in Re TMX Finance of Texas, Inc., TitleMax of Texas, Inc., and TMX Finance LLC

ACCEPTED 01-15-00126-CV FIRST COURT OF APPEALS HOUSTON, TEXAS 3/18/2015 6:22:24 PM CHRISTOPHER PRINE CLERK No. 01-15-00126-CV FILED IN In the Court of Appeals for the First District of 1st Texas COURT OF APPEALS HOUSTON, TEXAS ______________________________________________________________________________________________________________________________________________________________________________________________________ In re TMX Finance of Texas, Inc.; TitleMax of 3/18/2015 6:22:24 PM Texas, Inc.; and TMX Finance LLC CHRISTOPHER Clerk A. PRINE ______________________________________________________________________________________________________________________________________________________________________________________________________ Original Proceeding from the 152nd Judicial District Court, Harris County, Texas, Trial Court Cause No. 2013-33584, the Honorable Robert Schaffer, Presiding Judge ______________________________________________________________________________________________________________________________________________________________________________________________________ REAL PARTIES IN INTEREST’S RESPONSE TO RELATORS’ PETITION FOR WRIT OF MANDAMUS ______________________________________________________________________________________________________________________________________________________________________________________________________ SUTHERLAND ASBILL & WARGO & FRENCH LLP BRENNAN LLP Sarah F. Powers Daniel Johnson California State Bar No. 238184 Texas State Bar No. 24046165 spowers@wargofrench.com daniel.johnson@sutherland.com (Pro Hac Admission Pending) Robert A. Lemus 1888 Century Park East, Suite 1520 Texas State Bar No. 24052225 Los Angeles, California 90067 robert.lemus@sutherland.com Telephone: (310) 853-6300 1001 Fannin Street, Suite 3700 Facsimile: (310) 853-6333 Houston, Texas 77002 Telephone: (713) 470-6100 Facsimile: (713) 654-1301 COUNSEL FOR REAL PARTIES IN INTEREST  TABLE OF CONTENTS TABLE OF CONTENTS ............................................................................................i TABLE OF AUTHORITIES ................................................................................... iii STATEMENT OF THE CASE .................................................................................. v ISSUE PRESENTED .............................................................................................. vii I. INTRODUCTION ...........................................................................................1 II. STATEMENT OF FACTS .............................................................................. 4 A. Relators Engaged In Repeated Criminal Acts For The Purpose Of Converting LoanStar’s Customers While Mr. Bielss Oversaw Relators’ Operations In Texas ..............................4 B. The District Court Finds That Mr. Bielss Is A Fact Witness Who Has Relevant Testimony, And Denies Relators’ Motion .......................................................................6 C. The District Court’s Decision Is Supported By Evidence Demonstrating That Mr. Bielss Was Personally Involved In Relators’ Aggressive Growth And Marketing Strategies That Led To Their Illegal Conduct.............................................................................8 III. APPLICABLE STANDARD ........................................................................11 IV. DISCUSSION ................................................................................................12 A. The Apex Deposition Doctrine Does Not Apply To Preclude Discovery From Fact Witnesses Such As Mr. Bielss .......................................................................................12 B. LoanStar Is Entitled To Depose Mr. Bielss Because He Possesses Unique Or Superior Personal Knowledge Of Discoverable Information ...........................................14 C. LoanStar Is Also Entitled To Depose Mr. Bielss Because His Deposition Will Lead To The Discovery Of Admissible Evidence For Which Other Discovery Is Insufficient .........................18 i V. PRAYER........................................................................................................19 CERTIFICATION ...................................................................................................21 CERTIFICATE OF COMPLIANCE .......................................................................22 CERTIFICATE OF SERVICE ................................................................................22 APPENDIX ..............................................................................................................23 ii  TABLE OF AUTHORITIES Page(s) Cases In re Alcatel USA, Inc., 11 S.W.3d 173, 176 (Tex. 2000) ................................................................. 14, 17 Baxter v. Palmigiano, 425 U.S. 308 (1976) ............................................................................................10 Boales v. Brighton Builders, Inc., 29 S.W.3d 159 (Tex. App.—Houston [14th Dist.] 2000, pet. denied) ...............13 In re BP Products North America, Inc., No. 01-06-00613-CV, 2006 WL 2192546 (Tex. App.—Houston [1st Dist.] Aug. 4, 2006, orig. proceeding) ........................................................16 Butnaru v. Ford Motor Co., 84 S.W.3d 198 (Tex. 2002).................................................................................12 City of Houston v. Harrison, 778 S.W.2d 916 (Tex. App.—Houston [14th Dist.] 1989, no writ) ...................12 In re Continental Airlines, Inc., 305 S.W.3d 849 (Tex. App.—Houston [14th Dist.] 2010, no pet.) ...................16 Crown Cent. Petroleum Corp. v. Garcia, 904 S.W.2d 125 (Tex. 1995) ....................................................................... 12, 13 Johnson v. Fourth Court of Appeals, 700 S.W.2d 916 (Tex. 1985) ..............................................................................12 Simon v. Bridewell, 950 S.W.2d 439 (Tex. App.—Waco 1997, no writ)...........................................13 Wilz v. Flournoy, 228 S.W.3d 674 (Tex. 2007) ..............................................................................10 Statutes TEX. TRANS. CODE §§ 730.007, 730.015 ...................................................................5 iii Rules TEX. R. EVID. 513(c) ................................................................................................10 TEX. R. CIV. P. 199.1(a)............................................................................................12 iv  STATEMENT OF THE CASE Nature of Underlying This case involves claims by LoanStar against Relators Proceeding for misappropriation of trade secrets, tortious interference with contracts, and tortious interference with prospective business relations. (R.0001–0014.) Throughout the underlying action, Relators have resisted discovery. (See R.0741–0751; R.0980–0981.) Indeed, the instant petition is the second filed in this case. In December 2014, Relators filed their first petition for writ of mandamus seeking reversal of the District Court’s denial of Relators’ motion for “apex” protection as to the deposition of Mr. Tracy Young, the sole employee, member and manager of Defendant TMX Finance LLC. (R.0161, n.2; cf. R.0498.) That petition remains pending. The current mandamus proceeding relates to the deposition of Mr. Otto Bielss, who served as the Senior Vice President of Operations and oversaw Relators’ Texas market at the time that Relators’ employees were engaged in their illegal marketing scheme to convert LoanStar’s customer relationships. (R.0173–0184). Despite previously agreeing to present Mr. Bielss for his deposition, in December 2014, Relators reversed course and filed a Motion for Protective Order to prevent Mr. Bielss’ deposition. As with Mr. Young, Relators have asserted that the “apex” deposition doctrine shields Mr. Bielss from deposition. (R.0160–0240.) Upon consideration of the pleadings and argument, the District Court, the Honorable Robert Schaffer presiding, denied Relators’ Motion and ordered the deposition of Mr. Bielss. (R.0481:18–19.) In doing so, the District Court found that “[Mr. Bielss] was, if not intimately, actively involved in what [TitleMax] was doing” and LoanStar sought to depose Mr. Bielss’ “as a fact witness.” (R.0477:4–6; R.0479:19–20.) The Court supported its finding with record evidence, for example, that Mr. Bielss “could be somewhat heavy handed in pushing people to perform and reach certain goals” and “was involved in v  conversations where the subject matter of this lawsuit was discussed or may have been discussed.” (R.0477:18–25; R.0478:18–20.) Respondent Honorable Robert Schaffer 152nd Judicial District Court Harris County, Texas Order and Ruling at January 23, 2015 Order Denying Defendants’ Motion for Issue Protective Order Regarding the Deposition of Otto Bielss. (R.0481:18–19) (no written order was entered). vi  ISSUE PRESENTED Whether the District Court, the Honorable Robert Schaffer presiding, properly exercised its discretion by denying Relators’ Motion for Protection from “Apex” Deposition of Otto Bielss, a mid-level manager who has personal knowledge of Relators’ practice of illegally searching of DMV records to identify and steal LoanStar’s customers, was intimately involved in the operations in Texas, and was also responsible for Relators’ aggressive growth strategy in Texas that led Relators to engage in that illegal conduct. vii  I. INTRODUCTION The District Court, the Honorable Robert Schaffer presiding, properly exercised its discretion in denying Relators’ Motion for Protection from “Apex” Deposition of Otto Bielss (the “Motion”). Under the facts of this case, Relators cannot carry the heavy burden of establishing that not even “some” evidence reasonably supported the District Court’s decision below. In their “Issue Presented” and throughout their Petition, Relators misstate and attempt to minimize the evidence before the District Court, which showed Mr. Bielss’ personal knowledge of facts material to this litigation. In this regard, LoanStar presented the District Court with evidence that Mr. Bielss: (1) personally met with Relators’ employees throughout Texas to discuss the performance of their stores, including having conversations regarding marketing tactics; (2) was personally aware of and had communications regarding reports that Relators’ employees were illegally using Department of Motor Vehicle (“DMV”) records to solicit LoanStar’s customers; (3) personally conducted operations conference calls during which he aggressively questioned district managers regarding their performance, operations, and marketing efforts; (4) personally implemented an aggressive growth strategy that placed tremendous pressure on employees to sell Relators’ loans, including buyouts of competitors’ loans; and (5) personally oversaw Relators’ rapid expansion in the Texas title loan market. 1  When faced with this evidence, Judge Schaffer correctly noted that LoanStar was seeking Mr. Bielss’ deposition “testimony as a fact witness, not as a corporate rep[resentative],” (R.0479:19–20) and that “[Mr. Bielss] was, if not intimately, actively involved in what [TitleMax] was doing.” (R.0477:4–6.) In their Petition, Relators assert that Mr. Bielss is a protected “apex” deponent because he is now the Chief Operating Officer of TMX Finance LLC. (Pet. at 11.) Relators, however, fail to disclose that Mr. Bielss was only recently installed in that position. Indeed, until recently, Mr. Bielss was a Senior Vice President of Operations with “direct supervisory authority over the folks that are accused of wrong doing in this case.” (R.0476:23–25.) LoanStar is entitled to depose Mr. Bielss regarding what he did (or did not do) to supervise these individuals, many of whom have conceded engaging in the illegal conduct forming the foundation of this case. For these reasons, Relators previously agreed to produce Mr. Bielss for deposition, both as a corporate representative for TitleMax and in his individual capacity. (R.0400–0402 [Emails from TitleMax counsel to LoanStar counsel dated August 16, 2014 agreeing to produce Mr. Bielss for deposition].) Upon retaining new counsel, however, TitleMax switched tack and for the first time asserted its erroneous “apex” argument. (Id.) In an effort to support this argument, Relators mischaracterize the evidence that establishes Mr. Bielss’ direct involvement in Relators’ marketing activities in 2 Texas. For example, Relators assert that LoanStar did “not show that Mr. Bielss was involved in marketing strategies at the store level.” (Pet. at 11.) Putting aside that Mr. Bielss does not have to be involved in marketing at the store level in order to have relevant personal knowledge, Relators’ statement is contradicted by Relators’ general manager James Griffin, who testified about a meeting in which he discussed the store’s marketing efforts with Mr. Bielss. (R.0381–0383.) Relators further rely on Mr. Bielss’ affidavit, by which he claims not to have “firsthand personal knowledge” concerning Relators’ illegal marketing activities, although he admits that he has “limited knowledge regarding this information.” (R.0186, ¶¶ 3–4.) Mr. Bielss’ admitted “limited knowledge” itself precludes application of the “apex” doctrine. Moreover, Mr. Bielss’ assertion that he lacks “firsthand” knowledge is contradicted by the sworn testimony of other of Relators’ employees (including, but not limited to, Mr. Griffin). LoanStar is entitled to discover the credibility of Mr. Bielss’ affidavit, and in particular the extent of his knowledge and approval of Relators’ wrongful conduct. Additionally, LoanStar is entitled to take Mr. Bielss’ deposition in order to controvert Relators’ argument that their employees’ illegal marketing activities were not approved by management and instead were the result of the conduct of rogue employees. LoanStar will demonstrate for the jury that Relators’ position in this regard is simply incredible, as their employees’ illegal conduct occurred across 3 their Texas regional operations (each headed by a different regional manager). To do so, LoanStar must depose Mr. Bielss, who was one of only two of Relators’ employees who oversaw and implemented the marketing strategies across their Texas regions. Even if Mr. Bielss denies directing or encouraging Relators’ illegal marketing activities, LoanStar is entitled to explore the credibility of such an unbelievable denial. Accordingly, Relators have failed to establish that the District Court abused its discretion. In denying Relators’ Motion for Protection, the District Court properly determined that Mr. Bielss is a fact witness, and accordingly that the “apex” doctrine does not apply to prevent LoanStar from taking his deposition. LoanStar thus respectfully requests that the Court deny Relators’ Petition. II. STATEMENT OF FACTS A. Relators Engaged In Repeated Criminal Acts For The Purpose Of Converting LoanStar’s Customers While Mr. Bielss Oversaw Relators’ Operations In Texas Both Relators and LoanStar operate title-lending businesses that involve the issuance of loans secured by a customer’s vehicle. (See R.0001–0014.) From 2011 to 2013, Relators implemented an aggressive growth strategy across the state of Texas, by which they expanded from two to 230 stores over a two-year period, splitting the state into multiple regions. (See R.0507–0510; R.0593–0595 & n.5.) To foster their rapid growth, Relators illegally accessed DMV records to obtain 4 personal information from thousands of Texas citizens and LoanStar customers and market to those same individuals. (Id.; see also R.0001–0014.) A list of potentially stolen customers, prepared by Special Master Judge David Peeples, includes over 140,000 line entries. Facing not only civil, but also criminal penalties,1 numerous employees of Relators have invoked their Fifth Amendment right to avoid self-incrimination, including one of Relators’ Regional Managers. 2 During the pertinent time frame, Mr. Bielss served as the Senior Vice President of Operations 3 for the entire Texas market, overseeing all of the employees who engaged in the illegal conduct. (R.0280; R.0287–0290; R.0321– 0323.) Mr. Bielss personally played an active role in Relators’ aggressive marketing strategies used to grow its operations in Texas. (R.0287–0290, ¶¶ 6–9; R.0321–0323, ¶¶ 4–5; R.0477:4–6.) Additionally, in 2012, Mr. Bielss communicated with other TitleMax employees regarding allegations that TitleMax employees were canvassing competitors’ parking lots and illegally searching DMV 1 See TEX. TRANS. CODE §§ 730.007, 730.015. 2 To date, four of Relators’ employees have exercised their Fifth Amendment rights: Felix DeLeon, Lucia Grajeda, and Ishmael Hernandez, all General Managers, and James Batterson, a Regional Manager. (See R.0846–0853 [Felix DeLeon Dep.]; R.0854–0858 [Lucia Grajeda Dep.]; R.0859–0872 [Ishmael Hernandez Dep.]; R.0576–0590 [James Batterson Dep.]; see also R.0993:17–24; R.1039:5–9.) 3 As the Senior Vice President of Operations, Mr. Bielss reported directly to Tracy Young. (R.0288, ¶ 5.) 5 databases. (R.0539–0540 [McDonald Dep. 78–80 (“I received a call from [Mr. Bielss] saying that allegations were made, that we were—that an employee was going to a parking lot of a competitor. . . . In 2012 there was also another allegation that we were using or an employee was using a DMV database search.”)]) 4; see also (R.0287–0290 [Affidavit of Donald H. (“Landers Affidavit”), ¶¶ 7–8]; R.0377–0384 [James Griffin (General Manager) Dep. 172–176 (“The sales were good, so he just wanted to know what we were doing marketingwise [sic] to get the sales to where they were”)].) LoanStar accordingly seeks to depose Mr. Bielss regarding his personal knowledge of these matters, and the direction employees received as to the illegal conduct in which multiple employees engaged. B. The District Court Finds That Mr. Bielss Is A Fact Witness Who Has Relevant Testimony, And Denies Relators’ Motion In August 2014, LoanStar and Relators first discussed scheduling the deposition of Mr. Bielss. Recognizing that Mr. Bielss has unique knowledge relevant to the present case, Relators’ former counsel agreed to produce Mr. Bielss for deposition. (R.0400–0402.) LoanStar accordingly noticed Mr. Bielss’ deposition in December 2014. (R.0256–266; R.0267–0278.) Rather than present 4 Realtors inaccurately assert that LoanStar improperly submitted into the Court record testimony from Ms. McDonald that was marked “Attorney’s Eyes Only.” However, none of the deposition testimony LoanStar cited was so designated. (See R.0575 [reflecting the “Attorney’s Eyes Only” designations].) 6 Mr. Bielss for deposition consistent with the Parties’ prior discussions and agreement, Relators’ new counsel reversed course and filed the Motion to prevent his deposition. (See R.0160–0243; R.0412–0419.) At the January 23, 2015 hearing on the Motion, the District Court found that LoanStar was “seeking Mr. Bielss’ testimony as a fact witness, not as a corporate rep[resentative].” The Court concluded that Mr. Bielss had “direct supervisory authority over the folks that are accused of wrong doing in this case” and it seemed like “he was, if not intimately, actively involved in what [TitleMax] was doing.” (R.0476–0477.) In doing so, the Court noted that TitleMax employees provided sworn testimony indicating that Mr. Bielss “could be somewhat heavy handed in pushing people to perform and reach certain goals” and “was involved in conversations where the subject matter of this lawsuit was discussed or may have been discussed.” (R.0477–0478.) Additionally, the Court observed that Mr. Bielss “was at meetings” where high-pressure marketing tactics were discussed and LoanStar “want[ed] to know what went on in those meetings.” (R.0479–0480; R.0321–0323, ¶ 5]; R.0287–0290, ¶ 8].) The District Court accordingly denied Relators’ Motion and ordered Mr. Bielss to appear for deposition. (R.0481.) 7 Unsatisfied with the District Court’s ruling, for the second time in this case,5 Relators filed a Petition for Writ of Mandamus. C. The District Court’s Decision Is Supported By Evidence Demonstrating That Mr. Bielss Was Personally Involved In Relators’ Aggressive Growth And Marketing Strategies That Led To Their Illegal Conduct LoanStar presented evidence to the District Court showing that Mr. Bielss has unique, firsthand knowledge of material facts relevant to this lawsuit. As the Senior Vice President of Operations for Relators, Mr. Bielss oversaw Relators’ rapid expansion in the Texas market and implemented an aggressive growth strategy that placed tremendous pressure on employees to sell Relators’ loans, including buyouts of competitors’ loans. (R.0280–0285; R.0287–0290 [Landers Affidavit, ¶¶ 6, 9]; R.0507–0510 [Linda McDonald Dep. 10–11 (expansion from two to 230 stores over a two year period), 14–15]; R.0299–0303 [Richard Todd Hale (General Manager) Dep. 23–24]; R.0304–0309 [James Griffin (General Manager) Dep. 131, 140–141]; R.0310–0314 [Joshua Hadden (General Manager) 5 On October 24, 2014, LoanStar noticed the deposition of Tracy Young, the sole employee, member, and manager of Defendant TMX Finance. (R.0161–0168.) LoanStar seeks his deposition to discover TMX Finance’s involvement in Relators’ illegal marketing activities. As with Mr. Bielss, Relators filed a Motion for Protection in an attempt to prevent Mr. Young’s deposition on the ground that he is an “apex” deponent—thereby, completely ignoring that the inapplicability of the doctrine to Mr. Young and disregarding Mr. Young’s knowledge of relevant information. (Cf. R.0158–0159.) On November 24, 2014, the District Court denied Relators’ Motion for Protection as to Mr. Young. (Id.) Relators then filed a Petition for Writ of Mandamus, which is currently pending before this Court as Case No. 01-14-00964-CV. (See R.0161, n.2.) 8 Dep. 62–63]; see R.0315–0319 [Ernest Page (General Manager) Dep. 79–80]; R.0321–0323 [Baker Affidavit, ¶¶ 4–5].) It was during Mr. Bielss’ direct oversight and management of the Texas market that Relators’ employees began engaging in illegal marketing practices to identify and convert LoanStar’s customer relationships throughout the state of Texas, and continued to do so over several years. (See, e.g., R.0325–0334 [Randy Rainey (General Manager) Dep. 37–44]; R.0335–0342 [Hale Dep. 23–24, 42–44]; R.0343–0348 [Griffin Dep. 129–131].) As the individual overseeing operations for the state of Texas, Mr. Bielss was aware of reports that Relators’ employees were soliciting customers of competitors in parking lots and using DMV databases for marketing purposes. In late 2012, Mr. Bielss was in contact with Ms. McDonald regarding these allegations. (R.0539–0540 [relating a call from Mr. Bielss regarding TitleMax’s use of DMV databases].) Mr. Bielss also consulted with Relators’ in-house counsel regarding the allegations, and communicated with the legal department regarding Relators’ marketing practices before and after LoanStar initiated litigation against Relators. (R.0392–0396 [TitleMax Privilege Log entries TMX0013–0014 (Email from Vin Thomas to Otto Bielss dated November 26, 2012 “for the purpose of facilitating the rendition of legal advice related to correspondence from [LoanStar’s in-house counsel]”) and TMX0017 (Email from Otto Bielss to Vin Thomas dated November 27, 2012 “for the purpose of 9 facilitating the rendition of legal advice regarding marketing practices”)]; R.0395 [TitleMax Privilege Log entries TMX0015; TMX0016].) 6 Mr. Bielss’ knowledge of Relators’ illegal marketing conduct is unsurprising. As the Senior Vice President of Operations, Mr. Bielss was involved with Relators’ marketing efforts as Relators aggressively expanded operations in the Texas market. Multiple current and former TitleMax employees have testified that Mr. Bielss actively monitored operations in Texas and personally fostered an environment where employees were likely to “engage in improper practices in order to meet the performance goals.” (R.0287–0290, ¶ 9; see generally R.0322.) On regular conference calls, Mr. Bielss would question regional and district managers regarding their performance, and “berate” them, “even if they met performance metrics, in order to remind them that [they] were all expendable and 6 Mr. Bielss also may have been in contact with other employees regarding the illegal marketing practices. One of Relators’ regional managers asserted his Fifth Amendment privilege when questioned about his interactions with Mr. Bielss, including discussion of marketing practices and the use of DMV databases. (R.0576–0590 [James Batterson Dep.].) Mr. Bielss thus presumptively interacted with Mr. Batterson concerning marketing practices and the use of DMV databases. See Baxter v. Palmigiano, 425 U.S. 308, 318 (1976) (allowing adverse presumption because “the [Fifth] Amendment does not preclude the inference where the privilege is claimed by a party to a Civil cause.”) (citation omitted); Wilz v. Flournoy, 228 S.W.3d 674, 677 (Tex. 2007) (“jury in this civil case was free to draw negative inferences from the Flournoys’ repeated invocations of the Fifth Amendment”); TEX. R. EVID. 513(c) (excepting “civil cases” from rule prohibiting adverse inferences). 10 numbers were king.” (R.0322, ¶ 5; R.0289, ¶¶ 7–8.) Mr. Bielss also personally met with Relators’ employees throughout the state to discuss the performance of their stores, including having conversations regarding marketing tactics (R.0287– 0290, ¶¶ 7–8; R.0377–0384.) Further, Mr. Bielss’ responsibilities as Senior Vice President of Operations necessitated his involvement in and awareness of Relators’ employees’ day-to-day operations. In this regard, Mr. Bielss maintained and worked out of an office in Dallas, Texas (R.0536); supervised and coordinated with the Divisional Vice President, Linda McDonald, regarding opening new stores and hiring employees (R.0536–0537]); attended training sessions of new hires (R.0359–0362 [Page Dep. 90]; R.0363–0367 [Arturo Guerrero (General Manager) Dep. 27–28]; R.0368– 0371 [Gilberto Hernandez (General Manager) Dep. 26]); and sent emails to Relators’ employees directing them to maximize resources to grow the business (R.0372–376 [Antonio Amado (General Manager) Dep. 46–47]). There is accordingly no question that Mr. Bielss has unique and superior personal knowledge of relevant facts, and that the District Court properly concluded that Mr. Bielss should be deposed as a fact witness III. APPLICABLE STANDARD Mandamus issues only to correct a clear abuse of discretion or the violation of a duty imposed by law when there is no other adequate remedy by law. City of 11 Houston v. Harrison, 778 S.W.2d 916, 918 (Tex. App.—Houston [14th Dist.] 1989, no writ) (citing Johnson v. Fourth Court of Appeals, 700 S.W.2d 916 (Tex. 1985)). A trial court abuses its discretion when it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law. Id. A relator who attacks the ruling of a trial court as an abuse of discretion labors under a heavy burden. Id. The relator must establish, under the circumstances of the case, that the facts and law permit the trial court to make but one decision. Id.; see also Butnaru v. Ford Motor Co., 84 S.W.3d 198, 211 (Tex. 2002) (“The trial court does not abuse its discretion if some evidence reasonably supports the trial court's decision.”) (emphasis added). Here, Relators have entirely failed to meet this strict burden. IV. DISCUSSION A. The Apex Deposition Doctrine Does Not Apply To Preclude Discovery From Fact Witnesses Such As Mr. Bielss The apex deposition doctrine provides an exception to the general rule favoring broad discovery of relevant matters; it protects high-level executive officers from deposition where the officers lack knowledge of relevant facts and were noticed for deposition based upon their corporate positions. See Crown Cent. Petroleum Corp. v. Garcia, 904 S.W.2d 125, 128–29 (Tex. 1995). Cf. TEX. R. CIV. P. 199.1(a). Where a party seeks to depose an officer because he has knowledge of a discoverable matter, the apex deposition doctrine does not shield the officer from 12 deposition. See Boales v. Brighton Builders, Inc., 29 S.W.3d 159, 168 (Tex. App.—Houston [14th Dist.] 2000, pet. denied) (“First, we note that the ‘apex’ doctrine does not apply. Appellants do not seek to depose Krugh merely because of his corporate position. Rather they seek to depose him because they allege he has first-hand knowledge of certain facts[.]”); Simon v. Bridewell, 950 S.W.2d 439, 442 (Tex. App.—Waco 1997, no writ) (“A corporate officer is not exempt from deposition by the ‘apex’ doctrine merely because he is a corporate official. Rather, the doctrine may be invoked only when the deponent has been noticed for deposition because of his corporate position.”) (emphasis added). Indeed, notwithstanding the “apex” status of a high-level executive officer, the officer may be deposed if: (1) the noticing party has arguably shown that the officer has any unique or superior personal knowledge of discoverable information, or (2) the noticing party has made a good faith effort to obtain discovery through less intrusive methods, there is a reasonable indication that the officer’s deposition is calculated to lead to the discovery of admissible evidence, and the less intrusive methods of discovery are unsatisfactory, insufficient or inadequate. See Crown Cent. Petroleum Corp., 904 S.W.2d at 128 (if the party seeking the deposition has “arguably shown that the official has any unique or superior personal knowledge of discoverable information,” the trial court should deny a motion for apex 13 protection) (emphasis added); In re Alcatel USA, Inc., 11 S.W.3d 173, 176 (Tex. 2000) (same). As discussed below, Mr. Bielss has firsthand knowledge of facts relevant to the underlying litigation and LoanStar seeks his deposition for this purpose. Consequently, the District Court properly concluded that the apex deposition does not shield Mr. Bielss from deposition in this case. B. LoanStar Is Entitled To Depose Mr. Bielss Because He Possesses Unique Or Superior Personal Knowledge Of Discoverable Information LoanStar noticed the deposition of Mr. Bielss because he possesses knowledge of facts relevant to the claims and defenses in this case, and not because of his current corporate position. Indeed, Mr. Bielss has sworn that he has actual knowledge of discoverable information. (See R.0186, ¶¶ 3–4 (“I have limited knowledge regarding this information[.]”).) Notwithstanding Mr. Bielss’ characterization of his knowledge as “limited,” the evidence demonstrates that Mr. Bielss possesses unique or superior personal knowledge of discoverable information about which he can be deposed. (See supra Section II.C.) Mr. Bielss was the only Senior Vice President of Operations for the Texas market, and was in charge of Relator’s operations and marketing strategy throughout Texas. He occupied a unique role in which he not only monitored all of Relators’ operations and marketing efforts across Texas, but also had “direct supervisory authority over the folks that are accused of wrong doing in this case.” 14 (R.0476:23–25; see also supra Section II.C.) Relators’ attempt to misdirect the Court regarding Mr. Bielss’ role as the Senior Vice President of Operations and the knowledge he acquired through that position, by directing the Court solely to his new position as the Chief Operating Officer of TMX Finance LLC, is unavailing. (Pet. at 11.) Regardless of his current title, LoanStar is entitled to discover Mr. Bielss’ personal knowledge regarding Relators’ operations in Texas and his involvement with the aggressive growth strategy that fostered the environment in which the illegal marketing practices arose. 7 (See supra, Section II.C.) Furthermore, although Relators have taken the position that their employees’ illegal marketing activities were “not approved by corporate” and only engaged in by a few rogue employees (R.0977; R.1080), LoanStar is entitled to discover evidence proving that the widespread nature of the activity demonstrates otherwise. (See R.0593–0595.) LoanStar is similarly entitled to obtain evidence proving that the pattern of Relators’ illegal conduct across separate regions throughout the State of Texas—even in stores that are hundreds of miles apart—is not coincidental given that one man controlled marketing for the entire State. Thus, Mr. Bielss’ 7 In fact, if LoanStar were only interested in deposing Mr. Bielss because of his status as Chief Operating Officer, LoanStar would not have sought to depose him before he assumed that position. (Compare R.400–402 [Emails from TitleMax counsel to LoanStar counsel dated August 16, 2014 regarding Mr. Bielss deposition] with R.0280 [reflecting Bielss’ executive appointment in October 2014].) 15 involvement in and knowledge of Relators’ illegal marketing practices is a matter that LoanStar is entitled to explore through his deposition. Based on the evidence described herein, the District Court properly rejected Relators’ attempts to present a corporate representative in Mr. Bielss’ place, observing that LoanStar was seeking Mr. Bielss’ deposition “testimony as a fact witness, not as a corporate representative.” (R.0479:19–20.) Mr. Bielss’ monitoring of Relators’ operations and marketing efforts through meetings with regional and district managers across the Texas market, puts him in a unique position to testify about the scope and spread of the illegal conduct in Relators’ stores. (R.0322, ¶ 5; R.0287–0290.) As the District Court noted, LoanStar “want[s] to know what went on in those meetings.” (R.0481:4–5.) Mr. Bielss’ position as the Senior Vice President of Operations afforded him the opportunity to assess and understand the operations—including marketing activities—of all of Relators’ stores in Texas. Thus, unlike the executives in In re Continental Airlines, Inc., 305 S.W.3d 849 (Tex. App.—Houston [14th Dist.] 2010, no pet.), and In re BP Products North America, Inc., No. 01-06-00613-CV, 2006 WL 2192546 (Tex. App.—Houston [1st Dist.] Aug. 4, 2006, orig. proceeding), who did not have any personal knowledge of relevant matters and were noticed for deposition based upon their corporate positions, Mr. Bielss’ role as the Senior Vice President of Operations afforded him superior personal 16 knowledge of Relators’ operations than any lower-level employees. Accordingly, the District Court properly concluded that Mr. Bielss should be required to testify about these matters. In an effort to bolster Relators’ apex argument and distance himself from his prior responsibilities as the Senior Vice President of Operations, Mr. Bielss executed an Affidavit. 8 The Affidavit is insufficient in the first instance to invoke the “apex” doctrine, however, because through it Mr. Bielss does not “deny any knowledge of relevant facts” or deny that he has “superior knowledge” of Relators’ marketing activities across Texas. In re Alcatel USA, Inc., 11 S.W.3d at 175–76. Instead, Mr. Bielss simply attests that he has no “firsthand” personal knowledge of Relators’ “marketing or soliciting customers of competitors” or the “day-to-day operations or marketing activities of any TitleMax store in Texas.” (R.0186, ¶¶ 2, 3.) Whether Mr. Bielss ever personally marketed to or solicited any customers is inconsequential, (cf. Pet. at 11) as Mr. Bielss’ knowledge of Relators’ operations and marketing efforts is at issue. 8 Mr. Bielss submitted a pro forma affidavit substantially similar to the affidavit submitted by Tracy Young in support of Relators’ Motion for Protective Order regarding Mr. Young’s deposition. The paragraphs in which both men deny any firsthand knowledge of relevant facts are nearly identical. (Compare R.0186, ¶¶ 3– 4 [Affidavit of Otto Bielss] with R.0501, ¶ 3 [Affidavit of Tracy Young].) 17  Although Mr. Bielss’ Affidavit implies that he has no such knowledge, LoanStar presented evidence to the District Court demonstrating otherwise. (See supra, Section II.C [deposition testimony of Relators’ employees].) For example, LoanStar presented the deposition testimony of Relators’ general manager James Griffin, who testified that he discussed his store’s marketing efforts in detail with Mr. Bielss during his visit to the store. (R.0381–0383.) Given the discrepancies between Mr. Bielss’ Affidavit and the other evidence presented, LoanStar is entitled to depose Mr. Bielss to discover the actual extent of his personal knowledge so that the jury can evaluate his credibility. Because Mr. Bielss has unique or superior knowledge of facts relevant to this case, the District Court thus correctly denied Relators’ Motion for Protection. C. LoanStar Is Also Entitled To Depose Mr. Bielss Because His Deposition Will Lead To The Discovery Of Admissible Evidence For Which Other Discovery Is Insufficient Additionally, LoanStar is entitled to depose Mr. Bielss because his deposition is likely to lead to the discovery of admissible evidence that other methods of discovery are unsatisfactory, insufficient, or inadequate to obtain. Through the deposition of Mr. Bielss, LoanStar seeks information regarding the scope of his knowledge of and involvement in Relators’ marketing practices, and the discrepancies between the testimony of Relators’ employees and his Affidavit. The other available methods of discovery are insufficient to address these 18 inquiries. The full details of Mr. Bielss’ knowledge could not be obtained through interrogatories, and depositions of other employees would only reflect their personal knowledge.9 Furthermore, LoanStar already has served requests for production of documents on Relators and issued a subpoena for Mr. Bielss, but has not yet received a document production. Assuming documents are eventually produced, only Mr. Bielss will be able to testify regarding his knowledge and actions taken with respect to the documents. Given that Mr. Bielss’ deposition is likely to lead to discovery of admissible evidence, the apex deposition doctrine does not shield him from deposition. Accordingly, the District Court correctly denied Relators’ Motion for Protection, and the Court should deny the Petition. V. PRAYER The District Court did not abuse its discretion by ordering the deposition of Mr. Bielss. The evidence demonstrates that the apex deposition doctrine does not protect Mr. Bielss because he is a fact witness and his current executive position is unrelated to LoanStar’s bases for deposing him. Indeed, as the only Senior Vice President of Operations in Texas, Mr. Bielss was personally aware of and had discussions about Relators’ illegal marketing conduct, and was responsible for Realtors’ aggressive growth strategy in Texas that led to such conduct. LoanStar 9 Additionally, Relators’ employees may assert their Fifth Amendment privileges if questioned about their interactions with Mr. Bielss. (See supra n.2.) 19 thus may depose Mr. Bielss regarding his knowledge of and involvement in the spread of Realtors’ illegal conduct throughout the state. Because the District Court properly exercised its discretion in rejecting Relators’ apex deposition argument and denying their Motion, LoanStar respectfully requests that the Court deny Relators’ Petition for Writ of Mandamus in its entirety and affirm the decision of the District Court. Respectfully submitted, SUTHERLAND ASBILL & BRENNAN LLP By: /s/ Daniel Johnson Daniel Johnson (SBN 24046165) Robert A. Lemus (SBN 24052225) 1001 Fannin Street, Suite 3700 Houston, Texas 77002 Telephone: (713) 470-6100 Facsimile: (713) 654-1301 E-mail: daniel.johnson@sutherland.com E-mail: robert.lemus@sutherland.com And WARGO & FRENCH LLP Sarah F. Powers (CA No. 238184) (Pro Hac Admission Pending) 1888 Century Park E, Suite 1520 Los Angeles, California 90067 Telephone: (310) 853-6300 Facsimile: (310) 853-6333 E-mail: spowers@wargofrench.com Attorneys for Real Parties In Interest Wellshire Financial Services, LLC, d/b/a LoanStar Title Loans, d/b/a MoneyMax Title Loans, and d/b/a 20  LoanMax; Meadowwood Financial Services, LLC, d/b/a LoanStar Title Loans, and d/b/a MoneyMax Title Loans; and Integrity Texas Funding, LP CERTIFICATION I certify that I have reviewed this petition and have concluded that every factual statement in this response to the petition is supported by competent evidence included in the appendix or record. /s/ Daniel Johnson Daniel Johnson 21  CERTIFICATE OF COMPLIANCE This response contains 4,544 words, excluding the parts exempted by Texas Rule of Appellate Procedure 9.4(i)(1) with regard to other filings. /s/ Daniel Johnson Daniel Johnson CERTIFICATE OF SERVICE This is to certify that I have this day served all parties with a copy of the within and foregoing instrument in accordance with the Texas Rules of Appellate Procedure 6.3 and 9.5(b), (d), (e), to all counsel of record on this 18th day of March 2015. Via e-filing and/or U.S. Mail Roland Garcia, Jr. L. Bradley Hancock Mary Olga Lovett Christopher David Johnsen GREENBURG TRAURIG, LLP 1000 Louisiana, Suite 1700 Houston, Texas 77002 (Attorneys for Relators TMX Finance of Texas, Inc.; TitleMax of Texas, Inc.) Via e-filing and/or U.S. Mail Geoff Gannaway Bryon Rice BECK REDDEN LLP 1221 McKinney St., Suite 4500 Houston, Texas 77010 (Attorneys for Relator TMX Finance, LLC) /s/ Daniel Johnson Daniel Johnson 22  APPENDIX TAB Real Parties In Interest’s Mandamus Record Defendants' Motion for Protection From Apex Deposition of Tracy Young, Exhibit B (R.0498-0501) ..................................................................... P Plaintiffs' Response to Defendant's Motion for Protective Order Regarding the Deposition of Otto Beilss, Exhibits D and G and Email from Relators' Counsel Regarding Attorney Eyes Only Designations of Deposition of Linda McDonald (R.0502-0575) ............................... Q Deposition of James Batterson and Email from Relators' Counsel Regarding Attorney Eyes Only Designations of Deposition of James Batterson (R.0576-0590) .................................................................................. R Plaintiffs’ Omnibus Response to Defendants’ Motions for Protective Order, Discovery Limits, to Compel Disclosure of Damages Calculations, and Mediation filed July 16, 2014 (R.0591-0740) .............................................................................................................S Plaintiffs' Motion to Compel Discovery Responses from Defendants TMX Finance LLC, TMX Finance of Texas, Inc., and TitleMax of Texas, Inc. to Requests for Production of Documents (R.0741-0890) ..........................................................................................T Transcript from Hearing on November 21, 2014 (R.0891-1077) ............................... U Transcript from Hearing on July 18, 2014 (Excerpt) (R.1078-1081) ......................... V Cases Cited In re Alcatel USA, Inc., 11 S.W.3d 173 (Tex. 2000) .........................................................................................1 Baxter v. Palmigiano, 425 U.S. 308 (1976) ....................................................................................................2 23 Boales v. Brighton Builders, Inc., 29 S.W.3d 159 (Tex. App.