006
12/14/2006
12/19/2006 12/19/2006

113 ORDER granting 108 Unopposed Motion for Leave to Amend Pleadings and File Sixth Amended Petition.( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 10/27/2006)
114 Sixth AMENDED Peition for Writ of Habeas Corpus and Class Action Complaint with Jury Demand against all defendants filed by all plaintiffs.(fgarcia, ) (Entered: 10/27/2006)
115 MOTION and Order for Thomas A. Tucker Ronzetti to Appear Pro Hac Vice by all plaintiffs, filed. Motion Docket Date forthwith. (fgarcia, ) (Entered: 10/31/2006)
116 Plaitniffs' Exhibit "T" by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 11/04/2006)
117 ANSWER to Amended Complaint by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed.(Newman, Todd) (Entered: 11/09/2006)
118 ANSWER to Amended Complaint by Michael W. Padilla, filed.(Newman, Todd) (Entered: 11/09/2006)
119 ANSWER to Amended Complaint by Santiago Sol, filed.(Newman, Todd) (Entered: 11/09/2006)
120 ORDER granting 115 Motion and Order to Appear Pro Hac Vice of Thomas A. Tucker Ronzetti .( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 11/13/2006)
121 RESPONSE in Opposition to 112 Opposed MOTION to Certify Class, filed by Michael W. Padilla, Fairmont Specialty Insurance Company, Stonington Insurance Company. (Attachments: # 1 Affidavit In support of Defs.' Resp. to Plts.' Opposed M4Class Cert.# 2 Exhibit # 3 Exhibit # 4 Exhibit # 5 Exhibit # 6 Exhibit # 7 Exhibit # 8 Exhibit # 9 Exhibit # 10 Exhibit # 11 Errata # 12 Exhibit # 13 Exhibit # 14 Exhibit # 15 Exhibit # 16 Proposed Order)(Newman, Todd) (Entered: 11/14/2006)
122 ORDER Denying Insurer Defendants' Motion to Transfer Venue, denying 79 Motion to Transfer Case .( Signed by Judge Randy Crane ) Parties notified.(fgarcia, ) (Entered: 11/16/2006)
123 RESPONSE to 112 Opposed MOTION to Certify Class, filed by Marc Moore, Alberto R Gonzales. (Benavides, Rene) (Entered: 11/16/2006)
Minute Entry for proceedings held before Judge Randy Crane. MOTION HEARING and CLASS PRE−CERTIFICATION HEARING held on 11/17/2006. Appearances: E. Lisa S. Brodyaga/John Benjamin King/Clifford Walston/William Reed/Thomas A. Tucker Ronzetti/Rene C. Benavides, AUSA; Bradford W. Irelan/Susan Logston; Dan Worthington.(ERO:Richard Cortez [9:59−11:01]), filed.(lcervantes) (Entered: 11/17/2006)
124 REPLY in Support of 112 Opposed MOTION to Certify Class, filed by all plaintiffs. (Attachments: # 1 Affidavit Declaration of J. Benjamin King# 2 Exhibit CC40# 3 Exhibit CC41)(King, John) (Entered: 11/20/2006)
125 SURREPLY to 112 Opposed MOTION to Certify Class, filed by The Estate of Don Vannerson, Fairmont Specialty Insurance Company, Stonington Insurance Company. (Attachments: # 1 Affidavit of Susan Logsdon Authenticating Attachments# 2 Exhibit 15# 3 Exhibit 16# 4 Exhibit 17# 5 Exhibit 18# 6 Exhibit 19)(Newman, Todd) (Entered: 12/06/2006)
130 TRANSCRIPT of Pre Class Certification held on 11/17/06 before Judge Randy Crane. Court Reporter: ERO Richard Cortez. Transcript is available for viewing in the office of the clerk, filed. (Attachments: # 1 Continuation) (rcortez) (Entered: 12/20/2006)
126 Plaintiffs' Exhibit "U" by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 12/19/2006)
127 Supplemental REPLY in Support of 112 Opposed MOTION to Certify Class, filed by all plaintiffs. (Attachments: # 1 Affidavit King Declaration# 2 Exhibit

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 22 of 36

12/19/2006 12/19/2006 12/29/2006 01/05/2007 01/10/2007 03/05/2007 03/05/2007 03/07/2007 03/19/2007 04/19/2007 04/25/2007 04/25/2007 04/26/2007 05/07/2007 05/17/2007 05/17/2007
05/18/2007 06/18/2007

CC42)(King, John) (Entered: 12/19/2006)
128 Plaintiffs' Exhibit "V" by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 12/19/2006)
129 Supplemental REPLY in Support of 112 Opposed MOTION to Certify Class, filed by all plaintiffs. (Brodyaga, Elisabeth) (Entered: 12/19/2006)
131 Plaintiffs' Exhibit "W" by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 12/29/2006)
132 Plaintiffs' Exhibit "X" by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 01/05/2007)
133 ORDER Resetting Pending Motions (previously set for January 12, 2007); hereby reset for pending motions hearing on March 7, 2007 @ 9:30 a.m..( Signed by Judge Randy Crane ) Parties notified.(cjones, ) (Entered: 01/10/2007)
ORAL ORDER: 3/7/07 hearing cancelled; Parties notified.(bgarces, ) (Entered: 03/05/2007)
134 ORDER Motion Hearing reset for 4/13/2007 at 09:30 AM before Judge Randy Crane.( Signed by Judge Randy Crane ) Parties notified.(bgarces, ) (Entered: 03/06/2007)
135 Unopposed MOTION for Continuance hearing on motion for class certification by all plaintiffs, filed. Motion Docket Date 3/27/2007. (Attachments: # 1 Proposed Order)(Brodyaga, Elisabeth) (Entered: 03/07/2007)
136 ORDER Motion Hearing reset for 4/26/2007 at 09:30 AM before Judge Randy Crane.( Signed by Judge Randy Crane ) Parties notified.(bgarces, ) (Entered: 03/19/2007)
137 Plaintiffs' Exhibit "Y" by all plaintiffs, filed.(Brodyaga, Elisabeth) (Entered: 04/19/2007)
138 ORDER granting in part and denying in part 112 Motion to Certify Class.( Signed by Judge Randy Crane ) Parties notified.(bgarces, ) (Entered: 04/25/2007)
139 ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION TO CERTIFY SURETY BOND CLASSES.( Signed by Judge Randy Crane ) Parties notified.(eleandro, ) (Entered: 04/25/2007)
140 ORDER Status Conference set for 5/18/2007 at 09:30 AM before Judge Randy Crane.( Signed by Judge Randy Crane ) Parties notified.(bgarces, ) (Entered: 04/26/2007)
141 MOTION for Clarification as to 138 Order on Motion to Certify Class by Marc Moore, Alberto R Gonzales, filed. Motion Docket Date 5/29/2007. (Benavides, Rene) (Entered: 05/07/2007)
142 Unopposed MOTION to Substitute Defendant Michael Chertoff for Alberto Gonzales by all plaintiffs, filed. Motion Docket Date 6/6/2007. (Attachments: # 1 Proposed Order)(Brodyaga, Elisabeth) (Entered: 05/17/2007)
143 Opposed MOTION to Strike 141 MOTION for Clarification as to 138 Order on Motion to Certify Class by all plaintiffs, filed. Motion Docket Date 6/6/2007. (Attachments: # 1 Proposed Order striking Doc. 141# 2 Proposed Order extending time to respond to Doc. 141)(Brodyaga, Elisabeth) (Entered: 05/17/2007)
144 ORDER Status Conference set for 7/20/2007 at 09:30 AM before Judge Randy Crane.( Signed by Judge Randy Crane ) Parties notified.(bgarces, ) (Entered: 05/18/2007)
145 Opposed MOTION for Leave to File First Amended Answer and Counterclaims to Plaintiffs' Sixth Amended Petition for Writ of Habeas Corpus and Class Action Complaint by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 7/9/2007. (Attachments: # 1 Exhibit First Amended Answer and Counterclaims to Plaintiffs' Sixth Amended Petition for

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 23 of 36

06/20/2007
06/22/2007 06/25/2007 07/09/2007
07/12/2007 07/19/2007 07/20/2007
08/17/2007 09/06/2007