—Houston [14th Dist.] 2000, no pet.) .............................. 3 In re BP Products North America, Inc., No. 01-06-00613-CV, 2006 WL 2192546 (Tex. App.—Houston [1st Dist.] Aug. 4, 2006, orig. proceeding) ................................................................. 4 Butnaru v. Ford Motor Co., 84 S.W.3d 198 (Tex. 2002) .........................................................................................5 City of Houston v. Harrison, 778 S.W.2d 916 (Tex. App.—Houston [14th Dist.] 1989, no writ) ...........................................................................................6 In re Continental Airlines, Inc., 305 S.W.3d 849 (Tex. App.—Houston [14th Dist.] 2010, no pet.) ............................ 7 Crown Cent. Petroleum Corp. v. Garcia, 904 S.W.2d 125 (Tex. 1995) .......................................................................................8 Simon v. Bridewell, 950 S.W.2d 439 (Tex. App.—Waco 1997, no writ) ................................................... 9 Wilz v. Flournoy, 228 S.W.3d 674 (Tex. 2007) .......................................................................................10 24 Tab P  NO. 2013-33584 WELLS HIRE FINANCIAL SERVICES, LLC, § IN THE DISTRICT COURT d/b/a LOANSTAR TITLE LOANS, d/b/a § MONEYMAX TITLE LOANS, and d/b/a § LOANMAX; MEADOWWOOD FINANCIAL § SERVICES, LLC, d/b/a LOANSTAR TITLE § LOANS, and d/b/a MONEYMAX TITLE § LOANS; and INTEGRITY TEXAS § FUNDING, LP, § § Plaintiffs, § § v. § OF HARRIS COUNTY, TEXAS § TMX FINANCE HOLDINGS, INC.; § TMX PINANCE LLC; § TMX FINANCE OF TEXAS, INC.; and § TITLEMAX OF TEXAS, INC.; § § Defendants. § 152ND JUDICIAL DISTRICT DEFENDANTS' MOTION FOR PROTECTION FROM APEX DEPOSITION OF TRACY YOUNG TO THE HONORABLE ROBERT SCHAFFER: Defendants TMX Finance of Texas, Inc., TitleMax of Texas, Inc., and TMX Finance LLC ("Defendants" or "TitleMax") file this Motion for Protection from Apex Deposition of Tracy Young and in support thereof would respectfully show the Court as follows. I. INTRODUCTION On October 24, 2014, Plaintiffs noticed the deposition of Tracy Young for November 24, 2014. See Notice of the Oral and Videotaped Deposition of Tracy Young, attached as Exhibit A. Defendants object to presenting Mr. Young for a deposition. He is the CEO of the Defendants, and falls squarely within the definition of an "apex" deponent, because he has not been shown to have the requisite "unique or superior personal knowledge" to justify his 1130.00001/551776.vll 0498 EXHIBIT B 0499  I\ l! II' DISTRI( 'I' CUt iRl ,\H. rrru: LO.-\!'iS. d/h ·u d'h:~~ LOA~· ... ·-\·1 \HJI\J.\':>1.\X ll !'1.1.: 1.0.-\\>,, :md d,b.-a c;J:kVICTS. L1 (' d'hia LO.·I~.:s. ~\nd d'h'il \·l.-1:\X Tn f.F ·' r n-'\:\'"· ~tnd I~ i i"(.i/~1 J'Y TI~X:\S I i·~It--:GS. p,c_: niX 1-'i:'.t\ '-:C'I:. Ll C~ 1'\•l.'\ Fl!'<.·\~:c;: OF 'I'EX:\S. I"'C.: anJ !Tll.l'.'viJ\X 01: ll'X!\S. 11\C.: Lh.·~ i:1 ~~ian ts . ., I am tlle CEO n!'l\'!X Finance IJ.C. Ti!leMax t>!'lexct>.. 1\lc.. ;md Tlvl:'\. l·lnancc 0500 t.:ll!-.:t•JnJ('rS in pn1·king lois; (d). tK'quiring VJN ur liet•nse plato.:' mnnlx~rs ln parking ll!b: und (d !\·1~- lJt.ttl)l; 1:;: Tmc~' Yt)tuJg. my daw nr binll b __ U. -::_1 -_?'~. m1tl my :!tldr..:~;{:..: is '31 'lOS _I_Q C,e.c\~( ?c!•D:L_\)r;v_e.. $~~AnV!Jb.lo-.~ . in ;h.: Unh,cd S:nw~ ol !\m,:rim l Sent: Monday, June 23, 2014 8:36. AM To: ppiccolo@veritext.com; kent.sullivan@sutherland.com; Johnson, Daniel; Lemus, Robert; Wargo, Joseph D.; Powers, Sarah; Goebelsmann, Christina; Romero, Abigail Stecker; Castaneda, Elizabeth; carla.kelley@sutherland.com Cc: Steve LaBriola; Geoff Gannaway; Gail Fuller; Sonia Saum; Byron Rice; Christina Baugh Subject: Wellshire Financial SeNices, LLC et al. v. TMX Finance Holdings, Inc. et al. Follow Up Flag: Follow up Flag Status: Completed Dear Ms. Piccolo: Per the agreement among counsel, counsel for Defendants designates the following page and line numbers of Linda McDonald's deposition as Attorneys' Eyes Only ("AEO"): Pg. 35, Ln. 14 to Pg. 40, Ln. 12 Pg. 40, Ln. 23 to Pg. 41, Ln. 8 Pg. 41, Lns. 16-19 Pg. 46, Ln. 25 to Pg. 47, Ln. 17 Pg. 53, Ln. 19 to Pg. 56, Ln. 3 Pg. 56, Lns. 14-22 Pg. 58, Ln. 20 to Pg. 59, Ln. 3 Pg. 81, Ln. 15 Pg. 85, Lns. 4-5 Pg. 86, Lns. 8-9 Pg. 87, Lns. 1-4 Pg. 90, Ln. 18 to Pg. 92, Ln. 3 Pg. 93, Ln. 19 to Pg. 94, Ln. 17 Pg. 96, Ln. 2 to Pg. 99, Ln. 6 Pg. 101, Ln. 7 to Pg. 102, Ln. 9 Pg. I 02, Ln. 22 to Pg. I 03, Ln. 3 Pg. I 03, Ln. 9 to Pg. I 07, Ln. 17 Pg. 113, Ln. I to Pg. 114, Ln. 18 Pg. 115, Lns. 7-19 Pg. 116, Lns. 1-25 Pg. 117, Ln. 24 to Pg. 118, Ln. I 0 Pg. 128, Lns. 2-9 Pg. 129, Lns. 4-13 Please confirm receipt of this email by reply, and please let us know ifyou have any questions. Sincerely, LABRIOlA , Karen Prouty Conklin, RP 1 0574 Paralegal FELLOWS LABRIOLA LLP Peachtree Center! Suite 2300 South Tower 225 Peachtree Street, NE ! Atlanta, GA 30303 404.586.9200 [main] 404.586.2039 [direct dial] 404.586.9201 [fax] \Yww. !1::1\ab.com CONFIDENTIAL MEMORANDUM The infOrmation contained in this transmission is privileged and confidential information intended fat the use of the recipient(s) named above. If you are not an intended recipient, you are hereby notified that any review, disclosure, dissemination, distribution, or duplication of this communication is strictly prohibited. If you are not the intended recipient, please contact the sender by reply email and destroy all copies of the original message. 2 0575 Tab R  Page 1. 1 IN THE DISTRICT COURT OF HARRIS COUNTY, TEXAS 2 152ND JUDICIAL DISTRICT 3 4 5 WELLSHIRE FINANCIAL SERVICES, 6 LLC, d/b/a LOANSTAR TITLE 7 LOANS, et al., No. 2013-33584 8 Plaintiffs, 9 vs. 10 TMX FINANCE HOLDINGS, INC., 11 et al., 12 Defendants. 13 14 15 16 VIDEOTAPED DEPOSITION OF JAMES BATTERSON 17 Los Angeles, California 18 Tuesday, July 29, 2014 19 Volume I 20 21 Reported by: 22 JUDITH A. MANGO 23 CSR No. 5584 24 Job No. 1902035 25 PAGES 1 - 247 Veri text Florida Reporting Co. 800-726-7007 305-376-8800 0576  Page 2 1 IN THE DISTRICT COURT OF HARRIS COUNTY, TEXAS 2 152ND JUDICIAL DISTRICT 3 4 5 WELLSHIRE FINANCIAL SERVICES, 6 LLC, d/b/a LOANSTAR TITLE 7 LOANS, et al., No. 2013-33584 8 Plaintiffs, 9 vs. 10 TMX FINANCE HOLDINGS, INC., 11 et al., 12 Defendants. 13 14 15 16 17 Videotaped Deposition of JAMES BATTERSON, 18 Volume I, taken on behalf of defendants, at 400 19 South Hope Street, Los Angeles, Calif'ornia, 20 beginning at 10:08 a.m. and ending at 12:45 p.m. on 21 Tuesday, July 29, 2014, before JUDITH A. MANGO, 22 Certified Shorthand Reporter No. 5584. 23 24 25 Veritext Florida Repotiing Co. 800-726-7007 305-376-8800 0577  Page 3 1 APPEARANCES: 2 3 For Plaintiffs: 4 WARGO & FRENCH LLP 5 BY: SARAH F. POWERS 6 CHRISTINA L. GOEBELSMANN 7 Attorneys at Law 8 1888 Century Park East, Suite 1520 9 Los Angeles, California 90067 10 (310) 853-6800 11 spowers@wargofrench.com 12 cgoebelsmann@wargofrench.com 13 14 For Defendants TMX Finance, LLC; TMX Finance of 15 Texas, Inc. and TitleMax of Texas, Inc.: 16 FELLOWS LA BRIOLA LLP 17 BY: STEPHEN T. LA BRIOLA 18 Attorney at Law 19 Peachtree Center 20 225 Peachtree Street, N.E. 21 Suite 2300, South Tower 22 Atlanta, Georgia 30303-1731 23 (404) 586-9200 24 slabriola®fellab.com 25 Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0578  Page 4 1 APPEARANCES (CONTINUED) : 2 3 For the Witness: 4 HOLLAND & KNIGHT LLP 5 BY: SHELLEY G. HURWITZ 6 Attorney at Law 7 400 South Hope Street, 8th Floor 8 Los Angeles, California 90071 9 (213) 896-2400 10 shelley.hurwitz@hklaw.com 11 12 Also Present: 13 VICTORIA NEWMAN (VIA TELEPHONE) 14 GILBERT MIRANDA, VIDEOGRAPHER 15 16 17 18 19 20 21 22 23 24 25 Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0579  Page 52 1 A On the advice of counsel and pursuant to my 2 rights under the Fifth Amendment of the United 3 States and California Constitution, I respectfully 4 decline to answer that question on the grounds that 5 my answer may tend to incriminate me. 10:30:54 6 Q Did you have any conversations with Otto 7 Bielss, the vice-president of operations, during the 8 time that you were employed as a regional manager? 9 A On the advice of counsel and pursuant to my 10 rights under the Fifth Amendment of the United 10:31:03 11 States and California Constitution, I respectfully 12 decline to answer that question on the grounds that 13 my answer may tend to incriminate me. 14 Q Did you have any conversations with Charles 15 Cole during the time that you were employed as a 10:31:08 16 regional manager in Texas? 17 A On the advice of counsel and pursuant to my 18 rights under the Fifth Amendment of the United 19 States and California Constitution, I respectfully 20 decline to answer that question on the grounds that 10:31:12 21 my answer may tend to incriminate me. 22 Q And what did you discuss with Mr. Biells or 23 Mr. Cole? 24 A On the advice of counsel and pursuant to my 25 rights under the Fifth Amendment of the United 10:31:16 Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0580  Page 68 1 A On the advice of counsel and pursuant to my 2 rights under the Fifth Amendment of the United 3 States and California Constitution, I respectfully 4 decline to answer that question on the grounds that 5 my answer may tend to incriminate me. 10:37:08 6 Q Did you have conversations with Linda 7 McDonald regarding marketing practices in your 8 region? 9 A On the advice of counsel and pursuant to my 10 rights under the Fifth Amendment of the United 10:37:13 11 States and California Constitution, I respectfully 12 decline to answer that question on the grounds that 13 my answer may tend to incriminate me. 14 Q Did you have conversations with Otto Bielss 15 regarding marketing practices in your region? 10:37:17 16 A On the advice of counsel and pursuant to my 17 rights under the Fifth Amendment of the United 18 States and California Constitution, I respectfully 19 decline to answer that question on the grounds that 20 my answer may tend to incriminate me. 10:37:20 21 Q What were the purposes of any conversations 22 that you had with Mike Ryan with respect to 23 marketing practices in your region? 24 A On the advice of counsel and pursuant to my 25 rights under the Fifth Amendment of the United 10:37:28 Veri text Florida Reporting Co. 800-726-7007 305-376-8800 0581  Page 72 1 decline to answer that question on the grounds that 2 my answer may tend to incriminate me. 3 Q How many times did you speak with Otto 4 Bielss regarding marketing practices in your region? 5 A On the advice of counsel and pursuant to my 10:38:40 6 rights under the Fifth Amendment of the United 7 States and California Constitution, I respectfully 8 decline to answer that question on the grounds that 9 my answer may tend to incriminate me. 10 Q When did you have conversations with Otto 10:38:40 11 Bielss regarding marketing practices in your region? 12 A On the advice of counsel and pursuant to my 13 rights under the Fifth Amendment of the United 14 States and California Constitution, I respectfully 15 decline to answer that question on the grounds that 10:38:46 16 my answer may tend to incriminate me. 17 Q Did you have any discussions with Otto 18 Bielss regarding the propriety of any marketing 19 techniques or practices used in your region? 20 A On the advice of counsel and pursuant to my 10:38:55 21 rights under the Fifth Amendment of the United 22 States and California Constitution, I respectfully 23 decline to answer that question on the grounds that 24 my answer may tend to incriminate me. 25 Q And when did you have that conversation 10:38:56 Veri text Florida Repmiing Co. 800-726-7007 305-376-8800 0582  Page 73 1 with Otto Bielss? 2 A On the advice of counsel and pursuant to my 3 rights under the Fifth Amendment of the United 4 States and California Constitution, I respectfully 5 decline to answer that question on the grounds that 10:38:59 6 my answer may tend to incriminate me. 7 Q When you were regional manager, did your 8 district manager send you marketing plans for you to 9 review? 10 A On the advice of counsel and pursuant to my 10:39:08 11 rights under the Fifth Amendment of the United 12 States and California Constitution, I respectfully 13 decline to answer that question on the grounds that 14 my answer may tend to incriminate me. 15 Q Who sent you those marketing plans? 10:39:08 16 A On the advice of counsel and pursuant to my 17 rights under the Fifth Amendment of the United 18 States and California Constitution, I respectfully 19 decline to answer that question on the grounds that 20 my answer may tend to incriminate me. 10:39:12 21 Q Did Mike Ryan send you marketing plans? 22 A On the advice of counsel and pursuant to my 23 rights under the Fifth Amendment of the United 24 States and California Constitution, I respectfully 25 decline to answer that question on the grounds that 10:39:15 Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0583  Page 123 1 A On the advice of counsel and pursuant to my 2 rights under the Fifth Amendment of the United 3 States and California Constitution, I respectfully 4 decline to answer that question on the grounds that 5 my answer may tend to incriminate me. 11:14:01 6 Q How many individuals were involved in going 7 to parking lots of LoanStar to record the license 8 plate numbers of the cars parked in LoanStar parking 9 lots? 10 A On the advice of counsel and pursuant to my 11:14:12 11 rights under the Fifth Amendment of the United 12 States and California Constitution, I respectfully 13 decline to answer that question on the grounds that 14 my answer may tend to incriminate me. 15 Q Did you ever go to the parking lots of any 11:14:13 16 competitors of TitleMax to solicit the customers of 17 those competitors? 18 A On the advice of counsel and pursuant to my 19 rights under the Fifth Amendment of the United 20 States and California Constitution, I respectfully 11:14:22 21 decline to answer that question on the grounds that 22 my answer may tend to incriminate me. 23 Q How many times did you go to the parking 24 lots of competitors to solicit the customers of 25 those competitors? 11:14:29 Veri text Florida Reporting Co. 800-726-7007 305-376-8800 0584  Page 124 1 A On the advice of counsel and pursuant to my 2 rights under the Fifth Amendment of the United 3 States and California Constitution, I respectfully 4 decline to answer that question on the grounds that 5 my answer may tend to incriminate me. 11:14:30 6 Q Which competitors did you go to in order to 7 solicit the business of competitors from the 8 competitors' parking lots? 9 A On the advice of counsel and pursuant to my 10 rights under the Fifth Amendment of the United 11:14:38 11 States and California Constitution, I respectfully 12 decline to answer that question on the grounds that 13 my answer may tend to incriminate me. 14 Q How many customers did you record license 15 plate information when you went to the -- strike 11:14:46 16 that. 17 Did you ever go to the parking lots of 18 competitors to record the license plate numbers of 19 cars parked in those parking lots? 20 A On the advice of counsel and pursuant to my 11:14:57 21 rights under the Fifth Amendment of the United 22 States and California Constitution, I respectfully 23 decline to answer that question on the grounds that 24 my answer may tend to incriminate me. 25 Q And which competitors' parking lots did you 11:14:58 Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0585  Page 148 1 use in the direct mailer program? 2 A On the advice of counsel and pursuant to my 3 rights under the Fifth Amendment of the United 4 States and California Constitution, I respectfully 5 decline to answer that question on the grounds that 11:26:42 6 my answer may tend to incriminate me. 7 Q Who created the new marketing materials? 8 A On the advice of counsel and pursuant to my 9 rights under the Fifth Amendment of the United 10 States and California Constitution, I respectfully 11:26:47 11 decline to answer that question on the grounds that 12 my answer may tend to incriminate me. 13 Q Who approved the new marketing materials? 14 A On the advice of counsel and pursuant to my 15 rights under the Fifth Amendment of the United 11:26:50 16 States and California Constitution, I respectfully 17 decline to answer that question on the grounds that 18 my answer may tend to incriminate me. 19 Q Did you create the new marketing materials 20 used as part of the direct mailer program? 11:26:53 21 A On the advice of counsel and pursuant to my 22 rights under the Fifth Amendment of the United 23 States and California Constitution, I respectfully 24 decline to answer that question on the grounds that 25 my answer may tend to incriminate me. 11:26:57 Veritext Florida Repotiing Co. 800-726-7007 305-376-8800 0586  Page 181 1 decline to answer that question on the grounds that 2 my answer may tend to incriminate me. 3 Q Did you use the search results that you 4 obtained from DataTrax to solicit customers of 5 competitors? 11:43:07 6 A On the advice of counsel and pursuant to my 7 rights under the Fifth Amendment of the United 8 States and California Constitution, I respectfully 9 decline to answer that question on the grounds that 10 my answer may tend to incriminate me. 11:43:08 11 Q Did you ever search DataTrax or PublicData 12 for information related to liens held by 13 competitors? 14 A On the advice of counsel and pursuant to my 15 rights under the Fifth Amendment of the United 11:43:18 16 States and California Constitution, I respectfully 17 decline to answer that question on the grounds that 18 my answer may tend to incriminate me. 19 Q Did you ever search DataTrax or PublicData 20 for information related to liens held by LoanStar? 11:43:24 21 A On the advice of counsel and pursuant to my 22 rights under the Fifth Amendment of the United 23 States and California Constitution, I respectfully 24 decline to answer that question on the grounds that 25 my answer may tend to incriminate me. 11:43:27 Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0587  Page 202 1 decline to answer that question on the grounds that 2 my answer may tend to incriminate me. 3 Q Were those employees district managers in 4 Houston, Texas? 5 A On the advice of counsel and pursuant to my 11:51:37 6 rights under the Fifth Amendment of the United 7 States and California Constitution, I respectfully 8 decline to answer that question on the grounds that 9 my answer may tend to incriminate me. 10 Q Were those employees district managers in 11:51:38 11 Dallas, Texas? 12 A On the advice of counsel and pursuant to my 13 rights under the Fifth Amendment of the United 14 States and C~lifornia Constitution, I respectfully 15 decline to answer that question on the grounds that 11:51:43 16 my answer may tend to incriminate me. 17 Q Were those employees district managers in 18 El Paso? 19 A On the advice of counsel and pursuant to my 20 rights under the Fifth Amendment of the United 11:51:49 21 States and California Constitution, I respectfully 22 decline to answer that question on the grounds that 23 my answer may tend to incriminate me. 24 Q Were those employees district managers in 25 Waco? 11:51:55 Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0588  Page 238 1 BY MR. LA BRIOLA: 2 Q Indeed, such activity would violate company 3 policy, correct? 4 A On the advice of counsel and pursuant to my 5 rights under the Fifth Amendment of the United 12:41:10 6 States and California Constitution, I respectfully 7 decline to answer that question on the grounds that 8 my answer may tend to incriminate me. 9 Q Isn't it true that you told Linda McDonald 10 that you did exactly as she had instructed and that 12:41:15 11 you were not aware of any TitleMax employee in your 12 region who was doing what Linda McDonald told you 13 LoanStar was alleging? 14 MS. GOEBELSMANN: Object to form. 15 THE WITNESS: On the advice of counsel and 12:41:28 16 pursuant to my rights under the Fifth Amendment of 17 the United States and California Constitution, I 18 respectfully decline to answer that question on the 19 grounds that my answer may tend to incriminate me. 20 BY MR. LA BRIOLA: 12:41:30 21 Q Isn't it true that you told Linda McDonald 22 that you do not know of any TitleMax employee who 23 was writing down license plate numbers from 24 competitor parking lots and soliciting them for 25 business? 12:41:41 Veritext Florida Repotting Co. 800-726-7007 305-376-8800 0589 From: Karen Prouty Conklin Sent: Tuesday, September 02, 2014 11:14 AM To: ppiccolo@veritext.com; kent.sullivan@sutherland.com; Johnson, Daniel; Lemus, Robert; Wargo, Joseph D.; Powers, Sarah; Goebelsmann, Christina; Stecker, Abigail; Castaneda, Elizabeth; carla.kelley@sutherland.com Cc: Steve LaBriola; Geoff Gannaway; Gail Fuller; Sonia Saum; Byron Rice; Christina Baugh; Angela Torres Subject: Wellshire Financial Services, LLC et al. v. TMX Finance Holdings, Inc. et al. Dear Ms. Piccolo: Per the agreement among counsel, counsel for Defendants designate Page 77, line 21 through Page 103, line 13 of James Batterson's deposition as Attorneys' Eyes Only. Please confirm receipt of this email by reply, and please let us know if you have any questions. Sincerely, LABRlQJJ.A" Karen Prouty Conklin, RP Paralegal FELLOWS LABRIOLA LLP Peachtree Center I Suite 2300 South Tower 225 Peachtre·c Street, NE I Atlanta, GA 30303 404.586.9200 [main] 404.586.2039 [direct dial] 404.586.9201 [fax] W\\w.IC\Iab.com CONFIDENTIAL MEMORANDUM The information contained in this transmission is privileged and c.onfidential information intended for the use of the recipient(s) named above. If you are not an intended recipient, you are hereby notified that any review, disclosure, dissemination, distribution, or duplication of this communication is strictly prohibited. If you are not the intended recipient, please contact the sender by reply email and destroy all copies of the original message. 0590 Tab S  CAUSE NO. 2013-33584 WELLSHIRE FINANCIAL SERVICES, LLC, § IN THE DISTRICT COURT d!b/a LOANSTAR TITLE LOANS, d/b/a § MONEYMAX TITLE LOANS, and d/b/a § LOANMAX; MEADOWWOOD FINANCIAL § SERVICES, LLC, d/b/a LOANSTAR TITLE § LOANS, and d/b/a MONEYMAX TITLE § LOANS; and INTEGRITY TEXAS § FUNDING, LP, § § PlaintlfjS, § OF HARRIS COUNTY, TEXAS § v. § § TMX FINANCE HOLDINGS, INC.; § TMX FINANCE, LLC; § TMX FINANCE OF TEXAS, INC.; and § TITLEMAX OF TEXAS, INC., § § Defendants. § 15211 d JUDICIAL DISTRICT PLAINTIFFS' OMNIBUS RESPONSE TO DEFENDANTS' MOTIONS FOR PROTECTIVE ORDER, DISCOVERY LIMITS, TO COMPEL DISCLOSURE OF DAMAGES CALCULATIONS, AND MEDIATION COME NOW, Plaintiffs Wellshire Financial Services, LLC d/b/a LoanStar Title Loans, d!b/a Money Max Title Loans, and d/b/a LoanMax; Meadowwood Financial Services, LLC, d/b/a LoanStar Title Loans, and d/b/a MoneyMax Title Loans; and Integrity Texas Funding, LP, (collectively, "LoanStar") and hereby file this omnibus response to the discovery motions ("Omnibus Motion") filed by Defendants TMX Finance, LLC, TMX Finance of Texas, Inc. and TitleMax of Texas, Inc. (collectively, "TitleMax"), and respectfully show the Court as follows: I. INTRODUCTION TitleMax's Omnibus Motion should be rejected, as it is an attempt to prematurely and improperly curtail discovery before LoanStar has an opportunity to discover the tme scope of TitleMax's misconduct and ascertain the damages caused thereby. Contrary to TitleMax's 0591  unfounded accusations, the amount of discovery taken to date, as well as the discovery that still needs to be completed, is dictated not by "~ambo" tactics on the part of LoanStar, but by the remarkable scope of TitleMax's illegal scheme to purloin Loan Star's customers and TitleMax's refusal to be forthcoming in discovery. In fact, LoanStar learned just this week (July 14, 2014) - only through a third-party subpoena- that TitleMax's illegal conduct continues to this day, despite the entry of a temporary injunction order ("TIO") prohibiting it. Specifically, records produced by "The Source for PublicData, LP" ("PublicData") documenting searches performed by 20 TitleMax employees shows that at least four of them conducted at least 14 illegal searches directed at LoanStar customers, as recently as May 19, 2014. 1 Loan Star's discovery of these recent illegal searches, only through a third-party subpoena, has been typical of the discovery process in this case, as LoanStar has had to build its case by continuing to dig for the truth, one deposition at a time, because TitleMax refuses to be forthcoming in discovery and continually misrepresents the facts 'to LoanS tar. Indeed, discovery has revealed that the illegal searches at the heart of this case occurred during a period nearly double that represented by TitleMax and that its management was aware of and directed this conduct. In light of such circumstances, TitleMax's motions and requests for relief are without merit. First, TitleMax's proposed 50 hour deposition limit is actually an attempt to entirely shut down the deposition process, as LoanStar is already at that limit. TitleMax would prevent LoanStar from (among other things) deposing employees who continue to conduct illegal searches, as well as taking depositions to establish the extent to which TitleMax's corporate policies or practices dictated the illegal behavior. Second, TitleMax cannot complain that LoanStar has not provided detailed damages calculations when TitleMax has prevented LoanStar 1 T111e and correct, redacted copies of these search results are attached hereto as Exhibit A. 2 0592 from discovering information relevant to its damages. Third, there is no merit to TitleMax's request for a protective order as to a deposition notice that has never been served and was significantly modified by LoanStar at TitleMax's request. Fourth, TitleMax's demand that the Court order the parties to mediation is obviously premature, as TitleMax has denied LoanStar the information needed to make any mediation productive. The Court should therefore deny TitleMax's Omnibus Motion in its entirety. II. RELEVANT BACKGROUND The record in this case demonstrates that, from the very outset of this dispute, TitleMax has sought to conceal the vast scope of its illegal scheme to steal LoanStar' s customers. This has required LoanS tar to painstaking] y uncover the truth by continuing to turn over stone after stone, exposing additional evidence of misconduct and additional leads. For example: • In November 2012, more than six months before the filing of this case, TitleMax flatly (and falsely) denied that it was engaging in the illegal searching and marketing . to LoanS tar customers at the heart of this case. 2 Expedited depositions taken at the outset of the case were required to prove the falsity ofTitleMax's representation. 3 • TitleMax later admitted that its employees engaged in illegal searches, but denied that this conduct occutTed prior to June 2012, and thus refused to supplement the Overlap List to provide information prior to that date. LoanStar was forced to take 2 See December 6, 20 I 2 letter from Yin Thomas (TitleMax in-house counsel) to John McCloskey (LoanStar in-house counsel) filed as Exhibit B to Plaintiffs' Motion to Compel Discovery Responses filed on July 7, 20I4 ("TMX denies the allegations in your letter. Specifically, TMX employees are neither monitoring [Loan Star's] Texas store parking lots for the purposes of obtaining license plate numbers from [LoanStar's] customers through improper searching of lien information in Texas state-maintained motor vehicle records.") 3 See Deposition Excerpts filed as Exhibit C to Plaintiffs' Motion to Compel Discovery Responses filed on July 7, 2014 [Felix DeLeon Dep. 12:2-8, I4:IO-l5, I5:I3-24; Jarrod Dozier Dep.l9:9-l3, 34:9-25; Lucia Grajeda Dep.l7:8-2; Ismael Hernandez Dep.l2:6-20:9; Joshua Hadden Dep.l5:7-2I :3; Mike Ryan Dep.23: 15-28:9; Patrick Sudduth Dep. 23: I -36:2 I]. 3 0593  depositions to prove that, as well, and then had to file a motion to compel supplementation of the Overlap List. 4 • TitleMax failed to disclose numerous individuals with knowledge that the illegal conduct was ocCUlTing throughout Texas, instead forcing LoanStar to painstakingly uncover such evidence one deposition at a time. Only LoanStar' s efforts in noticing the depositions of individuals and subpoenaing the records of a third party exposed the true facts in this regard. 5 • Given that TitleMax tried to portray its illegal conduct as the acts of a few rogue employees, LoanStar has had to take depositions of former TitleMax employees to prove that TitleMax's management was not only aware of the misconduct, but also actively encouraged or even required it. 6 • In June 2014, PublicData produced over 22,000 pages of searches conducted by 20 TitleMax employees. An analysis of these records, ongoing since the production and completed only on July 14 reveals that at least four TitleMax employees have conducted at least 14 searches directed at LoanStar customers, as recently as May 19, 2014, despite the Com1's TIO prohibiting such conduct. These searches include queries by license plate number and zip code, demonstrating that TitleMax employees ·• See, e.g., Plaintiffs' Reply In Support of Plaintiffs' Discovery Motions filed July 10, 2014 Exhibits B [Miguel Mm1inez Dep. Rough Transcript [July 8, 2014] 14, 33-34, 79], C [James Griffin Dep. 10-12, 86-90], & D [Randy Rainey Dep. Rough Transcript [July 8, 2014]36-44]. ' See, e.g., Depositions Excerpts attached hereto as Exhibit D [Griffin Dep. 10-13, 48-49, 88-89 (James Griffin, Harold Landers, Gary Jackson); Rainey Dep. Rough Transcript [July 8, 2014] 36-37 (Randy Rainey, Tom Griffin); Martinez Dep. Rough Transcript (July 8, 2014] 33-14 (Miguel Martinez, Wanda "Wendy" Payne, "Ray from Euless"); Antonio Amado Dep. Rough Transcript [July 9, 2014] 19, 21 ("Denny" from "N011hwest Military", "Brigitte" from "281 and Blanco")]; see also Exhibit A. ' See, e.g., Exhibit D [Griffin Dep. 101-03, 105-07; Hale Dep. 121-24]. 4 0594  continue to use illegal marketing practices to identifY customers of TitleMax's competitors (including LoanStar). (Exhibit A.) In short, the record shows that TitleMax has attempted to conceal the scope of its unlawful scheme at virtually every turn, and that LoanStar has been able to uncover the facts of this case only through deposing numerous former TitleMax employees and through third party discovery. The record is also clear that LoanStar requires further discovery regarding the true extent of TitleMax's unlawful conduct, the source thereof, and the damages caused thereby. III. ARGUMENT A. TitleMax Cannot Show That Its Discovery Limitations Are Appropriate at This Time In its Omnibus Motion, TitleMax recognizes that, in considering whether to limit discovery, the Court should take into account: (I) the needs of the case; (2) the amount in controversy; (3) the parties' resources; (4) the importance of the issues at stake in the litigation; and (5) the importance of the proposed discovery in resolving the issues. (TEX. R. CJV. P.l92.4.) Notably, however, TitleMax fails to analyze these factors in its Omnibus Motion, undoubtedly .because all of these factors dictate denial ofTitleMax's attempt to prematurely cm1ail discovery. First, the record amply demonstrates that the needs of this case have not only required significant discovery to date, but that significant additional discovery is necessary. Such discovery is required to ascertain, among other things, the scope and extent of the misconduct at issue, the extent to which such misconduct reflects corporate policies or practices rather than the actions of a handful of rogue employees, and the damages caused by TitleMax's conduct. The record fm1her shows that the need for such discovery has largely been dictated by TitleMax's own attempts to hide the truth. TitleMax cannot complain about the need for additional discovery when it has sown the seeds of its own dilemma. 5 0595  Second, the amount in controversy here is significant. Although LoanStar cannot yet calculate damages because TitleMax has refused to provide the discovery necessary for LoanStar to do so, it is readily apparent that LoanStar's damages will be significant. Indeed, TitleMax admits to a potential universe of more than 7,500 stolen customers-a universe that will expand when TitleMax supplements the Overlap List as ordered by the Comt. Given that TitleMax's illegal conduct resulted in the conversion of thousands of customers who otherwise would have provided continuing revenue streams to LoanStar, damages will be substantial. Third, the parties' resources do not suggest that discovery should be limited. TMX Finance LLC is a behemoth, with over 1200 stores in 22 states, and in 2012 repotted interest and fee income of$656 million. (Exhibit B [TitleMa"< 2012 10-k].) Fourth, the importance of the issues at stake in the litigation weighs against TitleMax's attempt to severely curtail discovery at this point. This case involves egregious conduct that TitleMax admits was improper (as well as criminal) -conduct that not only allowed TitleMax to steal countless LoanStar customers, but also violated the privacy rights of tens of thousands of individuals. Indeed, discovery to date demonstrates that TitleMax has accessed the personal information for over 10,700 individuals through the database searches-including records of over 1,600 individuals in Texas since the TIO was entered in this case in July 2013. Finally, there is no question that the fifth factor - the importance of the proposed discovery in resolving the issues- also militates towards denial of TitleMax's Omnibus Motion. As shown above, it is only through discovery- particularly the depositions of former employees and other third party discovery - that LoanStar has begun to uncover the .truth. TitleMax has resisted that discovery at every turn, and has failed to be forthcoming with the true facts regarding (among other things) the number of employees involved in its illegal scheme and the 6 0596 extent to which TitleMax's management were both aware of and involved in that scheme. It is only through significant additional discovery that the full extent of such facts will be revealed, and the true nature and amount of LoanS tar's damages can be determined. Accordingly, ill!!!£ of the five factors support TitleMax's attempt to curtail discovery at this time. Further, as shown below, TitleMax's Omnibus Motion should also be denied because the individual components thereof are without merit. B. TitleMax Has No Grounds to Seek a Protective Order Regarding a Corporate Deposition Notice That Has Never Been Served and Has Already Been Narrowed TitleMax's motion for protective order as to a corporate deposition notice that has never been served is a red herring. Indeed, TitleMax fails to inform the Court that LoanStar agreed to narrow the notice before TitleMax ever filed its motion. Thus, the draft notice of which TitleMax complains no longer even exists. More than one month ago, LoanStar provided the proposed corporate deposition topics to counsel for TitleMax, requesting deposition dates and inviting discussion on the topics. Counsel for TitleMax delayed in responding for weeks, ultimately refusing to produce any witness for deposition and instead threatening to file the instant motion claiming, without specification, that the noticed topics were too broad. At LoanStar's insistence, a meet and confer was held during which counsel for TitleMax complained of overbreadth as to nearly all of LoanStar's proposed topics. LoanStar thereafter provided a substantially narrowed proposed notice, eliminating more than half of the proposed topics and adding language to narrow several others. (See Meet and Confer Email dated July 2, 2014, attached hereto as Exhibit C.) LoanStar also requested that TitleMax further discuss the topics. Instead, TitleMax filed the instant motion, vaguely referencing a purportedly "overbroad" notice it does not attach, and referencing topics that were already removed or 7 0597 narrowed by Loan Star. The Court should not enter a protective order regarding a deposition that has never been noticed and about which TitleMax has failed to meaningfully meet and confer. C. TitleMax's Proposal to Shutdown Deposition Discovery Must Be Rejected TitleMax's proposed 50 hour limit on depositions actually seeks to end deposition discovery, as TitleMax knows that LoanStar is already at that limit. Importantly, however, it is only through deposition testimony that LoanStar has been able to uncover facts demonstrating that TitleMax' s illegal conduct spanned a much longer time frame and involved far more employees than TitleMax ever disclosed, including management level employees. Indeed, every stone LoanStar turns over results in additional evidence and witnesses supporting its claims. Given LoanStar's success in using depositions of former employees to uncover the truth to date, it is not surprising that TitleMax seeks to end deposition discovery to prevent LoanStar from discovering the full extent of the misconduct and damages at issue here. The need for further deposition testimony is readily apparent. For example, once corrected, the Overlap List will provide a basis for discovery of the illegal conduct that occtmed during the actual time period at issue. TitleMax will be required to supplement its earlier discovery responses tied to the Overlap List, and to the extent additional employees with knowledge are disclosed, LoanStar is entitled to depose them. Likewise, LoanStar must be allowed to depose the four employees who were exposed by the PublicData records as continuing to conduct unlawful searches for LoanS tar customers. As the history of this case proves, those employees will likely reveal additional witnesses and leads. Fmiher, TitleMax's own arguments highlight the need for additional deposition discovery regarding its corporate policies and practices with regard to the illegal searches. TitleMax attempts to take the sting out of its illegal scheme by suggesting that one of the websites it used to conduct its illegal searches- PublicData- misled TitleMax's employees into believing they 8 0598 can search DMV records "[f]or any use in the normal course of business ... " That argument is disingenuous, as the language it highlights is actually a hyperlink which, when clicked on, displays the full text of the exemption- text which clearly prohibits the searches executed by TitleMax. In any event, at the same time TitleMax represents that its employees did not know their searches were illegal, TitleMax seeks to deny LoanStar discovery regarding TitleMax's corporate policies, practices, and training with respect to, among other things, the permissible uses of such databases and whether their use is considered an acceptable marketing practice by TitleMax. It is absurd for TitleMax to make its "innocent user" argument while at the same time attempting to foreclose discovery regarding these issues. In short, while it is clear why TitleMax wants the Court to end deposition discovery, it is equally clear that the Court should decline to do so at this time. D. TitleMax Cannot Demand LoanStat·'s Damages Calculations and Mediation While Simultaneously FJ"Ustrating LoanStar's Efforts to Obtain the Information Necessary to Calculate Damages and Participate in Meaningful Mediation TitleMax 's request for LoanS tar's damages calculation is especially ironic, given TitleMax's failure and refusal to provide LoanStar with information necessary to that very calculation. As the Comt knows, TitleMax attempted to mtificially cutoff disclosure of potentially stolen customers, necessitating a motion to compel by LoanStar and ultimately resulting in the Co uti ordering TitleMax to provide additional information to expand the Overlap List. As LoanStar's counsel has repeatedly informed counsel for TitleMax, LoanStar is not in a position to provide a damages calculation until TitleMax produces the information enabling it to do so. Additionally, as pleaded by LoanStar in its Second Amended Petition, LoanStar seeks to recover from TitleMax ill-gotten profits earned as a result ofTitleMax's illegal conduct. In order 9 0599 to calculate those damages, outside counsel for LoanStar7 must have access to certain TitleMax financial records. TitleMax has categorically refused to provide such information. Likewise, TitleMax demands mediation, but is unwilling to provide LoanStar with information necessary for such a mediation to be at all meaningful. Indeed, without complete information from which to determine the proper scope of damages, LoanStar would be flying blind and have no basis from which to adequately negotiate. 8 IV. PRAYER Accordingly, LoanStar respectfully requests that this Court deny the relief TitleMax seeks tlu·ough its discovery motions. DATED: July 16,2014 Respectfully submitted, SUTHERLAND ASBILL & BRENNAN LLP By: Is/ Daniel Johnson Kent C. Sullivan (SBN 19487300) Daniel Johnson (SBN 24046165) Robert A. Lemus (SBN 24052225) 1001 Fannin, Suite 3700 Houston, Texas 77002 Telephone: (713) 470-6100 Facsimile: (713) 654-1301 E-mail: kent.sullivan@sutherland.com E-mail: daniel.jolmson@sutherland.com E-mail: robert.lemus@sutherland.com And WARGO FRENCH LLP Joseph D. Wargo (GA No. 738764) 7 The parties' Rule 11 confidentiality agreement contemplates protection of commercially sensitive information through an "Attorney's Eyes Only" designation, by which even the parties' in-house counsel are prohibited from viewing information so designated. 8 Notably, despite its purported eagerness to mediate, TitleMax has never once made an effort to commence negotiations or made any settlement offer. 10 0600  (Admitted Pro Hac Vice) Joseph W. Ozmer II (GA No. 001542) (Admitted Pro Hac Vice) 999 Peachtree Street, N. E., 26 111 Floor Atlanta, Georgia 30309 Telephone: (404) 853-1500 Facsimile: (404) 853-1501 E-Mail: jwargo@wargofrench.com E-Mail: jozmer@wargofrench.com Sarah F. Powers (CA. No. 238184) (Admitted Pro Hac Vice) Christina L. Goebelsmann (CA No. 273379) (Admitted Pro Hac Vice) 1888 Century ParkE, Suite 1520 Los Angeles, California 90067 Telephone: (31 0) 853-6300 Facsimile: (31 0) 853-6333 E-Mail: spowers@wargofrench.com E-Mail: cgoebelsmann@wargofrench.com Attorneys for Wei/shire Financial Services, LLC, d/b/a LoanStar Title Loans, d/b/a MoneyMax Title Loans, and d/b/a LoanMax; Meadowwood Financial Services, LLC, d/b/a LoanStar Title Loans, and d/b/a MoneyMax Title Loans; and Integrity Texas Funding, LP 1l 0601  CERTIFICATE OF SERVICE This is to certifY that I have this day served all parties with a copy of the within and foregoing PLAINTIFFS' OMNIBUS RESPONSE TO DEFENDANTS' MOTIONS FOR PROTECTIVE ORDER, DISCOVERY LIMITS, TO COMPEL DISCLOSURE OF DAMAGES CALCULATIONS, AND MEDIATION has been forwarded to all counsel of record in accordance with TEX. R. C!V. P. 21 and 21a on this 16th day of July 2014. David Beck Geoff Garmaway Bryon Rice BECK REDDEN LLP 1221 McKinney St., Suite 4500 Houston, Texas 770 I 0. Stephen LaBriola Christina Baugh FELLOWS LABRIOLA LLP Peachtree Center Suite 2300, South Tower 225 Peachtree Street, N.E. Atlanta, Georgia 30303-1731 Allorneys.for TMX Finance LLC, TMX Finance of Texas, Inc. and TitleMax of Texas, Inc. DATED: July 16,2014 Is/ Daniel Johnson Daniel Johnson 12 0602 EXHIBIT A 0603  Date User Name Type of Search Search (Term) Results (List of Mnmcs) Display (Selection From List) Lien Holder Listed PD Bates Number 8/23/2013 PdobneyOI Partial Zip Code REDACTED REDACTED REDACTED Integrity Texas Funding PD 012493 to PD 012495 10/28/2013 PdobneyOI Plate REDACTED REDACTED REDACTED Integrity Texas Funding PD_OI2980 to PD 012981 11/1/2013 TMX F01t Worth 4 YIN REDACTED REDACTED REDACTED Integrity Texas Funding PD 018688 to PD 018689 12/3/2013 PdobneyOI YIN REDACTED REDACTED REDACTED Integrity Texas Funding PD_OI3191 to PD 013192 1211612013 PdobncyOI Plate REDACTED REDACTED REDACTED Integrity Texas Funding PD 013247 to PD 013248 12/]7/2013 Taylor Sullivan YIN REDACTED REDACTED REDACTED Integrity Texas Funding PD 017988 to PD 017990 1/17/2014 PdobncyOJ Partial Zip Code REDACTED REDACTED REDACTED Integrity Texas Funding PD 013545 to PD 013546 2/20/2014 PdobneyOI Plate REDACTED REDACTED REDACTED Integrity Texas Funding PD 014014 to PD 014015 2/20/2014 PdobneyOJ Partial Zip Code REDACTED REDACTED REDACTED Integrity Texas Funding PD 014016 to PD 014019 2/26/2014 PdobneyOI YIN REDACTED REDACTED REDACTED Integrity Texas Funding PD 014084 to PD 014086 2/2812014 TMX Fort Worth 4 VIN REDACTED REDACTED REDACTED Integrity Texas Funding PD 018814toPD 018816 318/2014 PdobncyOI Plate REDACTED REDACTED REDACTED Integrity Texas Funding PD Ol4220toPD 014223 412/2014 PdobncyOI VIN REDACTED REDACTED REDACTED Integrity Texas Funding PD_014360 to PD_014362 5/19/2014 James SchafCr Partiill Zip Code REDACTED REDACTED REDACTED Integrity Texas Funding PD_006477 to PD_006478 0 0'\ 0 ""'  PD_022382 ACCOUNT_IDENTIFIER ACCOUNT ACCOUNTID EMAILID STATUS ACCOUNTIYPE BILLTYPE BILLEXPDATE LNAME FNAME 10503349 1399113 TX ernest.page@titlemax.biz 0 c 2 2016-08-01 Page Ernest 10506290 3633225 TX richard.hale@titlemax.biz 0 c 2 Hale Todd 10506333 9205388 TX tmx·aust!n-tx10@tiUemax.biz 1 c 3 2015-04-01 Arellano Gabriel 10500436 9569219 TX estela.bravo@tillemax.biz 0 c 2 Bravo Estela 10506079 9636450 TX joshua.howells@tiUemax.biz 0 c 2 2013-08-01 Hol(~_hit!ll r~,f~\.1,i!:ii i'i·~tdr:i J~;i•lll"·r.:f[!J Redacted TX 75241-6525 !t@@i@ Tt.r~l~ -Dtj'r.ti.U~'"!Ii'!)f Mol.1M·. Vdrk),•;; /Owm·;~jDJ Redacted DALLAS, TX75241-6525 Redacted DALLAS, TX 75241-6525 i;@Mji!ifj r,;ri_i!; :·e.~i;i(~.'~7;1 foj' ,~1u!M \',•lit.:!••;. JO,•u. r;/CD Redacted DALLAS, TX 75241·6525 DALLAS, TX 75241-6525 DALLAS, TX 75241-6525 DALLAS, TX 75241-6525 Redacted Redacted DALLAS, TX 75241-6525 Redacted Redacted DALLAS, TX 75241-6525 Redacted 1J'.'i!l$ > [),'l'•'rl/1>'11/ 'Jf /i.lv:m Vdudo·; IOO•'JI!'<:d by PLATE Redocted To·.~,l,:!: D,.j"~-l~_i•i~·/11 'if .\.f,1i,ld.1diit!(~ IO~;_Iif•,::.:i{!)., ;. ll!!l!li'l'!H 1 Ycmrnccormt0209!1~10S-TX lmslwcn d111rgtd l 'LPok·rlp' M OdoVa28, 2013 al15:17:45. Terms of Use I frequently Ask~d Questions I Contact Us I Policies and Positions I About PublicData All information contained herein tlCopyright 1997-2(113. PubllcD.lta.com 6il M&t¥ctifNMiMP%¥¥¥H ? A+?twiiW!!J!£¥1¥&•9 -4 bti?iA ·1§§• &W§ii¥J§?ii&fi& w:a;;;; M§§!!if§Rtgi¥,t.P JAipi£!l9£¥%&8@hM£ & ssp -&d Oct 28 2013, 15:17:46 20131028151746151746 020994108 TX DETAIL DB=tTexas- Department of Motor Vehicles [Owners] Detail Record Dctnils Ort>ttc•tNIU/~' Ownc•r$/n-rl Owlll'rCily Owm•rS/al<' Redacted MESQUlTE TX Redacted Owtrc•r ZIP Cnrlc• Pn'Vicms Oruutr Nrtulimts Orvn~rCily Ptt'l•ic>us Ouma Sin!us Expimli1111 Mont/1 IImmeJ 07 Ptt'ViC'IIS Expimtimt Year Rt•!iislmfiM E:.:pimliOII Yc'llr Rrgi;;lm!icm £:xpimlion Mmrllt R<'gistmti'vu Effccliut 2012 2014 05 ]un 6 2013 T!IT!'Dil/r Owm·1~11ip Infamnlian MmldYrar Makr Sep 26 2012 01-TEXAS TITI.E 2000 GENERAL MOTOR CORP. hJpd,•/ fo.-f{>rM D•'$C!ipliou Vcltid,• Oad.lf T)lp.' Wltid,•Mrrji>rCc•/,,JfCi>li>rGt\JHp] YUK GENERAL MOTOR CORP. YUKON LL • SUBURBAN/SUV GOLD (Color Group YELLOW) Vdu'c/,•,\1inntC{>/MfCoh,rGn'lllp1 Vnmtiou none found 01 =REGULAR TITI.E NO MILEAGE 0 =VEHICLE IS NOT DIESEL (BEFORE ODOMETER POWERED BRAND LAWS) DOT 5/amimrl~ lnfomlilfillll DP5 51Cilc•u/ndir:ntor . Rc•gi.~/mliou EX<'IIIJI/iou Fired Bt·d 1\'t>~~hl Infomul~m 0 =VEHICLE DOES NOT 0 • VEHICLE IS NOT STOLEN 0 =VEHICLE IS NOT 0 =VEHICLE DOES NOT HAVE OVER MEET STANDARDS EXEMPT FROM 2/3 OF BED WITH PERMANENTI.Y REGISTRATION FEES MOUNTED EQunp..{!)N() 12980 Flood Dan~~gc lu(onmlioll Co!>enmt::lll Owtn~l~hip /rJ(onuntion Tilk /lot Clluk Ju(om:ntion  0 • VEHICLE HAS NO 0 • VEHICLE IS NOT U.S. GOVERNME 0 • NO HOT CHECK 0 • TEXAS SAFETY lNSPECTION IS FLOOD DAMAGE OWNED EXJSTS FOR TITLE NOT WAIVED APPLICATION /uuk Tilk lufomlllliou l'<'nlli/ ]{(•quill'd /ufonmliim lklmi/1 Jufomlfllioll J{,•rarl::lmcl~d /ufom~7/iorr 0 • VEHICLE HAS NO JUNK 0 • NO PERMIT REQUIRED 0 • NEVER SAL VAG ED 0 • NOT A RECONSTRUCTED VEHICLE RECORDS Survh•oro/r~• Agn'"''~·ul lrrfomutkm Titlo! Rl..'t•oktd lllfamlflliy :;tate- be/om areourmmotaticllls Clkk lrcr~•form:m~ vrlric/e$ nt 1/ri:; mldrc55 Click ltm: Joriii'JIC 11111irh"' in/Iris m~a Ploli! Numbr•r Redacted TX --, _ -. TX75149-1760 • -, •• , 75149-1760 Lien Holders lkn Holdi!r Pa~li011 lim 0.1/t 20120825 Lien Holder Information li~n li1•/riu NrmiCod<' Country MESQUITE TX 75150- r45pt A +> a '%9¥MY?t-%3 ~. < &4?¥Z8&fP u £S !¥Jii£ tt~??; bzSif? 9 £Pht&i Oct 28 2013 1 15:17:59 20131028!5!7S91517S9 020994108 TX SEARCH Type""Zip LN=TXDMV DB=txdmv p!=75149176029 ip=174.141.l.220 method=GET rcfcl"'bttp:I/Jbscarch. publicdota.corn'pddctails.php?db=t'ti:dmv&rcc=517222273 9&cd= 114&dlntunbcr=020994 I OS&d!statc=TX&id=&idcntificr-&scssionid=&tacdmv=DPPA-04 scrvct=lbscarch.publicdata.com requestagent=PDdisplay-20110lllcc tncdnn=DPPA-04 web filc=20 131 028-S HADOW l 06.htmlj823422467 PO 012981 - 0610  . . ·. . lUIU.l&IIL\Jl\.cl!ffi, ..Hom~ .1 M)r AcCOunt I Account History' 1AutOsearch-1 Refer FriendS & Ean\ Look~ps I Logout +Texas- Department of Motor Vehicles [0\'.'tlers] Results for Redacted on 1 dalabase(s) Searched by VJN Redacted l;fflilffil@ Yournro:mul 011988405-TX has !Tun c/rmgcd 1 'Look-up' 011 Novmhcrl, 2023 n/17:13:43. Terms of Use I Frequently Asked Questions I Contact Us I Policies and Positions I About PublicOat11 All information cont.:~! ned herein e Copyright 1997-2013- PublicDilt.l.com Nov 1 2013,17:13:45 20131101171345171345 011988406 TX DETAIL DBm1Xdmv ed=II4 rec=J706i266284 ip=174.14I.l.220 m::thod""GET refeFhttp://fusenrch. pub licdata.com'pdsenrch.php?p J=3 fujp31341 r175598&input=txdmv&tacDMV=DPPA- 0 1&type---vin&dlnumbet=O 11988406&dlstate=TX&id=&identiller=&sessionid=&o=grp_dmv_ vin setvet=lbsenrch.publicda!a.com requcstagent'-"PDdisplay~20l10111 cc tacdmv=DPPA~OI wcbfik:=2013 J I 0 I-SHADOW l 05.htmlj733536647 .f.llDLll!llAll\&J!ill, HOme I MyAccount I Account HistOry' I AutoSearch I Refer Friends & Earn Lookups I Logout a> Texas~ Deparbnent of Motor Vehicles [Ovmers] Detail Record Dcta i fs Onm••r Sl•rd OwnrfCity Ollllli'I'SIIIII' Redacted l@tml@ FORTWORTii TX Owurr ZIP Cod,• f'revklu$ Ou•ucrNfmc f'n·viMJS Ouoll<'rCity f'n•t•ifiiiS 0WII<'r5tlll<' 76116- Redacted NRICHLAND TX Rt'llr'fMI Nc>li!'!' 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Cui~ Vc/lirk Tonnas~· l'cln'rk Snh; Priu PASS 0000 0000619400 Vo•Jiic/1' So/If Datr· l't•llidt• Empl!l ~Y..ighl Vc'ltk/t' GtllS$ H'<'l8ftl VmNum!tu 00000000 002600 002600 @ii!ffil@ Boudr1f Till~ llifrmulllicll Docwl~'lll T!fl>c llifonmlicn Vcllirk OdOIIl'l<'r Juf0nt(1/icn or.·s~llnfonmliou none found 01 =REGULAR TITLE A= ACUTAL MILEAGE 0 • VEHICLE IS NOT DIESEL POWERED DOT Slaudnnts ltifom~lliou DPS Slokn ludimlor Rcgi51mticn E.wmpticn Fin•d Bed Wr(o;:hl li!fcmunli<'ll 0 =VEHICLE DOES NOT 0 =VEHICLE IS NOT STOLEN 0 • VEHICLE IS NOT 0• VEHICLE DOES NOT HAVE OVER MEET STANDARDS EXEMPT FROM 2/3 OF BED Wffil PERMANENTLY REG1STIIT<:III 0.1.1cn~r;;hip ''lfonmlimt Tille Hoi Cllak /lifomulinu /uspcr/i(lll Waiwd ll!(cmnliou 0 • VEHICLE HAS NO 0 • VEHICLE IS NOT U.S. GOVERNMEN 0 • NO HOT CHECK 0 =TEXAS SAFET'fliSJlP@~~~ FLOOD DAMAGE OWNED EXISTS FOR TITLE NOTWAIVED - 0611  APPLICATION ]smk rill~ /nfonmfion Penm't Requin.'l'i /ujcmmtivu Rel•uil/ luf~Jm:lliou RcCtJ/1$/mcld llifonmtiou 0 = VEHICLE HAS NO JUNK 0 =NO PERMIT REQUIRED 0 = NEVER SALVAGED 0 • NOT A RECONS1RUCTED VEHICLE RECORDS Sun>i"ilon:/1~' Ag1~•·ss.:ut Jufom,11icm Till<' R•1•ok~ri Iujcnlllliou DPS Susp<•usior1 /ufoml'llion H.·a;•y Use Tax b!fonmtion 0 = SURVIORSHIP 0 =TEXAS TITLE IS NOT REVOKED 0 =SUSPENSION NOT 0 • VEHICLE IS EXEMPT FROM PROOF AGGREEMENT IS NOT PART ISSUED OF PAYMENT FOR THE HEAVY OF THE VEHICLE'S TITLE VEHICLE USE TAX RtgL~ImlioJs \'a/idi/,11 llifonuatiou R,•g!Mmtitm Hot Clwck lufonmlion Tixm<' Plat I.' &i!Wl' Tsifamhlliou Rcgi.!'lmtiou SlickrrSd.wn· lufcmslll/itm 0 = REGIS1RATION IS VALID 0 • NO HOT CHECK ISSUED FOR 0 = REGIS1RATION 0 = REGIS1RATION STICKER NOT REGIS1RATION OF VEHICLE PLATES NOT SEIZED SEIZED E/,•ctn:mic Title ll!f'mmtiou t....•sJI0/1 Lnw iltfonmlir:m 2 =NEGOTIABLE TITLE ON 0 = VEHICLE HAS NOT BEEN PAPER IDENTIFIED AS BEING REAQUIRED TO DO LEMON LAW COMFLAINTS Abo1•c illformn/l'ou ns provided by stnlt•- bdow arc our mmolntions Click lu:n:fPn/1(111.' vdsic/,•J' nl (!sis aririn:s$ Cli'k lmrfons~ln.•vdsic/••s iu tfJfs mm Plait• Nwu!w Redacted Redacted IX 76116-7004 !@ffl@M Worth,TX 76116-7004 Lie11 Holdets Lieu Hold.:rPo.>liMI UmDalc I I 20090119 Lien Holder bzforma tion lkn Hr>ldnNowt• Um H(l{dcrNmubrr S/nW INTEGRITY TEXAS FUNDING 066996863 6700 GRAPEVINE HWY Cily Sin/~ ZipCorlf Ct~~mlly RICHLAND HILLS 1X 76I80- Certified Lien f-lnlders £4f%¥% miJ.; a gppmws 4 % -& PP%· ? 2¥§£1 %¥-k o ; ;:;;; r-£tHJ DMV VIN Search Results for Redacted on 19 dat:~butt(s) Searched by VIN Redacted Redacted 1 Y"wn«"'WI 020994I08·TX IM$b#lld111'8~d I 'l.Mk·up" om DtetU!b.:r3,2013111 12:23:49. 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Terms of Use I Frequently Asked Questions I Contact Us I Policies i!nd Positions I About PublicData All information contained herein ©Copyright 1997·2013- PublicD.lti!.COm Dec 162013, I4:Il:39 20131216141139141140 020994108 TX DETAIL DB=txdmv ed:=ll4 rcc=5036072056 ip= 174.141.1.220 method=GET refer-http://Ibsearch.publicdata.com'pdsenrch.php?pi=cl8d826&input=grp_dmv_p1nte&tncDMV=DPPA- 04&1}'Pc=platc&dlmunbcr=020994l 08 &dlstatc=TX&id=OD6471 A IF8140 II C84BAOOABCE4B04FO&idcntificr= l 05031 08&scssionkl=9155711 FAB2E79143279 A5CBA5C4A625&o=grp_ dm scrvcr=!bsearch.publicdata.com requcstagent=PDdisplay~20110lll cc tacdnw-DPPA-04 wcbfi1e=20 131216-SHADO W l 06.htmll592340 13 6 PD_013247 0615  ,PURLIGBAI!&!!JIL Borri~ I My ·ACcount I Accourit Histo'ry I AUtOsea'rciJ ·I Refer F~dS & ·Earn LookUps I Logout 1$- Texas- Deparhnent of Motor Vehicles (Owners] Detail Record Details Owucr Ntw~· OwuaSrn·eJ OwuaCil!f Onou.•rSIM~ j;@tml@ 1;@@1@ DALLAS TX .-. -. 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Click lun.•for m.m• wl1ick< 111 //lis 11ddn•$s Click 11<'11'/c>r 1111111' vdtic/,'i' i11 /Iris 1111'11 Redacted Redacted Lien Holders l.im Holda Postion I 20130730 Lie11 Holder !Jzforma tion lim Hu/r/(rNtWll.' 1i1'll HoldrrNmuba 5flwl Stm•/ (coni) INTEGRITY TEXAS FUNDING 067491478 3639 GUS TI!OMASSON RD Cii].l Stale Zip Cod( Couulzy MESQUITE TX 75150- PU01799,0  II Jan 17 2014,15:14:39 II'0140117151439151439 020994108 TX SEARCH Type=zip I.N=TXDMV DB=txdmv pl'""752113ll241 ip=I74.141.1.220 method=GET refer=http:lllbsenrch.publicdata.com'pddetails:.php'?db=txdmv&rec=S969473794&ed=I 14&dlnurrber=020994108&dlstate=TX&id=&identifier=&sessionid=&tacdmv=DPPA-04 sc.rvcr=lbscarch.publicdnta.com requestagent=PDdisplay-2011 0111 cc tacdmv=DPPA-04 wcbillc=20140117-SHADOW104.htmij687669119 .PllllllkllAIA~!Im, Home l My Account I AccOunt. History I AUtOsearcli I ~fcii- Friends & Earh Lookups I Logout *Texas- Department of Motor Vehides [Owners] Re.~ults for "75211311241" on 1 diltabase{s) Searched by ZIP Code Redacted Redacted '/~·.¥~,~~ ;: f~il'\u!/'~;~!,':fl ,\o!~lm \?t:ft~,:/(':1 /o:.,m:h:J.rn · Redacted DALLAS, TX 75211-3112 Redacted Redacted Redacted T~:j'·\~ .~ .f?•1:~r,(1~i.~;p(iif~\:f~.~.ir<"jWII!l\'!11 <"i/Mo>l•••'\'t'!Jid,;f. /Ou'H<'I~/[1 Redacted DALLAS, TX 75211-3112 Redacted DALLAS. TX75211-3112 Redacted Redacted Redacted Redacted Redacted Redacted DALLAS, TX 75211-3112 Redacted Redacted DALLAS, TX 75211-3112 Y11Hr11crounl 01099410S·TX luts /Jccn dmrgcd 1 '!Jmk·up' fltt ]QU!IIInJ 17.2014- 11115:14:39. Term$ of Use I Frequently Asked Questions I Cont.lct Us I Policies :~nd Positions I About l'ublicD.tta All information contilincd herein ~Copyright 1997·2014 • PublicD.tta.com ha &B p;;; Janl720l4, 15:14:44 0140117151444151445 020994108 TX DETAIL B=txdmv •114 fer"'http:lllbsenrch.publicdntn.com'PDSearch. php'?Type=Zip&input=txdmv&p I=7 52113 1124 1&id=&dlnumber=0209941 OS&dlstatc=TX&identifier-=&sessionid=&tacdmv=DPPA-04 r-!bsearcll.publicdala.com ques!agcnt=PDdisplny-201 lOll lee ~0_013545 tacdll"I'PDPPA-04 0620 liwebfile~20140117-SHADOWI04.htmlj687883!56 _PUilllliOllli\.Jtllm Home I My Account I AccountHistor)r I AutOsearCh I ReferFrlends&Eam LookUps I LogoUt Ill)- Texas- Deparbnent of Motor Vehicles [Owners] Detail Record Data ils ZIP Corll' '' none found Indicator Wdgl!lllifcmuliou DOES NOT "' 1 0 ~VEHICLE !S NOT STOLEN VEHICLE DOES NOT HAVE OVER OF BED W!TI! PERMANENTLY HAS NO INSPECTION IS STICKER NOT AboJ•e iufomwtion tiS prwided by slate- below nrc ou!·mwofatioJJ:; I '' I Redacted allas,TX Lien Holders lim Hof.t,., p,Js/!ou IimDa/1' 1 20081115 Lien Holder I11jormntion Ucn HCJ/d.-rNrmt: Uru Holder Number Stn!ct U'ITEGRDY TEXAS FUNDING 067727776 3306 IRVING BLVD  .Plllll.ffiD.&.k!rnt Home I MY AcCount i Accotlllt History :1 ·A.UtosearCh·l·Refer Friffids & Earn LookUps t' Logout * DMV License Plate Search R(!sul!s for ~on 16 database(s) Searched by PLATE Redacted 1 Yourncrouul OZ099410S-TX fill~ bun durrgcd 1 'I.Dok·rtp' on Fdmmry 20, 2014 n/15:23:23. Terms of Use I Fro:qul!ntly Asked Qu~stions I Cont01.ct Us I Policies and Positions I About PublicData All inform:~.tion cont<~ined herein rt>Copyright 1997·2014 • PublicDJta.com & ; r tg&¥,& ?5£¥¥b& -t & iiH ? &A %¥§1f%fi- i k , it!?iJi%@1 £ ¥ A&i fu?&ir£t~Hfrd§6 .f§W@ £@i?%£e& §@.Hl Feb 20 2014, 15:23:24 20140220152324152325 020994108 TX DETAIL DB=oc.dmv ed.. ll6 rec"'I3571116831 ip=174.141.1.220 rrethod=GET refer-http://lbsearclLpublicdnta.cornfpdsearch.php?pI ~&input=g~p _dmv_plate&tacDMV=DPP A- 04&typc=platc&dhmmbcr-020994108&dls!nle=TX&~SDOCC33DBAB93F984714665D5SCC&idcntifict""'l0503108&scssionid=E971l24BSSB8E2F4BSCAC3D0626D2436&o=grp_dm server=lbsearch.puhlicdata.com rcqucstogcnr-PDdisplay·20llOillcc tacdmv=DPP A~04 wcblile=20 140220~ SHADOW t 06.htmlj843 806141 . .PUIUl&D.~Ji.h.!!!!D!, Home 'I My.Account I Account History I AutOsciirch I Refer Friends & Earn Lookups I Logout *Texas~ Department of Motor Vehicles [Owners] Detail Record Detnils Redacted " ' Redacted = VEHICLE IS NOT SIDLEN " I 0 =VEHICLE HAS NO •VEHICLE 15 NOT U.S.  0 =NO PERMIT REQUffiED IS NOT REVOKED STICKER NOT lmi;NTJFlf'D AS BEING REAQUffiED 1D LAW COMPLAJNTS Ab1we illformnfi(lll ns pr·m.1ided by sl(!!e- below are ow·mmotnfions Lien Holders l.k11 Holda Posti<>ll Ucu Dmc 1 20130705 Lien Holder Information U..·u Hol!/,•r Nam,• lic11 Holda Numkr Sltw/ Stn:el ((OHIJ INTEGRITY TEXAS FUNDING 081181376 6210 WESLEY STREET City Sin/.: Zip Cod~ Crmulry GREENVJLLE 1X 75402- '64&e 6 &h*lti dt -% M 4 % 'lddHWi u&h:t «tHHMr+& -'?'r'ii#r& 5 & Feb 20 2014, 15:45:45 20140220154545154546 020994108 TX SEARCH Tw~zir LN=TXDMV DB=L.,.dmv p1=75402903404 ip= 174.141.1.220 mcthod=GET rcfcr-http:ltn>scarch.publicdata.com'pddctails.php? db=txdmv&rec= 1357111683l&cd=ll6&dlnumbcr-0209941 08&dlstatc""1X&id.::.95A55DOCC33DBAB93F984714665D55CC&identifier=-I 05031 08&sessionid...E971124B55BSE2F488CAC31 04 scrvcr-Ihsco.rch.publicdtlta.com requestagent=PDdisplay-20 110111 cc tacdmv=DPPA-04 wcbfilc=20 140220-SHADO WI 06.htmll88200413 6 PO 014015 0623  .PWlllklll1ll\&run. Hoine I My AcCount I hC~uri(HiStO.rf. I AUt05eaTch --1 ~Met Frierids & Earn Lookups I LogOUt *"Texas- Department of Motor Vehicles [Ovmersj Results for "75402903404" 0111 databasc{s)Scarchcd by ZIP Code Redacted r~~~M• 'V<'f~llfl.l~l/1 ~~-M~lor \l(/,;d;-.- iOi!'i:ri:i][!] .j;fiftti1r#i·R~~NVILLE, TX 75402-9034 Redacted "f<',ll'l:; .• D~J;!rrtn~·JJ! ,Uj M1;!rr l'<'lll~k~ 'tou•Jitr~HD !a®$1$ · :;REENVILLE, TX75402-9D34 Redacted ,·1 i;~(~· :·Pn~l!t'\~:ut OJ _1)-l•J/trr. i .;.j, 1dr~ /01!:,, ~~1 [) 'fij:#mi;ijMG~EE~LE, nC7s402-9o34 Redacted Redacted ' I ' ,· • 'l_i-:"~'" ~ptr!:rl!tw;~~r _;·~,·\!PY't ~~·fl(:.lr·~ m~,im·~.tm . Redacted REENVILLE, TX 75402-9034 Redacted :':;:.: ' ' ' ,.1:·"~1~ ~ Hrr:"~-~~~~·';' w. •:t~~-t·'~\, ;:11i:·:J,-$ /Ll;i·JI•'•~Jci:J Redacted GREENVILLE, TX 75402-9034 Redacted Redacted Redacted GREENVILLE, lX 75402-9034 Yourncrorml 02(1994JOS·TX l!n~ br.eu dmrgeri 1 '/..nnk-up ass Febmnry 20,2014 n/15:45:46. Terms of Usc I Frequently Asked Questions I Contact Us I Policie5 and Positions I About PublkD.lt01 All information cont<~.incd herein ll)Copyright1997-2014 • PublicDJta.com -!Mkst d?MH+&Jl Feb 20 2014, 15:45:48 0140220154548154548 020994108 TX DETAIL B''=txdnw •116 c=-5682118919 ~174.141.1.220 lhod=GEl efer-http'//!bscarcll.publicdata.conVPDSearch.pltp'? ypc::Zip&input-=txdmv&p I=75402903 404&id=9 5A55DOCC33 DBAB93 F984714 665D55CC&dlnumbcf""020994l 08&dl~tatc=TX&idcntificr= I05031 OB&scssionid=E97l 124855B8E2F488CA 4 scrvef""!bscarchpublicdata.com rcqucstagcnt=PDdi<;play-20 II 0111 cc tacdrm=DPPA-04 webfile~zo 140220-S HADO WI 06.htm~88214288 6 l'UiiU!iD1U3~!!!tm. Horne I My Account I Account History I Auiosearch I Refer Friends & Earn Lookups I Logout +Texas- Department of Motor Vehicles [Owners) Detail Record Defails Redacted  Bed Wei&hl llifonllllliou VEHICLE DOES NOTHAVEOVER 0 = NO PERMIT REQUrRED 0 • TEXAS 1TILE IS NOT REVOKED Greenville,TX 75402-90311 Lien Holders Ue11 //older PMiiOII 1 20010611 Lien Holder Infonua lion l.itJI Nolda Nnm.• Uc'll H~ldaNuml>u Stn·ct S/Jt'<'l ''''"/) COMMUNITY CREDIT UNION 032726377 P.O. BOX 867239 City Sial~· ZipC<.~i/,• Cmmtry PLANO TX 75086- UmD.11c 20010611 Lien Holder Information Lim Hc>ldrrNumbrr Sln'l'l (coni) COMMUNITY CREDIT UNION 032726377 P.O. BOX867239 City lip Code Cc>tmlnJ PLANO TX 75086- N-P Feb 20 2014, 15:45:56 0140220154556154556 020994108 TX DETAIL B=txdmv PD_014017 0625 ed=ll6 ~=13571163021 ip=l74.141.1.220 method= GET refer-http:l/lbsenrch.publicdata.com'PDSearch.php? Type=Zip&iopur-txdmv&p I =75402903404&id=9SA55DOCC3 3DBAB93F984714665D55CC&dlnumber-0209941 08&dlstate=TX&identifier-1 05031 08&.<;essionid=E971124855B8E2F488CAt 04 server=!bsearch.publicdata.com requestagcnt=PDdisp1ny~20 110111 cc tacdmv==DPPA~04 webfile=20 140220-SHADO W I 06.htmlj88233 8697 l!llWGIIATA.!i!!!Jl Home I My Account I Account Histor)r I Autt•il>u5 Expimliou Y.:.u R•·&i51mUon E.tpimlion Yt·ar n,,~is/mliou F.;rpimlimz Mou/11 R~gz:•tmti01z Effccliur 2013 201•! 12 Jan8 2014 Tilh•Dat.• Owm•Jsllip lnfouunliou Morld Ytnr Makt- Aug 9 2013 01 • TEXAS TilLE 2001 HONDA ,\>Jndd O(ScripliMz Vrllick Br>dy Typt l'rhirl~ M11jc>r C~ltu(Cc>lllr Cnmp/ HONDULX 4D = 4-DOOR SEDAN GOLD {Color Group YELLOW) Vrllic/c• Miuoz· Color{ColorCmup/ I'dlid' Clnss Cad,• VrhidcTommgl.' Vl.'hic/rSnlaPri« PASS 0000 0002098668 Vdzick Snld Dnl<• Vdiic/,• F.m;tl!l Wc/_1,{111 Vdzidc• GrP$.~ \V,•(-:11/ l'in Nwuba 00000000 003300 003300 Redacted Bllwft•dTillrl!!fimm/i(lll Dac!IIIX'III Type lr!JPmullim Vddc/r D1fmz~·l•'r lzif(lm~r/i(lll Di.'~l'll!ifan'XIIhm none foWld 01 • REGULAR TilLE NOMJLEAGE 0 =VEHICLE IS NOT DIESEL (BEFORE ODOMETER POWERED BRAND LAWS) DOT 5/illldmrf$/nfonmlinu OPS S/(1/rn/ndimlor R,•,<;:is/n//i(>/1 E:wuption Fi.ud B~d Wdglzllnf(lnmlio11 0 = VEHJCLE DOES NOT 0 = VEHJCLE IS NOT STOLEN 0 = VEHJCLE IS NOT 0 • VEHJCLE DOES NOT HAVE OVER MEET STANDARDS EXEMPT FROM 2/30F BED WilH PERMANENTLY REGISlRATION FEES MOUNTED EQUIPMENT F/(>z>rf Da1tr1gz' lrifonunti~u GoJ•I'nmu•Jll Dlvm,•z~llip Jrifomnliuu Titlr Hoi C/H•rl: Jnfcmmliou lm)J<·cliou Wnil'l'd lufomuiWII 0 = VEHJCLE HAS NO 0 =VEHICLE IS NOT U.S. GOVERNMEN O•NOHOTCHECK 0 • TEXAS SAFETY INSPECilON IS FLOOD DAMAGE OWNED EXIS1S FOR TilLE NOT WAIVED APPLICATION {nuk TillI.' llifc>IJI~l/ii>u Pmui/ 1\.t.'quin•d /tifQml'!/iQII Rl'lmilll!ifQmLi/inu Rrnmslmrh·d l!ifQmlil/i(l/1 0 • VEHJCLE HAS NO JUNK 0 ·NO PERMIT REQUIRED 0 =NEVER SALVAGED 0 -NOT A RECONS1RUCTED VEHICLE RECORDS Sun•ivm;:lzil' A,o,:n·,·u~·u/11ifrm~11ir>ll Til/,• R••t•(lkc~tl lnfomlllliM DPS SIISJ1<'11Si(lll ltif(lfll~l/inu Hcav_Lf U~<' Tn~· lnfonllllliM 0 • SURVIORSHIP 0 • TEXAS TilLE IS NOT REVOKED 0 =SUSPENSION NOT 0 = VEHJCLE IS EXEMPTFROM PROOF AGGREEMENT IS NOT PART ISSUED OFPAYMENTFORTHEHEAVY OF THE VEHJCLE'S TilLE VEHJCLE USE TAX Rrxislmllrm Vn/idi/,1( llifi>n,.l/km R~giMmlioll H(>/ C"lrr:ck /Jifnnm/iol/ lk~ll$~ PI ale Sei::mr lzifoumlicm R••xislrnli!!u S/zcktr Sd:tm: lnfnnm/lon 0 = REGISlRATION IS VALID 0 =NO HOT CHECK ISSUED FOR 0 • REG!SlRATION 0 • REGISlRATION STICKER NOT REG!SlRATION OF VEHJCLE PLATES NOT SEIZED SEIZED Elulmllic Tillr•luf(lmulion L•ut~JILilw/uf(lml1/iou 2 =NEGOTIABLE TilLE ON O=VEHlCLEHAS NOT BEEN PAPER IDENTIFIED AS BEING REAQUIRED TO DO LEMON LAW COMPLAINTS Above informnlion ns provided by slnrc- bi!low nrc om· mlltotaliOH$ C/ic/; llr•n•f<>r IIK>n' i'c•ilidr~ <1/ /ld$1/ddn·s~ Click llc•n•Jrr 111(11!' lll'IJid,~; iui/JL; nll'k-up' orr Fcbnmry 5, 2014-nt 12:53;06. Terms of Use I Frequently Asked Questions I Contact Us I Policies ;mdPusitions I About PublicData All inform~tion contained herein©Copyright 1997-2014- PublicDilti1.Com ', r !a1! ::!!f[;;ll'•!!i!lll 'l! 52!!'llii !!!!l ~ ~m ! !:E:!'i!l!5i!m~ • ;:!!![ ·~ - !'!".] Feb 28 2014,11:11:56 -!! !l!! l'i ii!Em!l'Z IE c-'5!!\'!!!!l5' J1~aJ1 ! • ..!iH e ~::;! m::sm il'.!:z:i~~ ' ! • 20140228111156111156 011988406 'fX SEARCH Typc=lin LN=TXDMV DB=txdmv pl-=i;@!iti!@ ip-174.141.1.220 method=GET rcfcr-http;//Ibscarch.publictlata.contlpdqucry.php?o=grp_ dmv_ vin&dlnumbci=O I I 988406&dl Texas- Department of Motor Vehicles (0'1-vners) RI'.Sults for Redacted on 1 d~t~b>~se(s)S~arched by VIN Redacted Redacted Yorrraccouul 01 Z988.J06-TX lm~ bml dun-ged 1 'l.bDk-up' on FtbnmnJ 28, 20Z4 n/ 1 I:I Z:56. Terms of Use I Frequently Asked Questions I Contact Us I Policies and Positions I About PublicD.ll¥&%§5£ i ?£5%?l-¥&US.tp? f§£ , __ *' 9 ug /&1 Feb 28 2014, 11:12:01 20140228111201111201 011988406 TX DETAJL DB---tx.dmv ed=ll6 rec=ll276263142 ;p= 174. 141.!.220 method=GET refei=llttp;lllbst:DrclLpublicdata.com'pdst:arciLphp'?p 1=I@ $1@ -&input=txdmv&tacDMV= DPP A~ 0 I &type=vin&dlmm'lbcr-0 11 988406&dlstatc=TX&id=&idcnri6cr-&scssionid-&o=grp_dmv_vin PD_018814 0631 scrver=lbsearcb.publicdata.com requestagenr-PDdispby·20IJ Oil lee tacdmv=DPPA-01 webfile""20 l40228·SHADO W 104.htm!j3513 78969 ,P,1llllli!IIL\JA.,e,llm Hoinc l:.My AccOUnt I Accciui-lt'Histoiy·J AtitoSeii!Ch'l ReferFriend.S&Eam LOOkUps I Logout *Texas- Deparlment of Motor Vehicles [Owners] Detail Record Details . ... -. On•ncrNanl:! OWI!UCily OH•urr Sfa/( Redacted HOUSTON TX Owner ZIP Cmf'1V!II Nvliu $/11'<'1 Rrnrwaf Nulicr Stair R.•m'1o«l Nalia ZIP+,; Uu/1$•' Plat•· Nml:fl,•r Pm>iouF ur.'II!L' Pial,• NumlW Muk>- jul 11 2013 01•TEXAS TITLE 2004 FORD Modi/ Dm'ripli<>u Vdtirk Dod.lf 1',11)11' l'rliiflr• MajorCo/or{Co/orGroupj FORD •!D•4-DOORSEDAN GRAY (Color Group GRAY) l'cliid~r Miuor ColarlC<.>l11r Gmup/ \fdlide Class Corf~ l'dlirleTotma.~~ l'rhirlt• Sales Plin: PASS 0000 0000000000 Vdticli' Sold Dali' V.:llick Empt!' w,·z~~~~ \1(/dckGnm\VI'igl!l ViuNumlm 00000000 003SOO 003SOO Redacted Br>l!dtd Till<' lufonmliou Dnmut•lll Typ.•lufnmnliou Vr!Jit:k Odo!lk'/t'r bifomtr~lirm Di~$<'1 Iufonua/iou none found 01 =REGULAR TITI.E A• ACUTAL MILEAGE 0 • VEHICLE IS NOT DIESEL POWERED DOT 5tandml1sllifr>mUJtiou DPS 5/0/1'!! Tlrdirolor R.·gistn!liou E:un~•tilm FLY•'>f Hl'd Wt~~~~~ TJifonmliou 0 =VEHICLE DOES NOT 0 • VEHICLE IS NOT STOLEN 0 • VEHICLE IS NOT 0 =VEHICLE DOES NOT HAVE OVER MEET STANDARDS EXEMPTFROM 2/3 OF BED WITH PERMANENTLY REGISTRATION FEES MOUNTED EQUIPMENT Ft.Jllll Dallt~S<' /Jifonmliou Go!>l'nlllk'lll Owt'lll'll'ltip lufimmlir>n Till.: Hoi Clw:k lryimmliou lnsJJectirm Wnivt·,J llifcmmlirm 0 = VEHICLE HAS NO 0 • VEHICLE IS NOT U.S. GOVERNMEN 0 = NO HOT CHECK 0 =TEXAS SAFETY INSPECTION IS FLOOD DAMAGE OWNED EXISJS FOR TITI.E NOT WAIVED APPLICATION Junk Tillr lnfmmllinu Prnuit R.·qrriwd llifonmlirm Rrlmi/1 bifomralirm Rr'C0/1$/mc/td l!ifPnmtitm 0 =VEHICLE HAS NO JUNK 0 =NO PERMITREQUJRED 0 • NEVER SALVAGED 0 =NOT A RECONS1RUCTED VEHICLE RECORDS Sun•il•m~l!iJIA,\!'Wnl:lll /Jifonmtiftu '1'11/e RcPokcd ltifonmlk>u DPS Su5Jio.'U$icm llifomnliol! 1-f.:al>,!l Us~ 'fit.\·/,ifon/llilla/1 0 = SURVIORSHIP 0 =TEXAS TITI.E IS NOT REVOKED 0 • SUSPENSION NOT 0 =VEHICLE IS EXEMPT FROM PROOF AGGREEMENT IS NOT PART ISSUED OF PAYMENT FOR THE HEAVY OF 1HE VEHICLE'S 11TLE VEHICLE USE TAX Re,~i:;/mtiou \ln/it!il,!lllifllnnaliou l<.cgi.1/mlimr HM Clreck 111/Pmulimt Ur~IIW Pin ITexas- Department of Motor Vehicles [Owners] Results for~on 1 database(:;) Searched by PLATE Redacted :·r~~j;1,~,:~::.91!~Jl:~N;jii',W.~1~•fut.i~~·~,i~l:·s :fi:·i'···: lthtiF$@1 1 Youraccomrl 020994108-TX /m' bun drrr~Scd1 'Look·11p' 1111 Mrrrtlr 8, ZOH uf 11;40:00. Terms of Use I Frequently Asked Qul'Stions I Contact Us I Polidcs and Positions I About Publk:D.lta All information contained herein lOCopyright 19\l7-20H- PublicD.lta.com 16 M&¥ N&i&fW . & bi@¥ !&& + f f &&,&p_§Witfi 1 " £i Hi?5"hiifi¥fii)§4;,-?JEtii£\Mii'HM4 &¥%4+ ?tii!§@d &A &£&\i§;g Mar 8 2014, 11:40:02 20140308114002114002 020994108 TX DETAIL DB=txdnw cd=ll6 rec=5823756578 ip=l74.141.L220 method"'GET refer=hup:f/Ibsearch. publicdata,com'pdscarch.php?pi =cb51256&input=txdmv&tacDMV=DPPA- 04&typc=platc&dlnumbcr-020994l 08&dlstatc=TX&id=OOCB55FC3 BBE7 F33 9B7FC4 ::1 C709449CA&idcntillct= I 0503 1OR&scssionid=BA05E4 AOE6DASCE8 7003 E7l AECEFA59B&o=grp_ c scrveF!bsenrcltpublicdatn.com requcstagenr-PDdispby-20110lllcc tacdtm=DPPA-04 webfile=20140308-SHADOW1 05.html[118691299 eUDlllillAll\~!!.!!1!!. Horne I My ACcOunt I ACcount HistOry: .I _AU:tciSeai-ch I Refef Friends &'Eiirri LoOkups I Logout . *Texas- Deparbnent of Motor Vehicles {0v.'l1ers] Detail Record Details OumaCity Ororu•r$/11/r• Redacted ROCKWALL TX OWII!'r ZIP Ccd,• 75087- . . Pn:vious Ow1u'r Nn11~.· --.. R,•,wwnl Nolin• City Pn:viMI$ Owu,•rCity LEXlNGTON Rwnua/ Nolie.' Stair Ptl'Virms Ouru,•rSIupl Vdlidc C/as;; Cod.: Vdrick TCIIIIII,~<" l'dride Slllt5 rn·re PASS 0000 0000100000 v,•!Jic/,· Sold Oak lie/lie/,• Empl!l Wdgi!J Vdlick G1t>s~ lVI'i,'{lll 1'111N11mho•r 00000000 003700 003700 ,. • t • • I Bondl'lfTit/r lnfonmtkJ/1 Dll~wlk'lll T.w:..o lufonmlion Vt'11icf~ Orl11m.:lr•r lnfom~11ion D/,•od /nfonntrlflm none found 01 "'REGULAR TlTLE NOMJLEAGE 0 • VEHICLE IS NOT DIESEL (BEFORE ODOMETER POWERED BRAND LAWS) DOT Sftwtfant~ lufonmlimr DPS Stolen Indicator Rrsi..~fmtim' E.wniJIIimr Fixril RcdWeig!rllllfonmliiJu 0 =VEHICLE DOES NOT 0 =VEHICLE IS NOT STOLEN 0 = VEHICLE IS NOT 0 =VEHICLE DOES NOT HAVE OVER MEET STANDARDS EXEMPT FROM 2/3 OF BED WITH PERiV!ANENTLY REGISTRATION FEES MOUNTED EQUll'MENT Flood DllltliiS<' 1ufom~1/ioll Gor•tmlll'lll Owmcr~luJ> lufonmlioll Tille Hoi Check lufom:nlion 0 = VEffiCLE HAS NO 0 =VEHICLE IS NOT U.S. GOVERNME, O=NOHOTCHECK  I 0 • NOT A RECONSlRUCTID VF.l'l!CLEI IIDIEN"DFI:ED A5 BEJNG REAQUffiED 1D LAW COMPLAlNTS Abot>e iuformnliou as provided by s/nte- below nreour n!IIJofntions '· Lien Holders Lim Holda Posliou UmD.tt.• 20131105 Lim Holder InfomUJ tiou Um Holda N111r~· Um HolllnNwul>•'r Stn.•,•l StT!'rl (coul) lNTEGRITY TEXAS FUNDlNG 082000419 2819 S GARLAND AVE Cily Sial.: Zi/'C'c>rl~ Cowrlry GARLAND TX 75041- Certified Lien Hnlders Mar8 2lll4, 12:00:08 20140308120008120008 020994108 TX SEARCH Typc=platc LN=TXDMV DB=txdm\' pJo~ ip=!74.141.J.220 method,.,GET rcfcFht1p:/llbscorchpublicdaln.com'pdqucry.php? o=grp _dmv_platc&d!number=0209941 08 &dlstnte=TX&id=OOCBS 5FC3BBE7F339B7 FC43 C709449CA&identifiep I 05031 OS&sessionid..:BAOS E4AOE6DA5CE870D3 E71 AECEF AS9 scrver=lbsearch.publicdata.com rcqucstagcnt=PDdisplayM20 II 0 Ill cc tacdm'FDPP AM04 webfile=20 140308-SHADO\Vl OS.htmljl28866JJ 0 PJ.UlllCJJAIA.c om, Home I My Account l Account History I AutOsea.rch l Refer Friends & Enm Lookups I Logout .., Texas· Department of Motor Vehicles [Owners] Results fo~on 1 d;'lt\lbosc{s)Scarchcd by PLATE Redacted r .'.t.H ~ /Jr't>li':II>'IH •'! 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IIIIis ~ddn.!S~ "' Redacted · 0636  J:JUO/~ J;®mtm• ~~ockwall,TX 75087-2809 Redacted Redacted KOCKwaU,JA iiBo9 I I Lien Holders ~~~~~ Ho/drr Pnslion jliru Dalr 120131105 I Lie11 Holder luforma tion IJ,•n Ho/drrNum/lrr S/rrd Slll'rl (wufJ JNTEGRITY TEXAS FUNDJNG 082000419 2819 S GARLAND AVE City ZipCrdt Cormlry GARLAND TX 75041- Certified Lien Holder::; Mar 8 2014, 12:36:55 20140308123655123655 020994108 TX SEARCH Typc91latc LN=GRP_DMV_PLATE DB=grp dmv_plate pt1@@1$1 ;>= 174.141.1.220 method= GET rcfur=http://lbscarch.publicdatn.com'pdqucry.php? o=grp_ dmv_platc&dlnwnbct=0209941 08&dlstate=TX&id=OOCB5SFC3 BBE7F33 9B7 FC43C70944 9CA&idcntificr= I 0503 I 08&sessionid=BA05E4AOE6DA5CE870D3 E71 AECEF AS 9B server=lbsearcltpublicdato.com requestagent=PDdisplay-20 1101 11cc tacdlllV"'DPPA-04 webfile:::20 1403 08-S HADO WI 06.htmljl68045 648 _p IllutkllfilA__JWJR Horrie I My Account I Account History I Autosearch I Refer Friends & Earn Lookups I Logout *DMV License Plate Search Results for~n 16 database(:;) Searched by PLATE Redacted "l'r"¥it~·- Ot"i'l~lm.:lll -~ ,\"hi/~:~t\'dlide:: /0/l'u,•r../OJ l@@i@l 1 Yourt~ccomrt 020994108-TX lws b~tlf rlrargcd 1 'Look-rrp' on Marclr 8, 2014 nl !2:36:55. Terms of Use I Frequently Asked Questions I Contact Us I Polities nnd Positions I About Public03til All information c;ontalned hcrcin©Copyrisht 1997-2014- PublidJ.Jta.com Mnr8 20l4t 12:36:56 0140308123656123657 020994108 TX DETAIL =174.141.1.220 thod=OET fut=httpillbseo.rcltpublicdata.com'pdscarch.php'!pl=~input=grp_dmv_platc&tacDtvfV=DPPA- 4&twe=plate&dlnwnber=0209941 08&dlstatc""TX&~55FC3BBE7F339B7FC43C709449CA&idemifler-1 05031 08&sessionid=BA05E4AOE6DASCES70D3E71 AECEFA59B&o""grp_d rver=Jbsearchpublicdata.com rcqucstagcnt=PDdisplay-20 II 0 Ill cc tacdnw=DPPA-04 webfile=20 140308-SHADO W 106. htmlj 168076124 PD_014223 0637  Apr2 2014, 08:34:17 140402083417083418 020994108 TX SEARCH B=grp dmv vin J..j;{ffl@lffti ~~216.207.175.4 rnethod=GET rcfer=httpiffuscarch. publicdata.c:omlpdqucry.php? o=grp_dmv_\'in&d!numbe!=020.9941 08&dlstate=-TX&id=5BAE647D09AA2F3 I 0999FAF058C I 74A3&idcnti&:r= 10503 108&scssionid= 1517717BDE3 7E5 C 187FD09BEB29P96FB server=Jhsearch. publiedata.com requ.:sto.gentFPDdisplay·20 110 Ill cc tacdmv=DPPA-04 webfile=20140402-SHADO\Vl 06.htmll97120199 .PUHll&DiliA.k!lm, Home I My AcCount J AccOunt HiStOiy'. J AU:tOsearch J Refei Friends & Earn Lookups I Logout * DMV VIN Search Results for l~;ffli~,~·tMII!!ltffi!!lJIIIIIIIIIIIon 19 database{s) Searched b}· VL\l .' ·r,:·w;< ~ Otiwtu~·JJ/ .if Mlilotl 1rldd~.;/Owth'l~:/[] !@@@ Redacted adacled 1 Yournccomrt 020994108-TX IMs btm du11ged 1 'l./Jilk·up' 011 11.pril2, 2014 1!1 8:34:18. Terms of Usc I Frcqumtly Asked Questions I Contact Us I Policies and Positions I About PublicData All information contained hcrcin~Copyright 1997-2014 • PublicData.com A r2 2014,08:34:20 20140402083420083421 020994108 TX DETAIL DB=txdmv cd=ll6 rec=5191934224 ip=216.207.175.4 mcthod=GET rcfcr-httpi/IbscnrclLpUblk:datn,com'pd.scnrch.php?p I"" inputmgrp_dmv_vin&tncDMV...DPPA~ 04&type=vin&dlmunbt:t=0209941 08&cllstate=TX&kl=SBAE64 7D09AA2F3 I0999FAFOSSC 174A3&identifi!!t= 10503 I OS&sessionkl= I Sl 771 7BDE37E5C I 87FD09BEB29F96FB&o=grp_dmv_. SC!rver-lbsenrc:1Lpublicdata.com requestagent=PDdisplay-20 II 0 Ill cc tacdmv=DPP A-04 Wcbfilc=20 t 404 02-SHADO W 106.htmll97:26424 5 .PllRUklltlli\.c ont Home I My Account I Account History I Autosearch I Refer Friends & Eam Lookups I Logout * Texas- Department of Motor Vehicles {Owners) Detail Record Details OwuaNan~<.' Owner Sln:cl OwnaCi/.1! Owu~rSinl~ Redacted i;@!jAHft DALLAS TX Oumrr ZIP Co,"/,• Pn.·vi.ms Oum~r Nmtl' Pn~inus OWII<'tCily Prcr•ir:lu~ Onm!!r Stnh' 75217· ONIRON AUTO SALES DALLAS TX Rrlli'IUI!I Nutirr 5/n:(/ Rrnrwal Nntirr Ctly Rmrwul Nulicr S/11/r Rcnrwa/ N/15 ExJiimlinu y,.,.,, R,:~islntliou ExpimliOJI Y~·flr Rcsl$/m/i,m £xpimliDH M:ur/11 RcgistmliPII Effutiue 2014 2014 07 AUS!: 26 2013 0638 Till.:Dnt.: Owuetslu'p /u.fimllilfion Modd Year Mnk~ Oct 112013 01 ·TEXAS TITLE 2005 DODGE MCidrl Model Dtsa~tlian Vflticlt•Hfld!fT!fll{' Vrl!iclr MajarColotiColflrGroul'l CAR DODGCAR VN•BOXTRAILER GRAY (Color Grou GRAY) Vdticlf Miuo.lrColdT{Colvr Gnmp} Vdticl~ C/nss Code Vcl!irle Tomms•· Vclridr Snlcs Price PASS 0000 0000138000 Vdu'ck Sold Dat.• Vdtidt• F.II?II!J Wt·(~ltl VdrirkGro$sWdgl!l ViuNuwl•cr 00000000 004000 004000 • ~ I ,. ~ I liaudcd Titlr lnfonwliOII DoCWIJC!Il Typr ltifom'.lllicm Vrfriclr0doml'lrr/ufoml.11itm Dir.lk l!ifomlilllou lm;wtilm Wair•r•d ltiftmlllliou 0 • VEHICLE HAS NO 0 • VEHICLE IS NOT U.S. GOVERNMEN 0 • NO HOT CHECK 0 • TEXAS SAFETY INSPEO"!ON IS FLOOD DAMAGE OWNED EXISTS FOR TITLE NOT WAIVED APPLICATION funk Til/,•l•ifonmliorr l'muil Rrqulwd Iufonmtiau l~<'lmill /Jifanmlfuu /ktrms/mclrd /iifrmmlion 0 • VEHICLE HAS NO JUNK 0 • NO PERMIT REQUIRED 2•REBUILT 0 • NOT A RECONSlRUCTED VEHICLE RECORDS SALVAGE: DAMAGED Survhmrsllip J\_~re,•m:.'ulllifmm:rtfau Tit/,• Rn•ok~d lnfnnn11itm DPS Sll~)!<'JI.nmllPu R··siMmllc>n H!11 Clu·ck 1rif!1nmlfuu Ucc·us.• Plnlr S<'i!u/1' !Jifrmmlinn R,•gistmlinu Stick,•rS··lzuw /Jifnm~tlicu 0 =REGISTRATION IS VALID 0 • NO HOT CHECK ISSUED FOR 0 = REGISTRATION 0 • REGISTRATION STICKER NOT REGISTRATION OF VEHICLE PLATES NOT SEIZED SEIZED Ekchtmic T/1/c·l!!fonmlian L.•mon lnr" llifomnliou 2 • NEGOTIABLE TITLE ON 0 • VEHICLE HAS NOT BEEN PAPER IDENTIFIED AS BEING REAQUIRED TO DO LEMON LAW COMPLAINTS Abm'l' iuformnticm ns pmvidt•d by sfntc•- brlmv an· our mmofafious Clkk hrJt'fnrmon• vrhidt.< nl/hi~ addn·s~ jCiick lrrn•formcur l'drici<'.~ iu 1/ri.< mwt Plall' Numbrr Redacted I@@Uiti IX 75217~2100 75217-21oo I Lien Holders Um Halda Poslitm UmDalt 20130916 Licll Holder Information l.it:n Hollf,•rM!ilt' Uw Ho/lfaNtwd,,•r Slm•/ SJn•d froul) INTEGRITY TEXAS FUNDING 081762388 3639 GUS THOMASSON RD. City Stair ZiJ>Co,1<' Cotm/Jy MESQUITE TX 75150- Certified Ueu Holders MAG& Mk4f?A&&M9' c &&+&£+ Z&t¥h£¥ p 8J-¥£F&dt + AR & v H Apr 2 2014, 08:34:30 ~o~o>>:Wit .I ·ACCoUrit' Hist9ry: I'AutOsearch'. I Refer frlemis & Earn· LOOkUps I LogoUt · rt-Texas- Department of Motor Vehicles [Ot.vnersJ Detail Record Details ,. Redacted HOUSTON Redacted Redacted Expiroli1111 Mnullr lufr:mmlit>ll 01 =REGULAR TTILE z ludrcalor 0 =VEHICLE IS NOT STOLEN 0 = NO PERMIT REQUIRED 0 =TEXAS TTILE IS NOT REVOKED Almw illformnti(li!IIS provided /1y slate -/1e/mv nn• nur muwtnfious Redacted Lien Holders Um Holder Poslio11 UmD.1/c I 20050430 Lie1I Holder ln[o11nation U.:rr Holda Nnm: lieu H(l/dcrNuml•cr Slit..:/ S/tWI(cmll} DC SERVICES NA LLC 056009292 PO BOX977 City 5/llft Zip Code C{lllllf1JI ROANOKE TX 76262-0977 ;p liL"_i£_'_'*_·-_'__ "_'_w_w_'_"'_e_+"'_.~_"_*__"_"_*_&_~_'"'_"'_'_:.::A,;:P'..:3ww..:2:.:0;'-';,"'::.::~=-;;;;:,::.:.:_"'_'_'"_''_·-_w_·_·_P_··_&_Th_ _'_"*_._'"'_·2_§_~_:..._- "'__• __ ~·:l::t[J-.-iuim:ilf 11j ~1,1P/i1J· \111iri1~~ {0~'11>'1~}[[1 Redacled MCKINNEY, TX 75071-6289 Redacted 'Ji~~~L~ .~J.~~'t!:.r1f:'..::~.zt_tf~:l.~t~i.~· -~!:'-':c;·:~'tOzi:zwr:;iOJ Redacled MCKINNEY, 1X 75071-6289 Redacted ··::::-···· Tf:.t;i§; ·:o~f\'1£i1',~:iil O/Mvi,ii'Vdtirl;:s 'jO;t:;·;;~~ill ··· •,'' ;,-·:., , ·... · ·, ".····or:':·-~<'·i ,·,,,y•,,~+-'-·-"-''·' Rodac.!ed MCKINNEY, TX75071·6289 Redacted I@Jffl1$ VICKINNEY, 1X 75071·6289 Redacted 'll·.rll.~:·-~ Dr·!~•~!-'{~l!!}(~ltz!.o/; ~',;!,/~·/,;:~ _/Orv1i~·i~=JOJ Redacted MCKINNEY, TX75071-6289 Redacted ·;~·.turaccotml D23115630·TX lmsbw!dwrgtd1 'Ulok·llp'on May 19,2014 at 15:51:58. Terms ofU~e J Frequently Asked Que:s!ions J Conlact Us I Policies and Positions I About PubllcDat~ All information conlained herein C Copyright 1997·2014· PublicDatil.cOm May 19 2014,16:06:24 0140519160624160624 023115630 TX DETAIL B=t:i:dmv =117 c=3999180183 =216.207.175.4 thod=GET feFhttp:l/lbsei\rch.publicdnta.com'PDSenrch. php?Type=Zip&htput=txdmv&p l =750 7162890 J&id=&d~ti.Ullber=02311 563 O&dlstate=TX&identifler-&sessionid=&tacdmv=DPPA~O 1 cFibscarch.pub\ic:data.com cqucstagcnt=PDdisplay~20ll 0 Ill cc tacdmv=DPPA·Ol webfi)e=::201405 19·SHADOW1 05.htmlj8008l 0290 Plt!lllCIJATa~com Home I My Account l Account History l AutosearCh l Refer Friends & Eam Lookups I Logout *Texas- Deparbnent of Motor Vehicles [Owners) Detail Record Details Owurr Nrww OWIII'r Sltrrl Dlvn,•rCity Ou•urt·Stnl!' ~ljfifi~·tA~S!~·~~~~~~~~--_j Redacted MCKINNEY 1X OWIJt'rZ!PCod,• /'n:vious Own a Nnm: Ptn•ious Owu~rCily Pn..,iousOwllcrStnh• 75071-6289 Redacted GRAND BLANC M1 Rc~JC~on/ NPiirc City R,•nc'lJml Ncr/in: Slntc ,'?,,•ucwnl Nc>lieo: Z/1' Codc Rr,wwnl Nc>/in• 7./P+4 /Juu~· Pinto• Num[•,•r Pn·~>icrus limtu Plnl<' Numl•rr l'tt'l•ic>us F.xpimtinn Mou/11 ~ 02 Pn·t•iC>ttS E.YI'imtWu Y<.•nr R,-sistmUou El'pimlion Y<.w Rcgistm/iou £xl'imtio11 Mou/lt Rcgislmtiou Effccli!N 2014 2015 02 Marl 2014 PO 006477  Til/cDnl~ Owu,•n:llip bifomttl/km Mnd<'IYmr Mnkr Aug 9 2012 03 =OUT-OF-STATE TITLE I 2003 CADILLAC M&dd MOtlel Ol!.>cl~t!ion Vd!iclr! B(IJy TYI"" Vdu·d~ Major Col&r(Co/orGnmpl CT CADICT 4D = 4-DOOR SEDAN SILVER (Color Grou SILVER) Vellidr Minor C&lnr(Color Grtlltp] \fehiclc Class Code Vcl!ideTommgl.' Vel!iclt Snle$ Price PASS 0000 0000000000 VdriclcSoldDnlr \lellidc Emply Wct:'{llf Vddclt• Gross Wdgh! ViuNuml>tr 00000000 003800 003800 . ~'. lJoud~dTillc lnf11nllllliou Do~;muc:ul TyJ't: llifnmwtiou V<'l!idt.! Odot11ckr Tufonmlion Di•":!d tufonmliou none found OI = REGULAR TITLE A= ACUTAL MILEAGE 0 = VE!-!JCLE IS NOT DIESEL POWERED DOT 5/mufnnls JufonmliPU DP5 51~/rn Iurfimlor lto•gislmlinu Exo·tt,pliou Ftn•d &-d Wright /lifnmwlinu 0 =VEHICLE DOES NOT 0 =VEHICLE IS NOT STOLEN 0 =VEHICLE IS NOT 0 =VEHICLE DOES NOT HAVE OveR MEET STANDARDS EXEMPT FROM 2/3 OF BED WITH PefuV!ANeNTLY REGISTRATION FEES MOUNTED EQUIPMENT Flood Dnuugr llifonunlion Gol•o'mH'/1/ Owrurn;/lip liifonmlion Tillr Hoi Chak Iuf"mflllion JmprcliM Wail:r•tlltifl)muliou 0 • VeHICLe HAS NO 0 • VEHICLe IS NOT U.S. GOVERN MEN 0 • NO HOT CHECK 0 =TEXAS SAFETY INSPECTION IS FLOOD DAMAGE OWNED EXISTS FOR TITLE NOT WAIVED APPLICATION ]rmk Tillr llifonr~11fuu Pcmli/ Rrquin:d lrifonmlrr:m Rcl>w1f /ufrmmliou ltrcous/nrct,·d lrifom::rlil.'n 0 =veHICLE HAS NO JUNK O•NO PERMITREQUffiED 0 = NEveR SAL VAG ED 0 • NOT A RECONSTRUCTeD veHICLE RECORDS 5un•il·Q~l!lp A:.;:n'!'tt~r:ul/tif~nlllllhm Tillr lkvnkrd Trifnmwlitm DPS SII5J..:Il5iou iufnnmtiou Ht•twy US<' Tax lnfonmliolr 0 • SURV!ORSH!P 0 =TEXAS TITLE IS NOT REVOKED 0 • SUSPENSION NOT 0 • veHICLE IS EXEw!PT FROM PROOF AGGREEMENT IS NOT PART ISSUED OF PAYMENTFOR THE HEAVY OF THE veHICLE·s TITLE veHICLE USE TAX Rcgislmliou \'nlidily lrifom~J/iou ltrgL~Jmlio11 /lot C/wck lnfonrL1/iou l.icrJI$<.' Plnlr Sri.:rrrr /rifomrn/hm Rrgis!mlio11 Stickrr Sti;;"wr llif~nmliou 0 =REGISTRATION IS VALID 0 =NO HOT CHECK ISSUED FOR 0 =REGISTRATION 0 • REGISTRATION STICKER NOT REGISTRATION OF veHICLE PLATES NOT SEIZED SEIZED Ek,lwuit Til/o.'/rifonrwliou lemon l.mu /ufonmtiou 2- NEGOTIABLE TITLE ON 0 ~VEHICLE HAS NOT BEEN PAPER IDENTIFIED AS BEING REAQUffiED TO DO LEMON LAW COMPLAINTS Above infarmntion as p1'ovidt'd by stnfe- below nrc our mmotnfiolls Click lrcn: for mo;:on:ve!ricles a/this addn:5s Click llc~l·Jormnro vdu"cles iu /Iris arm J>lnlc NrmWa Redacted edacted TX75071· ~I • • I Mckinney, DC 75071-6289 6289 Lien Holders Ucn Holda Poslion UmDntc 1 20120725 Lien Holder Information U~n Hold~rNIIIII<: lkrr J-!p/dcr Nunrb(r Stn:<'l 5tn:c/Jccm/} INTEGRITY TEXAS FUNDING 07220S028 1600 WEST UNIVERSITY DRIVE Cily Sialt• Zip Cod,• Counl!y MCKINNEY 1X 75069· Certified l.if'JJ 1-lnldm·.<; E,W:i&BW ::q;, ~~ .21 A£~ ,liffij May 19 2014,16:06:36 20140519160636160637 023115630 TX DETAIL DB=txdmv ed=ll7 rec=3913412516 ip=216.207.175.4 mcthod=GET refcr=http:lllbsearch.publicdata.comlpdsenrch. php?p 1=t3HGCM56373G706271 +&input=grp_ dmv_ vin&tacDI\ifV=DPP A- 0 I&I)Jle=vin&dlnumber-=023115 63 O&d!state=TX&id=&identifier-&sessionid=&o=grp_ dmv_ vin servcr-lbsearch.publicdata.com requestagcnt=PDdi>play-2011 0 Ill cc tncdfll\=DPPA-01 wcbfilc=20140519-SHADOW! 