Writ of Habeas Corpus and Class Action Complaint# 2 Proposed Order Order Granting Defendants, Fairmont and Stonington's Motion for leave to Amend Answer to Assert Counterclaims for Indemnity, Recoupment and Setoff)(Irelan, Bradford) (Entered: 06/18/2007)
146 MOTION for Leave to File First Amended Answer and Counterclaims to Plaintiffs' Sixth Amended Petition for Writ of Habeas Corpus and Class Action Complaint by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 7/10/2007. (Attachments: # 1 Exhibit First Amended Answer and Counterclaims to Plaintiffs' Sixth Amended Petition for Writ of Habeas Corpus and Class Action Complaint# 2 Proposed Order Order Granting Defendants, Fairmont and Stonington's, First Amended Opposed Motion for Leave to Amend Answer to Assert Counterclaims for Indemnity, Recoupment, Setoff and Attorneys' Fees)(Irelan, Bradford) (Entered: 06/20/2007)
148 Per Curiam of USCA for the Fifth Circuit (certified copy) dated 6/14/07; USCA No. 07−00024. the petition for leave to appeal under FRCP 23(f) is denied, filed.(bgarces, ) (Entered: 07/02/2007)
147 JOINT DISCOVERY/CASE MANAGEMENT PLAN by all parties, filed. (Attachments: # 1 Exhibit A# 2 Exhibit B1# 3 Exhibit B2# 4 Exhibit B3# 5 Exhibit B4# 6 Exhibit C1# 7 Exhibit C2# 8 Exhibit D)(King, John) (Entered: 06/25/2007)
149 RESPONSE in Opposition to 145 Opposed MOTION for Leave to File First Amended Answer and Counterclaims to Plaintiffs' Sixth Amended Petition for Writ of Habeas Corpus and Class Action Complaint, 146 MOTION for Leave to File First Amended Answer and Counterclaims to Plaintiffs' Sixth Amended Petition for Writ of Habeas Corpus and Class Action Complaint, filed by Juana Zamora, Aracely Zamora−Garcia, Manuel Sandoval−Herrera, Irma Sandoval Ibarra Valencia, Maria Francisca Arce Cedeno, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio. (Attachments: # 1 Affidavit of Elisaveta Dolghih# 2 Exhibit A# 3 Exhibit B# 4 Exhibit C# 5 Exhibit D# 6 Exhibit E# 7 Exhibit F# 8 Exhibit G# 9 Exhibit H# 10 Exhibit I# 11 Exhibit J# 12 Exhibit K# 13 Exhibit L# 14 Exhibit M# 15 Exhibit N# 16 Exhibit O# 17 Exhibit P# 18 Exhibit Q# 19 Exhibit R# 20 Exhibit S# 21 Exhibit T# 22 Exhibit U# 23 Exhibit V# 24 Exhibit W# 25 Exhibit X# 26 Exhibit Y# 27 Proposed Order # 28 Exhibit Certificate of Service)(King, John) (Entered: 07/09/2007)
150 ORDER granting 142 Unopposed Motion to Substitute.( Signed by Judge Randy Crane ) Parties notified.(mzamarripa, ) (Entered: 07/13/2007)
151 REPLY to Response to 146 MOTION for Leave to File First Amended Answer and Counterclaims to Plaintiffs' Sixth Amended Petition for Writ of Habeas Corpus and Class Action Complaint, filed by Fairmont Specialty Insurance Company, Stonington Insurance Company. (Attachments: # 1 Exhibit #1# 2 Exhibit #2# 3 Exhibit #3# 4 Exhibit #4# 5 Exhibit #5)(Irelan, Bradford) (Entered: 07/19/2007)
Minute Entry for proceedings held before Judge Randy Crane. STATUS CONFERENCE held on 7/20/2007. The Court addressed counsel on the issues of opposition to [145, 146] motion to amend; asserting defensive/affirmative claims; the Fifth Circuit opinion; case moving forward; and issuance of notice to class; and the scheduling order. The Court will issue a amended scheduling order. The Court further announced that it will also set status conference for every two (2)months. Appearances: John Benjamin King/Elisabeth Lisa S. Brodyaga/Thomas A. Tucker Ronzetti; Rene C. Benavides, AUSA; Bradford Wald Irelan/Susan Sullivan.(ERO:Richard Cortez [10:40l−11:05]), filed.(lcervantes) (Entered: 07/25/2007)
152 Agreed MOTION for Protective Order by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 9/6/2007. (Attachments: # 1 Proposed Order Agreed Protective Order)(Irelan, Bradford) (Entered: 08/17/2007)
153 MOTION for Partial Summary Judgment by Fairmont Specialty Insurance Company, filed. Motion Docket Date 9/26/2007. (Attachments: # 1 Affidavit In Support of Fairmont's Motion for Summary Judgment# 2 Appendix In Support of Fairmont's Motion for Summary Judgment# 3 Exhibit 1# 4 Exhibit 2# 5 Exhibit 3#

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 24 of 36

09/12/2007
09/14/2007
09/21/2007 09/21/2007
09/27/2007 12/04/2007 12/10/2007 12/10/2007 12/21/2007 01/01/2008 01/03/2008 01/04/2008 01/18/2008

6 Exhibit 4# 7 Exhibit 5# 8 Exhibit 6# 9 Proposed Order Granting Fairmont's Motion for Summary Judgment)(Irelan, Bradford) (Entered: 09/06/2007)
154 MOTION for Partial Summary Judgment by Stonington Insurance Company, filed. Motion Docket Date 10/2/2007. (Attachments: # 1 Affidavit Affidavit of Susan Logsdon in Support of Defendant Stonington's Motion for Partial Summary Judgment# 2 Appendix Appendix of Exhibits in Support of Stonington's Motion for Partial Summary Judgment# 3 Exhibit 1# 4 Exhibit 2# 5 Exhibit 3# 6 Proposed Order Order Granting Stonington's Motion for Partial Summary Judgment)(Irelan, Bradford) (Entered: 09/12/2007)
155 Opposed MOTION for Continuance of Defendants' Motions for Summary Judgments, EMERGENCY MOTION by all plaintiffs, filed. Motion Docket Date 10/4/2007. (Attachments: # 1 Exhibit 1# 2 Exhibit 2# 3 Exhibit 3# 4 Exhibit 4# 5 Exhibit 5# 6 Exhibit 6# 7 Exhibit 7# 8 Exhibit 8# 9 Exhibit 9# 10 Exhibit Declaration of Exhibits# 11 Proposed Order Proposed Order)(King, John) (Entered: 09/14/2007)
156 ORDER granting 155 Plaintiff's Opposed Emergency Motion for Continuance of Fairmont's and Stonington's Motions for Summary Judgment Pursuant to Federal Rule of Procedure 56(f).( Signed by Judge Randy Crane ) Parties notified.(mzamarripa, ) (Entered: 09/21/2007)
157 SCHEDULING ORDER: Pltf Expert Report due by 1/11/2008 Deft Expert Report due by 2/1/2008 Discovery due by 2/15/2008 Dispositive Motion Filing due by 2/22/2008 Non−Dispositive Motion Filing due by 2/22/2008 Joint Pretrial Order due by 3/31/2008 Pretrial Conference set for 4/7/2008 at 09:30 AM before Judge Randy Crane Jury Selection set for 4/8/2008 at 09:30AM before Judge Randy Crane Motion Hearing set for 3/21/2008 at 09:30 AM before Judge Randy Crane.( Signed by Judge Randy Crane ) Parties notified.(mzamarripa, ) (Entered: 09/21/2007)
158 PROTECTIVE ORDER granting 152 Agreed MOTION for Protective Order.( Signed by Judge Randy Crane ) Parties notified.(mzamarripa, ) (Entered: 09/27/2007)
159 Unopposed MOTION Authorization of Class Notice by Aracely Zamora−Garcia, Manuel Sandoval−Herrera, Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio, filed. Motion Docket Date 12/24/2007. (Attachments: # 1 Exhibit A (Alternative Proposed Notice)# 2 Proposed Order)(King, John) (Entered: 12/04/2007)
160 ORDER: Status Conference set for 1/18/2008 at 09:30 AM before Judge Randy Crane.( Signed by Judge Randy Crane ) Parties notified.(bgarces, ) (Entered: 12/11/2007)
161 ORDER granting in part and denying in part 143 Motion to Strike/Motion to Hold in Abeyance.( Signed by Judge Randy Crane ) Parties notified.(bgarces, ) (Entered: 12/11/2007)
162 ANSWER to Amended Complaint by Marc Moore, Michael Chertoff, filed.(Benavides, Rene) (Entered: 12/21/2007)
163 RESPONSE to 141 MOTION for Clarification as to 138 Order on Motion to Certify Class, filed by Maria Francisca Arce Cedeno, Adriana Echavarria, Jorge Luis Echavarria, Juan Larin−Ulloa. (Attachments: # 1 Proposed Order)(Brodyaga, Elisabeth) (Entered: 01/01/2008)
164 MOTION for Stacey Young and Benjamin Zeitlin to Appear Pro Hac Vice by Marc Moore, Michael Chertoff, filed. Motion Docket Date 1/23/2008. (Benavides, Rene) (Entered: 01/03/2008)
165 ORDER granting 164 Motion for Benjamin Zeitlin and Stacey Young to Appear Pro Hac Vice for Marc Moore, et al.( Signed by Judge Randy Crane ) Parties notified.(mzamarripa, ) (Entered: 01/04/2008)
166 ORDER granting in part and denying in part 146 Motion for Leave to Amend Answer to Assert Counterclaims for Indemnity, Recoupment, Setoff, and

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 25 of 36

01/18/2008
01/24/2008 01/25/2008 01/25/2008 01/25/2008 01/25/2008 01/25/2008
01/31/2008 02/07/2008 02/13/2008 02/14/2008 02/21/2008

Attorneys' Fees.( Signed by Judge Randy Crane ) Parties notified.(bgarces, ) (Entered: 01/18/2008)
Minute Entry for proceedings held before Judge Randy Crane. STATUS CONFERENCE held on 1/18/2008. The Court confirmed that prior to this hearing, counsel had an opportunity to review the Court's 166 Order*. The Court addressed counsel re: notice to class and directed counsel to submit an agreed proposed order to the Court as soon as possible.* The Court vacated the 157 scheduling order and discovery remains open. The Court will issue a new scheduling order and intends to have another status conference, late in February, before the deadline on the notice to the class and at that time will set remaining deadlines. The Court granted plaintiff's counsel until Friday, 1/25/07 to file response to motion for summary judgment. Appearances: Elisabeth Lisa S. Brodyaga, John Benjamin King, Clifford Walston; Rene C. Benavides, AUSA; Bradford W. Irelan; Lisa M. Putnam; Sofia Ramon; Michael Padilla. (ERO:Richard Cortez [10:28−10:36]), filed.(lcervantes) *Modified on 1/21/2008 (lcervantes). (Entered: 01/21/2008)
167 ORDER CLARIFYING SCOPE OF FEDERAL CLASSES: mooting 141 MOTION for Clarification as to 138 Order on Motion to Certify Class.( Signed by Judge Randy Crane ) Parties notified.(bgarces, ) (Entered: 01/24/2008)
168 Sealed Event, filed. (With attachments) (Entered: 01/25/2008)
169 Sealed Event, filed. (Entered: 01/25/2008)
170 Sealed Event, filed. (With attachments) (Entered: 01/25/2008)
171 RESPONSE in Opposition to 153 MOTION for Partial Summary Judgment, 154 MOTION for Partial Summary Judgment, filed by Juana Zamora, Aracely Zamora−Garcia, Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio. (Attachments: # 1 Proposed Order)(King, John) (Entered: 01/25/2008)
172 DECLARATION of Elisaveta Dolghih re: 153 MOTION for Partial Summary Judgment, 154 MOTION for Partial Summary Judgment, filed. (Attachments: # 1 Exhibit 2# 2 Exhibit 3# 3 Exhibit 4# 4 Exhibit 5# 5 Exhibit 6# 6 Exhibit 9# 7 Exhibit 10# 8 Exhibit 11# 9 Exhibit 12# 10 Exhibit 13# 11 Exhibit 14# 12 Exhibit 15# 13 Exhibit 16# 14 Exhibit 17# 15 Exhibit 18# 16 Exhibit 19# 17 Exhibit 20# 18 Exhibit 21# 19 Exhibit 22# 20 Exhibit 23# 21 Exhibit 24# 22 Exhibit 25# 23 Exhibit 26# 24 Exhibit 27# 25 Exhibit 28# 26 Exhibit 29)(King, John) (Entered: 01/25/2008)
173 NOTICE of Appearance by Howard Louis Close; Thomas C. Wright; Andrew Love on behalf of Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. (Irelan, Bradford) (Entered: 01/31/2008)
174 AMENDED ANSWER to 114 Amended Complaint/Counterclaim/Crossclaim etc., COUNTERCLAIM against Irma Sandoval Ibarra Valencia by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. (Irelan, Bradford) (Entered: 02/07/2008)
175 MOTION to Quash Subpoena by Michael W. Padilla, Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 3/4/2008. (Attachments: # 1 Proposed Order Order Quashing Subpoena# 2 Exhibit A# 3 Exhibit B)(Irelan, Bradford) (Entered: 02/13/2008)
176 RESPONSE in Opposition to 175 MOTION to Quash Subpoena, filed by Juana Zamora, Aracely Zamora−Garcia, Manuel Sandoval−Herrera, Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio. (Attachments: # 1 Affidavit Declaration of Elisaveta Dolghih# 2 Exhibit A# 3 Exhibit B# 4 Exhibit C# 5 Proposed Order)(King, John) (Entered: 02/14/2008)
177 Renewed MOTION Authorization to Serve Class Notice by Irma Sandoval Ibarra Valencia, filed. Motion Docket Date 3/12/2008. (Attachments: # 1 Affidavit Declaration of J. Benjamin King# 2 Exhibit A# 3 Exhibit B# 4 Exhibit C# 5 Exhibit D# 6 Exhibit E# 7 Proposed Order)(King, John) (Entered: 02/21/2008)

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02/27/2008 02/27/2008 02/27/2008 02/27/2008
03/07/2008 03/19/2008 03/19/2008 03/19/2008
03/19/2008 03/20/2008
03/21/2008 03/25/2008

178 ANSWER to 174 Counterclaim with Jury Demand by Irma Sandoval Ibarra Valencia, filed.(King, John) (Entered: 02/27/2008)
179 Opposed MOTION for Partial Summary Judgment by Irma Sandoval Ibarra Valencia, filed. Motion Docket Date 3/18/2008. (Attachments: # 1 Proposed Order)(King, John) (Entered: 02/27/2008)
180 Opposed MOTION for Summary Judgment by Irma Sandoval Ibarra Valencia, filed. Motion Docket Date 3/18/2008. (Attachments: # 1 Proposed Order)(King, John) (Entered: 02/27/2008)
181 DECLARATION of J. Benjamin King re: 179 Opposed MOTION for Partial Summary Judgment, 180 Opposed MOTION for Summary Judgment, filed. (Attachments: # 1 Exhibit 1# 2 Exhibit 2# 3 Exhibit 3# 4 Exhibit 4# 5 Exhibit 5# 6 Exhibit 6# 7 Exhibit 7# 8 Exhibit 8# 9 Exhibit 9# 10 Exhibit 10# 11 Exhibit 11 (part 1)# 12 Exhibit 11 Part 2# 13 Exhibit 11 (part 3)# 14 Errata 11 (part 4)# 15 Exhibit 12# 16 Exhibit 13# 17 Exhibit 14# 18 Exhibit 15# 19 Exhibit 16# 20 Exhibit 17# 21 Exhibit 18# 22 Exhibit 19# 23 Exhibit 20# 24 Exhibit 21# 25 Exhibit 22# 26 Exhibit 23# 27 Exhibit 24# 28 Exhibit 25 (part 1)# 29 Exhibit 25 (part 2)# 30 Exhibit 26# 31 Exhibit 27# 32 Exhibit 28# 33 Exhibit 29A# 34 Exhibit 29B# 35 Exhibit 29C# 36 Exhibit 29D# 37 Exhibit 29E# 38 Exhibit 29F# 39 Exhibit 29G# 40 Exhibit 29H# 41 Exhibit 29I# 42 Exhibit 29J# 43 Exhibit 29K# 44 Exhibit 29L# 45 Exhibit 29M# 46 Exhibit 30# 47 Exhibit 31# 48 Exhibit 32# 49 Exhibit 33# 50 Exhibit 34# 51 Exhibit 35# 52 Exhibit 36# 53 Exhibit 37# 54 Exhibit 38)(King, John) (Entered: 02/27/2008)
182 ORDER SETTING STATUS CONFERENCE: Status Conference set for 3/28/2008 at 09:30 AM before Judge Randy Crane.( Signed by Judge Randy Crane ) Parties notified.(mzamarripa, ) (Entered: 03/07/2008)
183 REPLY in Support of 153 MOTION for Partial Summary Judgment, filed by Fairmont Specialty Insurance Company. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C)(Irelan, Bradford) (Entered: 03/19/2008)
184 REPLY in Support of 154 MOTION for Partial Summary Judgment, filed by Stonington Insurance Company. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C)(Irelan, Bradford) (Entered: 03/19/2008)
185 MOTION for Leave to File Defendants' Response to Plaintiffs' Renewed Motion for Authorization to Serve Class Notice by Michael W. Padilla, Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 4/8/2008. (Attachments: # 1 Proposed Order Order on Motion for Leave to File Response to Plaintiffs' Renewed Motion for Authorization to Serve Class Notice)(Irelan, Bradford) (Entered: 03/19/2008)
186 RESPONSE in Opposition to 177 Renewed MOTION Authorization to Serve Class Notice, filed by Michael W. Padilla, Fairmont Specialty Insurance Company, Stonington Insurance Company. (Attachments: # 1 Affidavit Declaration of Bradford W. Irelan Regarding Exhibits# 2 Exhibit A# 3 Exhibit B# 4 Exhibit C)(Irelan, Bradford) (Entered: 03/19/2008)
187 Unopposed MOTION for Extension of Time Filing Responses to Plaintiff's Motions for Summary Judgment by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 4/9/2008. (Attachments: # 1 Proposed Order Granting Defendants' Unopposed Motion to Extend Time to File Oppositions to Motions for Summary Judgment)(Irelan, Bradford) (Entered: 03/20/2008)
188 REPLY in Support of 177 Renewed MOTION Authorization to Serve Class Notice, filed by Irma Sandoval Ibarra Valencia. (Attachments: # 1 Affidavit March 21, 2008 Declaration of J. Benjamin King# 2 Exhibit F# 3 Exhibit G# 4 Exhibit H)(King, John) (Entered: 03/21/2008)
189 ORDER GRANTING DEFENDANT'S UNOPPOSED MOTION TO EXTEND TIME TO FILE OPPOSITIONS TO PLAINTIFF IRMA SANDOVAL'S MOTION FOR PARTIAL SUMMARY JUDGMENT ON HER CLAIMS AND THE INDEMNITOR NOTICE CLASS CLAIMS AGAINST STONINGTON AND FAIRMONT AND PLAINTIFF/COUNTER−DEFEDANT IRMA SANDOVAL'S