05.htm!l80 1152654 PD_006478 Dnnv rnn HYit ---- 0642 EXHIBITB 0643 SEC Info Home Search Mv Interests .!::!run S1gnJn Plectse s;gu /11 TMXFinance LLC · 10-K ·For 12/31/12 Filed Onm1l..U.1 4:40pm ET · Accession Number 1104659-13-24898 • SEC File 333-172244 in Ithls entire Filing, ., I Show IDocs searched ,.I and Iewry "hit". Wiltlcnrtl.f: ? (:my letter), '' /nwny). Logic: for Does: & (!!..!!.!ll, [(or): forTe].!: [ (nnywhcre), "(&)" (nenr). fOr/On/As ppcs•Sj;2 10-K i?./31 /12 78:14M ~~~I"'rill Corn-l1P/fA Annual Report - Fonn 10-K Filina Tahlc of Contents DocumgntiEllhihi t OMqdption -.... Uu ,, 10-K Annual Rgport HTHL l.42M ,, 2o ~ F:X-10 , Material Contract l~aterial Contract HTML HT\4L 34K Ended Deccmhcr 3 I Prnper1ies 2012 2011 and 2010 ltem3 0645  Consolidated Stnterncnts ofrvlemher's Emritv Hnd Noncontrol!ing Interests Legnl Proceedings lOr tlm Ycms Ended Occemhcr ~~ ?012 20 II and 20 I 0 llJ:m.i Control<> nnd Procedures Mine SnfCLy Dt<>c!nsures J)irectors Executive Officers und Comorate Govemancc EYJ:l..U Executive Conmemmtion Item 5 Ex!Jihrts and fjmmcjpl Statement SchedJJ!es Market !Or Registrant's Common F.quitv. Related Stockhokler Matters and • Financial Stnten"X!nL~ and Stmnlen)21l!arv Data Issuer Purchases ofEquitv Securities Item I ltem6 Item !0 Selected Fimmcial Data Item II .!km1 • Item 12 11 MMagemcnt's Di~ctl~sion ;md Annlvsis ofFM1nnci ofCash Flm\'S Cor tim Yrm;s Ended Qccemher 31 lliml.R Item 9 ?012 ?0\1 and ?OJO ltem9A Notes tn Cnmnlidc!QSJlfC'> Olhcr lnfomrution Note"> to Consolidated Fjmmcjal Smtcn-ents Pnrt Iii Other lnfom)ation Item 10 Pl!cutive Qffir;cs) (Zip Code) Registrnnt's Telephone Number, Including Area Code; (2.1]) 525-2675 Securities registered pursuant to Section 12(b) ofthe Act: None Securities registered pursuant to Section 12(g) oflhe Act: None Indicate by check mark if1he reei~trnnt is a weU-known seasoned issuer, as defined in Rule 405 oft he Securities Act. Yes 0 No IBl Indicate by checkmMk if the regi.~tmnt is not required to file reports pursunnt to Section 13 or Section lS(d)ofthe Act. Yes lEI No 0 lndicnte by check mark whether the re~·i.~tmnt (1) has filed all reports required to 1Je filed by Section 13 or lS(d) oft he Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the regi~tmnt Wtts required to file such reports),ttnd (2)htts been subject to such filing requirements for the past 90days. Yes 0 No lEI (Note: The I'C!!i~trnnt hDs filed nU r¢ports pursunnt to the Securities E'I;Changc Act of 1934 as applicable fort he preceding !2 months) Indicate by checkrnnrk whether the reui~tri!JI! has submitted electronically and posted 011 irs corpomte~. if any, cvcl}•lnter.~ctive Dttta File required to besubmined and pos11~d pursuant to Rule 405 ofRcgulation S~T (§232.405 oft his chapter) during the preceding 12 months (or for such shorter period that the T1m\' 's ar::mal results may diffir signijicam~l·from currem c.rpectmions as (•,rpre.rsed ur implied in tlw fanvard-lonking srarcmcnls. Foclors lfwl might cau.rc ,\"ItCh tlijforence.f Include, but ar;: nollfmiled Ia, !hose df.~cusscd m "Item /A. Risk Fac1ors" in this report. 711<' rnmnnnr assumes 110 obflgalioutn ret•isc or update onyjonJ•ard-loaking .fttllcmcllfs, except as J'eq111red by faw, PART I ITI!:i\-11. BUSINESS. Introduction TMX Finance LLCis a privntdy-owned nutomobile title lending company with 1,035 company·owncd stores in 12 stares ns of!X:cemhcr 31 :w12. We provide our customers with access to funds throush loans secnred by a lirst or secontllien on the customer's automobile. Our loan products :lllow our customers to meet their liquidity needs by borrowing against the value oftheir vehicles while allowing the customer to retain use ofthe vehicle during the temt ofthe loan. TMX Finance LLCis a limited liability company that was formed in Delaware in 2003and e~sts solely ilS a holding company to O\mthe equity interests of its 8tth~idinri¢s. TMX Finance LLC changed its name from TitleMax Holdings, LLC to TMX Finance LLCeffective Inne 21 2010. Effective Sep1emher "";Q '012, Imp Young, the fom1er sole member ofTMX Finance LLC, transferred !00"'.4 ofhis membership inlerests to newly-formed TM:X Finance Holdings [nc., or our "Parcm," in e>J:hange for shares of common stock of our Parent. Mr. Young is the sole beneficial owner of the common stock of the Parent. We referto Mr. Young in this report :~s the "Sole Slmreholdcr." Unless the conte:-a indicates otherwise, references in this report to ''1"MX Finance," the "Company," •·w(.."," '"11s." "our" or similar term> represent TM:X Finance LLC end its consolidated affiliates. Our principal COijlOrate offices are located at 15 Bull Street, Suite 200, !>~wmn~h C~ornijl Jl40l, and our telephone number is @) 525-2675. Our wchsitc: address is www titlenL1Xhi7 The infomunion on ourwch~ite is not a part ofthis report. Oveniew Our automobile title lending business provides ll simple, quick and confidential wo.y for consumers to meet their liquidity needs. We offer Iitle lonns in amounts ranging from SIOO to SS,OOO to customers who gencrnlly have limiJcd access to consumer credit from banks, thrift institutions, credit card lenders and othcrtr.~dilionnl sources of consumer credit As of Dqcemhcr .11 2012, we had appro:cimatcly 470,000 customers and S577.2 m~llion in title loans receivable. We believe we arc the largest automobile tille lender in the United States based on title loans receivable. We principally operntc under two brnnds: TltlcMaxand TitleBucJ.:s. Tit!cMaxrequircs o. minimum o.pprnised Vehicle value of more than 5500 nnd offers interest rntes that we believe, 0648 based on market research, are up to 50% less than those offered by other cornparnble title lenders, TitleBucks provides loans to customers with less valuable vehicles and charges interest rates that are comparable to those charged by competitors for such loans. Tit!cBuck.s was created to capture custonmrs who do not meet TitleMax's minimum vehicle value requirement and who would othenvise use a competitor. We refernon·qualifying customers fromTitleMaxtoTitleBucks when possible. We also offcra second lien automobile product, with operations conducted within 77TitlcMaxstores in Georgia under the Equity Auto Loun, or "EA.L." brand and through 53 standalone stores in Georgia and Florida under the lnstaLoan, or "JNL," brond as ofDeecmhcr 31 2012. EAL and INLalso offer ll first lien product in certain situations. In addition, EAL and INL sell insurnnce products in connection with their loans as agents for an unaffiliated insurnnce company. The Comnmw is in the process of moving the EAL business into exclusively standalone stores underthe lnstaLo:m brand with separate management and lldditional loan products. As ofDecemher :;1 2012, EA.L and lNLhad appro>:imately S\7.1 million of combined gross title loans receivable, In each of2012, 201 !,and 20!0, 87.4%, 85.8% and 86.1%,rcspectively,ofourinterc~t and fee income was attributable to ourTitleMaxbrand and \1.6%, 13.3% and 13.3%, respectively, of our interest and fee income was ann"butllble to ourTit!eBucks brand. [n each ofthese years, less than 1.0% of our interest and fee incolll¢c was allnDutable to our EALand INL brands. Tnhlc of Content~ 2012 Highlights We grew our business significantly by opening or acquiring 281 new stores while closing only two stores, representing 3 net increase in stores of36.9% in 2012. Titese new store openings include 46 new JnstaLoan stores that previously operated under the Equity Auto Lo11n brand within Tit\eMaxstores in ~orgia. We increased our title loans receivable- to SS77.2 million 111 D~ccmher 31 2012, representing an increase of17.8% compared to Deccmher Jl 2()1 I. In June 2012, we entered into a credit agreement, or the "Cn:dlt Agreemem," to obtain a S25.0 million senior secured revolving credit faci!.ity. In July 2012, the Sole Shareholder made an equity contribution ofSI4.0 million. In November2DI2, our PDrent made an equity contnbmion to us ofS44.8 million. Gron1h Strategy A key objective of our growth strntegy is to establish a leading position as a title lender in each market in which we operate. The three elements of our growth strntegy are ns follows: Grow Existing Slllrt! Recdvahle.r. Our store title loans receivable lmve grown at a compound annual rate of 19.0% over the first four years ofthe stores' lives and 5.5% thereafter. Originations for2012 increased 26.6% compared to 2011. We be!.ieve there are significant opportunities to grow e:tmings at substantially aU ofoure),jsting stores. Our store managers have a strong incentive to continue the growth ofour stores because they are evaluated nnd compensnted in significant pm1 based outheir achievement ofcertain operating llnd growth seals, which we adjust each year to account for the continued improvement in our business, We believe that by focusing on these specific goals and tying them to employee compensation, we c<~n fun her enhance the operating efficiency of our stores as wclllls overall operating margins. Open New Stores Witlliu 011r Currmf Foofprlnf. We seek to develop a large presence in each of the nl."lrkets in which we operate, and we believe we have significnnl room to ~;row by opening additional stores in most oft he matke1s in which we currently operate. Wh~n considering whether we should open new stores in these markets, we e:>amine a numberoffactors, including consumer demand for our products, the t)olent that new stores will be nble to levernge e:cisting stores' m.1rketing effons and the e:dcnt to which new stores might dctrnct from saks from existing stores. Coutlmu:d E.rpausioulnro Ncwr!r Mflrkr!ts. We have identified severn\ key geographic arens or m:trkets for the potential opening or acquisition of additional stores. These n~arl\ets were identified following a review of demographics, a dctennination of whether state rcguiMion is fnvornble and an intcm<~l evaluation of each m:trkct's abifity to support our store development pros ram. Based on this re\·icw, we have e).jlanded into rmrkets in ihe southern and west em regions of the United States, including Florida, Arizona and Nevada. As is the case with our strategy to open new stores in our more established market$, we \Jc\ievc we have management and capital resources sufficient to support our growth strategy in our new markets. Industry Q\'enicw We operate in the alternative financial scrvkes industry, providing: automobile title loans to consumers who own, in most instances, their vehicle free nnd clei\1" and need convenient nnd sin1ple access to funds. Other products offered in this industry include other fonns ofconsumer loans, check cashing, money orders and money tronsfers. Consumers who usc alternative financial services are often referred to as "undcr,5erw:d" or "undcrbankcd" by banks and other trnditional financial institutions. CUstomers use the services provided lly the alternative financial services industry for a variety of reasons, including that they often: do not have access to traditional crcdit·bascd lenders like banks, thrift institutions and credit cnrd companies; have a sudden and une;g~ectcd need for cash due to common finnnciol challenges like medical em::rgencies, vehicle repairs, divorce and job changes; are self-employed smal! business owners with an inuncdia!c need for short·tenn working capital; need a small amount of cash immediately and do not have time to wait fora truditional\enderto approve a loan; and sec such services ns a sensible ahemntive to potentially higher costs and negative credit consequences ofother alternatives, such as overdraft fees, bounced check fees or late fees. T11hle ofCmuent.~ We believe that the underbanked consumer market, and in particuillr the I!Utomollile title loan segment ofthe ultemative financial services industry, will continue to grow as a result of a diminishing supply of competing banking services forth is segment ofthe population, as well as underlying demogmpl1ic trends, including an overall increase in the population and an increase in tlte numberofself-emp!oyed, sll'l311 business and service sector jobs :~s a percentage ofthe total workforce. We believe automoblie title loans are panicul3rly well-suited to grow in the current regulatory environment of the nnrkiltS in which we opemw, which we view as stable with respect to our loan products :md hostile to other alternative financial services products, such os payday loans. 0649 Scniccs Our automobile title lending business provides a customer who is IS years of age or older (c»:cpt in Alabama where the customer must be 19yenrs ofage or older) with a Joan ranging from S\00 to S5,000 that is secured in most cases by a first lien on the customer's automobile. We detemline the loan amount based upon the customer's need and our appruisal oft he wholesale value ofhis or her automobile, We do not run a credit check on the customer when approving the loan application for our firnt lien title loan product, and performance on the loan does not impact the customer's credit. Upon approval of a customer's application, we provide the customer with the detemined Joan amount, and the customer provides us with a certificate oftitle to the appraised aUtomobile; however, the customer retains fuU use and possession of! he automobile. We provide our customers with loan funds primarily through the issuance of a check and do not keep a significant amouut of cash on hand at any of our Slores. The customcris able to cash the check at a nearby partnered bank that does not require payment of a check cash~1g fee. Following our receipt &om the customer of full repayment of the loan, along with interest and fees, we release the lien on the customer's vehicle ttnd return the certificate oftitle to the custo~rur. !fa customer fails to remit payment to us when due, we ll13Y repossess the customer's automobile. However, we consider the remedy of repossession as a ]HSI res on, and we do not repossess a customer's vehicle unless we have first e*tausted aU options for repayment. As a result, we first undertake to contact the customerto obtain payment. Only if the customeris unresponsive or it is other.vise clear that the customer will not be able to meet his or her obligations will we initiate repossession, A regional or district manager must approve all repossessions in advance, nnd only approved third~party c.ompanies handle the repossession. Even when pennitted by state Jaw, we typically do not repossess a customer's automobile umilthe account is at least 14 days pas! due. Store managers are responsible for arranging vehicle sales. A repossessed vehicle may only be sold to a licensed used car dealer; our employees may not purchase a reposs~ssed vehi<:le. As required by stale regulations in certain slates in which we opernte, we remm any excess proceeds to the customerifthe vehicle sells for an amount in excess ofthe lonn value plus e:q1enses. We conduct business in Tems and cennin other states through wholly-owned suh~irlinries, each ofwhich is registered in the applicable state as a Credit Services Organiz:stion, or "CSO. "These CSOs have entered into credit services organiz:s.tion agreemems, or "CSOAgrcemcms, "\\ith third-party lenders, or the "CSO Lenders," thntlllllke the loans to our customers. The CSO Agreements govern the tenus by which we perfonnservic~1g functions and refer customers to the CSO Lenders for n possible e:o.1ension of a loan. We process Joan applications and commit to reimburse the CSO Lend em for an}' loans or related fees I hill are not collected from those customers. Unden1rlting and rusk 1\bnagcmenl AU underwriting decisions related 10 our first lien title Joan product offered by TitleMaxand TitleBucks arc made based on the apprnised "rough" wholesale value of a customer's vehicle, as adjusted by store employees' appraisal ofthe vel1ide based on the following charncteristics: year, m.1ke, model, e:olerior,lnterior and m.::chanicnl condition, nnd mileage. We believe this adjustment process reduces the overall risk ofour til!e loans receivable as compared to other first lien title lenders by having more conservative loan to value 111tios which results in more security for each loan and Jess overaU risk for our romnrmv. Prior to approval, a customer must present the vehicle, alien-free title to the vehicle, a go\'emmenr-issued picture identification and proofofincome (e~ept in Alabama). We verifY that such title is the correct title for the customr::r's vehicle based on a review ofthe vehicle identification number. Upon completion of the transaction, we send the title to the applicable state Depar1ment ofMotor Vehicles to have ]he C'ompnnv named as the first lien holder for the vehicle. We release !he lien only when the customer's account balance is fully paid. UndemTiting: of our EALanU fNL title lonn products is based prim.,rily on the customer's credit report nnd the payment hist01y oft he first lien Joan on the vehicle when applicable. Upon completion of the trnnsnction, we have the C'omnnnv named typicnlly as the second lien holder for the vehicle and we releose the lien only when the customer's account balance is fully paid. We balance the individual store's autonomy in the underwriting process with a company-wide risk manngement system supported primarily by our district nnd regionnlmnnagers' periodic underwriting reviews and store audits. Undemoriting reviews include a rilndom review of new Joan files and their supporting documentation to con finn the appraisals and related docum.::ntntion adhere to Company policy. Our district managers' audits ofeach store twice per month include document inspection (Iitle, picture, contrnct and key) and n~w Joan r~view (verifying appraisal of vehicles and completeness of files). Further. our regional managers typically spend one day each week with a different district manager to review the undem·riting process and other matters. 5 Tahle ofC'ontent~ Customers We serve individuals who typicaUy have limited access to consumer credit from banks, thrift: institlltions, credil card lenders and othertraditionalsources of consumer credit. Our typical customers rely on all, or nearly all, oftheir current income to cover inunedinte living e>.penses. Thus, we believe that when une>.pected e~openses ari;e, these customers value the convenient, immediate, simple and transparent access to funds that we provide. In addition, our customers who are small business 01111ers onen use title lending as a source of operating capitnl. Adl"crtising and l\L1rketing We market our title loans primarily through network television advcnising. Clustering of our stores in g.eographic regions n~1gnifies the effect of our regional television commercials. Funher, we market title loans through online pay per click programs, billboards, el<:ctronic messtJge centers located in front ofour stores and telemarketing to leads generated through our website. In addition, we create customer loyalty through special ~1centivc programs such as TilUnksgiving turkey giveaways and customer refcrrnl incemive programs. Individual stores employ telemarketing to current and past customers and dismbute flyers to local businesses and apartmcm complexes. Competition We compete \lith a limited number ofbusines5e$ that exclusively provide title loans, as well as with many providers ofotheraltemntive fi11ancialservices, such as payday lenders, instaUment lenders and pawnbrokers. We believe that the principal competitive factors in the title lo~n industry and the broaderaltemative financial services industry are interest rntes, fees, loan size, location, customer service and conveni~nce. We believe thnt we offer a more affordable alternative to late payment fees and overdmfi fees, and significantly lower annual percentage rates, or ':4PRs." than most other title lenders and other providers ofalternative financial services, such as payday lenders. We believe that both the title Joan industry and the broader alternative limmcial services indus!!)' in the United Stales me highly frilgnk!nted. Historically, there have been low harriers to entry, ere~ ling fragmentation and enabling small operators to compete with national chains. Emjioyccs As ofp,•cemher 11 "lOJ') we bad 4,335 employees, comprised as follows: Stores and Field Management 3,949 Corporate 386 Total 4,335 0650  We consider our employee relations to be good. None of our employees are covered by collective barg~ining agreements, and we have nev¢re:qJerienccd any organized work stoppage, strike or labor dispute. 6 Tnh!e ofCoruents Regulation Our automobile title lending operntions are primArily regulated at the state lc\•el and are subject to laws, regulations and supervision in ench oflhe states in whkh we operate. We nrc also subject to federal and state laws and regulations related to the recording and reporting of certain finaneialtmnsactions and the privacy ofcustorrn!rinfonnntion. The following is a genernl description ofsignificant regulations affecting our nutomobile title lending business. Slate aud Local Regulatiun E.1ch oflhe states in which we operate has specific state or local licensing requirements appijcable to offering loans secured by title to personal property, wl1ether through a traditional ]o3n, title lonn or pawn tmnsaction. We obtain stat~ or local licenses where required. We are subject to various state regulations govemil1g the tenru ofthe automobile title loans we offer. Several state regulations limit our recourse ag3inst the customer and the Dmount tho.t we may lend or provide, as wellns restrict the amount of finance orservic.c cho.rges or fees that we may assess and, in r;ertllill situntions, limit a customer's ability to renew any such loans. Forellllmple, we are prohibited from providing automobile title loans in e)l;ess ofS2,500 il1 MissiHippi and Tennessee, and $4,000 in Illinois (under certain circumstanees). In addition, we may not provide on automobile title Joo.n to a customer under the age of 19 in Alabama. In some states, we are required to meet minimum bonding or capital requirements nnd are subject to Vlllious transaction recordkecping requirements. In several snttes, we are subject to periodic ellllmination by state regulators, including e).llmination at the discretion of, nnd without notice by, such state regulators. We must also comply with various consumer disclosure requirements, which arc typically simi!o.r or equivalent to the federol Truth in Lending Acl and corresponding federal regulations. In the states In which we have recourse against the customer for payment of the obligation, our coUection uctivities regarding past due loans may also be subject to consumer debt collection Jaws and regulations adopted by the vnrious states. In addition, we must comply with general consumer protection Jaws in each state, including laws governing the repossession and foreclosure ofco\Jaternl. Our business operntes under a variety of state statutes nnd regulations, including those rel~ting to: licensinc and posting of fees; lending prnctices, including disclosure requirements such as those contained in sto.tc truth in lending laws and related consumer protection· laws; interest roles and fees; currency reporting; recording and reponing of certain financial transactions; pri\'ncy and data security of personal consumer infom1:1tion; prompt remittance ofe)l;ess proceeds from the sale of repossessed automobiles in cenain states in which we operote; and scn•ing :~s n credit seivices organiz:~tion, or "CSO," in certain states il1 which we may e>;~and our operntions. In addition to state Jaws and regulntions, our business is subject to various !Oc3l rules nnd regulations such as local zoning regulation und pennit ijcensing. For ex:~mple, the Austin, Dallas, 8 Paso and So.n Antonio, Telllls city councils passed ordinances that restrict e~ensions ofeonsumer credit by title lenders within city limits by, among othenhings, linking ma:..imum al!ow3ble loan size to 3% ofu consumer's gross annual income, mandaling a 25% principal reduction requirement on refinances orrenewals and limiting the tenn ofa loan to no more !han four insta!!ments or renewals. Our subsidiary TitleMo.xofTe:-as, Inc. is challenging the legality oft he ordinances in Austin and DaUos. The Austin, Dallos and San Antonio ordino'lnces went into em:ct on 1v!:w I 2()]2, June Ill 2012 and l:unmN I 201:>, respectively. Wc nrc complying with the ordinances in each ofthese markets. The 8 Paso ordinance will be effective~. Tnble ofC'onlo:nt~ Federal RcgulatiaiL Our lending activities are also subject to severo] fed em! statutes and reguhllions, including the following: The Dodd-Frank Wall Street Refom1 and Consumer Protection Act, or the "Dodd-Frank Act," and implementing regulations thereunder. which may impact the marketing 11nd regulation of the products and scr\'ices offered by tltc C'ompan\', depending on the e~ent to which the C'ompnnv and its products ond services are ultimately dctennincd to be subject to such Act and regulations. The Consumer Financi~l Protection Bureou, or the "CFPB." wa~ estoblished pursuant to the Dodd-Frank Act os a federal authority responsible for administering and enforcing the laws ;md regulations for consumer financial products and services. Titc Dodd-Fronk Act docs not specifically target title lending,tmditional pavm lending or installment lending for CFPB regulation. However, the CFPB is currently in the process of developing rules that could subject the C'ompnny to some fonn ofregulatory oversight. The CFPB is specifically prohibited from instituting fedeml u~nry interest rate caps. The G'amnrLeaeh-Biiley Act lind its underlying rcgulntions, which relate to privacy and data security and require us to disclose to our customers our privacy policy and practices, including those relating to the sharing ofa eustorrn!r'S nonpublic person11l infomution witll third parties. This disclosur¢ must occur when esto.blishing the customer rd~tionship ;:md, in some eases, at least annually thereafter. We must ensure that our systems are designed to protect tlte confidentiality of customers' nonpubijc personol infonnation, and we have policies and procedures in p!~ce to address unauthorittd disclosure ofa customer's nonpublic perso1111l information. The Bank Secrecy Act, or "BSA," as amended by the Uniting and Strengthening An~rica by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, or "USA PATRiOT Act, "which imposes a range of anti-money laundering, or ''AML," and anti-terrorism obligations on covered financi:!l instilutions. As required by tl1e BSA and USA PATRlOT Act, we undertake cemin AMLand nnti-terrorismcompliancc measures, including steps to verify the identity ofourcustorr.crs,and we may be required to employ other measurcs to ensure our compliance with requirements that we report and maintain records regarding trnnsactions that satisfy certain thresho!ds.ln addition, the Office ofForeign Assets ControL or "OFAC," is responsible for administering and enforcing economic lind trode sanctions based on US. foreign policy and national security goals against targeted foreign countries nod reginJCS, terrorists, intemntional narcotics traffickers,those engaged in activities related to the proliferntion of weopons ofrmss destruction and othcrthreats to the national security, foreign policy or economy of the U.S. to insure that U.S. entities do not engage in transactions with 0651  certain prohibited parties, as defined by various E'l!cutive Orders and Acts ofCongress. OFAC publishes, and routinely updates, lim ofnames ofpersons and Of!.lanizations suspected ofaiding, harboring or engaging In terrorist nets, including the Specially Designated N~tionnls and Blocked Persons. If we find ~name on any transaction, account or wire transfer that is on an OFAC list, we must undenuke cenain specified activities, which could include blocking or freezing the transaction requested, ~nd we must notify the appropriate authorities. 11Hl Equal Credit Opportunity Act, or "ECOA," which prohibits discrimination against any credit applicant on the basis ofnny protected category, such as race, color, religion, national origin, sex, marital status, age, whethenhe applicant receives public assistance and whether the applicant has e~rcised a right underthe Consumer O"edit Protection Act. The ECOA requires us to notify credit applicants of:my action taken on the individual's credit application. We must provide a loan applicant a Notice of Adverse Action, or ""NOAA, "when we deny anopplication for credit, which must include, among other things, a statement ofthe ECOA's prohibition on discrimination and an explanation of the applicant's rights under the ECOA. The Fni.rCredit Reporting Act, or "FCRA," which requires that we give certain no !ices to customers if we deny credit based upon a credit report or offer a customer Jess favorable creditteffil.S based upon information in a credit report. Fmther, the FCRA requires us to implement and foUow a "Rr:d Flags Polley" to detect and prevent identity theft. The Truth in Lending Act and its underlying regulations, which impose specific requirements on our disclosure to customers ofcredit temlS, including the annual percentage rnte, finance charge, amount financed, to tell of payments, payment schedule, security, late chDtges, prepayment ;md default, related to each automobile title lending trnnsaction. Fed em! Jaws wl1ich cap the annual percentage rate that may be charged on consumer loans made to active duty military personnel and theirimmedit~te families at 36% peryear. ·n1is 36% ~nnual cap applies to e.utomobile title loans that hrt\'e terms of 181 days or fewer. In addition, we are subject to the SeJVicememhers Civil Relief Act, whiclllirnits the amount of interest we can charge and our right to repossess collateral from military customers. Tnh[a ofConranlS ITEMIA. RISIlensive regulation by state, federal and local governments that do or may impose significant costs or limitations on the way we conduct or C"1Jnnd our business. In general, these regulntions are intended to protect consumers, rather than our investors ot creditors. See "Item 1. Busillcss-Rcgulufion" for a summary ofthe many significant swtc, federal and local laws and regulations governing our business ond industf)', Furthcnnorc,thc laws and regulations covcming our business arc subject to change. Our failure nrthc failure ofnny of our employees to comply with applicnb!c state, fcdcrul e.nd local requirements, whether vohmtlll)' or involuntary, could require us to discontinue our automobile title lending business in opplicable jurisdictions, which could negatively impact our business. Fnilure to comply with applicable !aw5 or regulations could result in snnctions by regulatory :~gencies, ci\'~ money penallies orrepulational damage, which could Jtavc a material adverse effect on our business, financial eondilion, results ofoperntions and ability to service our debt obligations. Tile Dodd-Frank Act, a,r well ns potcuJiallcgJs/aliolllll various states Ifadopted, creates significant tmcerlaluty uhout vurinus lmporlnllf aspects ofrmr Jm,ri11es.f. The Dodd·Frank t\ct that took effect on Julv 21 2010 is c:>lensive and significant legislation that, among other things: creates a liquidation framework for the resolution oflargc bank holding companies nnd systemically significant nonbank fmancial companies; creates a new frllm::work for the re;ulation of over-the-counter derivatives activities; strengthens the regulatory overnight of securities and caJlital markets activities by the Sccmities and E'>l:hange Commi.Hion, or "SEC:'' and creates the CFPB, a new federal authority responsibte for administering nnd enfordng the laws and regulations for consumer ftnmtcial products and services. The Dodd·Ftank Act will impact the offering, marketing and regulation of consumer fmancinl products and services offered by fmancial institutions, which m:ty include the products and services offered by the tonmanv. The CFPB has supervision, e;G~minntion and euforeenlt!nt authority over the consumer financial products m1d services ofcen~in non-depository institutions, whiclt could include the ('omnan\•. Compliance with the regulations implemented under the Dodd-Frank Act or the ovcr.;ight of the SEC orCFPB ll"'Y impose costs on, create operational constrnints for or place limits on pricing with respect to fmnnce companies such us the Cotm;mv. Until implementing regulntions are issued, no assurance Cllll be given that these new rcquirem:nts imposed by the Dodd-Frank Act \vill not increase our cost of doing business, impose new restrictions on the way in which we conduct our business or add significant operational constr.~ints that might impairourprofitabi!ity. The CFPBalso has the power to define and !J~n "unfair, dec<:plive orab11s1ve" practices in connection with consum::r products, We an:: current!}• fol!owing legislative llltd regulatory developments in ConJ:!rcss and in individual st~tes where we conduct bu.sil1ess. [I is difficult to assess the likelihood of the enactment ofany unf.wornblc federal or state legislation, and there can be no assurance that additional legislative or regulatory initilllives will not be enncted which would severely restrict, prohibit or climinote our ability to offer title loans. Any federal or Stille [egisle.tive or regulatory action that would serve to restrict the types ofactivities in which the Comn~nv is engaged could have a nklterial ' limit, if not eliminate, the availability of certain consumc:rloan products, including tille loans. Additional possible restrictive actions include, omons: others, the imposition of limits on APRs on consumer Joan transactions or the prohibition of cash advance and similar services. The cncnt of the imp oct ofany future legislative or regulatory chnnges will depend on the nature ofthe legislative or rcs:ulatory change, the jurisdictions to which the new or modified laws would apply nnd the amount ofbusiness we do in that jurisdiction. Moreover, similar actions by states in which we do not currcn!ly opcrntc could limit our opportunities to pursue our growth strategies. 9 Tahlc ofComcn1~ 0652  In addition to state and federal Jaws and regulations, our business is subject to various local rules and regulations such as local :roning regulation and pemlit licensing. local jurisdictions' efforts to restrict the business of alternative fmancial services product providers through the use oflocal zoning lllld pemlitting Jaws have been on the rise. Actiom taken in the future by local govemirlg bodies to require special usc pemlits or ln1pose other restrictions on such lenders could have tl material adverse effect on us. See "Busine:.s-Regularfoll" in Item I ofthis report. Failure In muiuluiu r:ertuiu criteria required by state ami locul regulatory bodies r:ou!tf result injim:s or rile loss of our liceJtses to conduct busiuess. 1\.fost states in which we opel"ilte requiru lkcnses to conduct our business. These state$ ortheirtespective regulatory bodies have established criteria we must meet in order to obtain, maintairl and renew those licenses. For c~mple, many oftltc states in which we operate require us to maintain a minimum amount of net wonh or equity. From time to time, we are subject to audits in these states to ensure we are meeting the applicallle requirements to nlilintain these licenses. Failure to meet these requirements could result in the revocation of our existing licenses, the denial ofour new licensing requests or the imposition offines, which could adversely affect our results of operations, cllsh flows and ability to service our debt obligations. We also cannot guarnntee that future license npplicadons or renewnls wiU not be denied. If we were to lose any ofour licenses to conduct our business, it could result in the temporal)' or pe1m.1nent closure ofstores, whiclt could adversely affect our results of operations, cash flows and nbility to service our debt obligations. Media reports and pttblic perception ofconsumer lou us, suclt as autouwbile title lou us, as beiug predatorjor abusive could tfecrease tlu: demamlfor our mtfomubife ti({c loa us nud lent( to 11wre restrlctlve regulation Certain consumer advocacy groups and federal and state legislators have assened th~t laws and regulations should Ue tightened to severely limit, if not eliminate, the availability of certain Joan produCts, such as automobile title lo3ns, to consumers. The consurner advocacy groups and media repons generally focus on the cost to a eonsumer for this type oflom1, which is often alleged to be higher than the interest typically charged by banks or sirlillar lending institutions to consumers with better credit histories. The consumer advocacy groups and media repons chnracterize these consumer loans as predatory or abusive. Jfthe negative characterization ofthese types ofloans becomes iltcreasingly accepted by consumers, demand for automobile title loans could significantly decrease, which could have a material adverse effect on our business, results ofopemtions, financial condition and ability to service our debt obligations. Additionally, if the negative characteri:mtion ofthese types ofloans is accepted by legislators and re!lulators, we could become subject to more restrictive laws and regulations, whieh could have a material adverse died on our business, results of opemtions. financial condition and ability to service our dl!bt obligations. Lr!gul proceedings may increase our cm-ts am/ dil1racl our mamrgemtmf teanL In the p~st, we and our competitors have been subject to regulatoty proceedings, class action llnvsuits and other litigation regarding the offering ofaltem~tive fin3ncial services, We are currently a defendant in multiple legnl proceedinss. See •'Jtem 3. /.J!gal Proceedings." It is likely that in the future, we will be subject to curnm!ly unforeseen legal proceedirlgs. The adverse resolution of any current or future legal proceeding could cause us to have to refund fees and interest col!ccted, refund the principal amount ofndvances, pay damages or other monetary penalties or modi!)· or tenninnte our opemtions in certain loca~ state or federaljurisdictions. The defense of such legal proceedings, even if successfuL requires significant tim! and attention ofour senior officers and other management personnel that would otherwise be spent on other aspects of our business and requires the e:-.penditure of substantial amounts for legal fees and other related costs. Settlement oflawsuits nmy nlso result in significant cash payouts and modifications to our operations. Due to the uncertaillly surrounding the litigation process, except for tl10se matters for which an ac:crun! hos been provided, we are unollle to reasonably estimate the rnnge ofloss, ifzmy, at this time in connection with the legal proceedings in which we nre currently involved. An adverse judgn)l;:nt or settlement ofa legnl proceeding may substantially exceed nny amount currently accrued and could have a material adverse effect on our business, results ofoperations, financial condition and ability to sen•icc our debt obligations. 10 Tnh!e ofContems Judicinl decisium, CFPB mlrNflnkiug or arwmdmeut.~ to tile Ft:dera/ Arbitration Act cotrld render the arbirratiou agreemMfs we use illegal flf twenforceabl~t. We include pre-dispute ~rbitration provisions in our loan ngreements. These provisions nre designed 10 nllow us to resolve any customer disputes through individ1ml ilrbitr.~tion rather than in coun. Our arbitration provisions explicitly provide that aiJ arbitrations will be conducted on an individual basis and not on n class bnsis. Thus, our arbitration ngreements, if enforced, have the efTect of shielding us from clilss action liability. They do not generally have any impact on regulatory enforcement proceedings. We take the position that the Federal Arbitmtion Act requires the enforcement in accordance with the tenns of arbitl"iltion agreements contninlng class actio11 waivers of the type we usc. While m.1ny couns. particularly federal courts, have agreed with this argument in cases involving other parties, an increasing number of courts, including couns in California, Missouri, Washington, New Jersey, and a number ofother states, have concluded that arbitration agreements with class action waivers are "rmr:on.rcionable" and hence uncnforcenble, panicularly where a smn!l dollar amount is in controversy on an individual basis. While the U.S. Supreme Court recently ruled in thcAT&TMobrlay 1'. Concepcion case that consumer arbitration ab'TCements meeting certain specific.1tions arecnforcenble,our nrbitrn.tion agreements differ in several respects from the ngreemcnt at issue in that Cl!Se, thereby potentially limitil1g the: preccdenliol effect oft he decision on ourbusirlcss. In addition, Congress has considered legislation that would scneml!y limit or prohibit mnudatofY pre-dispute arbitration in consumer contmets and has adopted such a prohibition with respect to certain mortgage loans and nlso certain eonsumcrloans to members of the military on active duty and theirdependems. Funher, the Dodd-Frank Act directs the CFPB to study consumer nrbitrntion and report to Congress and authorizes the CFPB to adopt rules limitirlg or prohibiting consuml:!rarbitmtion, consistent with the results of its study. Any such rule would apply to <~rbitration agreements entered into more th<~n six months ai\crthe final rule becomes effective (nnd not to prior arbitration agr! "Mr. Young has the ability to control substantially all matters of significance to the Comnanv, including the strntegie direction of our business, the election nnd removnl ofthe manager.; ofTMX Finance LLC, the appointment nnd removal of our officers, the approval or rejection ofa sal.:, merger, consol.idation or other business combination, the issuances ofadditional equity or debt securities, amendments ofour organililtional documents, the entering into ofrelated party transactions and the dissolution nod liquidation ofthc Comnmw, regardless ofwhethcr the holders ofthe senior secured notes, or our "bondholders," believe that any such action is in their best interests. As a result ofMr. Young's complete beneficial ownership and control ofourConmnnv his Interests could eonlliet with the interests of our bondholders. For C}.llnlple, if we encounter financial difficulties or are unable to pay our debts as they mature,l\k Young's interests as the sole equity ownerofour Parent might conflict with the interests ofour bondholders. Mr. Young might also have nn interest in pursuing transactions that, in his judgment, could enhance his equity investment, even though such tmnsactions might involve risks to our bondholders. In addition, Mr. Young could cause us to m.1ke acquisitions that increase the amount of our indcbtcdness or sell asse1s, either of which 1t1J1Y inlPairour ability to nuke payments under the notes. Economic rcct!SSlon, 111/CI/Jflloyuumt 1111d other factors could result in« reduct/oil i11 denmndfor our products and services, om/ we lilt/)' /Je 111/rtblc 111 mlnpt to any sucfl retfuclion. Factors that influence d~mand for our products and services include macroeconomic condilians such as employment, personal income n.nd consurnerscnliment. If consumers be eo me more pessinlist(e regarding the outlook for the economy nnd therefore spend less and save more, dcoond for title loans may decline. In addition, weakened economic conditions n\ily result in au increase in loan defaults and loan losses. We can give no assurance that we wi!l be able to sustain our current chargc-offmtcs orlhot we will not e),Jlerience incrtasing difficulty in collecting defaulted loans. Further, in an economic slowdown, we could bc required to tighten our underwriting standards, which likely would reduce our loon bolonecs. Should we foil to adapt to any significant declines in consumers' demand for our products or services, ourrevenues could decrease significantly and our opemtions could be htmned. Even if we do make changes to existing products or services or imroduee new products or services to fulfill consumer dcm:md, consumers may resist or may reject such products or services. We r1rc subject to 1/nhiliticsfor clnims rclrturl tu repossesslol! ofrmwmnhilcs. We use Ucensed third·porty providers in connection with the repossession of defaulting customers' automobiles, We typicaUy enter into ngrecments with these providers in which they indemnifY us for all losses related to claims arising from a repossession :md warrant that they maintain insurance sufficient to cover such claims omd indenmilicatian obligt~tions; however, we do not enter into these agreements with every third-pat1y provider. We are subject to the risk that any thirU-pany provider that we use nmy not have sufficient insumnce to cover such claims or indemnification obligations. In such event, we may be subject to claims ofcustomers related to repossession, which could have an adverse effect on ourb\tsiness. 