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 27 of 36

03/25/2008 03/27/2008 03/27/2008 03/28/2008
03/28/2008
04/01/2008 04/09/2008 04/11/2008 04/11/2008 04/11/2008

MOTION FOR SUMMARY JUDGMENT AGAINST STONINGTON AND FAIRMONT'S COUNTERCLAIMS AND MEMORANDUM IN SUPPORT granting 187 Motion for Extension of Time. Responses due by 3/28/2008.( Signed by Judge Randy Crane ) Parties notified.(mzamarripa, ) (Entered: 03/25/2008)
190 SURREPLY to 153 MOTION for Partial Summary Judgment, 154 MOTION for Partial Summary Judgment, filed by Juana Zamora, Aracely Zamora−Garcia, Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio. (Attachments: # 1 Affidavit Declaration of J. Benjamin King# 2 Exhibit 30# 3 Exhibit 31# 4 Exhibit 32# 5 Exhibit 33# 6 Exhibit 34# 7 Exhibit 35# 8 Exhibit 36)(King, John) (Entered: 03/25/2008)
191 Unopposed MOTION for Extension of Time To File Responses to Irma Sandoval's Motions for Summary Judgment by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 4/16/2008. (Attachments: # 1 Proposed Order Amended Order Granting Unopposed Motion to Extend Time to Respond to Irma Sandoval's Motions for Summary Judgment)(Irelan, Bradford) (Entered: 03/27/2008)
192 ORDER GRANTING DEFENDANTS' MOTION FOR LEAVE TO FILE RESPONSE TO PLAINTIFFS' RENEWED MOTION FOR AUTHORIZATION TO SERVE CLASS NOTICE granting 185 Motion for Leave to File.( Signed by Judge Randy Crane ) Parties notified.(mzamarripa, ) (Entered: 03/27/2008)
193 AMENDED ORDER GRANTING DEFENDANTS' UNOPPOSED AMENDED MOTION TO EXTEND TIME TO FILE OPPOSITIONS TO PLAINTIFF IRMA SANDOVAL'S MOTION FOR PARTIAL SUMMARY JUDGMENT ON HER CLAIMS AND THE INDEMNITOR NOTICE CLASS CLAIMS AGAINST STONINGTON AND FAIRMONT AND PLAINTIFF/COUNTER−DEFENDANT IRMA SANDOVAL'S MOTION FOR SUMMARY JUDGMENT AGAINST STONINGTON AND FAIRMONT'S COUNTERCLAIMS AND MEMORANDM IN SUPPORT granting 191 Motion for Extension of Time Responses due by 4/11/2008.( Signed by Judge Randy Crane ) Parties notified.(mzamarripa, ) (Entered: 03/28/2008)
194 AMENDED SCHEDULING ORDER: Pltf Expert Report due by 3/28/1998,Deft Expert Report due by 4/30/2008,Discovery due by 8/9/2008,Dispositive Motion Filing due by 8/22/2008,Non−Dispositive Motion Filing due by 8/22/2008,Joint Pretrial Order due by 9/29/2008, Pretrial Conference set for 10/6/2008 at 09:30 AM before Judge Randy Crane, Jury Selection set for 10/7/2008 at 09:30AM before Judge Randy Crane, Motion Hearing set for 9/19/2008 at 09:30 AM before Judge Randy Crane.( Signed by Judge Randy Crane ) Parties notified.(mzamarripa, ) (Entered: 03/31/2008)
195 Unopposed MOTION for Continuance of Final Pretrial Conference and Jury Selection &Trial Setting by Juana Zamora, Manuel Sandoval−Herrera, Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio, filed. Motion Docket Date 4/21/2008. (Attachments: # 1 Proposed Order)(King, John) (Entered: 04/01/2008)
196 NOTICE of Agreed Form of Class Notice and Opt−Out Form re: 177 Renewed MOTION Authorization to Serve Class Notice by Irma Sandoval Ibarra Valencia, filed. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C# 4 Exhibit D)(King, John) (Entered: 04/09/2008)
197 NOTICE of Substitution of Lead Counsel for Defendant's Fairmont Specialty Insurance Company and Stonington Insurance Company by Fairmont Specialty Insurance Company, filed. (Close, Howard) (Entered: 04/11/2008)
198 RESPONSE to 180 Opposed MOTION for Summary Judgment, filed by Fairmont Specialty Insurance Company. (Attachments: # 1 Proposed Order # 2 Affidavit Rex Ramos# 3 Exhibit A# 4 Exhibit B# 5 Exhibit C# 6 Exhibit D# 7 Exhibit E)(Close, Howard) (Entered: 04/11/2008)
199 RESPONSE in Opposition to 179 Opposed MOTION for Partial Summary Judgment, filed by Fairmont Specialty Insurance Company. (Attachments: # 1 Proposed Order # 2 Appendix To Exhibits# 3 Exhibit A# 4 Exhibit B# 5 Exhibit

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 28 of 36

04/14/2008 04/14/2008
04/15/2008
04/15/2008 04/22/2008 05/07/2008 05/07/2008 05/07/2008 05/07/2008
05/07/2008
05/09/2008 05/13/2008 05/15/2008 06/19/2008
06/19/2008

C# 6 Exhibit D# 7 Exhibit E# 8 Exhibit F# 9 Exhibit G# 10 Exhibit H# 11 Exhibit I# 12 Exhibit I# 13 Exhibit K# 14 Exhibit L# 15 Exhibit M# 16 Exhibit N# 17 Exhibit O# 18 Exhibit P# 19 Exhibit Q# 20 Exhibit R# 21 Exhibit S# 22 Exhibit T# 23 Exhibit U# 24 Exhibit V# 25 Exhibit W# 26 Exhibit X)(Close, Howard) (Entered: 04/11/2008)
200 NOTICE of attorney substitution by The Estate of Don Vannerson. Attorney Dan K. Worthington added, filed. (Worthington, Dan) (Entered: 04/14/2008)
201 Supplemental RESPONSE in Opposition to 179 Opposed MOTION for Partial Summary Judgment, filed by Fairmont Specialty Insurance Company. (Attachments: # 1 Supplement # 2 Supplement Ex. Q)(Close, Howard) (Entered: 04/14/2008)
202 AMENDED SCHEDULING ORDER: Discovery due by 9/12/2008,Dispositive Motion Filing due by 9/19/2008,Non−Dispositive Motion Filing due by 9/19/2008,Joint Pretrial Order due by 10/27/2008, Pretrial Conference set for 11/4/2008 at 09:30 AM before Judge Randy Crane, Jury Selection set for 11/5/2008 at 09:30AM before Judge Randy Crane, Motion Hearing set for 10/17/2008 at 09:30 AM before Judge Randy Crane.( Signed by Judge Randy Crane ) Parties notified.(bgarces, ) (Entered: 04/15/2008)
203 ORDER granting 177 Motion for Authorization to Service Class Notice.( Signed by Judge Randy Crane ) Parties notified.(bgarces, ) (Entered: 04/16/2008)
204 NOTICE of attorney substitution by Santiago Sol. Attorney Dan K. Worthington added, filed. (Worthington, Dan) (Entered: 04/22/2008)
205 REPLY in Support of 179 Opposed MOTION for Partial Summary Judgment, filed by Irma Sandoval Ibarra Valencia. (King, John) (Entered: 05/07/2008)
206 DECLARATION of J. Benjamin King re: 179 Opposed MOTION for Partial Summary Judgment, filed. (Attachments: # 1 Exhibit 39, # 2 Exhibit 40)(King, John) (Entered: 05/07/2008)
207 REPLY in Support of 180 Opposed MOTION for Summary Judgment, filed by Irma Sandoval Ibarra Valencia. (King, John) (Entered: 05/07/2008)
208 NOTICE of MOOTNESS re: 175 MOTION to Quash Subpoena by Juana Zamora, Aracely Zamora−Garcia, Manuel Sandoval−Herrera, Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio, filed. (King, John) (Entered: 05/07/2008)
209 Unopposed MOTION to Withdraw by Juana Zamora, Aracely Zamora−Garcia, Manuel Sandoval−Herrera, Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio, filed. Motion Docket Date 5/27/2008. (Attachments: # 1 Proposed Order)(King, John) (Entered: 05/07/2008)
210 DESIGNATION OF EXPERT WITNESS LIST by Michael W. Padilla, Santiago Sol, filed.(Worthington, Dan) (Entered: 05/09/2008)
211 ORDER mooting 175 Motion to Quash; granting 209 Motion to Withdraw.(Signed by Judge Randy Crane) Parties notified.(bgarces, ) (Entered: 05/14/2008)
212 ORDER Striking Document re: 210 Designation of Expert Witness List.(Signed by Judge Randy Crane) Parties notified.(mzamarripa, ) (Entered: 05/22/2008)
213 SURREPLY to 179 Opposed MOTION for Partial Summary Judgment, filed by Fairmont Specialty Insurance Company, Stonington Insurance Company. (Attachments: # 1 Appendix of Exhibits, # 2 Exhibit 1 (Affidavit of David Grobmeier), # 3 Exhibit 2 (Declaration of Jack Kessell), # 4 Exhibit 3 (Expert Report of Jack Kessell), # 5 Exhibit 4 (Declaration of Bernard Ash), # 6 Exhibit 5 (Expert Report of Bernard Ash))(Close, Howard) (Entered: 06/19/2008)
214 Unopposed MOTION for Leave to File Add New Evidence by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 7/9/2008. (Attachments: # 1 Appendix of Exhibits, # 2 Exhibit 1 (Affidavit of David Grobmeier), # 3 Exhibit 2 (Declaration of Jack Kessell), # 4 Exhibit 3 (Expert Report of Jack Kessell), # 5 Exhibit 4 (Declaration of Bernard Ash), # 6