12 Tnhlsoflonten!~ DismptiOilS in tile credit ami cnpitalmarkcts cottld negatively impact tlte availahility amf Cll.1·t ojborrowfug. Borrowed funds represent o significnnt portion of our capitol. We rely on borrowed capital, together with t:lsh flows from operations, to fund ourworldns capital needs, including making title !arms, Disruptions in the credit and cilpitnl tn11rkets, such ns those e),Jlerieneed in 2008 :~nd 2009, could adversely <~ffect our ability to obtain c11sh to m.'\ke title loons and to refinance existing debt obligations. Efficient access to these malkets is critical to our ongoing financial success; howe,•er, our future access to the credit and debt capital markets could become restricted due to a variety of factors, including a deterioration of our ean1ings, cash flow, balance sheet quality or overall business or industry prospects, a sust11ined disruption or fintlterdeterioration in the state of the credit or capital markets or a negative bias toward our industry by m:ukct participants. Our ability to obtain additional financing in the future will depend in part upon prevailing credit and capital mmkets conditions. The credit and capital markets are volatile and n decline in those markets m1y adversely affect our efforts to arrange additional financing on satisfactory term<;, If adequate funds ore not available on acceptable terms, we may not be able to make future title loans, lake advantage of acquisitions or other opponunities or respond to competitive challenges. Cilauges ill credir ratings issued hy .flaristica/ ralillg nrgunirarloi/S could adversely offecl ourctrsts offinancing. Credit mting agencies rote our indebtedness based on factors that include our operating results, actions that we take, their view of the general outlook for our induS\!)' and their \'icw ofthe general outlook forthe economy. Actions taken by the mting agencies cnn include m.1intaining, upgrading or downgrading the cttrrent rnting or placing us on :a milch list for possible future downgrading. Downgrading the credit rnting of our indebtedness or placing us on a watch list for possible future downgrading could limit our ability to access the capital markets to meet liquiditY needs :md refinance maturing UabilitiC:s or increase the interest rates and our cost of financing. Tile lml!!nlflr<' nud Credit Agrccmellt impose .~ignijicanf opcrnlilll: nnd jimmdnf restrlcficms, w/llcilmay prevem us from pursuing certaill htu·Jucss opparlsmilies awl taklng ccrtafu actions. The lmlenture and Credit Agreement impose, and future debt agreements may impose, operating and financial restrictions on us. These restrictions limit or prohibit, t.mong other things, our ability to: incur additional indebtedness unless certain financial tests are satisfied; issue disqualified capita! stock; pay dividends, redeem subordinated debt ormke othcrrestricted payments; m.1ke certain investments or acquisitions; issue stock ofsuhsic!i~rie!>; 0654  grant orpemlit certain liens on our assets; enterinto certain transactions with afftliates; merge, consolidate or transfer substantially all of our assets; incur dividend or other payment restrictions affecting cenain of our suhsjdinries; trans fn, seU or acquire assets, including capital stock of our suh~idinrics; and change the business we conduct. These covenants could adversely affect our ability to fmance our future operations or capital needs, withstand ll future downturn in our business or the economy in general, engage in new business activities, including future opportunities that may be in our interest, and plan for or react to market conditions or otherwise e~cute our business strntegies, A breach of any ofthese covenants could result in a def.1uh with respect to the related indebtedness.Jfa default occurs, the relevant lenders or holders of such indebtedness could elect to declare tlle indebtedness, together with accrued interest and other fees, to be immediatdy due and pnyab!c and proceed against any collaterol securing that indebtedness. Accclerntt'on ofour other indebtedness could result in a defaull under the tcnns ofthe Jn.d.sn..t.urs and Credit Agreement. 13 Tt~b!e off'ontenl~ Compr!tltlonln lflf!jimmr:lnl Sl!n•lces lmfusfry cmlltl en use us to lost m11rket sllare am/ rel't/11/f!S. The industry in which we opernte has low barriers to entl)' and is highly fragmented and very competitive. We cncoumer significant competition from other automobile title lending companieJ, pawnshops, installment lending companies, online !~nders, consumer finance companies and pmviders of other forms: of alternative financial seJViccs, many of which have significantly greater financial resources than we do. Significant increnses in the nun1ber orsiZI! of competitors or other changes in competitive infiut.•uces could cause us to lose market share and e:.perience slowi11g or declining revenues, thereby affecting our ability to generate sufficient cash flow to fund our operations and service our indebtedness. We cannot assure you that we will be able to compete successfully wi!h ourcompeti!Ors. Competition form1rl:ct share will likely intensify. Increased competition could lead to consolid11tion within the indus\!)'. If our competitors get strongerthrough consolidation and we are unable to idcutify attractive consolidation opportunities, we could be at a competitive disadvantage and e"Jlerience declining market share and revenue. lfthese events nuterialize, they could negntivcly affect our ability 10 gcnemte S11fficicnt cash flow to furtd our operntions and service our indebtedness. In addition to increasing competition among tmditionol providers ofaltemative finnncial services to consumers, there is a risk oflosing market share to new market entrants such as banks and credit unions. Sevemllarge finnncial institutions have introduced payday·like products in the last few years. Broad consumer adoption ofthese alternatives could reduce the number ofloans we IWlke and adversely nffect our cash flows. Our growth stmtcgy cnlls for opening additional stores, both in states in which we cum:nt!y operate nnd stutcs into which we arc looking to e"JJand. If our competitors aggressively pursue store e:q>ansion, competition for store sites could result in a failure to open the planned number ofstores and could result in increased costs to procure desired locations, both of which could impairourrcsults ofopcrations. E:aemn/ fuctllrS amf other circumsialt~·es over wflicfl we lw!•c llmltct! Cflllirol "' tlwt ttrc !Jcyfll!d fntr cmltral could ndver,rl!fy affect our abili(l' to grow tltrouglt tf1c opening ojuew stores. Our.:::q>ansion strategy includes opening new stores. The success ofthis strategy is subject to numerous e~emol factors, including, but not limited to: the avai!nbility ofsites with acceptable restrictions and suitable temt5; our ability to attract, trnin and retain qualified store IMnagement personnel; our abtlity to access capital; ourabiUty to obtain required government petmits and licenses; the prevaitin~:t laws and regulatory environment of each state or jurisdiction in which we operate or seek to operate, which nrc subject to change at any time; and the degree ofcompetition in new markets and its effect on our ability to attract new customers and our ability to ad:tpt our infrastructure and systems to accollUllOdate our growth. Some ofthcse factors arc outside of our control. The failure to e;.l!cute oure"Jlansion strategy would adversely affect our ability to c:q~nnd our business and could mntcri3lly adversely affect our business, results ofoperations, financial condition and :~bi!ity to seJVice our debt obligations. Our al/owmu:ejor louulosses uud our accrual for tosses Ol/{(1(11/$ we process awl guaruutcejar ttl/ tmconsolidatcd tllfrd·partj' fender ure ouly esti11U1ies am/may /lot he adequate to fitiiJ• ab.wrb lom:s. We nDintain <~n aUow:~ncc for lo:tn losses for cstin'l3ted probable losses on our title loans. We also maintain an accrual for losses rel3ted to loans we process fornn unconsolidated third-party lender that we guarnntee, See "Item 7. Manogemr:nt ~Discussion and Analysis ofFillallciol Conditi011 ami Rc:sulls ofOpcratiom-Critical Accarmtil!g Policlc:.f" for factors considered by management in estimating the 111lowance for Joan losses and accrual for losses related to our unconsolidated third·party lender. These rcser\'es arc cstinmtes, and ifac!ua\ losses are greater than our reserves, our results ofoperations and finanei~l condition could be adversely affected. " Tahle orloutent~ Our busiuess and results ofaperatioiiS 1/UIJ' bl!. Uflversely «ffictc:d ljwe ure rmabfc Ia 111111/age our ;:rowtlleffictivefy. There can be no assurance that we will be able to continue to grow our business or that our current business, resJJ!!s of operations and fin3nti.11 condition will not suffer if we fail to pmdently n~1nage our gro\~1h. Failure to grow the business and generate estimated future h:vel.~ of cash flow could inhibit our ability to service our debt obligations. Ourc:q~ansion strategy, which contemplates growing our title loans receivable in eiliting stores, openinc new stores in existing markets and opening new stores in new markets, is subject to significant 0655 risks, Our current business and results of operations :md any futuro srowth depend upon a number offactors, including the ability to obtain and maintain financing to support these opportunities, the ability to hire, train and retain an adequate number ofqualified employees, the ability to obtilin nnd maintain any required govemment peunits and licenses, the abi~ly to successfully integrate ;my acquired operations as well as other fnetors, some of which arc oUiside of our control, such as the continuation offavorob!e regulatory and legislative environments. Further, e:-pansion Into additional states will increase our regulatory and !egltl risks. Regu!atOI)' and legal actions could divert management's attention away from eM!euti:ng our growth strotegy. The profitability of our current operations could suffer as management's attention is di\•erted toward our c:-.pansion plans. Ifwe are /lot .mccessjitl at entering new brtslucs:us or hromfeniJJC tire scope ofour existing product aud .rervicc offerings, we may uat achieve our expected growth rule or recoup our im•csmwnt, We may enter into new businesses that ore adj~cent or complementary to our e:>.i.sting businesses and that broaden the scope of our e:dsting Product and service offerings. We may not achieve our e:q~ected growth if we are not successful in these efforts. In addition, entering into new businesses and broadening the scope of our e:-isting product and service offerings may require significant up front e:o.penditurcs !hat we may not be able to recoup in the futuro. These efforts may also divert management's attention and c;qJose us to new risks and regulations which rroy have a material adverse effect on our business, results of operations, financial condition and ability to service our debt obligations. /11 certain .~tateJ; we re/;• on tilird parties to II IItke loans tf1 tlllrcu.~tonurs, and the loss of access to UltJ' ojtflese tfllrd partie~ could slgulflcontly it1cren.ff! our casts and change the way we operate in tltese states, In cenain states, particularly including Tel\!ls, we operate as a Credit Services Organization and therefore :ltT and security measures could fnilto prevent a disruption in the nvnilnbi~ly orperfonnance of our infomllltion systems. Any disruption in the availability or perfommnce of our info mullion systems could significt~ntly disrupt our operations and cause us to lose customers and revenue. Fut1hcr, a security breach of our information systems Could n!so interrupt or damage our operations or h:mn our reputation, We could be subject to liability if confidential customer information is misnppropriated from our information systems. Despite the implem:ntntion ofsignific:mt security m:nsures, our infonnation systems may still be vulnernble to physical break-ins, computer viruses, programming errors, employee misappropriation and attacks by third panics or similar disruptive problem>, which could ...-:quire us to incur significant e;-.pense to eliminate these problem> and address related data security concerns. We /lUI)' be mmblc to prtJtcct our prnprh.!tary tcc/uwfogy or keep up witfl tlrat 11jrmr competitors. The success of our business depends to a significant desrce upon tile protection ofour software and other proprietuY inteJJectuoJ property rights. We m.1y be unable to deter lnisappropriation ofour proprietary info1Tl111tion, detect unauthorized usc or take appropriate steps to enforce our imdlectunl property rights. In addition, competitors could, without violating our proprietary rights, develop tcehnolollies thot are as good as or better than our technology. Our failure to protect our software nnd other propriCt:!.t)! intellectual property rights or to develop technologies that are as strong as our competitors' could put us at a disadvantage to our competitors. Any such failures could have a material adverse effect on our business, prospects, results ofoperations, financinl condition nnd ability to service our debt obligations. Our business may .mffer ifour trademarks Qr .tcrvicc mnrks nre iJJjri11ged. We rely on trademarks and service marks to protect ourvan·ous brand names in our markets, Many ofthcsc trademarks ond scl'\·fcc marks have been il key part ofestablishing our business in the conununities in which we opcmte. We believe these trademarks and service tnurks have significant value nnd are imponnnt to the nurketing of our services. We cannot assure you that the steps we have taken or will take to protect our proprietary rights will be ndcqunte to prevent misnpproprintion of our rights or the use by others offeatures based upon, or other.viie sinilnr to, ours. Jn addition, nlthough we be~eve we hnve the ri_gilt to use our tradem.1rks and service marks, we cannot nssure you that our trademarks und service marks do not or will not violnte the proprictnry rights of others, thnt our tmdelll!lrks .!l.nd service marks will be upheld ifchallen{!ed or that we will not be prevented from using ourtmdenwks and service marks,any ofwhich occum:mccs conJd hannourbusincss. Adverse re11! cstrrte marketjluct:mtio11s could affect Qllt profits. We cumntly lease all ofour locations c;.x:cpt one. A significant rise in real est~te prices orreol property ta:-a::s could result in an increase in store lease costs as we open new locations nnd renew lenses forcJ>lsting locations. Any such increase, especially in Georgia, Tc~s. Alabama or Tennessee, could have a rnaterial adverse effect on onrbusincss, prospects, results of operations and financial condition. Our husiuess is seasonal, wllicll causes nur revenues to fluctuate and uwy adversely affect our ability tu ser.•lce our debt. Our business typically declines slightly in the first quaner as a result ofcustomers' receipt of tax refund checks. Demand for our services is generally greatest during the fourth quaner. This seasonality requires us to manage our cash flows over the course ofthc year. If the state or federal sovcmmcnt were to pursue economic stimulus actions or issue ltdditional tax refunds or tnxcrcdits :!.I other times during the ycnr, such actions could have a material adverse effect on our business, prospects, results ofopemtions and financial condition during those periods. Jf ourrevenues were to fall subst.imately $370.5 million of total debt outstanding. Subject to re~trictions in the Indenture we 'ttla}' incur additional indebtedness. Our substantial level of indebtedness could have important consequences to our bondholders and significant effects on our business, including the following: it may be more difficult for us to satisfY our financial obligations, including with respect to tlh! notes; our ability to obtain additional financing for working capital, capital expendilUres, strategic acquisitions or general corporate purposes may be impaired; we must use a substnntial portion of our cash flow from operations to pay imerest on the notes and our other indebtedness as well as to fund excess c~sh llow offers on the notes, which will reduce the funds available to use for opemtions and other purposes; our ability to fund a repurchase ofour outstanding senior secured notes upon the occurrence of a change of control of! he C'.omQilnv or other event as specified in the ~may be limited; our substantial level of indebtedness could place U$ nt a competitive disadvantage compared to our competitors that rnay h:tve proportionately less debt; our flc,jbiJity in pl~nning for, or reacting to, changes in our business and the indusuy in which we operate mny be limited; and our substanti~llevel ofindehtedness may make us more vulnerable to economic downturns and udverse developments in our business. We e;-.pcct to obtain the funds to pay ourc1>pcnses nnd repny our indebtedness primarily from our operations and, in the case ofour indebtedness, from n refinatlcing thereof. Our ability to meet our e;q>enscs and 111<1ke these payments therefore depends on our future perfomumce, whkh will be affected by fmancial, business, economic and other factors, nnny of which we cannot control. Our business may not generate sufficient cash llow from operations in the future, and our currently onticipated growth in revenue und c~sh flow may not be n:alizcd, either or both of which could result in our being unable to repny indebtedness, including the notes, or to fund other liquidity needs. If we do not have enou,gh funds, we may be required to refinance all or part of our then existing debt, seU assets or borrow more funds, which we may not be able to accomplish on tenns accept~ble to us, or at aU. Jn addition, thetenns of existing or fi.ume debt agreements moy restrict us from purnuing nny oftl1ese alternatives. Despite tmrcurrcut imlcbtctlllcss lcL•cl, we tnuf any ofour e.-.lstlug or jiuurc ~uh.tillinrirs IIUIJ' stilll1e able to fllcur substantially mare debt, wllich cau/lf cxacerbMe tlte ril·ks associated with our :mhstallfiallevemce. We and any ofour existing and future suhsirlimic~ mny be able to incur substantial additional indebtedness in the fnture. Although the terms of the hulctunre contain limitations on our abillly to incur addi!iono.l indebtedness, these restdctions arc subject to a number ofqualifications and e>a:eptions. lfwe incurnny additional indebtedness that ronks equally with the notes, the holders oftho:~t additional debt will be entitled to share ratably with the holders oflhc notes in nny proceeds distributed in connection with ony insolvency, liquidation, reorganization, dissolution or other winding up of the C'onmnnv, subject to nny collateml securing the notes. If new debt is added to our or ony ofour existing and fitture suhsjdinne~' current debt levels, the related risks that we now face could be eXDcerbated. ITEM 1 B. UNRESOLVED STAFF COfrlMENTS. None. 17 Ti!hlc of Content; ITEM2. PROPERTIFS. Our stores ~;encmlly range in size, from appro:li!Tllltely 1,800 to 2,,100 square feel. Most of our stores arc located in highly visible, accessible locations with ~rterial roadways that we believe have high daily traffic volume and high r;:oncentration of retail us em, typically with retnilers serving eomparnble customer bnses such as national auto parts and rcnl·to-own companies. We prefer our stores to be freestanding. single tenant buildings, but we also use retail strip shopping center stores, preferably on iln end unit or with a bay with high rand visibility, We believe that our stores provideD welcoming, peisonal environment for conducting our business .. All but one of our stores arc leased, with typical lease tenns of five years and two options to renewal the end ofthe lease. with an average gross monthly rent ofS3,SOO. Our !eases usually require thilt we pay aiiiTlllintenonce costs, insurance costs and property ta»::s. The following table shows the composition ofour store network at Dccemher~l 2012: Sl~re Coun1 AlabaiTlll 124 Arizona 62 Florido 2 Georgia 290 Illinois 48 Mississippi 3 Missouri 67 Nevada South Cnrolino Tennessee " 81 109 Te»!S 161 Virginia 62 Total 1,035 We believe that our facilities, equipment, furniture and fuiures are in good condition and well maintained and that our fucilities ~re sufficient to meet our present needs. ITEM3. LEGAL PROCEEDINGS. 0657  We nrc involved in a number ofat:tive lnwsuits, in.duding the legal proceeding discussed below as well as a numberofroutine litigation and administrntive proceedings arising in the ordinary course ofbusiness. Due to the uncertainty surrounding Ute litigation process, except for those tt1.1tters for which an accrual has been provided, we arc unable to reasonably estimate the probability ofan unfuvornble oulcome orthe range ofloss, if~ny, at this time in connection with these proceedings. While the outcome of many ofthese matters is currently not detenninable, we believe we ln1ve meritorious defenses to the claims in these proceedings and that the ultimate cost to resolve these matters will not have a materially adverse effect on our consolidated financial position, results ofoperations or cash flows. Ju.rtiu Jolmsou, ct a/ v. TltldftJ.t o[MISS(IIlrf, 11/c, (/lkla Mig11011 Norfolk, rt at v. TilltMa:>: ofMissouri, Juc.) On F~lml~rv 10 201 I, Mignon Norfolk filed a putative class action lawsuit in the Circuit Court of Jefferson County, Missouri against Titler..·la>::ofMissouri,Inc., or "TMM. "and n TMM District Manngcr. On Julv "'l7 "'JQ]'l, the nnmcd plaintiff changed from Mignon Norfolk to Justin Johnson. TI1ecomplaint alleges, among other things, that TMM failed to pay cerlnin employees overtime compensntion as required by Missouri !11w. The pl~intiffseeks, among otherthing:s, a judgment for an amount cqunlto plaintiff's unpaid compensation, as well as liquidated dam.1gcs. The litigation is currently in the discovery phase, and it is too early to detennine the likelihood of an unf.,vorable outcome or the ultimate liability, if any, resulting from this action, ITEM:4. J\.1INESAFEJYDISCLOSUIUS. Not applicable. 18 Tah1l!cutive Officer and President ofTMX Finance LLC, is the sole beneficial ownerofthe common stockofTMX Finance Holdings Inc., which owns all IOOofthe outstanding limited liability company interests in TMX Finance LLC. There is no established public trading market for common equity ofTMX Fin11nce Holdings Inc. orTMX Fin11nce LLC. For information about cash dividends paid by TMX Finance LLC for the past two fiscal years (including certnin restrictions that limit the p11yment of dividends), see "ltem 7. Managcme111 ',f Dlscu:rsion and Analysis ofF/nanclal Condition and Resu/Is ojOpermlons-Lfquidlly and Copflal Resourus." ITEM6.SEUi'£TED CONSOLIDATED FINANCIAL DATA. The following lilble sets forth se!et:ted historicul consolidated fmoncinl data for the C'nnmanv as ofond for the fiscal years ended Decemtl!'r :II 201J, :m1 l, 2illQ, 2002 and ZlJ.!la. The fimmci~linformation for the years ended Dgcs:mh,•r ill "'lQJ"'l lQ.U and 2Qill, and as ofPcq·n~Htf :It 'l01' and 2!!l.L has been derived from our audited finnncinl statemc:nts included elsewhere in this report. Tite financial infom1ntion for the yems ended Decemhcr l I '009 and m, flnd as ofDccemher 31 '010 '009, and 200R, has been derived from our audited finoncio[ statements not included in this report. The historical selected financial information may not be indicative of our future performance 11nd should be read in conjunction with the information contained in "Item 7. A.fanagtment S Discussio11 and Analysis o[Fii/OIIcfal Condifton and Resulu· ofOperallon.~" and the consolidated fmancial statements and related notes in "/!em 8. Fimmcfal Statemrm/s oml Supplementary Data." Ye~r fnded Decemb~r Jl. in rhous:>nds 2012 21HI 2010 2009 2008 Stnlcments of Income Data: Interest and fcc income s 656,755 s 505,865 s 389,449 s 312,022 s 262,635 Provision forloan losses (144,749) {99,54:2} (63,932) (51.184) (45.3\8) Net interest and fee income 512,006 406,323 325,517 260,838 217,317 Costs, expenses nnd other: Salaries and related expenses 201,899 159,201 116,090 90,234 78,046 Occupancy costs 64,727 48,556 34,939 33,366 32,698 Depreciation ond nmortiz.:uion (I) 17,210 13,813 10,353 9,0'17 8,670 Advertising 22,217 15,512 10,243 6,206 13.242 Other operuting and administrative e:q:!enses 77,469 58,6% 41,407 33,720 30,345 Interest e:>:pense. net (2) 49,293 42,610 26,251 11,674 13,286 Total e:-.pcnses 432,825 338,388 239.283 \84,227 176,287 Income from continuing opemtions before reorganimtion items 79,181 67,935 86,234 76,6\1 4I.030 Reorganimlion items (3) 4,548 6,655 Income before discontinued operations 79,!81 67,935 81,686 69,956 41,03[) (Loss) gain from discontinued operations (4) 145 (2,1841 Net income 79,181 67,935 81,686 70,101 38,846 Net income (loss) <~ttn'butable to noncontrolling interests (1,627) (1,906) (4.031) (1.977) Net income allributable to member's equity s 79,162 " s 69,562 s 83,592 s 74,132 s 40,823 19 Tnh!e ofC'nntent~ Y~~r Ended December Jl. in lhauuntls ~012 2011 2010 201)9 2008 Non-GAAP f1nancial Measures (5) (unaudited): 0658 Net income s 79,181 s 67,935 s 81,686 s 70,101 s 38,846 Interest e;..pense, net 49,293 42,610 26,251 11,674 13,286 Taxes 948 1,917 756 13 Depreciation and amonization 17,210 "' 13,813 10,353 9,027 8,999 EB!TDA s 146,632 s 124,996 s !20,207 s 9!,558 s 61,144 n~ccrnb~rJl. In lhouu.ndl 2tlll lOll 2010 200~ 1008 Dal:mce Sheet Dnto: Cash and cash equivalents s 90,794 s 38,141 s 53,585 s 27,008 s 10,18& Title loans receivable 577,172 490,093 360,325 282,917 232,450 Allowance for loan losses l94,561) (73,103) (52,0-18) (40,280) (29,885) Unamortized Joan origination costs 3,7L6 2829 2,139 1,160 1,251 Title loans receivable, net 486,327 419,819 310,416 243,797 203,816 Tota1assets 767,783 604,748 470,331 338,763 283,648 Total debt 395,454 346,054 273,401 178,353 193,884 Total liabilities 456,795 408,410 329,195 207,489 208,550 Member's ~:quity 318,365 202,484 145,876 133,198 73,904 Member's equity and noncontrolling interests 310,988 196,338 141,136 131,274 75,098 Statement of Cash FloiVD:tla: Net cash provided by operating acti\'ities s 222,321 s 175,159 176,211 s 144,225 s 105,208 Net cash used in investing activities (254,528) (246,453) ' (154,651) (95,%4) (75,(20) Net cosh provided by (used in) financing activities 84,860 55,850 5,017 (31,441) (28,120) (I) Represents de,neciation and an10rtirntion ofproperty and equipment. (2) Includes amortization of debt issuance costs and discount/premium of$3,481, 53,633, S2,035, $1,210 and S3,144 for the fi.~cal years ended December J 1 2012, 2011, 2010, 2009 and 2008, respectively. (3) Reorganization items rcfc::rto c:qlenses incurred in connection with our reorganization pursuant to Otapter 11 of the U.S. Bankruptcy Code. See Note 16 of Notes to Consolidated Financial Stll\cmcnts in "/lcm8. FlnarJcia/ Stalemcmsand Supplemelllazy Data." These items include professional fees and interest earned on accumulated cash resulting from the Otapter ll proceeding. (4) References to discontinued operations relate to payday~1ending ~uh~irliprie.o: that were discontinued in April2008 and had no activity in the fiscal years ended necemher 31. 2012, 2011 or20IO. (5) We disclose our earnings before interest e;..pense, t~.>a!s, depreciation nnd amortization, or "EBJTDA," which is a "nori·GtlAP financial mcm'llfc" as defined underthe niles of the SEC. 11 is intended as a supplemental nlllosure of ourpcrfoml.llncc that is not required hy, or presented in llcconlance with, U.S. generally accepted accounting principles, or "GAAP." We present EBITDA because we believe that, when viewed with the Comrmnv's Gt\AP results <:~nd the accompanying reconciliation, EB1TDA provides usefulinfonnation about our operating perfonn:tnce and period-over·period growth, as well as information that is helpful for evaluating the operating performance of our core business without regard to potential disruptions. AdditionaUy, we believe that EBITDA is conunonly used by securities analysts, investors and other interested ponies in the evaluation of high yield issuers, mmy of which present EBITDA wl1en reporting their results. However, EBITDA should not be considered as an alternative to income from continuing opemtions or any otherperfonnanee measure derived in accordance with GAAP or as an alternative to cash flows from operating activities or any other liquidity measure deri\'ed in accordance with GAAP. Our presentation ofEBlTDA should no~ be construed to imply that our future results will be unaffected by unusual or nonrecurring items. 20 Inh!e of Contents ITEM7.l\-~AGEMENT'S DISClli3SION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 17us ,rection i.1· intemled w pro1'ide informaTIOn that will assm you in understanding ourconsalldattulfinancial staleme//ls,lhe changl!s fn tl1osl!jinancial s/a/erllf!/1/sfrom pt:Yfad /o pl!rlod and the prlmaryfoctors comributlng to thos~ changes. 711cfo/lawlng discu.ulun and o11o~mis shouhf be read in conjmrclion wllll our con,(o/fdat~djinaucial slatemcJJ/sand relatl!d note.~ ill "/Iem 8. Ftnancia/ S!atemel/ls and Supplementary Dala." In addllton 10 IIWorrcaljinanctal information, the following dtscusston and onal)•sfs conlolnsforward-laoklng staremems thai rejlllcl our pfan.r, es/imotcsaud beliefs h111 that also Involve risks and uncertaimics. Our aclual rcsulls could diifor materiallyfrom those discussl!d inthefonvard.Jooklng stalemcl!ls. Please sec "Fon1·ard-Laoklug Srateme/lfs "and "Item lA. Risk Factars"for discussions oj1lre uncerlainllt:s, risks and assumptions assoclart:d wilh IIII.!S<' sroremcms. Comp:my 0\eniew We nre a pri11ately-owned automobile tille~lending compnny with 1,035 company-o\'oned stores in 12 stntes as of December 3! 20P. We se!Ve individuals who gencrnlly hove linllted access to consumer credit from banks, thrift institutions, credit card lenders and other traditionol sources of consumer credit. We provide our cus!Oillll~ with access to loans secured by a lien on tht: custorrn:r.;' automobiles while ~Uowing the customers 10 retain usc oft he vehicles during the term oft he loans. As ofDecemher 31 2012, we served more than 470,000 ens tome~ and had appro.ri!rotely SS77.2 million in title loans recei\'able. We belie\'e tllllt we are the largest automobile title lender in the United States based on title !arms receivable. Our business pro\'ides a simple, quick and confidential way for consumers to ffii!Ct their liquidity needs, We offer tirle loans in amounts ranging from 5100 to SS,OOO at rates thnl we belie11e, based on 111.11ker research, are up to 50% less th~n those offered by other comparable title lenders, with ~~~ average Joan size ofappro,_j1n.1tely S\,300. Our til it: loans do not impact our customers' credit ratings as we do not ntn credit checks on ourTitlelvlaxond TitleBuck~ customers, and we do not make negative credit reports if we are un~blc to collect loan balances. We conduct business in Tc~s and cenain other stales through wholly..owned suhsitliaries, each of which is registered in the applicable state as a Credit Services Organization, or "CSO. "These CSOs have entered into credit services orgnnization agreements,or "CSOAgrcr:mcll/s, "with third·p~rty lenders, or the "CSOLenders, ''that make the loans to our customers. The CSO Agreements govern the temlS by which we perfom1 servicing functions and refer customers to the CSO Lenders for a possible e;o.tension of a Joan. We process loan applications and conWiitto rein1burse the CSO Lenders for any loans or related fees that are not collected from those customers. Our gro11th strategy includes increasing our title loans receivable in oure,_jsting stores, opening new stores in existing m;Jrkets and eJqJanding our store base into new markets with fnvo111blc cha111ctcristics. We seck to deYclop and 1n1intain a large presence in e11ch of the rruukets in which we opcrntc. Our strntegy hns enabled consistent gm\11h throughoutl.!!.!l. Conmnnv's history thill has included fluctuating market conditions. 0659  During the year ended [)cccmhcr 1! ?Oil we continued to execute our growth strategy and opened or acquired 281new stores while closing only two stores, Tite new stores opened include 84 in Te~Gls, 49 in Arizona, 36 in Vrrginia and 62 in Georgia (48 ofwhich were opened under the InstaLoan brand). For the year ended December 11 2012 the (nnmnnv lind revenues ofS656.8million, an increase ofS150.911li!lion or29.8%, and net income ofS79.2million, an increase ofSII.3 million or 16.6%, from Jhe corresponding results for the year ended Dt>cemhcr l! l!llJ.. 11te increase in net income for2012 compared to 2011 was the result ofstrong same-store perfonn:mce and several of our newer stores becomins profitable, partioUy offset by costs related to the oddition ofthe new stores discussed above and an increase in our net eharge·offrntes. 11 TnhleofCnntent.~ Kty Perform:mce lntlicators We measure ourperfomlllnce through certain key perfommnce indicator.;, or "KP/s, "that drive our revenue and profitability. OUr KPis include total orisinations, average origimnions per store, total title loans receivable balance, average receivable balance per store and net cbnrge-offrate ilS il·percent ofag~;regilte origilmtions over the period. We influence our KPls through operational e~cution, infonnation systems and proper incentives for our field-level employees. E"lemaUy, our KPls are affected by competition and macroeconomic conditions, including availability of credit, consumer confidence, consumer spending habits, unemploy100nt ilnd state ond federnl regulations. The following table reflects ourresults as measured by these KPis: Y~ar F.ndell December ll, (dellan In thousands! 2012 lOll 201(1 Originations s 794,159 s 6..77,485 s 441,212 Avernge originations per store 910 930 785 Total title loans receivable 577,172 490,093 360,325 A vernge title loans receivable per store 662 Net ch11rge-offs as a percent oforigiMtions 15.1% "" 12.3% 611 11.8% In :!ddition, we closely monitorsame~store interest and fee income. The C'(lmnnnv considers interest and fee income from stores open more than l3 months in its caleul:uion of same~ store interest and fee inco100. 11te following sunvnarizes the C'onm~nv's same-store interest and fee income for the fiscal years ended Decen1ho;r :.1 2Dt2,1!l.Ll and lQ!..Q: Year £nd~d Dl!temb~r ll. {dotlnrs in !hous:mds} lOll !011 2010 Interest and fee income s 552,692 s 483,285 s 385,160 Interest and fee income growth 14.4% 25.3% 29.1% Number of stores open more than l3months 6!1 554 540 22 Tnh!c ofComenl~ Results ofOJlCralions Strue Sofl11'nre System In May 2012,. our new proprietary store software system, which is used in approximately 2.1.4% ofour stores as of December:"! 1 2012, incurred signific<~nl service outages. T!JCSC outages caused us to rc\•iew the status oft he system as a long-tennsolution for our existing and future stores. Based on this review, we initially detennined and announced that we would d1'scontinue furl her development of the systetn and write·o rftbe relllted capitah'zed costs, However, a fler the service outages in M:sy, we stnbilizcd the pla.tfonn and obtained vendor quotes to correcttechnicnl deficiencies. Bnsed on this additional infonnation, we decided to reevaluate whether we will continue developmem ofthe proprietary system or purclwse a new p:~cknged softw11re system to meet our future needs. This evaluation remains on-going. We dctennined that we aru not required 10 record an impaim~ent charge related to our proprietary store software during the year ended Deccn~1er >I ?O!"l becouse the undiscoumed future cash flows from the asset group are greater than the canyin!:l amount. However, depending on the outcome of our full evalu:llion, it is reasonably possible !hilt we could decide to implement a different store soil ware system and discontinue the development ofour proprietal)' systent This decision could result in a one~time, non-cash expense thnt could runge from S13.0 nullion to SIS.O million. }'Cor Emlctl Dt!cemher 11 2()12 Cvmpurcd 11) l~11r Enrfctl nccemher H 2flll Interest and fee income Interest and fee income was 5656.8 million for 2012 compared to SS05.9 million for2011. TI1c increase of$150.9 million, or 29.8%, was primarily due to the addition ofa significant number of new stores over the las\ 12 months and strong same-store perfoffilllnce, !merest illld fee income from stores open less than 13 months increased $81.5 in 2012 compllrcd to 2011 and accounted for 54% of the total increilse in 2012. Same•store interest and fee income increased S69.4 million, or 14.4%, for 2012 compared to 2011. The ('(l!Jmnm• considers interest a11d fee income from stores open more than 13 months in its calculation ofsome-store interest and fee income. Pro\ision for lo:m losses Our provision for loan losses was 5144.7 million for 2012 compared to S99.S million for 2011, an increose ofS4S.2 million, or 45.4%, The provision for loan losses is based on loan loss experience, contractual delinquency oftitle loans rcceivilble, economic and other qualitative considerations and ~Mnagcmcnt's judgment. Approximately Sl2.0 million ofthe increase relates to a 26,6% increase in loan originations, and the remnining increase of$33.2 million was due to un increase in our loan loss charge-offrate. Net cht~rt;e-offs as a percent of originations incn:ased to 1:5.1% for2012 from 12.3% for20J I. The net chargc-offs and originations include loans made by our CSO Lender.; that we guarantee. Our net charge-off rule hos increased during the l~st twelve months, due primarily to the nddition of a significant number of new stores and rapid loan growth. During this period, we have worked to m.1nage ourcharge-offs in the face of the significant incNil$C in new stores and loan volume ilnd we will continue to monitor net chnrge--offmtes and make udjustrnents as necessary to IMxilnizc loan portfolio growth nnd long-tem1 profitability. Costs, expenses nnd other Salarie.~ and related t•xpenscl· Salaries ond related e.wenscs were S201.9 million for 2012 compared to Sl59.2 million for 2011. This represents an increase ofS42.7million, or 26.8%, This increase was mostly due to growth-rel~ted increases in hcadcount, primarily rei :\led to operational personnel necessruy to scrvke the higher volume of loans and as n result of opening new stores. Also contributing to the increase was higher corpomte headcount, primarily in the areas of operations, construction and real estate. In addition, n significant portion ofour operation~ eflllloyees' compensation is incentive-based, which increased SJ2.1 million due to higherprofitabilhy ot the store, district and regional levels. 0660 Occupancy costs Occupancy costs were S64.7 million for2012 compared to $48.6 million for2011. This increase ofS16. 1 million, or 33.1%, was primarily due to increases in rent, utilities, and nuintenance costs BSsociatcd with opening new stores as weU as expanding corporate office space. D~:prec/atlon ami amorlizaJion Depredation and amollization for2012 was S17.2 nullinn con~ared to Sll&million for2011 The increase ofS3.4 million,or24.6%, was primarily attnbutableto remodeling and relocating stores, fitting out new stores and e;o,panding corporntc office sp11ce. 23 Tnh!e ofConrem~ Advertising expense for 2012 was $22.2 miUion compared to Sl5.5 million for2011. The increase ofS6.7 million, or 43.2%, wa~ prim:uily due to increased intemet advertising and online lead generntion rdated to ourupgrnded we~>.~ite. Othrr opcrallng and admlnisrra/lve e.r:penses Otheropernting and administrative e:-.penses for 2012 were S77.5 miUion compared to $58.7 million for 2011. TI1e increase ofS\8.8 million, or 32.0"/c, was prinurily attn'hutable to growth- related increases in costs associated \\ith collatefill collection, technology services and office supplies and postage. !meres/ e.{pem·e, net, Including tJmorllzallan ofdebt issuanr:e costs Interest expense, net, including: amortization ofdebt issuance costs, was $49.3 million for2012 compi!red to $42.6 million for2011. This represents an increase of$6.7 million, or 15.1%. During 2012, we incurred S4.4 million ofi!ddition<~l interest compared to 2011 on S60.0 million aggregate principal amount ofour 13,25% senior secured notes issued on Ju]\' 22 2011. We also incurred interest ofSJ.3 miUion in the second halfof2012 on our $25.0 million revolving line of credit obtained on June 27 2012. Also contributing to the increase in interest e){Jcnses was an increase in notes payable issued by TMXFinance LLCand our consolidated CSO U:nders. We e>.pect interest e>.pensc to increose in the future relative to prior periods due to the higher average out5tandillg debt balance. Net income As a result of the above factors, net income was $79.2 million for 2012, an increase of 16.6% over net income ofS67.9 miUion for 20!1. H:nr Endr!d IJN'(!/11h(•r 31 }Ill 1 Compared to }t-(lf Ended Pf!wmhor 31 2fl11) Interest and fcc income Interest and fee income was S505.9 million for 2011 compared to $389.4 million for2010. The increase of$116.5 million, or29.9%, is primarily due to strong s~me•store performance as customers turned more to title l~nding because ofa contraction of credit from other sources. Snmc·store interest and fee income increased SI01.2 million, or26.3%, for the year ended Deeemher ~ 1 'Oil compared to the snme period in 2010. The C'onmnuv considers interest and fee income from stores open more than 13 months in its calculation ofsnme-store interest and fee income. Interest and fee income also was higher in the year ended Decem her J I 201 I due to an increase ofappro1cimately SIS.3 million from 5I ores open less thon 13 months. The increase from stores open less than 13 months accounted for 13% ofthe total increase in interest and fee income. Pro\ision for lo:m losn~s Our provision for loan losses was S99.Smi.llion for20ll compared to S63.9ml1lion for2010. The provi$ion increased S35.6million,or 55.7%. Appro11imately SIS.Omi!lion ofthc increase rel~testo the 29.9'% increase in loan originations, and the renmining increase ofS20.6 million was due to an increase in our ]oat! loss charge-off rate. Net charge-offs as a percent of originations increased to 12.3% for the year ended Decemhcr Jl 201 1 from 11.8"/, for the comparable period in 20!0. The increase in our net clmrgc-offrate was a result ofa shin toward growth in our store management incentive pl~ns, which led to an increase in loan originations. Costs, ex~nses ::mdoth~r Saforl~:s and related e.r:prm.ws Salaries and related e>.penses were S\59.2 million for 2011 con~ared to Sll6.1 million for 2010. This represents an increase ofS43.1 million, or 37.1%. Approximately S24.l million ofthe increase was due to growth-related increases in headcount, primarily related to opemtional per50nnelnecessmy to service the higher volume: ofloans and as a result of opening new stores. Also contnbuting to the increl!se was h1'gher CO!Jlornte headcount, primanly in the an: as ofinfolltllltion technology, recruiting nnd real estate and construction. In addition, a significant portion ofonroperntions employees' compensation is incenti\.'e-b~sed, which increa~ed S!8.9 million due to higher profitabilit)' at the store, district and regional levels. Occupancp casf.v Occupancy costs were 548.6 million for 2011 compared to S3-1.9 million for2010. This incrense of$13.7 million, or 39.3'Vo, was primarily due to increases in rent, Utilities, and maimenance costs associated with opening new stores as well as expanding COJJlO!iltC office space. Deprcciarfan ancl omorllzalfan Depreciation ;md amorti~tion for2011 was S13.8 million compared to $10.4 million for2010. Tile increase of$3.4 million.or32.7%, was primarily autibutab!e to remodeling and n:loc;uing stores, filling out new stores, e>.pl'lnding corpomte office space and the acquisition ofan aircraft in the four1h quarter of2010. Also contributing to the increase w;u dcprecintion e:q:Jen5e related to an upgmde to our proprietary lor~n system, which was pl11ced in service in the 5ccond quarter of2011. Ad!•erlislllg Advertising e>.pensc for2011 wllS SlS.S million compared to S\0.2 million for2010. The increase of$5,3 million, or 52.0%, WllS primarily clue IO incrcnsed television odvertising costs in 0661 2011 related to airtime for our "shorl on cttsh" marketing cnmpnisn. Otlu:roperallng and udmlnlstratlvc expc11sr:.s Other operating nnd administrative expenses for 2011 were SSS.7 million compared to S41.4 million for 2010. The S17.3 million increase was primarily driven by growth-related increases in costs associated with recruiting and relocation, collateral collection, accounting and legal services, tmvel, <~nd office supplies and postage. /lit.I:Ccds increAses in accounts payable and accrued eXpenses. G-owth in working capital is driven by dem:md forourlonn products and is funded on a near-tenn basis througlt operating cash flows without the need for reliance on other sources. Long-tem1 cnpitalnecds are managed by assessing the growth capital needs oft h.:; Compmw and bnlancing those needs against the available ill\em a] and e>J:emnl capital resources. Long-temt capita! needs have historically been fimded through credit facilities and issuances ofdebt securities. We m.1nnge the risk that we may not be able to refinance our debt securities through propertiming ofrefinaneing trnnsactions nhead of scheduled maturities and, to a Jesser c:.tcnt, as market conditions pcmtit. Our principal sources ofnear-tcnnliquidity are cash on hand, working capital, cash flows from operntions and borrowings under our new $25.0 million secured revolving credit facility described below. Cash and cash equivalents were $90.8 ntillion at D.:;cemhcr31 20\"1 as compared to $38,1 million at n~cl'mher 3\ 2011. In June 2010 and July 2011, we issued $250.0 million and $60,0 million, respectively, of senior secured notes due 2015, These senior secured notes, or "the Notc.f, "were offered only to qualified institutional buyers pursuant to Rule 144A under Ute Securities Act of 1933, as amended, or the "Sccllrl/lc.tAct," and to non~U.S. persons olllside of the United States in compliance with RegulMion Sunder the Securities Act. The inclenture governing our Notes, or the "lmiNtture "lm.its ourabiUty to incur additional indebtedness. Howevar, we were pcnnittcd to obtain 01 S2S.O million seniorseeured revolving loan facility that is equal in priority with the Notes. ln June 2.012., we entered into a crtdit agreement, or the "Cretl/1 Agreement,'' to obtain a senior s~ured revolving credit facility of up to S25',0 million, or the "Rcvu/vlug Crcdl/ Facility," that matures hme 15 "0!;. Subject to ccnain exceptions, the obligations under the Revolving Credit Facility are fill\y and unconditionally guarnutced by TMX Finance LLC, TitleMn:< Finance Corporntion and eDch oftheir existing and future donlt:stic suhsiriinries. The Revolving Credit Facility and the guarantees rank equal in right of payment with the Notes. The Credit Agreenx:nt contains certain covenants thnt are subsHmtially similar to those in the~. l11e Credit Agreement also contnins a financial covenant that requires the maintenance ofa minimum earnings to fixed charge ratio of2:1. 'fiLe hulentm"e and Credit Agreement permit us to incur additional debt as long as the new debt does not cause us to m1intain less than a 3:1 earnings to fl»!d charge ratio, as defined in the~.ln addition, ifoureamings to fL'I'I!d charge r.uio is below 3:1, we are permitted to incur up to SJO.O million of additional indebtedness and an incremental S25.0million of guarantees underourCSO Agreements. As ofDecemhcr31 20t~. oureamings to fi.~d cl!arge ratio wt~s below 3:1. We may seek to draw on the additional permitted sources ofborrowing in the foreseeable future to continue to facilitate our srowth strategy. For n description ofour outstanding borrowings, see "-Oilier lndcbt~:d/lcss." Additional covenants in the lndenHrre and Credit Agreement restrict, among other things, oura\Jility to dispose of assets, incur guarantee obligations, pr~pay other indebtedness, make dividends and other restricted payments, create liens, make equity or debt investments, m1ke acquisitions, modify tenm ofthe lnd!:nture, engage in mergers or consolidations, change the business we conduct, engage in certain trnns~ctions with affiliates and make distn'butions to rhe Sole Shareholder. Such restrictions, together with our highl~·Jeveragcd nature, could limit our ability to respond to changing market conditions, fund our capital spending program, provide for une~ected capital investments or take advantage ofbusiness opportunities. We are in compliance with the covenants in the Indenture as ofD«cemher 31 :W12. The~ requires us to maintain an cantings to fi;\'ed chargerntio above 3:1 for us to incur additional indebtedness, including the issuance ofsuarnntees under our CSO Agreements. We do not anticiputc 11 significant decline in demand for our products and services, but any such decline or other uneXpected changes in financial' condition could et~use our earnings to fixed charse ratio to remain below 3:1 for an e~ended period oft~. If we are unable to incur additional indebtedness for sro\\1h in our CSO operations, our net income may decrease due to impuimlt:nt of assets and less revenue from CSO operations, which could adversely affect our ability to obtain new credit under favorable temiS. To the e>J:ent that we e."Perience shon~tcrm or long-term funding disruptions, we hnve the ability to address these risks through various menns, including a.djustn\Cnts to short-rennlending to customers. reductions in capital spending, reductions in e>.penses and potential equity contnlmtions from our Parent, all of which could be e;,pected to generate additionnlliquidity. To the extent permitted by the Indenture and Credit Agreement, we e)ilect to make periodic distributions to our Parent in nmounls Sltfficient lo pay some or all ofthe taxes due on the ~·s items ofincome, deductions, losses and credits whi~h ha\'C been aUo~ated for reporting on the Sole Shareholder's income taxretum. We may also make distnbutions to our Parent in addition to those required for personal income taxes. Total distn1mtions were approximately S23.3 million, S!3.0 million and S7S.4 million for the years ended n~ce!llher::; I 2012, 2011 and 1Qill, respectively. The 2012 amount includes distributions ofappro>.lnmtcly SO.S million by our consolidated CSO Lenders. The 2011 amount includes a noncash distribution of appro:.irnate\y SQ.3 million related to leasehold improvements in store location properties sold Uy TY Investments, LLC, which is owned by the Sole Shar.:;holder. See "Item 13. Certain Relationships and Related Transactions, llnd Director Independence-Real Estate Leases. We anticipate making distnbutions to the Parent for estimated inconlt: ta~s for 2012 totaling approximately $23.0 to S26.0 nullion. At Decernher 3t '1()12, 26 Thh1e of\on[<;og the availability ofpcmritted distnbutions for purposes other than estimated income taxpnymcnts was approximately $5.0 million (calculated net oftm estimate for income tl'l)o;I!S). 0662  The .ln!kn.!llr!l requires us, in the first quarter ofeach ye~r. to tn!lke "excess cas/! flow offerl·" (as defined in the~ to all holder5 ofNotes to purehase the maximum principal amount ofNotes that may be purchased with the Jesser ofS3D.D million or 75% of our excess cash flow (as defined in the l!!d~!!!!!I!<) forlhe applicable fiscal year. We made t!n excess cash flow offer in March 2012 at 102% oft he principal amount oft he Notes, but no holders of the Notes accepted the offer. We will make another e;o:;ess cash flow offer in March 1013 at 102% qf the principnl amount oflhe notes. An investment banking firm 111.1kes a market for our Notes and the volume oftrnnsactions is relatively smtll. Historically, the market price for our Notes based on the limited tmding that occurs has been well above the price we must offer in the excess cash flow offer. Therefore, we do not e>-pect a significant amount of cash to be used to fund the 2013 excess cash flow offer. In May 2010,\he IRS initiated an C).imately S0.9 million in 2011 for agreed adjustments related to the IRS e;.anllnation. We successfully contested other proposed adjustments, :md tl1e eN~.mination was closed in September2012. In November20l0, we acquired an aircraft for S\7.5 nul !ion that satisfied the requirements ofSection 1031 of the llltcmal Revenue Code to complete the like-kind e:-::h~nge for an aircraft we sold in May 2010. The purchase oftl1e aircraft was fimded by notes payable to the Sole Shareholder. In February 2011, tl~escnotes were refinanced into one note payable to the Sole Shareholder with a principal balance ofSI7.4 million bearing interest at 10%. In December201J, this note was refinanced into two notes payable to the Sole Shareholder. As of Decernher 31 2012, these notes have principii! balances ofS11.4 million and S5.4million and bear interest at 5.12% :md 10%, respectively. See "item 13. Certain Rdationshlps and Refa1cd Tnmsoclfolls, ami Director Judi!pendel/ce-AirpfaJie Paymems." In July 2012, the Sole Shareholder OJ;~ de nn equity contribution ofS14.0 million to the Cornn:mv. ln November 2012, the Purent maUe nn equil)' contnbution ofS44.8 million to 11!£ Cnlllnnny. The November 2012 contribution was funded by proceeds from the sale ofStOO million of 11.0% PIK Notes due Octo her 15 2015 or the ''PIK Notes," by the Parem to unrelated pnrties. Under the tenns ofthe indenture goveming the PIK Notes, interest on the PIK Notes is pay~blc in cash to the e~ent dismbutions nre nvnilablc under the terms of the~ governing 1he Commmv's Notes. If distributions are nOIJJemlitted under the tenns oft he itldcnum; governing the ('omnrmv's Notes, the Parent nny issue additional PIK notes in a principal amount to satisf)' the interest due. Distributions fromth¢ Cnnmnpv to the Parent, when pennilted, will pro\'idc the primary means for the Parent to make any cash interest payments on the PlK Notes. The ma»mum potential amount of dismbutions for purposes of funding the Pareut's Interest payments is Sli.O million for each of the years ending December 31 2013, ~and2!lJi. Cuslljlowsjrom operotiug activities Net cash provided by opemting activities was S'l.22.3 million for2012 compared to S175.2 million for 2011. The increase of$47.1 million, or 26.9%, wM due to an Sll.3 million increase in net income, as well os a S35.8 million incre~se in adjustn'lents to reconcile nc! income to cash provided by operating activities. The incre~se in odjustmenls lo reconcile net income to cash provided by opernting activities was primarily driven by a S45.2 million increase in the prevision for loan losses, whicl1 resulted from increased demand for our loan products and an increase in our net chnrge-o!Trate, :~s well as :1 S3.4 million increase in depreciation and amonizntion e~ense. These increases were partially offset by decreases in cosh from changes in other assets and accounts payable. The decrease in Cllsh from chnnges in other assets was primarily attribut.penses. The decrease in cush from changes in accounts pllyoble wns due to timing of payments. Cusltflam.penditures and a $5.3 million incrense in net title lor~n originations. The increase in capital expenditures w~s related to ongoing projects to upgrnde our technology and to ltli\nagc our store ponfollo through remodels or movement oflocntions, fitting out new stores and installing new si{l:nS. These increases were partially offset by SB.O million ofcash paid for acquisitions durinl;l20ll. Casltf/ows jrumjluuuciug uctMtles Net cash pro\'ided by financing activities for 2012 was S84.9mi11ion compared to $55.9 million for 2011. The increase ofS29.0 million, or SUI%, was primarily the result ofpro~eds of SSS.S million from equily contnbutions and S25.0 nullion from the 27 Revolving Credit Facility in 2012 compared with proceeds ofS64.2 million from the Notes issued in 2011. Also contributing to the increase in cash provided by financing nctivities was n decrease ofSJl.S million in repayments of notes payable i!nd capital leases. These increases were partially offset by a St0.6 million increase in cash used for distributions. Other Indebtedness As ofDeccmher J I. 10J?, we hnve S57.0 million ofnotes payable in the D£J:lregllte, consistin1; of one unsecured note pi!yable to ~bank, three unsecured notes payable to other unrelated entities, three unsecured notes payable to the Sole Shareholder and several notes payable to third parties issued by our two consolidated CSO Lenders. The note payable to ~bank and the three notes paynble to the Sole Shnreholder nrc pnyable by Avi~tion. The note payable to a bank has a principal balance ofS0.4 million as of Dec!.Tier 433,225 s 41,075 s 41,015 s 351,075 s s s 31,%6 2,535 2,535 26,896 13,400 13,004 47 47 47 255 26,620 26,620 29,264 2,771 3,340 11.317 11,836 3,105 261 267 272 m 283 1,745 206,998 46,333 41,862 27,741 17,806 37,217 744,57& s 132,599 s 89,126 s 39,S'QJ s 18,344 s 38,962 (I) The ln.r:css cJ:ess cash flow payments as the amounts, if any, are not presently detcminable. Seasonality Our business is seasonal due to fluctuating: demand for our title loans during the year. Historically, we have ~erienced our highest demand in the founl1 quancr of each fiscal year, with approximately 30% of our annual originations occurring in this period. Also, we have historically e:-.petieneed a reduction of9% to IS% in our title loans receh•able in the fmt quanerof each fiscal year, primarily associ:ned with our customers' receipts oftnxrefi.md checks. Accordingly, we typicnlly e:q>ericnce a higher use ofeash in rhe founh quarter while genernting more cash in the first quarter(e:~t:lusive of any other capital usage). Due to the seasonality ofour business, results ofopcmtions for any fscalqunner :~re not necessarily indicative ofthe results of operations that may be achieved for the full ftscal year or;my future period. Critic:Jl Accountinc: Policies The preparation oflh~ C'ornn:nrv's fmancial statements requires management to make estimates, assutnptions mtd judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the coiiSotidated financial statements and the reponed amounts of revenues and expenses during the reporting periods. Manogement bases its estimates on historical experience, empirical data and various assumptions thai are believed to lie reaso1111ble under the circumstances, the results of which form the basis for making judgments about the call)'ing values of assets and liabilities. Actual results may differ using different estimates or under different assumptions or conditions. l\·lanagemcnt believes the following critical accounting policies affect ils more sinnifitalll estimates, assumptions andjudgmcnts used in the preparntion of its consolidated financial Sllltements. The development and selection ofthese cJitical accounting policies and the related sumn>Jries of them below have been reviewed with the Board ofl\·lanager.s ofrhe Comrwt)v A//rmmrce far Lmm La.\"Sr:s and Accmal far CSO Lcmlr:r !.mm l.assr:.~ The roost significant estimates made in the preparation of our accompanying consolidMed financial statements are the detemliuation of an allowance for Joan lo~scs and an aecruol for losses related to loans we process for our unconsolidated CSO U:nder. The allowance for loan losses and accrual for lo11n losses related 10 our unconsolidated CSO Lender represent m.1nagemem's estimate oflosses on title leans receivable and loons processed for our unconsolidated CSO Lender that we suarantee under CSO Agreements. These cstinutes are based on an nnalytica] model tlmt contemplates .several factors, including historical delinquencies, charge-offs ~nd rccoVcl)' rates, Additionnl factors, such as lcngdt oftime stores have been open in a state, relative mix: of new stores within a state and other relevant factors, are evaluated on a periodic basis to determine tlte adequacy oft he reserve. Based on the results ofthis analytical model, we record an allowance for loan losses on our consolidated balance shcets.ln addition, we record a liability for estimated losses related to the guarnnteed loans owned by our unconsolidated CSO Lender in nccO\mts payable and accnred C)lj)enses on our consolidated balance .sheets. Loans that are deemed to be uncollectible are charged-ofhgainst the allowance when they become 61 days contractually past due. Recoveries on losses previously charged to the allowance arc credited to the 29 Tnhlc MC'ontcnts allowance when collected. For the years ended Dcccmher 31 2012 and lQU. if default rates had been 25% higher or lower, the al!owance for loan losses would have changed by appro:Wnate!y S14.4 mr1!ion and S12.2 million, respectively. lm:amr: Recognition Interest and fee income is recognized using the interest method. Accrualofintere.st and fee income on title loans receivable is discontinued when no payment has been received for 35 days or more. Effective Octoh!!r I ,009, m.1nagement changed its accounting estimate related to the suspension ofinterest and fee income. Prior to this date, accrual of interest Dnd fee income on title loans receivable ceased when no pnyment was received for 30 days or more pursuont to controctuoJ terms. Based on additional information and nnalysis of customer trends, management determined that the likelihood of receiving a payment fromn customer dinlinishcs when no payment is received for 35 days. TI1e accrual ofincome is not resumed until the account is less than five days past due on n contmetu:r.l basis, at which time management considers collectability to be probable. Recent Accountinc: St:md.:lrlk In October2012, the Financial Accounting Standards Board, or the "FASD," issued ASU 2012-04 to provide technical corrections and improvements to a wide r.mge ofTopics in the Accounting Standnrds Codification, including confonning amendments related to fair vnlue measurements. TI1e amendments in this guidance will be effective for fiscal periods beginning aflcr Deccll\h!!r 15 2012. The adoption ofthis guid~nce is not n:-.pected to have a material impact on the ('onmmw's financial position, results ofoperations or cash llows. 0664 Off-B:d~oce Sheet Arrangements l\ith L'nconsoHdaled CSO Lender Under the terms oft he CSO Agreements with non-exclusive third-party lenders, we are contractually obligated to reimburse the lenders for the- full amounts ofthe loans and certain rolaNd fees that arc not collected from tltc customers. in certain cases, the lenders sell the re!oted loans, and our obligation to reimburse for the full amounts ofthe loans and certain related fees that are not collected from the customers e»ends to the purchasers. As ofDccemhcr ~ 1 2012, the total amount of!oans and related fees guaranteed by us was appro>.imately S26.9 million. The value of the related liabilil}' at Dccemhcr :\I 2012 was appro>-im:ltely S4.6 million and is included in accounts payable and accmed e1.penses on the consolidated balance sheets and provision for loan losses on the consolidated statements of income. · IT£\17 A. QUANTrfATlVEAND QUALITATIVEDISCLOSURES ABOUf MARKET R1SK. The Compnnv does not have any financial instruments that e:-.pose it to material cash flow or earnings fluctuation~ as :1. result ofmarket risks. 30 Tphle ofContcnt~ ITEMS. FINANCIAL STATE1olENTS AND SUPPLEM.b'!TARY DATA. Ji'.'DEX TO CONSOLIDATFD FINANClALSTAT£\lENTS Rcnon oflmlcnendcm Re"i~lererl Puhlic Accmmrins Fim1 32 C'on~olidntecllhl;mee Sheet~ n~ off)ecemher 11 '>012 and 2011 33 C'on::olhlored Stmenb!nt~ nf!ncnme forth(; 'teao: Fndcc! Pcet•mh.:r:ll '>OJ'> '101 l nnd '>010 C'on~olidnt(;d Statements ofMemher·~ F.m1ity and Nnnco!J!ml!jnl! Interest~ for the Ycnrs F:nded Oeecmher 31 201'> 2011 nnd '010 Consolidnted Stnt(;nJents nfCn~h Flow~ fnrthe Vena: FJlded Decrmher11 20!"1 '>01 I nml 'lOJQ " 3S 36 Notes to Con~nlidmcd Fin11neial StmcrilCn!~ 38 31 TnhleqfCnntCil!~ Report of Independent Reg1steredPubllc Accounting Firm To the Board ofDircctors nnd Sole Member TMX Finance LLC and Affiliates We have audited the accompanying consolidated balance sheets ofTMX Finance LLC and Affiliates (collectively the "Company") as ofDeccmhcr 31 2012and 2Ql!, and the related consolidmed stme~mms ofincome, member's equity and noncontroUing interests, ami cash llows for the three years in the period ended Dcccrnhcr :11 101'>. TI1ese financial statements are tl1e responsibility of1hc Conm:m\''S m.:umgemem. Our responsibility is to e:-.prcss an opinion on these financi~l statements b~sed on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). TI10se standards requin: that we plan and perfonn the audit to obtain reasonable nssumnce about whctherthe consolidated financial statements are free ofn1.1teria\ misstatement. The Commmv is not required to have, nor were we engaged to perfonnan audit ofits internal control over financial reporting. Our audits included consideration of internal control over financial reponing as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose ofe)Jlressing an opinion on tl1e effectiveness of1he Conmnnv's internal control over financial reponing. Accordingly, we e"Press no such opinion. An audit nlso includes eHtmlning, on a test basis, evidence supponing the amounts and disclosures in the financial statements, assessing tl1e accounting principles used ~nd signific~nt estimates made by management, as well as evaluating the overall fin;mcial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our oplnion, the consolklated financial statements referred to above present fairly, in all material respects, the fmancinl position ofTMX Finnncc LLC llnd Affiliates as ofDecemhcr 11 2012 and 201 l, and the results ofthciropemtions and their cash flows for the tilrcc years in the period ended D.;cICE LLC AND AFFILIATES Consolidated Balance Sheets Dec~mho.lr31.2012 nndlQ.U. (in thousand!:) 2012 2011 Assets Cash and cash equivalents s 90,794 s 38.141 Title loans receivable 577,172 490,093 Allowancc.forloan losses (94,561) (73,103) UnamoniZ!:d loan origination costs 3,716 2,829 Title loans receivable, net <186,327 419,819 lnteresl receivable 38,055 31,517 0665 Property and equipment, net 95,239 72,57\. Debt issuance costs, net ofaecumu[ated amortization of$9,526 and S5,445 as ofDeccmhcr 3 I 20)? and December~! 101 I, respectively 10,570 14,042 Goodwin 5,915 5,975 Intangible assets, net Note receivable from Sole Shareholder Other assets 1,077 39,746 '" 1,549 20,994 Total Assets s 767,7?:3 s 604,748 Uatilifics nndfquity Senior secured notes, net s 311,519 s 312,120 Revolving credit f;~cility 25,000 Notes payable 37,336 11,370 Notes payable to related panics 19,628 20,5\2 Obligodons under capital leases 1,971 2,052 Accounts payable and 11ccmed c;.,penscs 61,341 62,356 Total liabilities 456,195 408,410 Commitments and contingencil!S (Notes 13 and 14) Member's equity and nonconuolling interests: Total member's equity (with ret:~incd earnings ofS243,835 ;md Sl86,704nt n¢cl!mher 31 "l()J"l and neccmhcr:'\1. "l()J 1, respectively) 318,365 202,484 Noncontrol!ing interests {7,377) (6,146) Total member's Cr[Uity and noncontrolling interests 310,988 196,338 Tot:~! Uabilities and Equity s 767,783 604,748 See notes to consolidated financial statements. J3 Tnh!c ofe":omc111~ T!\tx FINANCELLC AND AFF£LIATES ConsolitbtcdStntcmcnts or Income For the Years Fntled Drcrmher 3 r 2012,2Qll antllill.!). (in thousands) ZOt2 1011 2010 Interest and rec income s 656,755 s 505,865 s 389,449 Provision for loan losses (144,749) (99,542) (63,932) Net interest :md fee income 512,006 406,323 325,517 Costs, expenses and other: Sal~ries and relotcd c>:penscs 201,899 159,201 116,090 Occupnnc:y costs 64,727 48,556 34,939 Deprecbtion and amortizlt!on 17,210 13,813 10,353 Advertising 22,227 15,512 10,243 Other opr:r.tting and odministrnlivc c:-:penses 77,469 58,696 41,407 Interest, including amortization of debt issuance costs 49.293 42,610 26,251 Total r:~cnses 432.825 338,388 239,283 Income [Jefore reorganization items 79,181 67,935 86,234 Rcorganiz:ttion items: Professional fees 4,548 Net income 79,181 67,935 81,686 Net income (loss) auributnble to noncomrolling interests (9 (1,627) (1,906) Net i11come atmbutable to member's equity s 79,162 s 69,562 s 83,592 Sec notes to consolidated financial statements. 34 Tnhls of('ontcnts TMX FINANCE LLC AJ'\,'0 AFFILIATES ConsolitL1!cdSt.1lcments of Member's Equity and Noncontrolling Interests For the Years Ended Dccrmhc>:r31. 2012,lQ!landM!l.Jl {in thousands) Tala! M~mber's E:quHy ~nd Noneonlrol!ing Noncontrclling &tu!tv lnteruu lnlercsls Dal:mce, Qc:ccml!cr 31.2009 s 133,198 s (1,924) s 131,274 Net income (loss) 83,592 (1,906) 81,686 Contribulions 3,146 420 3.566 0666  Distributions (74,060) (1,330) (75,390) Balance, Dccsmhcr 3 I. 20 I0 145,876 (4,740) 141,!36 Net income (loss) 69,562 li.627) 67,935 Consolidntion ofvnrinb!c interest entities 221 221 Distributions (12,954) (12,954) Balance, Qscemher 3 I. 20 II 202,484 (6,146) 196,338 Net income 79,!62 19 79,181 Contributions 58,750 58,750 Distributions (22.031) (1,250) (23.281) Bahmte, D('cemiX!r 31. 2012 s 318,365 s (7,377) s 310,988 See notes to consolid:ucd financial statements. 3S I11hle of Content~ Tl'viX FINANCELLC AND AFFILIATES Consolidated Statements ofCnsh Flows For the Years Ended O~cemhcr31. 2012,2011 and2010 (in thousands) 2012 20Il 2010 Cash Flows rromOperatingAcli\itics Net income s 79,181 s 67,935 s 81,686 Adjustments to reconcile net income to net cash provided by opemting acth·ities; Provision for loan losses 144,749 99,542 63,932 Depreciation and amortization 17,210 13,813 10.353 Amonimtion of discount, premium, debt issuance and upfront lease costs 3,832 3,887 2,230 Amortization of acquired in:timgibles 140 160 Net loss on disposal ofpropeny and equipm::nt 427 128 264 Loss on disposal ofaircraft held for sale, net of selling expenses 13 Oumges in assets and !inbilitics: Interest receivable (6,538) (8,082) (7,462) Other assets (14,778) (7,288) {1,256) Net change in loan origination costs {887) {690) {979) Accounts payable and accrued expenses (I,QI5) 5,754 27,430 Net cash provided by operating nctivities 222,321 175,159 176,211 Cash Flo"s fromlmt:sting Acthitics Net title loans originated {210,370) (205,098) (129.572) Payments for acquisitions, net ofcash :~cquired {8,032) {400) Purchase ofproper1y and equipment (41,128) (32,409) (18,713) Proceeds from disposal of property and cquipnwnt 823 399 112 Proceeds from sale of<~ircrnfl held for sale, net ofscllillg expenses 12,700 Purdnlseofaircmfl. (17,657) (lncrcnse) decrease in restricted cash (4,325) (3.525) 846 Issuance of note receivable from Sole Shareholder (2,000) Receipt of payments on note receivable from Sole Shareholder 472 418 33 Cash from consolidation ofCSO Lenders 1.794 Net cash used in investing ncti\•itics (254,528) (246,453) (154,651) Cash FlO\IS from Financing Acthilics Proceeds fromseniorsccured notes 64,200 247,695 Proce~::ds from revolving credit facility 25,000 Proceeds from notes payable to related parties 12,000 17,750 Proceeds from notes payable issued by consolidated CSO Lenders 15,307 9,080 Proceeds from notes payable 12,376 Repayments of notes payable to related parties {SS4) (13,844) (5,647) Repnyments of notes payable and capital leases {1,797) (667) (14,762) Payments of debt issuance costs {611) (2,291) (17,195} Repayments oftcnnloan, net {151,000) Proceeds from contributions to consolidated CSO Lenders 76 Proceeds from contn'butions 58,750 3.566 Distributions by consolidated Vllriable interest entities (1,250) Distributions to Sole Sh<~rehold~r (12,704) {75,390) Net cosh provided by financing activities 55,850 5.017 Net increase (decrease) in cash and cash equivalents (15,444) 26,577 Cash and cnsh equivalents at beginning of period 53,585 27,008 Cash 1111d cash equivalents at end of period s 38.141 s 53,585 See notes to consolidated financinl sttltcments. 36 0667 Ti!h!e ofCnn!ent.<: Tl\1X FlNANCELLC M'D AFFU.lATES Cons:olhL1ttdStatements of Cash F1011S, continued (In thousantls:) 2012 !011 !010 Sugiemcni:ll disclosure ofc:J.Sh flow information: Interest pilid s 45,%2 s 38,251 s 7,694 Leasehold improvements dlstn1mtcd to Sole Shareholder s s 250 s Suf:P.emental disclosure ofreorganizntion items: Professional fees pnid for sen• ices rendered in connection with the Chapter II proceeding: s s 6,457 See notes to consolidated financial statements. 37 Tnh!c ofContcnt~ TMX FlNANCELLC AND AFFD..IATES Notes to Consolidated Financial Statements (1) Nature ofBusincss, Princi)lies of Cons olldation and Significant Accounting Policies TMX Finance LLC and affi!i:~tes (collectively, unless the conte.\1 inditatcs otherwise, the ··company") is a specially finance company that originates and servites automobile tille loons through 1,035 title-lcndillg stores in 12 stoles as ofD.!ccHlhcr ::n 2012. Afftli~tes include wltoUy-owned .o:uh~idimiM ~nd consolidated variable interest entities ("VIE:;") ns described Uelow. The Comn~nv operntes as TilleMaxin 831 stores, and in ]51 stores, !h!! Conm;mv operntes under n Tit!eBucks Urnnd. ·nu'< Conmmw also offers a second lien nutomobi!e product in Georgia .1ension of a loan. The ('ompa1w processes loan applications and corrunits to reimburse the CSO Lenders for:~ny loans or related fees that are not collected from those customers. Two oft he CSO Lenders opcrnte on nn exclusive bnsis with the; ('omnnnv, nnd the C'onmmw hns dctcnnined that they are VIEs ofwhich the C'onmnnv is the priin:uy beneficial)'. Therefore, ill£: C'omnanv has consolidated the5c VIEs. 38 Tnhle of('nntcnts TMX FINANCE LLC AND AFFILIATES Notes to Consolidated Financial Sla!ements (1) N:~ture of Business, Principles ofConsolitbtion and Significnnt Accounting Policies (continued) The ('nmnanv is associated with several other entities that it must eva!unte as potential variable interest entities. TY Investments ( "11'/") and Pnrker~Young ("PY} are owned 100% and 50%, respectively, by the Sole Shareholder. Each ofthese entities 0\\1\S ccrtnin real estate that is leased to tlu~ ('omponv. The Compmw cvalunted these entities and detcmlined 0668  that th¢ C':onmgnv does not have a variable interest and that neither has characteristics of11 variable interest entily pursuant to the applitllble accounting guidance. Both entities have sufficient equity ~~risk without the need for any additional subordinated financial support. The Cnmn:mv has therefore determined thnt TYI and PYare not \'oriablc interest entities. TitlcMaxA viation, Inc,, a Deh1ware corporation (':4vfal{on "),and TitleMaxConstruction, LLC{"Colls/mcrion ")are otlterentities evaluated as potential variable interest entities. Aviation is owned by our Parent nnd has three aircraft and rel~ted debt. Tite aircraft are used by the Comonny to conduct its business. The Conmany and certain ~uhsidiaries guarnntee certain debt of A vintion. Construction is owned by the Sole Shareholder and directly handles the store improvement work for the Comnany. Aviation and Construction are VIEs ofwhich the Compnnv is the primary beneficiary; therefore, these entities have been consolidMed. SignjfiqnJ Accounting ?oHcje~ The accounting" and reponing policies oft he C'omnml\' are in accordance with accounting principles generally accepted in the United Stntes of America and coRfOilll to gcnerol practices within the consumer finance industry. The following is a description of significant accounting policies used in preparing the consolidated financial statements. DaslsojPrcs~:11tatiou 11Je accompanying consolidated financial statements include the accounts oft he C"omnrnw, its wholly-owned ~uhsidinries and its consolidated VIEs. A !I significant intercompany transactions and balances have been ctinUnated in consolidation, Us!! ojEsflmates The prepamtion ofconsolidOUnts of income mher31 2012 aud 1illJ. were ns follows: in 1houunds 2012 2011 Nonaccrualloans s 84,520 s 54,198 T:~hle ofC'o!l1cn1s T/\1X FINANCE LLC Al\'D AFFILIATES Notes to Consclid:Jtcd Fimmd:ll Statemen(s (2) Credit Quality InformtJ.tion, Allow;mce for 1-Gsscs on Title Loans R~cchnNc and Liatility Related to Unconsolidated CSO Lender Loans (continued) Changes in the nllowance for loon losses for the years cnclcd Oec,•mher] 1 2012, JOil and 2Q!Qwere as follow~: in th~u,.mds 1012 20ll 2010 Beginning balanr.:e s 73,103 s 52,0.!8 s 40,280 Provision for loan losses 141,145 98,536 63,932 Otarge-offs (162,222) (103,552) l70,932) Recoveries 26,071 18,768 Ending balance s 73,103 s 52,048 Olilnges in the liability for losses 011 loans processed for the C'onmnnv's ~lflconsolida1etl CSO Lender for the years ended Deeemher; I 10t? and lillJ. were as follows: in 1housnntl5 2012 2011 Beginning balance s 1,006 s Provision for loan losses 3,604 1,006 Ending balance s 4,610 s 1,006 Tite aggregate provision for loan losses for the years ended Dece!l1hcr 3 I 20!2, ;mu and 2Q.ll! was Sl44,749, S99,542 and $63,932, respectively. (3) Conccntr:~tian afCredit Risk Th£ C'onmanv'~ portfolios of automobile Iitle loans rec~;ivable are with consumers living primarily in Ckorgia, Alabama, South Clrolina, Tennessee, Missouri, r.. !ississippi, V~rginb, Te;~;~s, Illinois, Ne\'ada, Arizona and Florida. Const>!]uently, such consumers' ~bililies to honor their co111mc1~ mny be affected by cconomie conditions in these areas. The C'onmanv is C;qlOscd 10 a concentration of credit risk inherelll in providing altemnte financing to borrowers who cannot obtain trnditional bank financing. In tht> event ofdefuult ofthe title loans receivnble, rhe C'omrmnv has aect:ss to automobiles supporting these title loans receivnble throu~;b repossession. As of!Rcemher :>!. ,01" aU title loans receivnble were collateralized by the rdated consumers' ~ulomobites. The ability to repossess coUateml mitigates this risk At nccemher 31 2012 npproximate!y 36%, !4%, 12% and ! !%oftitlc loans 0671  receivable were in'Ckorsia, Abbam!l, South Carolina and Tennessee, respectively. The C(lmnnnv also has a risk that its customers will seek protection from creditors by filing under the bankruptcy laws. When a customer files bonkruptcy, the C'ompnnv must cease collection efforts and petition the Bonkruptcy Court to obtain their coll~teml or e~tablish 11 court-approved b11nkruptcy plan involving the CcuttrMm· and all other creditors oft he customer. It is the C(lmn;mv's C).:flerience that such pions can take om en:ended period of time to conclude und usuully involve a reduction in the interest rate from the rntc in the contrnctto a court-approved rntc. 43 TnhleofC(Intcnts n.IX FINANCELLC AND AFFILIATES Notes to Consolidated Finnncial Statements (4) Property and Equipment Propeny and equipment at nccemhl'r ~I ,012 and l!ll! consisted oft he: following: in th~uunds 2012 2011 Leasehold improvements s 55,009 s 39,165 Computers and software 26,667 23,569 Aircraft 23,288 23,288 F'umiture and fi:o:tures 20,761 15,370 Signs 19,971 15,792 Assets not placed in service 17,456 7,022 ASSI!tS \Uitlercilpitallcases 2,240 2,240 Vehicles 335 339 Building 2BS Land ;o Subwtal 166,082 126,785 Accumulated d.:prccialion and amortil.plore other options for its store software solution. As ofDecemher J I 2012, the C'mllP:lllV is continuing to evalul!te the best lOli!Henn solution for its store sofiwnre systelltl! is reasonably possible that !he f'omnnnv could decide to implement t1 different store software system in the neartenn This decision could require the C'omr!il!w to reevaluate the canying amount oft he proprietary store software system, which could result in none-lime, non-cash e:>.pense that could rnngc fromS13.0 miWon to SIS.O million. (5) Other Assets Other assets at Decemher 31 ,01., and 2ill.! consisted of the following; In thouunds !011 !OIJ Deposits related to unconsolidntcd CSO lender 9,230 s 2,112 Restricted cash (a) 8,600 4,275 Repossessed assets 6,355 4,78S Prepilid rent 4,887 1,857 Deposits, primarily on leased office space 4,671 3,071 Other prepaid e;o,penses 3,413 2,349 Sign and supplies inventol)' 1,605 1,327 Other 985 1,218 Total other assets s 39,746 s 20,994 (a) The Comrmnv deposited money in accounts that were restricted to satisfy various stntc licensing requirements. •14 Tnhle ofC'cmtent~ TMX FINANCE LLC AI'\'D AFFILIATES Noles to Consolid:!.led Financial Statements (6) Acquisitions In Mny 2011, ]he lomp:mv acquired nil of the title loans and assumed all of the opemting lenses related to J91ocations in Nevada for an aggregate cash purchase price of$6,8 million. The C'omnnnv recorded goodwill ofSS.O million as a result ofthis trnnsaction. In addition, tl1e Cmnnnnv allocated S0.3 million of the purchase price to customer relationships, which was ilmortizcd over 15 months. Amortiztttion ofthe custonwr rela!ionships intangible asset ll':tS SO.! million and S02 million during the ye:trs ended Oeccmhct· '\I 201, ilnd 2ill.L respectively, and is included in other operating and administrntive e:q,enses on the consolidated statements ofincon~. 0672  In July 2011, the Comhnnv acquired all ofthe tit !I: loa us and assumed aU ofthe opernting leoses related to eight1ocations in Missouri ond six locations in Nevada for an aggregate cash purchase price ofSl.6 million, Th!! C'mnprmv recorded goodwill ofSI.O million ns a result of this uansattion. The goodwill thot resulted from these transactions reflects the fact that the trnnsactions expanded the Comrmnv's number of stores and provided a presence in a new market. (7) Senior Secured Notes, Re,~hing Credit F:u::ility and Notes P:~yatie Senjor Secuffuntely $2.3 million is being accreted overthe life ofthe 2010 Notes as a component ofinterest e).llense using t11e b1terest method. The accretion of discount was SO.S million, SO.S million and S0.2 million fortheyears ended neccmbcr 31 2012,2011 and 2010, respectively. On Julv 22 2nll,the Issuers issued S60.0 m.i!Jion aggregate principal amount of their 13.25%SeniorSecured Notes du!! 2015 (the "2011 Noles"), TI1e 2011 Notes were issu~d with tcnns substantially identical to the 2010 Notes and at 107% ofpar for a S4.2 miUion premium, which resulted in gross proceeds 10 the C'omnnnv ofS64.2 million. The premium is being amoniJ.c:d over !he life of the 2011 Notes as a component of interest eJ.pense using the intert!SI method. The amortization ofprenrium was Sl.l urillion and SO.S mil!ion for the years ended Decemh,;r 31 2012 and 2011. respectively. In connection with the issuance oflhe 2010 Notes and 2011 Notes (collectively, the ''Norc~·"), the Cnmpmw copitoli.zed approximately Sl9.5 million in issuance costs, which primarily consisted ofunderwriting. fees, legn! fees and other professional expenses. TI1e issuance costs nrc being amoniJ.ed over the life ofthe Notes as a componenl of interest ellpense. The nmonimtion ofissunnce costs related to the Notes was S4.0 nullion, Sl6 miUion and $1.8 million forthe yen~ ended Qecemhcr]l 10p, 2!lll and 2Q.ll, respectively. Tlle Iswcrs mt~y, nt their option, redeem some ornU ofthe Notes on or after Jufv I 5 "'nl :>at tl1e redemption prices {expressed as percentages ofprincipnl amount) set forth below, phls accrued and unpaid interest to the redemption date. Vur 2013 (06.625% 2014 and thereafter 100.000% Prior to Jul\' 15 2013, the Issuers may redeem up to 35% of the aggregate principal amount of the Notes original!y issued at t1 redemption price of 113,25% ofthe principal amounl of the Notes redeemed, plus ac~;"rued and unpaid interest, ifnny, to the redemption date if: such redemption is made with the proceeds of one or mor~ equity offerings; at least 65% ofthe aggregate principal amount ofthe Notes originnlly issued remains oulstnnding immediate!