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 29 of 36

06/25/2008 06/26/2008 07/03/2008
07/08/2008
07/25/2008
07/28/2008 08/04/2008
08/11/2008
08/13/2008 09/02/2008 09/07/2008 09/07/2008 09/07/2008 09/07/2008 09/07/2008 09/07/2008 09/09/2008

Exhibit 5 (Expert Report of Bernard Ash), # 7 Proposed Order)(Close, Howard) (Entered: 06/19/2008)
215 ORDER GRANTING SURETIES' UNOPPOSED MOTION FOR LEAVE TO ADD NEW EVIDENCE granting 214 Motion for Leave to File.(Signed by Judge Randy Crane) Parties notified.(mzamarripa, ) (Entered: 06/25/2008)
216 STIPULATION re: Experts by Juana Zamora, Aracely Zamora−Garcia, Manuel Sandoval−Herrera, Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio, filed.(King, John) (Entered: 06/26/2008)
217 Opposed MOTION to Intervene by Deanna Arevalo, Dominica Rodriguez, filed. Motion Docket Date 7/23/2008. (Attachments: # 1 Proposed Order, # 2 Affidavit Declaration of Elisaveta Dolghih, # 3 Exhibit A, # 4 Exhibit B, # 5 Exhibit C, # 6 Exhibit D, # 7 Exhibit E, # 8 Exhibit F)(King, John) (Entered: 07/03/2008)
218 Corrected MOTION to Intervene by Deanna Arevalo, Dominica Rodriguez, filed. Motion Docket Date 7/28/2008. (Attachments: # 1 Proposed Order, # 2 Affidavit Declaration of Elisaveta Dolghih, # 3 Exhibit A, # 4 Exhibit B, # 5 Exhibit C, # 6 Exhibit D, # 7 Exhibit E, # 8 Exhibit F)(King, John) (Entered: 07/08/2008)
219 RESPONSE in Opposition to 218 Corrected MOTION to Intervene, filed by Fairmont Specialty Insurance Company, Stonington Insurance Company. (Attachments: # 1 Affidavit of Jessica Zavadil, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Exhibit E, # 7 Exhibit F, # 8 Exhibit G, # 9 Exhibit H)(Close, Howard) (Entered: 07/25/2008)
220 NOTICE of Joinder re: 219 Response in Opposition to Motion, by Michael W. Padilla, Santiago Sol, filed. (Worthington, Dan) (Entered: 07/28/2008)
221 Opposed EMERGENCY MOTION, MOTION for Protective Order( Motion Docket Date 8/25/2008.) by Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez, filed. (Attachments: # 1 Affidavit Declaration of J. Benjamin King, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Exhibit E, # 7 Exhibit F, # 8 Exhibit G, # 9 Exhibit H, # 10 Proposed Order)(King, John) (Entered: 08/04/2008)
222 First REPLY to Response to 221 Opposed EMERGENCY MOTION MOTION for Protective Order, filed by Fairmont Specialty Insurance Company. (Attachments: # 1 Affidavit of Jessica Zavadil, # 2 Exhibit Exhibit A Deposition Transcript of Deanna Arevalo)(Close, Howard) (Entered: 08/11/2008)
223 ORDER granting 221 Emergency Motion for Protective Order.(Signed by Judge Randy Crane) Parties notified.(bgarces, ) (Entered: 08/13/2008)
224 SUPPLEMENT to 219 Response in Opposition to Motion, by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. (Attachments: # 1 Exhibit A, # 2 Exhibit B)(Close, Howard) (Entered: 09/02/2008)
225 EXHIBITS by Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, filed.(Brodyaga, Elisabeth) (Entered: 09/07/2008)
226 EXHIBITS by Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, filed.(Brodyaga, Elisabeth) (Entered: 09/07/2008)
227 EXHIBITS by Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, filed.(Brodyaga, Elisabeth) (Entered: 09/07/2008)
228 Supplemental EXHIBITS by Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, filed.(Brodyaga, Elisabeth) (Entered: 09/07/2008)
229 EXHIBITS by Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, filed.(Brodyaga, Elisabeth) (Entered: 09/07/2008)
230 EXHIBITS by Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, filed.(Brodyaga, Elisabeth) (Entered: 09/07/2008)
231 TRANSCRIPT re: Status Conference held on 3/28/08 before Judge Randy Crane. Court Reporter/Transcriber Exceptional Reporting. Release of Transcript

Case: 7:05-cv-00331 As of: 07/06/2011 11:12 AM CDT 30 of 36

09/09/2008 09/16/2008 09/17/2008 09/18/2008 09/18/2008 09/18/2008 09/20/2008 09/20/2008 09/21/2008 09/21/2008 09/22/2008
09/23/2008

Restriction set for 12/8/2008., filed. (thudson, ) (Entered: 09/09/2008)
232 Notice of Filing of Official Transcript as to 231 Transcript. Party notified, filed. (rcortez) (Entered: 09/10/2008)
233 REPLY in Support of 218 Corrected MOTION to Intervene, filed by Deanna Arevalo, Dominica Rodriguez. (Attachments: # 1 Affidavit Declaration of J. Benjamin King, # 2 Exhibit G, # 3 Exhibit H, # 4 Exhibit I, # 5 Exhibit J, # 6 Exhibit K)(King, John) (Entered: 09/16/2008)
234 Agreed MOTION for Extension of Time Filing Pretrial Motions by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 10/7/2008. (Attachments: # 1 Proposed Order)(Worthington, Dan) (Entered: 09/17/2008)
235 EXHIBITS by Juana Zamora, Aracely Zamora−Garcia, Irma Sandoval Ibarra Valencia, Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, Isidro Herrera, Juan Larin−Ulloa, Petra Carranza de Salinas, Miguel Rubio−Flores, Deanna Arevalo, Dominica Rodriguez, Alberta Rubio, filed. (Attachments: # 1 Exhibit, # 2 Exhibit)(Brodyaga, Elisabeth) (Entered: 09/18/2008)
236 EXHIBITS by Adriana Echavarria, filed.(Brodyaga, Elisabeth) (Entered: 09/18/2008)
237 ORDER EXTENDING THE DEADLINE FOR THE FILING OF PRETRIAL MOTIONS granting 234 Motion for Extension of Time. Deadline for filing pretrial motions shall be due by 9/24/2008.(Signed by Judge Randy Crane) Parties notified.(mzamarripa, ) (Entered: 09/19/2008)
238 Supplemental EXHIBITS by Juana Zamora, Aracely Zamora−Garcia, Manuel Sandoval−Herrera, Irma Sandoval Ibarra Valencia, Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, Isidro Herrera, Juan Larin−Ulloa, Petra Carranza de Salinas, Miguel Rubio−Flores, Deanna Arevalo, Dominica Rodriguez, Alberta Rubio, filed.(Brodyaga, Elisabeth) (Entered: 09/20/2008)
239 Supplemental EXHIBITS by Juana Zamora, Aracely Zamora−Garcia, Manuel Sandoval−Herrera, Irma Sandoval Ibarra Valencia, Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, Isidro Herrera, Juan Larin−Ulloa, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio, filed.(Brodyaga, Elisabeth) (Entered: 09/20/2008)
240 EXHIBITS by Juana Zamora, Aracely Zamora−Garcia, Irma Sandoval Ibarra Valencia, Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, Isidro Herrera, Juan Larin−Ulloa, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio, filed.(Brodyaga, Elisabeth) (Entered: 09/21/2008)
241 EXHIBITS by Juana Zamora, Aracely Zamora−Garcia, Manuel Sandoval−Herrera, Irma Sandoval Ibarra Valencia, Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, Isidro Herrera, Juan Larin−Ulloa, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio, filed.(Brodyaga, Elisabeth) (Entered: 09/21/2008)
242 Plaintiff Irma Sandoval's SUPPLEMENTAL Briefing in Support of 179 Opposed MOTION for Partial Summary Judgment by Irma Sandoval Ibarra Valencia, filed. Motion Docket Date 10/14/2008. (Attachments: # 1 Affidavit of Elisaveta Dolghih, # 2 Exhibit 41, # 3 Exhibit 42, # 4 Exhibit 43, # 5 Exhibit 44, # 6 Exhibit 45, # 7 Exhibit 46)(King, John) Modified on 9/22/2008 (mzamarripa, ). (Entered: 09/22/2008)
243 NOTICE of Joinder re: 190 Surreply to Motion, 207 Reply in Support of Motion, 179 Opposed MOTION for Partial Summary Judgment, 242 Plaintiff Irma Sandoval's SUPPLEMENTAL Briefing in suport of 179 Opposed MOTION for Partial Summary JudgmentUnopposed MOTION to Supplement as to 179 Opposed MOTION for Partial Summary Judgment, 171 Response in Opposition to Motion, by Deanna Arevalo, Dominica Rodriguez, filed. (King, John) Modified on 9/23/2008 (mzamarripa, ). (Entered: 09/23/2008)

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09/23/2008 09/23/2008 09/23/2008 09/24/2008 09/24/2008 09/24/2008
09/24/2008 09/24/2008 09/24/2008 09/24/2008

244 EXHIBITS by Juana Zamora, Aracely Zamora−Garcia, Irma Sandoval Ibarra Valencia, Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, Isidro Herrera, Juan Larin−Ulloa, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio, filed.(Brodyaga, Elisabeth) (Entered: 09/23/2008)
245 EXHIBITS by Juana Zamora, Aracely Zamora−Garcia, Irma Sandoval Ibarra Valencia, Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, Isidro Herrera, Juan Larin−Ulloa, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio, filed.(Brodyaga, Elisabeth) (Entered: 09/23/2008)
246 EXHIBITS by Juana Zamora, Aracely Zamora−Garcia, Manuel Sandoval−Herrera, Irma Sandoval Ibarra Valencia, Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, Isidro Herrera, Juan Larin−Ulloa, Petra Carranza de Salinas, Miguel Rubio−Flores, Alberta Rubio, filed.(Brodyaga, Elisabeth) (Entered: 09/23/2008)
247 MOTION to Exclude Testimony of Jerry Watson by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 10/14/2008. (Attachments: # 1 Exhibit, # 2 Exhibit, # 3 Exhibit)(Irelan, Bradford) (Entered: 09/24/2008)
248 PROPOSED ORDER re: 247 MOTION to Exclude Testimony of Jerry Watson, filed.(Irelan, Bradford) (Entered: 09/24/2008)
249 MOTION Bonding Defendants' Motion to Decertify the Surety Bond Classes and Memorandum in Support by Michael W. Padilla, Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 10/14/2008. (Attachments: # 1 Proposed Order, # 2 Appendix Index of Exhibits, # 3 Exhibit 1, # 4 Exhibit 2, # 5 Exhibit 3, # 6 Exhibit 4, # 7 Exhibit 5, # 8 Exhibit 6, # 9 Exhibit 7, # 10 Exhibit 8, # 11 Exhibit 9, # 12 Exhibit 10, # 13 Exhibit 11, # 14 Exhibit 12, # 15 Exhibit 13, # 16 Exhibit 14, # 17 Exhibit 15, # 18 Exhibit 16, # 19 Exhibit 17, # 20 Exhibit 18, # 21 Exhibit 19, # 22 Exhibit 20, # 23 Exhibit 21, # 24 Exhibit 22 Part 1, # 25 Exhibit 22 Part 2, # 26 Exhibit 23, # 27 Exhibit 24, # 28 Exhibit 25, # 29 Exhibit 26, # 30 Exhibit 27, # 31 Exhibit 28, # 32 Exhibit 29, # 33 Exhibit 30, # 34 Exhibit 31, # 35 Exhibit 32, # 36 Exhibit 33, # 37 Exhibit 34, # 38 Exhibit 35, # 39 Exhibit 36, # 40 Exhibit 37, # 41 Exhibit 38, # 42 Exhibit 39 Part 1, # 43 Exhibit 39 Part 2, # 44 Exhibit 40, # 45 Exhibit 41, # 46 Exhibit 42, # 47 Exhibit 43, # 48 Exhibit 44, # 49 Exhibit 45, # 50 Exhibit 46, # 51 Exhibit 47, # 52 Exhibit 48, # 53 Exhibit 49, # 54 Exhibit 50, # 55 Exhibit 51, # 56 Exhibit 52, # 57 Exhibit 53, # 58 Exhibit 54 Part 1, # 59 Exhibit 54 Part 2, # 60 Exhibit 54 Part 3, # 61 Exhibit 54 Part 4, # 62 Exhibit 54 Part 5, # 63 Exhibit 54 Part 6, # 64 Exhibit 54 Part 7, # 65 Exhibit 55, # 66 Exhibit 56, # 67 Exhibit 57)(Close, Howard) (Entered: 09/24/2008)
250 Opposed MOTION to Compel Documents on Initial Upfront Payments by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 10/14/2008. (Attachments: # 1 Proposed Order, # 2 Appendix of Exhibits, # 3 Exhibit 1, # 4 Exhibit 2, # 5 Exhibit 3, # 6 Exhibit 4, # 7 Exhibit 5, # 8 Exhibit 6, # 9 Exhibit 7)(Close, Howard) (Entered: 09/24/2008)
251 MOTION for Partial Summary Judgment Against the Federal Defendants, by Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, Isidro Herrera, Juan Larin−Ulloa, filed. Motion Docket Date 10/14/2008. (Attachments: # 1 Proposed Order)(Brodyaga, Elisabeth) (Entered: 09/24/2008)
252 MOTION to Exclude Testimony of Bernard Ash by Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez, filed. Motion Docket Date 10/14/2008. (Attachments: # 1 Proposed Order, # 2 Affidavit of Elisaveta Dolghih, # 3 Exhibit A, # 4 Exhibit B, # 5 Exhibit C)(King, John) (Entered: 09/24/2008)
253 MOTION to Exclude Testimony of Jack Kessell by Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez, filed. Motion Docket Date 10/14/2008. (Attachments: # 1 Proposed Order, # 2 Affidavit of Elisaveta Dolghih, # 3 Exhibit A, # 4 Exhibit B)(King, John) (Entered: 09/24/2008)

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09/24/2008 09/24/2008 09/24/2008 09/25/2008 09/30/2008
10/12/2008 10/14/2008 10/14/2008 10/14/2008
10/14/2008 10/14/2008 10/14/2008

254 MOTION to Exclude Testimony of Burnie Burner by Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez, filed. Motion Docket Date 10/14/2008. (Attachments: # 1 Proposed Order, # 2 Affidavit of Elisaveta Dolghih, # 3 Exhibit A, # 4 Exhibit B, # 5 Exhibit C, # 6 Exhibit D, # 7 Exhibit E, # 8 Exhibit F, # 9 Exhibit G, # 10 Exhibit H, # 11 Exhibit I, # 12 Exhibit J, # 13 Exhibit K)(King, John) (Entered: 09/24/2008)
255 MOTION to Compel Federal Defendants to Respond to Plaintiffs' Requests for Admission or, in the Alternative, to Deem Such Responses Admitted by Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez, filed. Motion Docket Date 10/14/2008. (Attachments: # 1 Proposed Order, # 2 Affidavit of Elisaveta Dolghih, # 3 Exhibit A, # 4 Exhibit B, # 5 Exhibit C)(King, John) (Entered: 09/24/2008)
256 MOTION for Summary Judgment by Marc Moore, Michael Chertoff, filed. Motion Docket Date 10/14/2008. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2 Class Order, # 3 Exhibit 3 Watkins Declaration, # 4 Exhibit 4 Herrera, # 5 Exhibit 5 Herrera, # 6 Exhibit 6 Herrera, # 7 Exhibit 7 Isher, # 8 Exhibit 8 I−352, # 9 Exhibit 9 Echevarria, # 10 Exhibit 10 Goodwin, # 11 Exhibit Goodwin, # 12 Proposed Order Granting Motion for Summary Judgment)(Guerra, David) (Entered: 09/24/2008)
257 NOTICE OF JOINDER re: 247 MOTION to Exclude Testimony of Jerry Watson by The Estate of Don Vannerson, Santiago Sol, filed. (Worthington, Dan) (Entered: 09/25/2008)
258 ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT FAIRMONT'S MOTION FOR SUMMARY JUDGMENT AND GRANTING IN PART AND DENYING IN PART DEFENDANT STONINGTON'S MOTION FOR PARTIAL SUMMARY JUDGMENT granting in part and denying in part 153 Motion for Partial Summary Judgment; granting in part and denying in part 154 Motion for Partial Summary Judgment.(Signed by Judge Randy Crane) Parties notified.(mzamarripa, ) (Entered: 09/30/2008)
259 EXHIBITS re: 251 MOTION for Partial Summary Judgment Against the Federal Defendants, by Norma Pena De Herrera, Isidro Herrera, filed.(Brodyaga, Elisabeth) (Entered: 10/12/2008)
260 RESPONSE in Opposition to 256 MOTION for Summary Judgment, filed by Norma Pena De Herrera, Isidro Herrera. (Attachments: # 1 Proposed Order)(Brodyaga, Elisabeth) (Entered: 10/14/2008)
261 First RESPONSE in Opposition to 251 MOTION for Partial Summary Judgment Against the Federal Defendants,, filed by Marc Moore. (Attachments: # 1 Proposed Order)(Young, Stacey) (Entered: 10/14/2008)
262 REPLY to Response to 242 Unopposed MOTION to Supplement as to 179 Opposed MOTION for Partial Summary JudgmentUnopposed MOTION to Supplement as to 179 Opposed MOTION for Partial Summary Judgment, filed by Fairmont Specialty Insurance Company, Stonington Insurance Company. (Attachments: # 1 Appendix, # 2 Exhibit Exhibit 1, # 3 Exhibit Exhibit 2, # 4 Exhibit Exhibit 3, # 5 Exhibit Exhibit 4, # 6 Exhibit Exhibit 5, # 7 Exhibit Exhibit 6)(Close, Howard) (Entered: 10/14/2008)
263 Unopposed MOTION for Leave to File Add New Evidence by Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. Motion Docket Date 11/3/2008. (Attachments: # 1 Affidavit to Exhibits, # 2 Exhibit 1, # 3 Exhibit 2, # 4 Exhibit 3, # 5 Exhibit 4, # 6 Exhibit 5, # 7 Exhibit 6, # 8 Proposed Order)(Close, Howard) (Entered: 10/14/2008)
264 NOTICE of Withdrawal of Motion re: 255 MOTION to Compel Federal Defendants to Respond to Plaintiffs' Requests for Admission or, in the Alternative, to Deem Such Responses Admitted by Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez, filed. (King, John) (Entered: 10/14/2008)
265 RESPONSE in Opposition to 247 MOTION to Exclude Testimony of Jerry Watson, filed by Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3