}• nfter the occurrence of such redemption; and the r~demption occurs within 90 dnys ofsuch equity offering. Tnh!g nfContcnll:. TMX FINANCE LLC AND AFFILIATES Notes to Consolidated Financial Statements (7) Senior Secured Notes, Re,ohing Credit Fncility antl Nl)tcs Pnynl.ie (continuetJ) The C'omnrmv must make e:'(Cess cosh flow offers in the first quarter of each year forthe lcsserof$30.0 million or 75% of e:-t:ess cash flow as defined in the Notes. TI1e redemption offer price is 102% ofthe principal amount oft he Notes. The C'omn:mv made an e;.;cess cash flow offer in March 2012 at 102% ofthe principal amount ofthe notes. Tile offer expired in April and no holders ofthe nOto:ls accepted the 2012 e:ol:ess cosh flow offer. The Issuers entered into registration rillht~ agreements and were required to file registration statemants to exchange the Notes for substantiaUy identical registrnble notes. The Notes require the Issuers to post consolidated financial stntemcnts and Management Discussion and Analysis ofFin;mcial Condition nnd Results ofOperntions on its W<;h~ite or with the Securities and E'([:hange Connnission ("SEC") within 60 days of each quarter end anti within 90 dnys of each yearend. In addition. the Issuers must provide current reports for material items and must hold and participnte in quarterly conference caUs wilh holders ofthe Notes. The Issuers may incur unsecured indebtedness subject to certain restrictions in the Notes. In addition. the Notes contain covenants that restrict transactions with affili:Hes, repayments ofsubordinated debt, distn'butions to the Sole Shareholder, compensation for the Sole Shareholder and relatives, the incurrence ofliens, the issuance of dividends and the sale of assets. According to these covenants, effective Jnlv I ?010, gener.~l distnbutions to the Sole Sharel1older are permiltcd under certain circumstances n11d are limited based on certain restrictions as defined in the Notes. At Decemher Jl 2012, Ihe availability ofsuch distnbutions to the Sole Shareholder was SS.O million under the terms ofthe Notes. I!!£ C'ompryny is in compliance with the covenants of the inrlcntnrc goveming the Notes as ofOecemhcr 31 101"'. Revo]vjnp Qerli! F<1cilitv On June ?7 1012, Tl\'fX Finance LLC and Titlel\·IaxFinance COTporation entered into a credit agreement (the "Cn:clil Agrectmmt") that provides a senior secured revolving credit facility of up to 525.0 million (the "R1.•vo/vi11g Cr.!dit Facilily") that 1113tun::s June 1S 2015, Borrowtng~ tmderthe Revolving- Qed it Facility be~r annual interest at LIBOR plus 8.5% with a LIBOR floor of 1.5%. The Credit Agreement contains certain restrictive covenants that are substantially similar to those in the illik!!.!.!!rs governing the senior secured notes. The Credit Agreern:nt also contains a financial covemnt that requires the m.1intenance ofa minimum !ill:d charge ratio of2:l. In connection with the completion ofthe Credit Agreement, the Conm~nv cnpiti!liH:d appro:cinutely $0.6 million in issuance costs, which pri1113rily consisted oflegal fees and other professional e;openses. The issuance costs are being amortized over the life ofthe Revolving Credit Facility as a component ofinterest expense. The amortization of issuance costs related to the Revolving Credit Facility was SO.I million for the year ended Dec~tmher1! 101'. Nnte~ PayghJc The C'omrnnv had notes payable of$37.3 nul lion and Sl1.4 million at December 31 2012 and 2011, respectively. Notes payable at Oeccmher Jl 2012 includes three notes payable by TMX Finance LLC, t1 note payable by Aviation and 63 notes issued by our consolidated CSO Lender.s. The three notes payable by TMX Finance LLC are in the amounts ofS6.0 million, SS.O million and S\.0 million, and each bear.s interest at 13.0% with interest payable monthly. Tite principal amount of each ofthese notes is due in July 2013, although the SS.O million note nnd SJ.Omillion note rn:J)' ench be e;\lcnded for up to one odditionnl yearn! the Conmmw's 0673  sole discretion. The note p<~yab!e by A vi<~tion has 01 principal b01lance ofS0.4 million as of December 31 2012and bears interest at 4.4% with payments ofprindpoland interest due monthly. Our tonsolidated CSO Lenders had a total ofS2S.O million ofnotes payable outmoding as ofDccemher ::-1 "012. These notes bear interest ranging from 10% to IS% and allow the consolidated CSO Lenders to take one or more dmws up to a total ma)cimumprincipal of$29.0 million. The aggregate principal amount ofaU oflhese notes i.s due in 2013, but 22notes with om aggregate principal amount ofSII.9 million available for borrowing have automatic annual renewal provisions. The effect ofthese renewal provisiom has not been reflected in the debt maturities table below. One of the consolidated CSO Lenders has issued si.xnotes payable to its sole member with an aggregaJe balance ofSS.&million as of December :\1 2012. 46 Table ofC'C\ntent.<: TMX. FINANCE lLC AA'D AFFD..IATES Notes to Consolidated Finlllldnl Statem~nts (7) Senior Secured Notes, Remhing Credit F:tcility :md Notes P:ty:~ble (continuctl) Notes P:tvflhle to Rel;,tecl Pi!rtie~ The ('onmanv had noles payable 10 related parti~s ofS19.6 rru1tion and $20.5 million a1 D••ct•mh¢r 3! 'l01? and 2Qli, respetlively. Notes payable to related panics at Dec¢11111er 'il JOI" in dudes three notes payable by Avi;~Jion Jo the Sole Shareholder in the amounts ofS2.8 million, Sl Limum potcntinhmount of future, undiseounted payments is S433.2 million. The tom:nttanying amount oft he related liability at Dcccmher31 2012 is S310.0 million. Rc\•ofl•lug C1cdil Facllify SubjccJto certain C>t:cptions, the obligations under the Revolving Credit FaciU])• nre fully and unconditionally guaranteed,joitttly and severally, on a seniorsetured b:~.sis by the Issuers and ea.ch oftheirexisting and future domes lie suhsiclinri>!s. This gunrnll!ee arose from entering into the credit agreement that provides the Revolving Credit Facility for the purpose of additional financing. The Revolving Credit Facility and the guarantees will rank senior in right of payment to all oft he Issuers' and the guarantors' e)lisJing and flLturo subordinated indebtedness llnd equal in right of payment will\ all oft he Issuers' and guarantors' existing and future senior indebtedness, including the Notes. TI1e obligations under the Revolving Credit Facility and the guaruntees are secured by substantially all oft he Issuers' assets, subject to cert:lill limitations. Under this guarantee, the mal.imumpotcntial amoum of future, undiscounted payments is appro:-Jmately S31.4 million. The current canying amount ofthc related liability at D!cemhcr ~I 2012 is S25.0 million. CSO Agreeml!llls Under the tcmn ofthe CSO Agreements with non•eX~:Ius1\•e third-party lenders, the C'nmnnnv is conu-acJunUy obligated to reimburse the lenders for the full amounts of the loans and cenain related fees that are not collected from the custoJners. In cenain cases, the lenders sell the rel:1ted loans, and the C'ompilnv's obligaJion to reimburse for the full amounts Oft he loans and cenain n:lated fees th3\ arc not collected from the customers cX!ends to the purchasers. Under this gu:mm1ee, the tna;cimum potential amount of future, undiseounted payments is nppro;..inunely S26.9 million. The value ofthe rein ted liability at December 31 "0t 'lis appro»imately S4.6 miUion ;md is included in accounts payable and accrued e;-,pcnses on the consolidated balance sheets and provision for loan losses on the consolidated SH!Iemems of income. 47 Tnhle ofC'ontent~ TMX FINAI\:CE LLC Al~DAFFJLTATES Notes 1o Consolit!atcd Financial Sl:ttement:s (7) Senior Secured Notes, Rc\uhing Credit F:lcility :lndNotcs Pay:tblc (coDtinued) Aln:ruft TI1e Sole Shareholder has a note payable to a fmance company originating from the purchase of an airtraft. The note payable is unconditionally and ;~.bsolutcly guaranteed by TMX Finante LlC and certain of its whoUy.owned ~nh~1dinric~. Tile note paynblc is tollaternlized by a security interest in the aircrnft and requires perfonnance under the guarantee if there 0674  is a defimlt on th~! note payable and the collateral and Sole Shareholder's guarantee are not sufficient to pay t11e entire amoul\l of the not~:. The m..1:1imum potential amount of future, undiscoumed payments for the note is $3.3 million. The current canying amount ofthe related liability at D<:ccmh,•r \I ?OJ? is S28 million. (8) Accounts Payalie and Accrued F.xrenscs Accounts payable and accrued e:qlenses .pcnscs s 77,469 s 58,696 s 41,407 48 T~blc of('Onl!!J)t~ TMX FINANCELLC AND AFFILIATES Nole5 to Consolidntcd Financinl Statements (I 0) Fair Value Measurement and Fair Value of Financial Instruments Fnir value is the price that would be received for an asset or paid to transfer a liability in an orderly trnnsnction between llUlrket p:u1icipants on tire mcnsurcment date. The fair value hierarchy requires an entity to m:r>imile the usc of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value hicrorchy describes three levels ofinputs thnt may be used to measure f.1irvnluc: Levell: Quoted prices {unadjusted) for identical assets or liabilities in active markets thnt the entity has the nbility to access 3S oft he me>"lsuremcnt date. Level 2: SignifkMlt other observable inputs other than Levell prices, such as quoted prices for similnr assets or liabilities, quoted prices inllUlrkets that are not active and other inputs that nrc observable or can be corroborated by observable m.1rket dMa. Level 3: Significant unobservable inputs that renect a company's own assumptions about the assumptions that market participants would use in pricing. an.asset or liability. The C'omnrmv lias loans that nre transferred to repossessed assets nnd are rneusured at fair value on a nonrecurring basis; that is, the Instruments nrc not ~mnsured nt fair value on an ongoing b:~!is but are subject to fair value adJustments in certain circumstances (for e:\llmple, when there is evidence ofimpainnent). The following table presents the repossessed asset~ value carried on the consolidated balance sheets by level within the fair value hier:rrchy (t~s described above) for which a nonrecurring. change in fnir vnlue has been recorded: Atli\1l ;\brltt:IS For Identical Observable Unoll$ttv:&bt.e Auets Inputs Inputs in thou$:&nd' Tot~\ (Len! I! (Lil''lli2J (le\'1."!1 J] Tot:~\ Lossu Repossessed t~ssets Qccemhcr:; I 20! 2 s 6,355 s s s 6,355 s 3,803 Repossessed assets s 4,785 s s s 4,785 s 1,755 The fair value of repossessed assets was detennined based on comparable recent used vehicle sales and krrol\11 changes in the broad used vebr'de m.1rket. The C'omnauv's fin~ncia\ instruments consist priman1y oft:ash and cash equivalents, restricted cash, title loans receivable (net), u note receivable from the Sole Shareholder, the Revolving Credit Facility, the Notes anti other notes payable. For aU SitCh instruments, other than the Notes, the canying amounts in the consolidated financial statements appro1.i.mate their fair values. The fair values of cash and cash equivalents are measured using levd 1 inputs. Title loans receivable are originated at prevailing m.11ket rates. Given the short·tennnature ofthese loans, they are continually repriced at current market rntes. Tire fuir values oftitlc loans receivable are measured usingleve13 inputs. Tire fair vnlues oft he Revolving Credit Facility and notes payable and receivable arc estimated using level 2 inputs based on rates cumntly availnble for debt with simila.rtenru and remaining maturities. Tire fair value oft he Notes is estimated using leve\2 inputs based on the market yield on trades ofthe Notes at the end ofench reporting period. The fair value ofthc Notes was S390.8 million and $360.6 million as ofl)•cemher :11 2012 and .:illl.L respectively. 0675 Tahle ofCon!ents Tl\1X FINAJ~CELLC AND AFFILIATES Notes to Consolid.1ted Finnndnl Statements (11) FmJioyee Benefit Plans !ncentive 1\:!Vinr~ Pl~n The Comnnnv has a 40l(k) Employl.'CS' Incentive &!vings Phmthlll covers all employees who have completed sixmonths of service. The romn:mv's match ofe!T'Jiloyee contnbutions is discretionary and detennined annually. Beginning !:mann• I 2QQ9, !he Comnrmv initiated a new matching progrum whereby eligible employees' contributions are matched 50% by the rommmv up to 6% of the employees' earnings. The cost ofsuch contributions totaled appro)jmately Sl.O million, SO.S million and SO.S million for the years ended Pecemhs:r ~I 2!ll.2, 2!ll.l and 2.!llQ, respectively. He.1!tb ln~pmnce Phm Effective Deccmh¢r 1 2(H 1, Jltc: romnanv ;~doptcd a self·insurcd health plan available to aU full· time salaried employees after sixmontlts of service. 'The romn:tnv has stop-loss insumnce coverage for individual and aggregate claim levels. The total e:q:~ens~s related to this plan arc included in salaries and related e~emes on the consolidated statements of income and were appro:-imntely S3.3miUion and 50.3 million forthe yenrs ended December~ 1 ?Qp and 2Ql!, respectively. Priorto Dcccmbcr2011, the C'nmmuw offered reimbursements for health premium costs incurred by employees in obt:~ining outside medical coverage. The amounts reimbursnble varied between employees nod were detcmrined by position or through negotintions between the C'onmnnv and the employees, • (12) Rclnfcd Pnrt)" Trnnsactions llte Cornnmw leases the corporate office from PYa11d various retail spaces from TYI and ecnain employees. Rental payments poid to these entities foroperatin~; leases amounted to appro)jmately SO.S miUion for the year ended Decemher ~ 1 2012 and SO.S million for each oft he years ended Decemhc1· ~~ 201 t and 2010, The Conmnrt\' also !eased cenain retail sp:~ces under capital lease agreements fromcenain employees with total payments af$38,000 for the year ended December ~I 2012 and SO.l million fore:~ch of the years ended Decemhcr 31 2011 and 2Q.!!!. As ofDeeemher ~1 2012, the romnmw did not have :my capital !ense agreements wil11 related panics. Interest e"J)ense on notes payabh: to related panics totaled S!.3 million, $2.2 million and S0.9 million for the years ended December :I I 2012, 20! 1and 2010, rc~pcctively. Interest income on the note receivable from Sole Shareholder was appro)jmme!y $0.2 million for each ofthe years ended Decc!llhcr ~1 ">OJ? and l!ll!,nnd $20,000 for the year ended !?eq:mllo;r 31 2010. (13) Commitments Orerntjng I case Cnmmjum:ms The rommmv leases retail space: under non~eaneelab!c agreements that require various minimum annual rent payments plus the payment ofpropeny Ia:res und illsur.mce. In addition, the C'nmnnny leases certain equipm:nt under non-eancel~ble operating lease agreements, wl1ich require set rent payments <1nd payments ofpropeny taxes. Future nlinimumrcnlal commitments under all non-cancelable operating leases whh tenns of one year or more :tre due in calendaryears ending December 31 as foUows: (iu lhouund5) Rclnlcd Vear fnding D~t~mb~r lt. rarl\' Other Total 2013 s 638 s 45,695 s 46,333 2014 552 41,310 41,862 2015 362 35,677 36,039 2016 339 27,402 27,741 2017 227 17,579 17,806 Thereafter 311 36,906 37,217 Total obligations under opcrnting leases s 2,429 s 204,569 s 206,998 ll1e total rent e:-.pensc was appro~im:nely $<10.0 million, $29.6 million and $22.2 million, respectively, for the years ended 11cccmhcr :>I ">01 ?, 1Q.!l and 2010. Rent e:.pense is recorded on o strnight·Hne basis over the life ofthe lease. 50 T:~h1c nfCnntcnJ~ Tl\JX F1NANCE LLC ,\I\'UAFFlLIATES Notes to ConsoliiJ.1!ed Fin:mci:~l Sta.lements (13) Commitments (continued) C.1pjtal Len~e C.ommiJUleDt~ The ronmanv Ieoses seveml retail spaces under capita! lease agreements with terms of 15 years. Future mininmm lease payments under capita\lellses, together with the present value ofthe: net minimum lease payments as ofTJec.;omher:; I 10!2, are due in cnlendnryears ending December 31 ns foUows: (in lhouunds) Year En din Deccmhor ll, Total 2013 s 261 2014 267 0676  2015 272 2016 277 2017 283 Thereafter 1,745 Subtotal 3,105 Less: amount representing interest (1,134) Total obligations under capital leases s 1,971 (14) Contingenci~s The C'omn:mv is involved bt various legal proceedings. These proceedings are, b1the opinion ofm.1nagemem, ordinary routine mailers incidental to the normal business conducted by the C'ompmw. Legal proceedings brought against the C'onm:mv include, but <~.re not limited to, allegations of violations of state or fcdcml consumer protections, disputes regarding repossessions, and employment related mauen. For e)l3mple, TitleMaxofMissouri, Inc. is a party to a putath•e class action law~uit aUeging that the entity failed to pay certain employees overtime compensation as required by Missouri law. In the opinion of management, an appropriate accmal has been established related to the above referenced legal matters. Outcomes ofsuch proceedings are not e:qlected to have a mnteria\ adverse effect on the C'ommmv's consolidated financial position, results of operations or cnsh flows. (I 5) Ph:mtom Stock Pl:tn The Cnmpnnv has a Phantom Stock Plan which authorizes the gtilnt oflong•tenn incentive awards in the forn1 of phantom stock units, or "PSUs" or phantom stock apprcci~tion rights, or "PSAR.~. "The phantom unit awards do not constitute ownership of any membership or other equity interests of the Conmrmv or any ofits suh~itlimic~ nor do they give the holder any votb1g rights. PSUs entitle the holder to receive a cash payment equal to the fair value oft he underlying shares of stock in TMX Credit, Inc., subject to certain resuictions and to risk offorfeiiUre. The PSARs em ide the holder to receive a cash amount determined by the appreciation in the fair value oft11e underlying: shares of stock in TMX Credit, Inc. betwee11 the grant date of the shares and the date ofexercise. The fuirvnluc ofthc phantom shares is equal to three times the earnings before interest, ta>l:s, depreciation and amonilation ("EBITDA ") ofTMX Credit, Inc. for the 12 months precedbtg: any \'!l!uation date, as computed by the Compnnv. The value ofthe PSUs and PSARs is zero at Dccember:ll 2\H2and 2011. A fonnerofficer oft he Conmnnv had an employm.!nt agreement which in~ludcd a phnntom sto~k award that became payable on Decernh«r 31 :201 I The incremental increases b1 the reponed \'alue of this award of SO. I million and $5.7 nlillion are included in salaries and related e~enses in the consolidated statements of income fort he years ended Decemher 3 I 2ill.l and 2!llil. respectively. The total cal~ulated value of$9,8 million is included in accounts payable and a~crued e~enses in the eonso!id:~ted balance sheets at December~~ 201 I The phantom stock award was paid during 2012. 51 TahleofC'(!ntenr~ TJ\IX FINANCE ll.(.' AND ArFILlo\TfS Notes lo Consolidated Finnnci:tl Statements (unautlited) (16) Chapter 11 B:mkruptcy Filing On Anri! "0. ?fl09, the Cnnmanv filed voluntary petitions under Chapter II ofthe United States Bankruptcy Code in the U.S. Bankruptcy Court in the Southem District ofGeorgia. The filing o~curred due to Jhe innbiliry to rea~h :~n agreement to e~end a tem1 loan ngrcement or to obtDin replacement fmancing with a new lender. During the pendency ofthe bankrup!cy proceedings, tilt! C'ompmw continued to profitably operate its business. The Compnnv e:>.itcd bnnkruptcy protection on Anril P ?Q!Q. AU princip;ll and interest payments ordered by the Bankruptcy Court were made on time and in full, and no creditors were impaired ns n result of the proceedings. (17) Guarantor Condensed ConsolilL1ting Fimmci:1\ Stntements The payment of principal and interest on the Notes is guaranteed by the wholly-own~d suh;;idi:Jrie~ ofthe Issuers other than inunaterial suh~idinri!!S (the "Srrb.~ldlary Guurantors"). It is not guaranteed by Construction, Avintion or the Cnmpnnv's consolidated CSO Lenders tthe "Non-Guara/1/ar.\'ub.l·ldlm'Js•.,·"). Thesepamte fmancialstatc~nts ofthe Subsidiary Guarantors are not included her~bl because the Subsidiary Guarantors are th(~ C'oUinnnv's whoUy-oWiled cot~so!idated ~t1hsidinries and are jointly, scveraUy, fully and unconditionaUy liable for the obligations represented by the Notes. The C'ommmv bdieves that the consolidatbJg fm;mci~l infomJ.'Ition for the Jssuers,the combined Subsidiary Guarantors and the combined Non-Guarantor Suh~irlinrie~ providi! infonnation thoc is mote meaningful in understanding the financial position ofthc Subsidiat)' OJarantors than separate financial statements ofthe Subsidi31)' GuarantoiS. The following consolidating linan~ial statements present consolidating financial data for the Issuers, the combined Subsidi:~ry Guarantors, the combined Non-Guarantor Snh.~idinrie.~ and an elimination column for adjustments to arrive at the infonnation for rhe C'mnmmy on a consolidated basis as ofD~:ccmh~:r ~I ?012 and 1!ll! and for each ofthe years in the three ycnr period ended Dsccn~1er .'\I 'lOJ "·Investments in ~uh::jrtj;m·cs arc a~counted for by the C'ompnnv using the equity mcthnd fur purposes of this presentation. Rc$ults of operations of~ph::isHrri!)~ are therefore reflected in the parent comp:my's investment a~counts and eamings. The principal elimination entries set fonh below eliminnte investments in '"Jh~ic!imies !lnd intercompany balances and transactions. Table o[C'ont) Nnn• lssuen Gutlr~nl~rs Guarnnlors fJimin11tions Consolldt~tcd Assets Cash and cash equivalents s s 37,220 s 921 s s 38,141 Title loans receivable 475,263 14,830 490,093 Allowance for loan losses (70,955) (2,148) (73,103) Unamonizcd loan origination costs 2,829 2.829 Title lmms receivable, net 407,137 14,830 {2,148) 419,819 Interest receivable 31,'152 65 31,517 Propeny and equipment, net 51,437 21,134 72,571 Debt issu:mce co~t~. net of accumulated amortization 14,042 14.042 GoodwiU 5,975 5,975 Intangible <~ssets, net 140 140 Note receivable from Sole Shareholder 1,549 1,549 Other assets lO 37,863 1,374 (18,273) 20,994 Investment in affiliates 541,614 (541,614) Total Assets s 557,215 s 571,244 s 38,324 s (562,035) s 604,748 llatjlities and Equity Senior secured notes, net s s s s 312,120 Notes paynble 312,120 J1,370 ' 11,370 Notes payable to related potties 20,512 20,512 Obligations under capital leases 2,052 2,052 Accounts pilyableand iltcrued e){lenses 18,940 44,581 5,698 (6,864) 62.356 Total Liabilities 331,060 46,634 37,580 (6,864) 408.410 To!al member's equity and noncontrolling interests 226,155 524,610 7>14 (555,171) J%,338 0678 Total UabiUties 6nd Equil)' s 557,215 s 571,244 s 38,324 s (562,035) ;'--.....::'";.;·:.;7':::' 54 Tt~hle nfCnntent~ Tl\IX FINANCELLC ANDAFAUAn".S Notes to Coruolitbted Fin:mcinl Stlltements (17} Guarantor ContknscdConsolidaling Finnncinl Statements (continued) Consnlidnling Sbtemenl of Income Year fntkd December 31 2011 (In thousands) Non· !JSUU:.'I Gu~nntors Gu~r~nton Ellminntlons Conso!id~!td Interest and fee income s s 652,205 s 4,550 s s 656,755 Provision forlmm losses (144,749) (144,749) Airt:rof\ service revenue 3,745 (3,745) Net hucrest and fee income and aircraft service revenue 507,456 8,295 (3,745) 512,006 Costs, expenses and other: Salaries and related e~enses 201,881 18 201,899 Occupancy costs 64,336 391 64,727 Other operating and administrative e;>;penscs 316 116,042 4,293 (3,745) 116,906 Interest, including amortization ofdcbt issuance costs 46,273 (554} 3,574 49,293 Total e;>;penses 46,589 381,705 8,276 (3,745) 432,825 Net (loss) income before equity in income of affiliates (46,589) 125,751 19 79,181 Equity in income from affiliates 125,751 l115,751) Net income (loss) s 79,162 $ 125,751 s 19 $ (125,751) s 79,181 55 1'able off'nnlcnts Tl\'IX FL'IANCELLC AND AFFiLIATES Notes to Consolid:lted Fimmd:li Statements (17) Guarantor Condensed Consolitbting Fin:ancinl Statements (continued) Consolidating Statement of Income Year Ended Oeccnthcl"31, 2011 (in thousands) Non· luu~rs Gunrnntors Gunr:mtors Diminatioou Com~lid3!ed Interest ond fcc income s s 504,965 s \100 s s 505,865 PrO\·ision for!oan losses (99,542) (99.542) Aircraft service revenue 3,840 (3,840) Net interest and fee income and aircraft service revenue 405,423 4,740 (3,&40) 406,323 Co~ IS, cx~nses and other: Salaries ond related e:q~enses 159,017 184 159,201 Occupancy costs 48,236 320 48,556 Other tlpemtins and administrative e;>;penses 337 88,096 3,428 (3,840) 88,021 Interest, including amortization of debt issu:mce costs 40,212 (37) 2,435 42,610 Total c:q~enses 40,549 295,312 6,367 (3,&40) 338,388 Net (loss) income before equity in income of affiliates (40,549) 110,111 (1,627) 67,935 Equity in income from affiliates 110,111 (110,111) Net income (Joss) s 69,562 s I 10,111 s {1,627) s (l!O,lll) s 67,935 56 0679 Tahh• n f('nntt:!l!S TMX FINAJ'l'CE lLC AND AFFILIATES Notes to Consolidtlt~d FinMcinl Stntemmts (17) Guarantor Contlensed Consolitbting Financial Statements (continued) Coosolid:lting Statement of Income Year En tied Os:ccmher 31. 20 I 0 (in thousands) Non- ls~u~rs Guar.ln!ort Gu:.nntors Eliminations Con,olid:~tod Interest and fee income s s 389,449 s s s 389,449 Provision for lonn losses (63,932) (63,932) Aircraft service revenue 1,493 {1,493) Net interest and fee income and aircraft service revenue 325,517 1,493 (1,49)) 325,517 Costs, Clpcnses :md other: Salaries and relnted e;.;penses 115,821 269 116,090 Occupancy costs 34,793 146 34,939 Other opcmting and ndministrntive expenses 61,038 1,458 (1,493) 62.003 Interest, indudiny nrnor1iz.ation of debt issuance costs 25,771 (46) 526 16.251 Toto! eXpenses 25,771 211,606 ))99 (1,493) 239,283 (Loss) in com<: from continuing opt:r.ttions ht:fort: reorgauir.~tion itt:ms (25,771) 113,911 (1.906) S6,234 Reorganization items: Professional fees 4,548 4,548 Net (loss) income before equity in income ofaffili;ues (25,771) 109,363 (1,906) 81.686 Equity in income from affiliates 109,363 (109,363) Net incomc(loss) s 83,592 s 109,363 s (1,906) s (109,363) s 81,686 57 Tnble ofContcnt~ T!\lX FINANCELLC AND AFFlUATES Notes to Consolltlate:d Financial State:ments (17) Gu:mmtor Conde:nse:d Consolitfating Fin:mcial State:ments (continuedj Consolidating Statement of Cash FlO\IS Year Ended O£csmi"Sr 31 2012 (in thousnntll) Non- lssuen GuJir:mlor.l Gn:~rnntors Consolltl~t~tl Net cash (used in) fX"Oiidcd by operating acthilics s (•12,519) s 157,899 s 222,321 Cash Flo\l:s from In resting Acti\ities Net title loans originated (190,799) (19,571) (2\0,370) Purchase ofproperty and equipment (41,128) (41,128) Proceeds fromdisposalofpropeny and equipment 823 823 Increase in restricted cash {4,325) (4,325) Receipt ofpuyments on note receivable from Sole Shareholder 472 472 Net activity with affiliates 5,658 (7,528) 1,870 Net cash provided by (used in) investing activities 6,130 (242,957) (17,701) (254,528) Cash FlDIIS from Financing Acti,itics Proceeds from rcvol\'ing. credit facility 25,000 25,000 Proceeds from notes payable 12,000 15,683 27,683 Proceeds trom<:ontributions 58,750 58,750 Repuyments of notes pnyable and cupitalleases (80) (2,601) (2,681) Payments or debt issuance costs (611) (611) Distributions {22,031) (1,250) (13,821) Net cash provided by finnncing activities 36,389 36,639 11,832 84,860 Net increase in cash nnd cash equivalents 5!,581 1,072 52,653 Cash and cnsh equivalents at beginning of period 37,220 921 38,141 0680  Cash nnd cash equivalents at end of period s s 88,801 s 1,993 s 90,794 58 Tnhlc of Content~ T[I.JX. FlNANCELLC AND AFFILlATES Notes to Consolid::atcd Finnnci:ll Stalemenls (17) Gunr:mtor Condensed Consolit.1.1fing: Finnncinl Slntcmcnts (continued) ConsolitL1ting St:~temcnt ofCllSh FlO\IS Yenr Ended n~ts:mt3:r 31 2011 (in thousnnds) Non· bsuen: Cu:tr:l.l'ltOr$ G11llr:mlon Consolidated Net <:llSh (uscdjn) pro1idetl by operating acthitics s (35,454) s 206,652 $ 3,%1 s 175,159 Cash F1o11S from ln\l:Sting Acthilies Net Iitle loans originated (190,537) (14,561) {205,098) Paymems for<~cquisitions, net ofcilsh :~cquired (8,032) (8,032) Pun:haseofproperty and equipment (31,930) (479) (32,409) Proceeds from disposal of property and equipment 399 399 Increase in restricted casl1 (3,525) (3,525) Receipt of payments on note receivable from Sole Shareholder 418 418 Cash from consolidation ofvariablc interest emitics 1,794 1,794 Net activity with affiliates (24,838) 23,380 1,458 Net cash used in investing activities (24,420) (210,245) (11,788) (246,453) Cash Flu11S rrom Fln~ndng Aclhifics Proceeds from senior notes 6:1,200 64,200 Repayments ofnotes payable and capital leases {2,035) (68) (12,408) (14,511) Proceeds from notes payable 21,080 21,080 Payments of debt issuance costs (2,291) (2,291) Proceeds from contributions to consolidated variable interest entities 76 76 Distributions (12,704) (12,704) Net cash provided by (used in) financing activities 59,874 (12,772) 8,748 55,850 Net (decrense) increase in cosh and cnsh equivah::nts (16,365) 921 (15,444) Cash and cash equivalents at beginning of period 53,585 53,585 Ca5h and cash equivalents at end of period s s 37,220 s 921 s 38,141 59 TahleofC'ontent~ TJ\.l.X FlNAI"'ICE LLC AND AFFILIATES Notes to Consolitbtcd Financial Statements (17) Guarantor Contknscd Consolidating Fin:mcilll Statements (continued) Consolitlating Statement of Cash Ro11s Year Ended n:cs;mhcr 31, 201 o (in tbous:mtls) Non· lsmers Guarani on Gunran!ars Consaltd:~.!ed Net ~ash (used in) JrOiitkd by operating n~ti\ilics s (6,320) s 183,578 s (1,047) s 176,211 Cash Flo\ls from lm'CSting Actilifics Net title loans originated (129,572) {129,572) Payments for acquisitions (400) (400) Purchnsc ofpropcny and equipment (18,700) (13} (18,713) Proceeds from disposal of property and equipment 112 112 Decrease in restrict~d c:~sh 846 846 Proceeds from safe ofaircmfl held for sate, net of selling c~enses 12,700 12,700 Purchase of aircraft (17,657) (17,657) Issuance ofnotc receivable to Sole Sharcholdcr (2,000) (2,000) Receipt ofpnymcnts on note receivable from Sole Shareholder 33 33 Net nctiviry with nffiliates (65,275) 61,685 3,590 0681  Net cash used in investing activities (67,242) (86,029) (1,380) (154,65!) Cash Aows from FinQncing Aethitie:s Payments on term loan (151,000) (151,000) Proceeds from senior notes 247,695 247,695 Proceeds from contnbutions 3,146 420 3,566 Repayments ofnotes payable and capital leases {5,938) (58) (14,413) (20,409) Proceeds from notes payable 17,750 !7,750 Payments of debt issuance costs (17,195) (17,195) Distnbutions {74,0{i0) {1,330) (75,390) Net cash provided by {used in) financing activities 73,562 (70,972) 2,427 5,017 Net increase in caSh and cash equivalents 26,577 26,577 Cash and cash equivalents at beginning of period 27,008 27,(108 Cash nnd cash equivalents at end of period s s 53,585 s s 53,585 .60 T~hlc ofC'on!Cn!s ITEM 9. CHAi'~GES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITE:.\19A. CONTROLS AA'D PROCEDURES, Disdusurr:: Cuntruls ami Procedures TI!C Commmv m.1intnin.s di5clo.sure controls and procedure$, as defined in Rule 15d-l:5(c) under the Securities E.\:Change Act of 1934, ns am:ndcd, or the "Exclumge Ar:f," tho! ;ttions oflhe Treadway Commission. Based on this evaluation, nunagement concluded that our internal control over fimmcia1 reponing was efiCctiveas ofDcccmher:>t "lOP. Chnnges in Internal Control Q,u Financial Reporting There were no changes in !he C'nnmnnv's internal con1rol over financial reporting, as defmed in Rule 15d-15(t) under the E.:.cl1ange Act, during the year ended f)gccmhcr 31 2012that materially affected, or are reasonably likely to materially affect, 1he Conmnnv's intcmal control over fmanci~l reponing. ITEM9B. OTHER INFORMATION. None. 6J T~hlc off'onlenrs PARTW ITEM 10. DffiECTORS, EXECUfJVEOFFICERS AND CORPORATE GOVERNANCE Set forth below are the names and ages of, and the positions held by oure1a!cuth•e officers <1nd by ot1r numagers (which are similar to directors, subject to certain limitations contained in T~·IX Finance LLC's operating :'lgrecmcnt). B;ecutivc officers serve at the pleasure ofTmcv Ynmw, who is our 01ainnnn oflhe Board, ChiefE'Il:cutivc OffiCer and President, subject to the tenns of<~ny applicable employment agreement. Pursuant to TMX Finance LLC's amended and restated opernling agreement, managers serve untilthdrdcath,perm<'lnent disability, rcsignn~ion or removal by Mr. Young. N:~m~ Pod!lon " 0 Trncv Young 55 Cbainmn ofthc Board, 01iefE~cutive Officer nnd President FliiT!hc!h C. Nelson 47 Cbicf Accounting Officer Olio W. Bielss, Ill 50 Senior Vice President of Operations Douglas W. Mnrohn 40 Sen,ior Vice Pres idem of Operations ArthurTretynk 34 Senior Vice President of Operations Rohe11 F. Pirkle, Sr. 58 Manager 0682  John 0 KmJncclv 111 5I Manager Mr. Young founded onrConm~nv in 1998and has since served as ChiefE.\l!cutive Officer. He was appointed as the Ccmmnnv's President on b=·larch .,., 20Ll Prior to foundingmu Comonnv, Mr. Young owned and operated Patriot Loan Co., a consumer installment lending company with locations in four states. Mr. Young has been a manngerordirec!orofl.b.t Comonnv or its predecessor since 1998. Mr. Young's current position os our C11ief~cutiYC! Officer and President combined with his past manage~mnt experience in the consumer lending businC!SS provide him with leadership skills and a practic:al and infonned perspective on matters related 10 the Conmnny's business and industry. FJi7i1helh C'. Nelwn was appointed as the Conmanv's Chief Accounting Officer in AuguSl2012. Ms. Nelson joi11ed rhe Cmnnnnv as Corporate Controllerin December 2009. She was promoted to Vice President ofFinancial Operations in Decernber2011 and served in this capacity until her nppointment as Otief Accounting Officer. Prior to joining the ('ommmv, Ms. Nelson held vnrious positions in financial ma.nagemenl with CentexCorporntion, a construction and real estate company. Ms. Nelson started with CentexCorporation in 2002and served as a Division Controller from 2006 to 2009. Otto W. Bielss, Ill joined us in January 2010 as Senior Vice Presidem ufOperations ofTMX Finance LLC and serves in such cap~city for our other companies as weU. Prior to joining us, Mr. Bielu spent nine years with Ace Cash E-.:press as a Di\·ision Vice President. Prior to Ace Cash E\press, Mr. Bielss held various management positions with Blockbuster Inc., Micltaels Stores, Inc., RadioShack Corporation and Eagle Sound Production, a privately-owned sound production company in Irving, Tc;>.as. Mr. Bielss brings over29years ofmanagement e;..perience to the Compmw. Douglas W. Marohn joined us in August 201 1and is currently serving as a Senior Vice President ofOpemtions. r-.tr. Marohn oversees our EAL and rNL brnnds. Prior to joining~ ~.Mr. Marohn served as Se11ior Vice President ofOpemtions at Nicholas Financial, Inc., where he held various management positions from Aprill998through July 201 I. Mr. Marohn has eJJensivc e~eriencc in opern1ional manngcrnent and developl'lr.nt in the consumer lending indusuy. ArthurTretyakjoined us in May 2011 ns n Senior Vice President of Operations. Priorto joining the Conm~nv Mr. Tretyak spent three years ns a Vice President with En ova Financial, the e·conuncrce division ofCash America International. Prior to Enovn Financial, Mr. Tretyakserved two years as 11 consultant with l'l'lcKinsey & Company. Mr. Trclyak's spednlired knowledge and experience in online lending enable him to provide valtmble leadership to the C'omnn1w as it develops its online title lendin~; business. Honorable Rnh.:11 F. Pirkle, Sr. wns elected a nmnagerofTMX Finance LLC in Dccember20ll. Judge Pirkle has been a judge and in the priVilte practice oflaw since 19&4. Throughout the past !Oyears, Judge Pirkle has and continues to serve as ChiefJudge in three Municipal Couns in ~orgia, as weD as an AssodateJudge forthe State Coun and Judge Pro Tempore for the Juvenile Court Prior to holding these positions, Judge Pirkle was the elected Solicitor G:neral for Long County, Georgia for 12 years. Judge Pirkle holds a BachelorofBusiness Administrntion from the Terry School of Business oft he University ofGcorgia, a Masters Degree from 62 Tnhle ofComen!!; Georgia Southern University and a Juris Doctor L"lw Degree from Samford University. Hc hns c:\lcnsive training and e:q.tcrience in nil Fed em\ and State Courts. His knowledge in the different areas oflaw enables ltim to provide guidance and insight to the Cnmnnny and the Board of Managers in matters related 10 business nnd government. lohn G. Kennerlv Ill previously scrvcd as a rnanagerofTI'viX Finnnce LLC from June 2010through December 2011 and was again elected a nunagerofTMXFimmce LLCin Dcccmbcr2012. Mr. Kennedy serves as Managing Director and Head ofCapital Markets at Tudor, Pickering, Holt &Co. Securities, Inc., where he hns been employed since January 20!0. Mr. Kennedy hos more th:~n 25 years ofexperience in investment banking. Mr. Kennedy served as a Managing Director ofDeucsche Bank's investment banking group :md served as a Mannging Director ofDonaldson, Lufkin & Jcnnrette until its sale to Credit Suisse First Boston. Mr. Kennedy setves on the Board ofDirectors ofRoadrunner Transportation Systems Inc. Mr. Kennedy has served or currently serves as trustee or director of various private companies, foundations nod not~for-profit institutions. Mr. Kennedy earned a BachelorofSciencc, cum laude, from Washington and Lee University P.nd a Mnsters in Business Administration from the Amos TuckSchoolofBusiness at Dartmouth College. Mr. Kennedy hils spent much of his career in the investment banking industry and has signifieartt finance experience, which allows h,im to contribute a valuP.ble and informed perspective on business and finance-related matters. Additionally, Mr. Kennedy's e:q.teriences as p. trustee ordirectorofother entities have e:qJosed him to a wide amy ofbest prnctices, which enable him to provide unique insig\11 and guidance. Two of our three managers, Messrs. Pirkle and Kennedy, arc independent m:~nagers {with independence being determined in accordance with the New York Stock E\:Change's definition ofindcpe11dence, as ifit applied 10 us), menning that they do not have, and have never had, any material transactions, relationships, or arr.mgcments with us, either directly or as a shareholder, pnrtncr or officer of another orgnnizationthat hns or had a relationship with us. The C'nmpanv's managers ha\•e no! created an audit, compensation or nominating committee and do not ha\•e any other committee performing such functions. Tracv Ynmw, our Chainnan ofthe Board, OJiefE'l!cutive Officer nnd President, perfofm!d the function ofa compensation conuninee during the fiscal year ended Qceemhe1·; 1 "012; however, no m.1nagcrs acted as n nominating commillee or on audit convnittee during 2012. The managers believe thatl\·Jr. Young is most properly suited to consider and decide Ill.'ltters typicaUy falling witl1in the authority of a compensation and a nominating committee. Additionally, we have adopted a Code of Conduct and Ethics that is ~ppliciible to allofouremployces, including ourC11iefE~cutive Officer, Chief Accounting Officcnmd Coipor.~te Controller. The CodcofConduet nnd Shies is fiOStcd on ourwchsilc at WI\"W.Iitlem1xhj7. We intend to satisfy the disclosure requirement regarding any amendment to, or waiver of, a provision of! he Code ofConduet anti Ethics for our ChiefExecutive Officer or Olief Accounting Offker by posting such information on our wchsitc, The C'ompanv 's operating agreement ploces sl"gnific1mt linu"tations on the authority, role and responstbilities oflhe manilb'Crs other than Mr. Young, os the sole bcncficinl omter of our pan:nt compa11y, nnd subjects them to the authority ofMr. Young in many respects. For e~mple, the opemting agreement provides thotthc executive officers serve at the pleasure of Mr. Young rathenhan the managers and restricts the ability ofthe Ill.'lnagcrs to, among other things, amend TMX Finnncc LLC's operating agreement nnd require additional capital contributions from Mr. Young. Manager Compensntion A manager who is also one ofour employees does not receive any additional compensation for his services as a manager. Each non·ex.ecutive m::mager is paid for his services and does not receive any sepilrate tooeting fees, equity awards orincentive compensation. In addition, non·eJ.:Ccutive m:mogers are reimbursed for any reasonable out ofpocl:et e:qJenses incurred in connection with rendering their service :'IS managers. The following table describes the compensation cnmed by non·e1'CCUiive managers during 2012: 2012 l\funager Compen$lllion Fees Enrnetl or rnitl in All Other Name C:uh Comnensation TaT~\ Rohcn F. Pjrkl.: Sr. 100,000 100,000 John W. Robinson, U\ 200,000 200,000 Effective 0-:cl!mhcr ~I 201 ::!, our parent company approved n change to our Board ofManagers. The three managers are Messrs. Young, Pirkle, and Kennedy. 0683  63 Toh!c of Contents IT~111, EXECUfiVECOI\-IPENSATION. Compensation Discussion undAn3lysis General This COJ111tnsation discussion and analysis provides an overview of our compensation program :md policies, the material compensation decisions we have w.ade with respect to !hs ~·stop c~cutive officers and the material factors that we considered in making !hose decisions.111e tables and disclosures foUowing this compensation discussion and analysis contain specific dattl about the compensation earned in 2012,2011 and 20\0, tiS npplicable, by the following individuals, whom we referto as our named e~cutive officers: Imcv '(tmng, our 01iefE-.:ecutive Officer 1111d President (a), Bi7nheth (' Nel~on our01ief Accounting Officer, Quo W. Bielss, Ill, a Senior Vice President ofOperations, Douglas W. t'o.