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10/14/2008
10/14/2008 10/14/2008 10/14/2008
10/14/2008 10/16/2008 10/17/2008 10/17/2008
10/17/2008 10/17/2008 10/22/2008 10/23/2008 10/30/2008
10/30/2008

Exhibit C, # 4 Proposed Order)(King, John) (Entered: 10/14/2008)
266 RESPONSE to 254 MOTION to Exclude Testimony of Burnie Burner, filed by Michael W. Padilla, Fairmont Specialty Insurance Company, Stonington Insurance Company, Santiago Sol. (Attachments: # 1 Appendix to Exhibits, # 2 Exhibit 1, # 3 Exhibit 2, # 4 Exhibit 3, # 5 Proposed Order)(Close, Howard) (Entered: 10/14/2008)
267 RESPONSE in Opposition to 250 Opposed MOTION to Compel Documents on Initial Upfront Payments, filed by Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez. (Attachments: # 1 Proposed Order)(King, John) (Entered: 10/14/2008)
268 RESPONSE to 253 MOTION to Exclude Testimony of Jack Kessell, filed by Fairmont Specialty Insurance Company, Stonington Insurance Company. (Attachments: # 1 Appendix to Exhibits, # 2 Exhibit 1, # 3 Exhibit 2, # 4 Exhibit 3, # 5 Proposed Order)(Close, Howard) (Entered: 10/14/2008)
269 RESPONSE in Opposition to 249 MOTION Bonding Defendants' Motion to Decertify the Surety Bond Classes and Memorandum in Support, filed by Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H, # 9 Exhibit I, # 10 Exhibit J, # 11 Exhibit K, # 12 Exhibit L, # 13 Exhibit M, # 14 Exhibit N, # 15 Exhibit O, # 16 Exhibit P, # 17 Exhibit Q, # 18 Exhibit R, # 19 Exhibit S, # 20 Exhibit T, # 21 Proposed Order)(King, John) (Entered: 10/14/2008)
270 RESPONSE to 252 MOTION to Exclude Testimony of Bernard Ash, filed by Michael W. Padilla, Fairmont Specialty Insurance Company, Stonington Insurance Company, Santiago Sol. (Attachments: # 1 Proposed Order)(Close, Howard) (Entered: 10/14/2008)
271 ORDER granting 263 Motion for Leave to Add New Evidence.(Signed by Judge Randy Crane) Parties notified.(bgarces, ) (Entered: 10/16/2008)
272 Unopposed MOTION for Continuance of Current Trial Setting by Michael W. Padilla, Fairmont Specialty Insurance Company, Stonington Insurance Company, Santiago Sol, filed. Motion Docket Date 11/6/2008. (Attachments: # 1 Proposed Order)(Worthington, Dan) (Entered: 10/17/2008)
273 Corrected RESPONSE to 242 Unopposed MOTION to Supplement as to 179 Opposed MOTION for Partial Summary JudgmentUnopposed MOTION to Supplement as to 179 Opposed MOTION for Partial Summary Judgment, filed by Fairmont Specialty Insurance Company, Stonington Insurance Company. (Attachments: # 1 Appendix, # 2 Exhibit 1, # 3 Exhibit 2, # 4 Exhibit 3, # 5 Exhibit 4, # 6 Exhibit 5, # 7 Exhibit 6)(Close, Howard) (Entered: 10/17/2008)
274 NOTICE by Marc Moore, Michael Chertoff, filed. (Attachments: # 1 Errata)(Young, Stacey) (Entered: 10/17/2008)
275 DECLARATION of Stacey I. Young, filed.(Young, Stacey) (Entered: 10/17/2008)
276 ORDER DENYING MOTION TO COMPEL 250 Motion to Compel.(Signed by Judge Randy Crane) Parties notified.(mzamarripa, ) (Entered: 10/22/2008)
277 NOTICE of Setting. Telephone Conference set for Friday, 10/24/2008 at 11:30 AM before Judge Randy Crane, filed. Parties notified. Attorney Howard Close will initiate telelphone conference call. (lcervantes) (Entered: 10/23/2008)
278 ORDER GRANTING OPPOSED MOTION FOR INTERVENTION, FOR APPOINTMENT AS CLASS REPRESENTATIVES, AND FOR LEAVE TO FILE COMPLAINT IN INTERVENTION granting 218 Motion to Intervene.(Signed by Judge Randy Crane) Parties notified.(mzamarripa, ) (Entered: 10/30/2008)
279 INTERVENOR COMPLAINT with Jury Demand against Michael W. Padilla, Fairmont Specialty Insurance Company, Stonington Insurance Company filed by Deanna Arevalo, Dominica Rodriguez.(mzamarripa, ) (Entered: 10/30/2008)

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10/30/2008 10/30/2008 11/03/2008 11/03/2008 11/03/2008 11/03/2008 11/04/2008
11/04/2008 11/04/2008 11/07/2008 11/07/2008 11/07/2008 11/17/2008 11/17/2008

280 EXHIBITS re: 251 MOTION for Partial Summary Judgment Against the Federal Defendants, by Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, Isidro Herrera, Juan Larin−Ulloa, filed.(Brodyaga, Elisabeth) (Entered: 10/30/2008)
281 ORDER DENYING PLAINTIFF SANDOVAL'S MOTIONS FOR SUMMARY JUDGMENT AND BONDING DEFENDANTS' MOTION TO DECERTIFY denying 179 Motion for Partial Summary Judgment; denying 180 Motion for Summary Judgment; denying 249 Motion.(Signed by Judge Randy Crane) Parties notified.(mzamarripa, ) (Entered: 10/31/2008)
282 ANSWER to 279 Intervenor Complaint by Michael W. Padilla, Fairmont Specialty Insurance Company, Stonington Insurance Company, Santiago Sol, filed.(Close, Howard) (Entered: 11/03/2008)
283 Proposed Pretrial Order by United States, Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, Isidro Herrera, Juan Larin−Ulloa, Michael Chertoff, filed.(Brodyaga, Elisabeth) (Entered: 11/03/2008)
284 Exhibit List by Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, Isidro Herrera, Juan Larin−Ulloa, Michael Chertoff, United States, filed. (Attachments: # 1 Continuation, # 2 Continuation, # 3 Continuation)(Brodyaga, Elisabeth) (Entered: 11/03/2008)
285 Witness List by Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, Isidro Herrera, Juan Larin−Ulloa, Michael Chertoff, United States, filed. (Attachments: # 1 Continuation)(Brodyaga, Elisabeth) (Entered: 11/03/2008)
Minute Entry for proceedings held before Judge Randy Crane. Case called on the docket for Final PRETRIAL CONFERENCE held on 11/4/2008. The Court confirmed that this case had settled in part as to all non−federal defendants. Attorney Howard Close read the Settlement Terms into the record and tendered to the Court for filing the Settlement Terms Sheet for filing, without any objection, the Court will not seal the document. The Court set this matter for preliminary settlement hearing on Thursday, 11/20/2008 at 9:30 A.M., a written order will be issued. The Court directed counsel submit summaries, affidavits/declarations by 11/17/2008 for the Court's review before the hearing. The Court excused all counsel except for the federal defendants counsel Stacey Young and Lisa Brodyaga for the plaintiffs. Without any objection, the Court addressed counsel re: pending summary judgment motions by submission without a hearing and also as to severing this part of the case and will issue orders on its rulings. Appearances: Dan K. Worthington; Howard L. Close/Thomas C. Wright/Bradford W. Ireland; Elisabeth Lisa S. Brodyaga/John Benjamin King/William Reid/Lisa Dolghih; and Stacey Young.(ERO:Richard Cortez [10:08−10:58]) (Law Clerk: Samantha Rodriguez), filed.(lcervantes) (Entered: 11/04/2008)
286 SETTLEMENT TERMS SHEET by Defendants other than Government and Plaintiffs Irma Sandoval, Petra Carranza de Salinas, Deanna Arevalo, Dominica rodriguez, filed.(mzamarripa, ) (Entered: 11/04/2008)
287 ORDER SETTING PRELIMINARY SETTLEMENT HEARING Settlement Hearing set for 11/20/2008 at 09:30 AM before Judge Randy Crane.(Signed by Judge Randy Crane) Parties notified.(mzamarripa, ) (Entered: 11/04/2008)
288 Mail Returned Undeliverable as to attorney Stacey Young re: 277 Notice of Setting, filed. (ceaton, ) (Entered: 11/10/2008)
289 Mail Returned Undeliverable as to attorney Stacey Young re: 277 Notice of Setting, filed. (pjameson, ) (Entered: 11/10/2008)
290 Mail Returned Undeliverable as to attorney Stacey Young re: 276 Order on Motion to Compel, filed. (pjameson, ) (Entered: 11/10/2008)
291 Mail Returned Undeliverable as to attorney Stacey Young re: 278 Order on Motion to Intervene, filed. (rvazquez) (Entered: 11/17/2008)
292 Mail Returned Undeliverable as to attorney Stacey Young re: 281 Order on Motion for Partial Summary Judgment,, Order on Motion for Summary Judgment,, Order

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11/17/2008 11/17/2008
11/18/2008 11/19/2008 11/19/2008 11/21/2008 11/24/2008 11/24/2008
11/25/2008 11/25/2008 12/11/2008 12/12/2008
01/26/2009

on Motion for Miscellaneous Relief,, filed. Renoticed Order 281 per updated address. (kstrouse, ) (Entered: 11/17/2008)
293 Mail Returned Undeliverable as to attorney Stacey Young re: 287 Order, filed. (Re−noticed) (mewilliams, ). (Entered: 11/17/2008)
294 Joint MOTION for Approval of Partial Class Settlement by Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez, filed. Motion Docket Date 12/8/2008. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Errata 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Errata 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Proposed Order)(King, John) (Entered: 11/17/2008)
295 NOTICE of Resetting. Parties notified. Settlement Conference set for Thursday, 11/20/2008 at 12:00 PM, previously set for 9:30 AM due to ongoing criminal jury trial, before Judge Randy Crane, filed. (lcervantes) (Entered: 11/18/2008)
296 TRANSCRIPT re: Final Pretrial held on 11/4/08 before Judge Randy Crane. Court Reporter/Transcriber Exceptional Reporting. Release of Transcript Restriction set for 2/17/2009., filed. (thudson, ) (Entered: 11/19/2008)
303 Notice of Filing of Official Transcript as to 296 Transcript. Party notified, filed. (rcortez) (Entered: 01/23/2009)
AO 435 TRANSCRIPT ORDER FORM by Tiffany Shirey. This is to order a transcript of Pretrial Proceeding held on 11/04/08 before Judge Randy Crane (original). Court Reporter/Transcriber: Exceptional Reporting Services, filed.(rcortez) (Entered: 12/23/2008)
297 Mail Returned Undeliverable as to attorney Stacey Ilene Young re: 271 Order on Motion for Leave to File, filed. (jewilliams, ) (Entered: 11/24/2008)
298 NOTICE of Filing of Settlement Documents re: 294 Joint MOTION for Approval of Partial Class Settlement by Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez, filed. (Attachments: # 1 Exhibit Agreement of Settlement, # 2 Exhibit Exhibit 1 to Agreement of Settlement, # 3 Exhibit Exhibit 2 to Agreement of Settlement, # 4 Exhibit Exhibit 3 to Agreement of Settlement, # 5 Exhibit Exhibit 4 to Agreement of Settlement, # 6 Exhibit Exhibit 5 to Agreement of Settlement, # 7 Exhibit Exhibit 6 to Agreement of Settlement, # 8 Proposed Order)(King, John) (Entered: 11/24/2008)
299 ORDER SETTING APPROVAL HEARING. Hearing set for 2/5/2009 at 01:30 PM before Judge Randy Crane.(Signed by Judge Randy Crane) Parties notified.(mzamarripa, ) (Entered: 11/25/2008)
300 ORDER GRANTING PRELIMINARY APPROVAL OF PARTIAL CLASS ACTION SETTLEMENT granting 294 Motion for Approval.(Signed by Judge Randy Crane) Parties notified.(mzamarripa, ) (Entered: 11/25/2008)
301 Unopposed MOTION for Attorney Fees by Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez, filed. Motion Docket Date 12/31/2008. (King, John) (Entered: 12/11/2008)
302 PROPOSED ORDER and SUPPORTING EXHIBITS re: 301 Unopposed MOTION for Attorney Fees, filed. (Attachments: # 1 Exhibit Exhibit 1, Part 1, # 2 Exhibit Ex. 1, part 2, # 3 Exhibit Exhibit 1, part 3, # 4 Exhibit Ex. 1, part 4, # 5 Exhibit Ex. 2, # 6 Exhibit Ex. 3, # 7 Exhibit Ex. 4, # 8 Exhibit Ex. 5, # 9 Exhibit Ex. 6)(King, John) (Entered: 12/12/2008)
304 Joint MOTION for Approval of Partial Class Action Settlement by Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez, filed. Motion Docket Date 2/17/2009. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20)(King, John) (Entered: 01/26/2009)

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01/27/2009 02/04/2009
02/04/2009
02/04/2009 02/05/2009
02/11/2009
02/12/2009 02/12/2009 02/20/2009
02/20/2009 02/20/2009 02/23/2009

305 Agreed PROPOSED ORDER re: 304 Joint MOTION for Approval of Partial Class Action Settlement, filed.(King, John) (Entered: 01/27/2009)
306 NOTICE of Supplemental Evidence in Support of re: 304 Joint MOTION for Approval of Partial Class Action Settlement by Michael W. Padilla, Manuel Sandoval−Herrera, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez, Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. (Attachments: # 1 Exhibit A, # 2 Exhibit B)(Close, Howard) (Entered: 02/04/2009)
307 NOTICE Amended Notice of Supplemental Evidence in Support of re: 304 Joint MOTION for Approval of Partial Class Action Settlement by Michael W. Padilla, Manuel Sandoval−Herrera, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez, Fairmont Specialty Insurance Company, Stonington Insurance Company, filed. (Attachments: # 1 Exhibit A, # 2 Exhibit B)(Close, Howard) (Entered: 02/04/2009)
308 NOTICE of Submission of Supplemental Evidence re: 304 Joint MOTION for Approval of Partial Class Action Settlement by Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez, filed. (Attachments: # 1 Fully Executed Settlement Agreement)(King, John) (Entered: 02/04/2009)
Minute Entry for proceedings held before Judge Randy Crane. SETTLEMENT CONFERENCE held on 2/5/2009. The Court addressed counsel and individual Gloria Calderon, without any objection, the Court made its findings approved the settlement and will issue order including severing out the Government claims and assigning a new case number and attorney fees. Appearances: Elisabeth Lisa S. BrodyagaJohn Benjamin King; Bradford W. Irelan; Jessica Zavadil in lieu of Thomas C. Wright; Dan K. Worthington.(ERO:Richard Cortez [2:07−2:32])(Law Clerk: Samantha Rodriguez), filed.(lcervantes) (Entered: 02/20/2009)
309 SETTLEMENT AGREEMENT between Bonding Defendants and Inidividual Plaintiffs by Juana Zamora, Rodney Vannerson, Michael W. Padilla, Aracely Zamora−Garcia, Manuel Sandoval−Herrera, Irma Sandoval Ibarra Valencia, Fairmont Specialty Insurance Company, Stonington Insurance Company, Petra Carranza de Salinas, Miguel Rubio−Flores, Deanna Arevalo, Dominica Rodriguez, Alberta Rubio, The Estate of Don Vannerson, Santiago Sol, filed.(Brodyaga, Elisabeth) (Entered: 02/11/2009)
310 FINAL JUDGMENT AND ORDER OF DISMISSAL. Case terminated on 2/12/2009.(Signed by Judge Randy Crane) Parties notified.(mzamarripa, ) (Entered: 02/12/2009)
311 ORDER granting 301 Unopposed MOTION for Attorney Fees by Irma Sandoval Ibarra Valencia, Petra Carranza de Salinas, Deanna Arevalo, Dominica Rodriguez. (Signed by Judge Randy Crane) Parties notified.(mzamarripa, ) (Entered: 02/12/2009)
312 Unopposed MOTION to Sever Claims Against Federal Defendants by Juana Zamora, Aracely Zamora−Garcia, Irma Sandoval Ibarra Valencia, Norma Pena De Herrera, Adriana Echavarria, Jorge Luis Echavarria, Isidro Herrera, Luis Alvarado Narvaez, Juan Larin−Ulloa, Petra Carranza de Salinas, Miguel Rubio−Flores, Deanna Arevalo, Dominica Rodriguez, Alberta Rubio, filed. Motion Docket Date 3/12/2009. (Attachments: # 1 Proposed Order)(King, John) (Entered: 02/20/2009)
313 STIPULATION of Dismissal of claims against Fairmont Specialty Insurance Company, Stonington Insurance Company, Michael Padilla, and Santiago Sol by Juana Zamora, Aracely Zamora−Garcia, Miguel Rubio−Flores, Alberta Rubio, filed.(King, John) (Entered: 02/20/2009)
314 ORDER OF SEVERANCE granting 312 Motion to Sever.(Signed by Judge Randy Crane) Parties notified.(mzamarripa, ) (Entered: 02/23/2009)
*** Civil Action No. M−09−CV−73 has been opened, as per DE#314, Order to Sever signed by Randy Crane, U.S. District Judge. (mzamarripa, ) (Entered: 02/23/2009)