·larohn, a Senior Vice President ofOpernrions, and ArlhurTretyak, a Senior Vice President ofOperutions. (a) Effective Mnrsh 12 2flt:l, Mr. Young's title 1\'as clLonsed to Chief~cutive Officer and Presidenl. In addition, this discussion addresses the compensation provided to our fo!ll1f!r OliefFinancial Officer, Donald E. Thomas, whose employment with the Comnany ended on Ani:USt 21 "0!2 We hired two individual~ who were expected to take the role ofPrcsident in 2012, but each separated from the ComNnv in 2012 prior to completing their field training progrnms or assuming the full duties oft he President role. This discussion docs not address the compensution ofthese fonncrcmployccs. Our compensation progmms are intended to attfilct and retain vital employees and to incentivi?J:: high level talent to work for and uhimatcly ndd value to our business. Our compensation stntctur~: is ~lative!y simple, combining base salaries with a mix of cash-based bonuses and incentive awartls, perquisites and severance protection. We do not h11ve a formal Compensation Conulittee. AU decisions related to compensation are approved by ourChiefE.\l!cutive Officer. E:ccctttivc Prry Policy The clements of our executive compensation policy are intended to meet the foiJo\\ing objectives: Base salary • Provide the ti'l!d element oft he comp~:nsation package • Be competitive in order to recruit and retain the best talent for our business and indusuy • Reinforce our business strutegies, management process and overall perfommnce Profit bonus • Jncentivize the achievement of specific profit goals over the short tem1 Guaranteed bonus • Aid in long•tennrctention through establishment ofspecified amounts for certain e:-=:cutives Long-tem1 incentives • lncentivlze executives to achieve superior returns • Aid in retention ofkey individuals Perquisites • Aid in retention ofkcy individuals Sevefilnce Benefits • Aid in retention ofkey individuals 64 Tph!c nfC'C'Ini(;UfS Specific Cf)mpcnsalfmt Efcmc11ts The principal components of our executive compensation progfilm are base salary 11nd a combination of guaranteed bonuses, profit bonuses llnd/orlong·tCmlincentive compensation, ns well ns 401(k) m.1tching contributions and I!Clllth care allowances. Ceria in executives ilrc illso entitled to severance benefits upon a tenninntion ofemployment under certain circumstances. We do not maintain supplemental retirement progralll!> or defined benefit pension pl:ms for our executive officers because we believe that the existing compensation nrrnngements ennble oure»:cutive officers to ade!]uately plan for their retirement. Base Sala,;•: Base salaries nrc paid to our e:-2cutive officers to compensate them for the perfomvmce oftheir respective job duties and responsibilities. Base salaries of our executive officers are typically reviewed on nn annuel basis, In setting annual base salaries, the following are the primary factors Ia ken into considcfiltion: the e~cutive officer's performance, the petfonn:lnce of the operntions nnd deparlments for which he or she is responsible, changes in the scope oft he executive officer's job responsibilities and current compcnntion practices and trends in our industry, These factors arc reviewed on a wholly subjective basis, and no specific criteria are established with respect to individual, company ordepamncnt performance. OurChiefExecutive Officer, as the sole beneficial owner ofourparcnt company, has historically set the salaries for all ofthe C»!cutives, including !tis own. Projif Bonus: Mr. Biclss is entitled to receive a bonus based on a percentage of monthly profitabilhy based on internal measures as set by the C'nmrmnv. During 2012, Mr. Biclss' monthly profit bonus was based on 0.15% of an internal profit metric that measured the fee and inumm income from the applicable stores for which Mr. Biclss was responsible, less direct costs oflltose stores and less an allocated amount for corporate overhead C.\)}enses. This profit bonus is intended to directly align Mr. Bie!ss' pay with the perfom~aricc ofllte stores that he is responsible for managing. The amount of Mr. Bielss' profit bonus earned for2012 is reflected in the Non-Equity Incentive Plan Compensation column oft he Sumrr1.1ry Compensation Table. GuaronW!!d Bonus: Guafilnteed bonuses for C).t:CUtives are detennined individually for each person. The bonuses nrc paid either monthly or annually. Ms. Nelson panicipates in a guaranteed bonus award incentive equal to 25% ofherbuse salary on an annual bonus, and Mr. Marohn received a guaranteed bonus ofS125,000 upon eompletion of his initial training period. Thg Cnmnnnv paid Mr. Marohn an ildditional bonus ofSJ25,000 in 2012 in lieu ofa profit-based bonus, with an Ciq)ectiltion that he will move co a profit-based bonus in future years. During 2012, on II..Jr. Thomas' two-year anniversary with the Compnnv he received a guarnnteed bonus ofSJ35,000. These guaranteed bonuses are reflected in the Bonus column oft he Summ:uy Compensmion Table. Umg.rcmJ/ncenfives: In 2011, we adopted the AutoC1sh Inc. (replaced by TMX Credit, Inc.) PhantomStockPlun, which authorizes the grant oflong•tennincentive nwards in the 0684 fonn ofplumtom stock units, or "PSUs" orph:mtom stock appreciation rights, or "PSAR..t." The phantom unit awards do not constitute ownership ofany membership or other equity interests of1hc Comrnnv or any ofits suhsidja!jc~. nor do they give the holder any voting rights. PSUs entitle the holderto receive a cash payment equal to the fuir value ofthc underlying shares ofstock in TMX Credit, Inc., subject to certain restrictions and to risk offorfeiture. The PSARs entitle the holder to receive a cash amount detemlincd by the appreciation in the fuir value ofdte underlying shares ofstock in TMX Credit, Inc. betwee11 the gmnt date oft he shares and the date ofcn:rcisc. The fair value of the phantom shares is equal to three times the EBITDA ofTMX Credit,lnc. for the 12months preceding any valuation date. Mr. Tretyakwas issued 50PSUs in 2011, which vest over three years from the date ofMnv 16 '>OP and become m<'lture llnd payable on the fourth armivcrsmy ofthc grunt date. Pl!rquisitr:s: The C'ompnnv provides limited perquisites to its nnmed e~cutivc offic~rs. suelt as relocation assistance. Tite nnmed executive officers nlso receive health cnre benefits that are geuern!ly made available to other employees. In adPition, the OliefE\:ecutive Officer is entitled to use the Commmv's nircmll for non-business purposes. Incremento\ variable operoting com associated with such personal use and paid by the C'ornnmw totaled S29S,057 in 2012. ML-: ofCompcnsntion Elcme11fs Other than the TMX Credit, Inc. PSUs described above with respect to Mr. Tretyak, the C()mpnnv does not have nny equity component to irs compensation nrrnngerm:nts fort he no.med e:.l:cutivc officers. As such, !he C()mnnnv believes that it is necessary to provide 11 highly competitive ct1sh based compensution package, as described above, to attroct and retain top talent. In addition, as recruiting talent with consumer finance and/or multi-unit e:-.perience often requires the relocntion of executives from othergeogmphic mnrkets, the Comnnnv offer:s relocation assistance to certain employees. Severance al/li Tcrmlllaflou Arrangemeuts Curt'l!lll Named E:n:cnlivc Officers l'vlessrs, 1\·larohn and Tretyak have offer letters thou provide for payments upon a temlinntion of employment due to involuntary temlintltion. These tumngemcnts are descnbed in the: section entitled "Emp/oymcm Agrccml!llls!Ttmns ofEmployment." The Compnn"' believes that tl!cse ammgements aid in ntlmcting nnd retaining qunlificd c1-t:cutivcs to build vnluc without the fearoflosbtg employment for situations other than for cause or voluntary te_mtination. 65 Tnhlc ofCcm!cnt!; Executhe Compensntion Summny Comperuntion Tnlie The foUowing tab!~ summ:ui~s the total compensation enmed in 2012, 2011 and 2010 by our named eXI!cutive officers. In :~ddition, the following table includes our former Chief Fin:mcial Officer, Donald E. Thomas, whose employment with the l'ompnnv ended on Anmt.~t 21 2012. Non-Equity fntenlhe Pl;m All Other flH~I s~tlll1' Bonus Compensation Compenution N:~me :md Prindl!lll Pasi!ion Year {Sl{l} ($)(3} {S\!4) To!al ' Tmc\• Youm: 2012 s 250,000 s s s 31)4,691 s 554,691 Olief&l!cutive Officer and 2011 250,000 325,997 575,997 President 2010 250,000 125,081 375,081 Ri7nhcth C_ Nclmn 2012 1S2,726 50.000 1,164 233,890 Chief Accountins Officer Otto \V. Bielss, HI 2012 150,000 359,470 2:5,135 534,605 Senior Vice President ofOperutions 201 I 150,000 291,914 6,789 448,703 2:010 185,000 62,500 72,665 83,812 403,977 Douglas W. Marohn 2012 262,500 250,000 8,024 520,524 Senior Vice President ofOperutions ArthurTrctynk 2012 500,000 2,502 502,502 Senior Vice President ofOperutions Donald E Thom<'ls• 2012 231,346 42,058{2) 5,495 278,S99 Fonner O!icfFinancial Officer 2011 316,058 172,942 17,046 506,046 2010 191,538 35,000 97,92:0 324,458 For ser.·ices perfonned from Apri12010 tl1rough August2012. (I} Represents guaranteed bonus nmounts bnsed on the ammgcment outlined in each person's offer!encr, as applicable. (2) Tile nmount of Mr. TI10mas' bonus represents the portion of his guurnnteed bonus for his second year of employment that was earned in 2012. (3) Represents profil bonus amounts earned monthly or annually based on the arrnngcnu:nl outlined in each person's employment agreement or offer Jetter. (4) TI1e follov.ing table reflects the items that nrc included in the All OtherCompensntion colunm for 2012: 66 Tnll!c of('ontcnt~ All Other Compensation Dct:lil P~r ulsiles Hen\lh 0685  C:~re Peuonal Total Relotntlon AIIOIV:III.tt Us~ ar 401(11) All Othtr N~me Anist~l\cc b Aircrrtft !'.blch Se,~r:tnce Com~cnntlon Tmcv Yonng s s s 298,056(c) s 6,635 s s 304,691 Eli7.1herh C. Nel~on 1,164 1,164 Otto W. Bie!ss,l!l 22,591(a.) 2,544 25,135 Douglas W. Marohn 2,250 5,774 8,024 ArthurTretyak 2,502 2,502 Donald E. Thomas 5,495 5,495 (a) Mr. Bielss was provided wilh a housir~g allowance in connection wilh his pending relocation to Tc:.as, where he wiU continue to serve as a Senior Vice President oflhe C'onm:mv (b) Prior to December 20ll,lhe C(lntmrw offered reimbursermnts for health premium costs incurred by employees in obtaining outside medical coverage. In 2012, Mr. Marohn was provided with three months ofheolth care nllownnc:es umil he was eligible to join the Comnnnv's new health plan. (c) The f'nmnanv ca[culau!s the ~ggregate inc:rem:m\al costs of Mr. Young's persontll use ofthe oircrafi based on an hourly charge that inch1des the costs offuel, contmctlabor, crew trnvel and onboard catering. Since the Cnmnnnv's aircrnfl. are primarily used for business trove~ the calculatiort exeludes ful=d costs that do not change based on usage, such as pilots' salaries and the costs to acquire and maintain I he aircraft. 67 Tnhle ofC'nntent~ Grants ofPian-BascdA\mrds The following table sununarizes infommtion regarding plan-based awards grunted to each of our named el.l!Cutiveofficers in 2012: F.t!lmat~d Fulurc Payouu Und~r Non·Equil"l' fncenlin Plan Award~ Name Thnr~hald M:ulmum Trncv Yount: s s s FJimhelh (' Nelson OttoW.Bielss,IJI 291,914(1) Douglas W. Marohn ArthurTretyak Donald E Thomas (l) Represents 11 cilsh incentive opportunity based upon a percentage of~n internal profit metric for the areas of! he business he is responsible for managing. on a monthly basis. For Mr. Biel.ss, the percentage equals 0.15% of his assigned regions. By nature oft he award, the threshold, target and ma.'>Qmum payout are undctctminable 111 the time ofgrnnt. Accordingly, as required under SEC rules, the amounts reflected in the table above are representative amounts based upon pcrfommnce in 2011. £mpl.oyment Agreements/Terms of Employment Each named e:retutive officer, e»::ept for our 01iefE...-ecutive Officer, has an employment agreement, written offer !ener or verbal acreement that specifics the temiS of his or her overall compensation package as described below. Fft·flht!lll <'. N,•fs,m: Ms. Nelson joined us in December2009 and was appointed 01ief Accounting Officer in August 2012. The tenns oft.,·ls. Nelson's employment as 01ief Accounting Officer were dctennined in an oral compensa1ion agroe1n:nt entered into on Au!·u~l 21 2012. Pursuant to the agreement, Ms. Nelson's base salaty was specified at an annual rate ofS200,000 and an annual bonus in the amount of2S% ofher base salary, · · Oua II~ Btclss,/11: Mr. Bielss joined us as a Senior Vice President ofOpera1ions in J:lnunl)' 2010. We executed an offer letter with Mr. Bielss t\1:11 specifies his base salary for 2010 at an annual raw of$200,000 and an annual bonus in the amount ofS75,000, pnid in monthly inslalbnents. Durir~g. 2010, Mr. Bietss as reed to a reduclion in s11lary co $150,000 and a discontinuance ofhis annual bonus. In re:ecution of a separation agreement including a genernl release. ArthurTrotyak: Mr. Tretyakjoined us as a Senior Vice President of Operations in May 2011. We executed an employment agreement with Mr. Tretyakth~t specifies his base saint)' alan annuill rate ofS500,000. Mr. Tretyak is eligible to receive an annual cash incentive opportunity equal to 5.0"/oofthe EBlTDA for the preceding fiscal year forTMX Credit, Inc. ln addition,lvfr. Tretyak is eligible to receive phantom stock awards under the TMX Credit Phantom Stock Plan. The employment agreement with Mr. Tretyak also provides that in the event of a temlination without Cause, or his resignation for Good Reason, he will be entitled to severance equal to six months' base salary, plus a pro-rated annual bonus forthe year oftcnninnlion. In such an event, l\-lr. Tretyak would retain any PSUs which were vested at the time oftermination. Mr. Tretyak would be required to c~cute a separntion agreement including a seneral release of claims, reaffirmation of cenain restrictive covenants contained in his employment agreelt"ll!nt, and certain other promises, in a fonnaccep!able to the Cpmmmv. T:thlc off't!r:; I 1011, given the na1red e~cutive officers' compeiJSalion ns of such date. ForinfoiTlllltion regarding the employlllCrll agreements with each named executive officer, including a descriplion ofrights upon tennination of employinerlt under different circumstances and ofthe non-competilion covenants 0686 contained in the employment agreements, sec the section entitled "Employmwt Agrerments1 Terms ofEmployrmm/." Payments Dill! to Tumim11iou bj• the Comnnm• Without Cnu,r~: Termlnalion wlllwut ccw.fe (and.jorMr. Trelyak, rlent distributions arc nvai!able under the tenm oft he indentur.:: govcming the Conm:my's Notes. If distributions :~re not permitted under the tenns oft he indenture governing the CC'Imnmt"'s Notes, the Parent may issue additional PIK notes in u principal amount to satisfy the interc>t dua. Distributions from the f'nmnnnv to the Parent, when pemlitted, will provide the primaty means for the Parent to make nny cash interest payments on the PIK Notes. Re!!l Fstnte Unses We lease our corporate headquaners from Parker-Young, LLC, or "Pl'." PYis owned 50% by the Sole Shareholder und 50% by an unrelated third pany. The initial tennofthis \ease espires in 2015, followed by twa ten-ye;n options to renew. As ofDccemhcr:>l 2012 we leased four retail spaces from TY!nvestmenu, LLC, or "TYI," which is wholly-owned by the Sole Sharel10lder, :~nd two retail spaces ITomTMXInvestment~, LLC, or "TMXI." 3 whollyo{lwned subsidiaty ofTYI. These retail spaces were acquired by TYI and T1\fXJ, tiS applicoble, and subsequenrly !eosed to us because they ::~re located in areas whare we could not secure sat is factory leases from other panies. We 3lso lease two condominium units in Savannt~ll, Georgia from TYJ, which are prirnarily used as a relocntion benefit to auract ne\\' tronagemcnt. Rental payments to PYwcrc appro>imately .$0.2 million for the year ended nec,;mher ."ll 2012, Rental puymcn ts to TYI and TMXl totakd appro:dmately $0.2 million for the year ended Drcemher11 10)?. Airpl:rnc Payments TMG is a pa11y to an Aircraft Reimbursement Agreement with Aviation. Under this agrec!T><:!nt, we reimburse Aviation fora!! costs it incurred in connection with the ownership and operntion ofaircraO used by us, including debt servicing for an airplane and hangar, insur;mce, a full time pilot and fuel and m.1intenance costs. llte reimbursement agreement limits our reimbursement obligations to S3.0 million per year. Total payments to Avial ion under this agreement were appro>.imately SJ.3 million for the year ended D.;et•mher 3 l 2012. In Januaty 2011, TMGentercd into a Non-Exclusive Aircraft Lease Agreement with Aviation. Under this agreement, Aviation leases to TMGan aircraft owned by Avi~tion on a non~ eXt:lusive basis for a rental chaq;e ofS200,000 per month beginning in Apri1201I. Tat~l payments to Aviation under this agreement were appro:cimatcly S2.4 million for the year ended Decemher31 'lOP. An airplane owned by Aviation is collateral for a Joan to the Sole Shareholder from a third party with a balance as of Januaty land Qcccmher; 1 "01') of approximately $3.1 million and S2.8 million, respectively, with repayment oft he loan guaranteed by us. The note is payable in monthly installments of£35,000, including interest and principal. The note has a fi.\l:d interest ra\e of6.35% and has a final payment of$2.1 million due in October2015. The total amounts of principal and interest paid on this loan by the Sole Shareholder were :~pproximately S0.2 nullion and $0.2 nllllion, respectively, for the year ended Decemher 31 2011 Related to Aviation's purclmse ofan additional :~irplane in Novernber2010, we loaned the Sole Shareholder $2.0 million at 12% interest, due in November2014. l11e balance oft his nate at January I and Decemhcr 31 '~OJ') was appro>.irrutely SLS million nnd SJ.I million, respectively. The !Otlll amounts of principal and interest paid by the Sole Shareholder on this loan were approximately SO.S million and SD.2 million, respectively, for the yenrendcd D.::cemher 11 10p. 0687  70 Tnhli! nfC'on1en1s Working Caritallnclebteclness A former President ofTMX FiMnce had an employment agreement with TMXFinnnce with a term through pw:mher~! 101 I. Pursunnt to the employment agreement, ourfomx:r President was entitled to receive, in addition to his base salary, an annual profit sharing bonus equallo 1.5% ofour earnings before interest, 111~s; nmortization and depreciation. The employment agreement included a provision granting our fonner President the option to c:~rhange $.2.0 million of debt for a 3% interest in TMX Finance. The employment agreement was nrnended effective as of Jnnuarv I 2010 to replace this equity option with a grnnt ofphantomunits. The plumtom units, which were fuUy vested, represented the right to receive a cash payment equal to the difference, ifpositive, between $2.0 million a.nd an a.mount equal to 3% oftht: fair market value oft he outstttnding membership interests ofTMXFin1111ce, This amount was paid during 2012. In May 2010, in response to significnnt demand for our product, the Sole Shareholder made nn interim equity contn'bution ofS2.9 million to the C'onmnnv to ensure adequate cash availability for the business. Following the issuance ofS250.0million ofNotes In June 2010, TMXFinancc made a distn'bmion to the Sole Sht~reho!der in an amount equal to the amount of this intctimequiry contnbU!ion. In July 2012 and November2012, the Sole Shm:holdcrmadeadditional equity contributions ofSJ4.0miUion and $44,8million, respectively, to Company. Formoreinfo~tion regarding re\ated·party activities,see Note 12to our consolidated finoncial statements in "Jtvm8. Financial StatcmwlsandSupplvm~ntary Data" and "Item 7. Management's Discussion and Analysis ofFinancial Condition and Results ofOperations-Other /lldchtcdm:.rs." Policies and Procedures for Rc\icw, Appro\'nl nntl Ratification ofRclatcd Party Transactions The Board ofManagers ofTMX Finance is drntling a related party trunsaction policy. Currently, the Board ofManagers must conform to the related party requirements included in the~ for the senior secured notes. The ~requires related party IIOlnsactions 10 (I) be no Jess favorable than an ann's length tronsaclion with n person who is not a related pnrty, (2) be approved by a majority ofthe non-employee m1nagers if the trnnsaction is greaterthnn S3 million ~nd (3) for tmnsaclions greater thnn S7.5 million, be delemUned to be fair from a financial point of view based upon an opinion provided by a third party fmn of national standing. The Board ofManagers will e1Wlmine all related pony tmnsnctions using the tenns ofthe Indenture until sucl1 time ilS the C'onmony's own policy is fonnally adopted. Compens:1tion Interlocks ami Insider P:1rtici[X1tion The Sole Shareholder detemrined the compensation ofoure»!cutive officers for the fiscal year ended December~ 1 2012. No executive officer ofthc C'ommmv served during 2012 on the Board of Directors or Compensation Committee of any other entity that had an exe~utive officer who served as a manaser or director ofthc C'omnnnv or on i\n)' Compensation Commi11ee of ours at any time during 2012. 71 Tnhlc ofC'mll~nts ITE!\114. PIUNCIPALACCOUNTANTFEES AND SERVICES. The following l3blc presents fees and c,;pcnses bilkd for professional services provided by McCilndrev l.l.P and RSM McG!aclrey, Inc, (through Novcmhcr ::.o ?OJ I) for 2012 and 2011. y.,nr Ended Deeember 31, Z()J2 :!011 Audit Fees s 680,883 s 698,176 Audit·Rclnted Fees 36,191 509,879 Tax Fees 3,300 364,175 All Other Fees 13,1:59 Total Fees s 720,374 s 1,585,389 Audit Pcr:.r: Consists of fees and C)\Jlenscs for professional services rendered for the oudit of our consolidated fmnncial statements, review ofthe interim consolidated financial stntements included in quarterly reports, and services normally provided in connection with statutory and regulatory filings. Audit· Rclot~d F~cs: Consists of fees and e:vcnses for professional services provided in connection wilh our Notes offering (in 2011) and nudit of our retirerront savings plan. Ta.~ F:Finance Corporation as Issuers, the gunrantors party thereto, and Wells Fargo Bank, National Association as Trustee nnd Col!awaiAgent, including the guaranteetmd the fonn of 1325% senior secured note due 2015 (E\hibit4.1 to TMXFinance LLC's Registration Statement on Form S-4, dnted Fehnmrv 14 2011, is incorpornted herein by this reference) 4.2"' First Supplemental~. dated M~v IJ ?Q1t,among TMX Finance LLCand TitleMaxFinance Corporation as Issuers, the gu:~rantors p~ny thereto, and Wells Fargo Bank, Nation;,] Association as Trustee and Collateral Agent, including the guarantee ~nd the form of 13.25% senior secured note due 2015 (E.'hibit 4.2 to TMX Finance LLC's Registration Statement on Fonn S-4, dated Serternher 10 201 I, is incorporated herein by this reference) ., Second SupplciTlCntallmlenture, dated !nne 5 2012, among TMX Finance LLC and TitleMnxFinance Corporation as Issuers, the guarantors pany thereto, and 4.> Wel!s Fargo Bank, National Associ~cion as Trustee and CoU:uernl Agent (e~ibit 4.3to TMXFinance LLC's Quarterly Repon on Fonn 10-Q, dated Am•nl'l 20 lQU, is incorporated herein by this reference) 4.4" Third Supplemental~, dated Julv 20 2012, among TMXFinance LLCand TitleMaxFinance Corporation as Issuers, the guarantors pany thereto, and Wells Fargo B:mk, Nation~] Association as Trustee and Collateral Agent (exhibit 4.4'to TMXFinance LLC's Quartt:rly Report on Fom1 10-Q, dated Amm~l 20 2Q11, is incorporated herein by this reference) lO.l• Aircrnfi Reimburst:ment Agre~n~nt dated Jnnllllrv 1 2011, by and amOn£ TitleMaxofGcorgia, Inc., a Georgia corporation, TitleMaxAviation, fnt:,, a Delaware corporation, and TMXA, LLC. a Dcla\Yare limited liability company (£\l!ibil10.3 to TMX Finant:e U.C's Registration Statement on Fom1 S-4, dated Eehmmv 14 .:ill.!!. is incmpomtel! herein by this reference) 10.2 First Amendment to Aircraft Reimbursement Agreement dated Janmuv I 1012, by and amons; TitlcMaxofGeorgia,lnc., a Georgia corporntion, and Tit!eMax Aviation, Inc., ll Delaware corporation 73 F:xhlbi! No. lOY Non·E'\Ciusive Aircraft Lcnse Agreement doted lmumry I "l(H! by and between TitleMaxAvintion, Inc. and TitleMaxofGeorgia, Inc. (E-Jiibit 10.4to All'lust 29 200Sby and among Tit!eMaxofGcorgia, Inc., Equity Auto Loan, LLC,and National Retail Properties LP (E~1ibit 10.9to Amendmem No. Ito TMX Finance LLC's Registration Statement on Fonn S-4, dated l\fnrch l.O 1011, is incotporoted herein by this reference) Real Estate Lease Agreement dated Sepl\'l!llwr I "l.fiOSby and bt:tween TV Investments, LLC3nd TitleM3xofMissouri,lnc. (E'Il1ibit 10.\0to Amendment No. Ito TMX Finance LLC's Registrntion Statement on Fonn S-4, dated March :m. ?OJ I, is incorporo!cd herein by this reference) 10.10" Real Estnte Lease Agrc~ment dllt~d Jmmmv I 1009by nnd between TY Investments, LLCand TitlelvlaxofMississipp~ Inc. (E'Il1ibit 10.11 to Amendment No. Ito TMX Finance LLC's Registration Stalement on Fonn S-4, dated iy!nrch 30_ 2011, is incorporoted herein by this reference) 10.\l" Real Estate Lease Agreement dated Am·H~t 1 ~007by and between TV Investments, LLCand TitleMaxoflllinois,lnc. {E.\ltibit10.12 to Amendment No. I to TMX Finance LLC's Registration Statement on Form S-4, dated ly!nrch 10 201 I, is incorporated herein by this reference) 10.12" Real Estate Lease Agreemem dnted Septern1wr 1 1007 by and betwce11 TYlnvestmcnts, LLCnnd TitleMnxofVlfginia, Inc. {E'Ii1ibit !O.Bto Amendment No. I to TMX Finance LLC's Registration Statement on Fonn S-4, dated 1\·l<~rch JO. 1011, is incorporated herein by this reference) 10.13" Real Estate Lease Agreernem dated hill' 1 2007 by and between TYlnvestments, LLCand TitleMaxofGeorgia, Inc. (Exhibit 10.14to Amendment No. Ito TMX Finance LLC's Registralion Statement on Form S--4, dated Nlnrch >O :Wll, is incorpornted herdn by this reference) 0689  10.14* Ren! Estate Lease Agreement dated Serten~•cr I 7007by and between TYlnvcstments, LLCand TiHeMaxofMissouri, Inc. (fuhibit 10.15 to Amcndmcnt No. I to TMXFinancc LLC's Registrntion Stntcment on FonnS-4, doted Mnrch .iO 1 011, is incorpomted herein by this reference) !O.JS• Ren1Fstate Lease Agreement dntcd 1ulv 'I. "007 by Hnd between TYinvestmenls, LLCand TitleMnxofSouth Cmolina, l11c. {E"Illibit 10.16 to Amendme11t No. Ito TMX Finance LLC's Registrntion Statement on FormS-4, dated Mnrch :;o "011, is incorporo.ted herein by this reference) Renl Estate Lease Agreement dated Novemher"O 1007 by and between TY!nvestments, LLCand TitleMaxofMissouri, lnc. (E\hibitl0.17to Amendment No.1 to TMX Finnnce LLC's Registration Stntement on FonnS-4,dated Mm'Ch 30 20! l, is incorponued herein by this reference) Real Estate Lease Agreement by and between TYinvestments, LLCand TitleMaxofSouth carolina, Inc. (E-.dlibitl0.18to Amendment No. Ito TMXFinance UC's Registrntion Stntement on Form S-4, dated March .iO 2011, is incorporated herein by this reference) 10.18• Real .Estate Lease t\greement dated Anri1.i0 200Rby and between TYinvestments.LLCand TitleMnxofG!orgia, Inc. (E-itibit 10.19to Amendment No. I to Tl-.-fX Finance LLC's Registrntion Stntcmant on Fonn S-4, dated Mi'lrch .iO. 2011, is incorporated herdn by this reference) 74 Ttih1e of Contents Exhibit No. Dtstri lion of Exhibit Employment OfferletterofOtto Bielss dated Occemhcr 14 2000 70!1 10.22t Employment Agreement of ArthurTrctyak dated ~:lilY I6 '01 I 10.23t Amended :md Restnted Phantom Stock Plan dated .!nne 17 'OJ! 21.1 31.1 Certification Pursunnt to Rule \5d-14(n), as Adopted Pursuant to Section 302 ofthe Sarbanes-0.-.:ley Act of2002, sig;ncd by the ChiefE'=!!cutive Officer 31.2 Certification Pursuant 10 Rule 15d-14(n) us Adopted Pursuant to Section 302 of the Snrb~nes-0.-dey Act of2002, sirmcd by the ChiefFinnncial Oflker 32.1 CertificMion Pursunnt to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906ofthe Sarbancs-0.-.:ley Act of2002, signed by the 01icfE-..r:cutive Officer 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906ofthe S3rbancs-O~ay Act of2002, signed by the OtiefFinancial Officer 101 Interactive Data File: (i) Consolidated Bal3nce Sheets as off)eccmbcr ::>1 "'~01" and December ~I "'IOJ I; (ii) Consolidated Statemants of!ncomc for the Years Ended Deccml1er ~ 1 20]" JQL!..and 2!1ll!; (iii) Consolidated Statements ofCash flows for the Yenrs Ended O?cemhcr :>I 2017, JQL!.. and 2010; and (iv) Notes to Consolidated Financial Statements t E'=!!cuti\'e compensiltion pl3ll or agreement, 75 Tnhlc: ofContent~ SIGNATURFS Pursuant to the requirements ofScction 13 or 15(<1) of the Securities E~hange Act of 1934, the rcgi~tmnt has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized, D~te: Mnrch 27 "011 TMX FINANCELLC By: lsi TRACJ'ml/1\'G Trncv Ynung ChiefE.>J:cutivc Officer and Manager Pursuant to the requirements ofthe Securities £-:change Act of 1934, this repo11 has been signed by the following persons on behalfof1he re1•i~1mntand in the CD.pacities and on the dates indicated. N:~me Title 0:\\1'. lsi Trnct• l~mll" Oli~fE\:Ccutive Offic~rand Manager Tmcv Yonnq (principal e:-:ecutive officer) lsi E/l·ahrt/i C Ni!/.mu 01icf Accounting Officer {principal F.li7ahe!h C. Nelson financial and accounting officer) lsi R11hcrf F. Pjrklc Manager j\"lnrs;h 'l7 2011 0690 Robert F Pirkle lsi ,fohn G, Keuuedv fll Manager M~rch 27 "013 John Q Kenncdv Ill 76 Dates Referenced Herein and Documents InCotpOrated By Reference 7J1iro lfl-K Ellinf!. Date Qtlrer filinr:.s ~ 9/25/03 7/1/07 7121/07 8/3/07 9/1/07 11/20/07 4/30/08 8/29/08 9/1/08 12/31/08 1/1/09 41!9/09 4/20/09 101!/09 12/14/09 12/31/09 1/!110 4/12/10 61181!0 6121110 7/1/10 7121110 12131/10 1/1/11 2/1 Oil! 2/14/11 S-4 3/30/11 S-4/A 4/19/11 S=!!IA 5/13111 5/16/ll 6/91!1 6/16/!1 61171!1 7/221!1 9/16/11 S-4 11/301!! 121!/11 12/31/ll 10-f( R~K 1/1/!2 51!/12 5/16/12 6/5/12 6/181!2 6/27112 1\:K 7/201!2 7/27112 8/201!2 lQ,Q 8/211!2 1\:K 8/27112 R-K 9/30112 lQ,Q !0/171!2 10/31/12 R-K 12/15/12 0691 EXHIBITC I 0692 Goebelsmann, Christina From: Powers, Sarah Sent: Wednesday, July 02, 2014 8:12 PM To: 'Geoff Gannaway'; Goebelsmann, Christina Cc: 'danieiJohnson@sutherland.com'; Wargo, Joseph D. Subject: RE: My motion Attachments: TMax--30b6 deposition notice to TMX Finance LLC.docx Geoff- Dn June 25, you indicated that you intended to file a motion. We insisted on a meet and confer and you refused to change your position. When pressed as to the proposal for deposition limits, you only agreed to consider a "modest" increase from a proposal that would have resulted in LoanStar being able to take only approximately one or two additional depositions. Given your indication that you would only agree to a "modest" limitation, we cannot agree, especially as additional evidence ofTitleMax's wrongdoing continues to emerge. If you are willing to change your position, we may be able to come to an agreement. However, in a good-faith effort to compromise, we have significantly revised and narrowed the proposed 30(b)(6), attached in red line for your convenience. This draft is directed to TMX Finance LLC; if we are able to come to an agreement, we will also prepare similar notices to TMX Finance TX and Title Max TX. As discussed before, we may be able to further narrow the topics if you are willing to agree to accept additional interrogatories in the alternative. We remain willing to discuss. Sincerely, Sarah F. Powers WARGO FRENCH 1888 Century Park East, Suite 1520 Los Angeles, California 90067 Telephone: (310) 853-6453 (direct) Facsimile: (3 I 0) 853-6333 E-Mail: spowers@wargofrench.com Website: www.wargofrench.com WARGO FRENCH I Ill= A\!anta I Los Angeles 1 M1am1 The information in this message is intended for the addressee only and may contain privileged and confidential infonnation. If you are not the intended recipient, please immediately stop reading this message, delete it from your system and notify the sender at spowers@wargofrench.com that it has been deleted. Any unauthorized reading, distribution, dissemination, copying, or other use of the infonnation in this message is strictly prohibited. From: Geoff Gannaway [mailto:qqannaway@beckredden.com] Sent: Wednesday, July 02, 2014 5:19PM To: Powers, Sarah; Goebelsmann, Christina 1 0693 Cc: 'daniel.johnson@sutherland.com' Subject: My motion Is there any word yet on any alternate proposal for deposition limits, or on a revised list of corporate rep topics, per our discussion on Monday? As 1indicated, I would like to get my motion on file this week, so I need to hear from you soon. GEOFF GANNAWAY Partner Beck IRedden~ Beck Redden LLP 1221 McKinney St., Suite 4500 Houston, TX 77010 Phone 713.951.6263 Fax 713.951.3720 ggannaway@beckredden.com WW'N.beckredden.com 2 0694  NO. 2013-33584 WELLS HIRE FINANCIAL SERVICES, LLC, § IN THE DISTRICT COURT d/b/a LOAN STAR TITLE LOANS, d/b/a § MONEYMAX TITLE LOANS, and d/b/a § LOANMAX; MEADOWWOOD FINANCIAL § SERVICES, LLC, d/b/a LOANSTAR TITLE § LOANS, and d/b/a MONEYMAX TITLE LOANS; § and INTEGRJTY TEXAS FUNDING, LP, § § OF HARRJS COUNTY, TEXAS Plaintiffs, § § v. § § TMX FINANCE HOLDINGS, INC.; § TMX FINANCE, LLC; § TMX FINANCE OF TEXAS, INC.; and § TITLEMAX OF TEXAS, INC., § 152'' JUDICIAL DISTRJCT Defendants. PLAINTIFFS' NOTICE OF THE ORAL AND VIDEOTAPED DEPOSITION OF THE CORPORATE REPRESENTATIVE OF TMX FINANCE, LLC To: Defendant, TMX FINANCE, LLC, by and through its attorney of record, David Beck, BECK REDDEN LLP, I 221 McKinney St., Suite 4500, Houston, Texas 77010. Please take notice that, in accordance with Rule 199.2(b){l) of the Texas Rules of Civil Procedure the deposition of one or more corporate representatives ofTMX Finance, LLC ("TMX Finance") will be taken by Wargo & French LLP, counsel for Wellshire Financial Services, LLC, d/b/a LoanStar Title Loans and Integrity Texas Funding, LP, at ----~ on The deposition will continue from day to day until completed and will be taken by stenographic, as well as videographic, means by a certified court reporter. TMX Finance's corporate representative will be requested to testify on behalf of the corporation on the topic(s) listed on the attached Exhibit A. Respectfully submitted this _ _day of June, 2014. 0695 SUTHERLAND ASBILL & BRENNAN LLP By: Kent C. Sullivan (SBN 19487300) Daniel Johnson (SBN 24046165) Robert A. Lemus (SBN 24052225) 1001 Fannin, Suite 3700 Houston, Texas 77002 Telephone: (713) 470-6100 Facsimile: (713) 654-1301 E-mail: ken t.sul !ivanrcusutherland.com E-mail: daniel. jobnson@sutherland.com E-mail: robert.lemus@sutherland.com And WARGO & FRENCH LLP Joseph D. Wargo (GA No. 738764) (Admitted Pro Hac Vice) Abigail J. Stecker (CA No. 284534) (Pro Hac Vice in Process) 999 Peachtree Street, N.E., 26111 Floor Atlanta, Georgia 30309 Telephone: (404) 853-1500 Facsimile: (404) 853-1501 E-Mail: jwargo@wargofrench.com E-Mail: astecker@wargofrench.com Sarah F. Powers (CA No. 238184) (Admitted Pro Hac Vice) Christina L. Goebelsmann (CA No. 273379) (Admitted Pro Hac Vice) 1888 Century ParkE Suite 1520 Los Angeles. California 90067 Telephone: (310) 853-6300 Facsimile: {310) 853-6333 E-Mail: spowers@wanwfrench.com E-Mail: ceoebelsrnann@wargofrench.com Attorneys for Plaintiff Wells/tire Financial Sen,ices, LLC d/b/a Loan Star Title Loans and Integrity Texas Funding, LP 2 0696  CERTIFICATE OF SERVICE This is to certify that I have this day served all parties with a copy of the foregoing Notice of Oral and Videotaped Deposition in accordance with Rules 2la and 191.5 of the Texas Rules of Civil Procedure on June_, 2014. Daniel Johnson 3 0697  EXHIBIT"A" INSTRUCTIONS AND DEFINITIONS _!._ _ The relevant timeframe for the topics listed is November 2010£ej3teml:1er 2911 to the present, unless otherwise indicated. +.-1. "Customers of Competitors" means the customers of anv non-TitleMax car title lender in the state ofTexas. ~1..___"Integrity" means Integrity Texas Funding, LP. J.:L_"LoanStar" means LoanStar Title Loans. 4. "TMX Finance TX" means Defendant TMX Finance ofTexas,lnc. its successors, predecessors, divisions, subsidiaries, affiliates, present and former officers, agents, employees, and all other persons acting on behalf of Defendant TMX Finance of Texas, Inc. or its successors, predecessors, divisions, subsidiaries, and affiliates. 5. "TitleMax TX" means Defendant Titlernax of Texas, Inc. its successors, predecessors, divisions, subsidiaries, affiliates, present and former officers, agents, employees, and all other persons acting on behalf of Defendant Titlemax of Texas, Inc. or its successors, predecessors, divisions, subsidiaries, and affiliates. 6. "You," "your," or "TMX Finance" means Defendant TMX Finance, LLC, its successors, predecessors, divisions, present and former officers, agents, employees, and all·other persons acting on behalf of Defendant TMX Finance, LLC or its successors, predecessors, or divisions. 4:-.i__ "DataTrax" means www.Datatraxonline.com, betadatatraxdotnet.zebec.net, or any website used for the purpose of accessing DMV records that either (1) includes the term "datatrax" or (2) is owned or operated by Zebec, Inc. ~fr:___"PublicData" means www.publicdata.com or any website used for the purpose of accessing DMV records that is owned and operated by The Source for Public Data, LP. 4,_7.__ "DMV Databases" means any database or website that contains DMV Records, including but not limited to the following: a. DataTrax, www.Datatraxonline.com, betadatatraxdotnet.zebec.net, or any website used for the purpose of accessing DMV Records that either (1) includes the term "Datatrax" or (2) is owned or operated by Zebec, Inc.; b. PublicData, www.publicdata.com, or any website used for the purpose of accessing DMV records that is owned and operated by The Source for Public Data, LP; and 4 0698  c. the Texas Department of Motor Vehicles website. _7._ _ "DMV Records" means records available through the DMV, no matter whether accessed through a third-party vendor or otherwise, and including personal information about an individual, such as home address and the holder of any liens on the individuaPs vehicle. +.S. "Litigation" means any action or proceeding in which You are alleged to have misappropriated or otherwise interfered with Customers of Competitors or lists of Customers of Competitors. &.2:.__ "Loan', or "loans" means a loan secured by the title to a vehicle. Q....ill,__ "Marketing" means the action or business of promoting and selling products or services, including market research and advertising. To "Market" means to promote or sell products or services. +4:-l.L...._ccOverlap List" means the overlap list of customers prepared by the Special Master appointed in this a~tion and transmitted to the parties on or about December 16, 2013 . .f..l-:.11. "Refinance" or "refinances" means a loan secured by the title to a vehicle that involves the replacement of an existing loan on the vehicle. g.l.1._ "Parent Company'' means any company or companies that hold an ownership interest in You, whether through ownership of stock, membership interests, or otherwise. l.i__"Subsidiary'' means any company with operations and/or offices in Texas in which You own more than 50% of the stock or membership interests, or that You otherwise control.. 4-J.:.l5. "TitleMax" means the car title Joan company or comoanies opemting under the brand name TitleMax. +4:-.l.Q,_"Affiliate" means any company with operations and/or offices in Texas that is not a Parent Company or Subsidiary, but that is related to You in one or more of the following ways: a, Any company in which You own less than 50% of the stock or membership interests; or b. Any company that is controlled or more than 50% owned by Your Parent Company. +§..:.1..1._"TMX StoreNumbcr" means the number appearing on the Overlap List under the column labeled "TMX StoreNumber." +4:1Jh._ "Person" means any natural person, corporation, firm, association, partnership, joint venture, proprietorship, governmental body, or any other organization, business, or legal entity, and all predecessors or successors in interest. 5 0699  .J+...L:L_"Possession, custody, or control" of an item means that the person either has physical possession of the item or has a right to possession equal or superior to that of the person who has physical possession of the item. +&-20. "Refer'' or "relate to" means as well as tenses thereof, mean, refer to and include any tangible thing which is in any way relevant, refers, reflects, memorializes, evidences, contains, embodies, constitutes, states, identifies, describes or pertains to all, or any portion of, the specified facts, contentions, statements and describe categories of documents requested and subject matters thereof. W-:-21. "Document" means all written, typed, or printed matters, and all magnetic, electronic, or other records or documentation of any kind or description in your actual possession, custody, or control, including those in the possession, custody, or control of any and all present or former directors, officers, employees, consultants, accountants, attorneys or other agents, whether or not prepared by you, that constitute or contain matters relevant to the subject matter of the action. 2-<+:.22. "Identify" or "describe," when referring to a person, means you must state the following: a. The full name. b. The present or last known residential address and residential telephone number. c. The present or last known office address and office telephone number. d. The occupation, job title, employer, and employer's address at the time of the event or period referred to in each particular interrogatory. e. In the case of an entity, identify the officer, employee, or agent most closely connected with the subject matter of the interrogatory and the officer who is responsible of supervising that officer or employee. ~23 "Identify" or "describe," when referring to a document, means you must state the following: a. The nature of the document (e.g., letter, handwritten note). b. The title or heading that appears on the document. c. The date of the document and date of each addendum, supplement or other addition or change. d. The identities of the author, signer of the document, and persons on whose behalf or at whose request or direction the document was prepared or delivered. 6 0700  e. The present location of the document and the name, address, position or title, and telephone number of the person or persons having custody of the document. 22.14. The terms "aJJ,>~ "any," and "each" shall each be construed as encompassing any and all. CORPORATE REPRESENTATIVE TOPICS -h---¥;::J1:1r a~:~tAerity te eeAdt~et bw.;-ifl-ess-HHhe State efTe::as. 2.1. Yeur eerpeFate str~:~et1::1re, iAeht9iRg !:I tit Ret lira:lite84e: The 8\/Aer:-hif.l ef YEH:H'-stee*t Formatted: Indent: Left: 1", No bullets or numbering TAe iE:IeAti:fieatieR efYear 12arent CemfJaRy; ~ The st'r1:1etl:lra! relatieRsRi13 Bet·NeeH Ye~:l aREI Ye1::1r PareAt CeJTifJaAy; 4 ~~;W-eWiH!rshi13 efstee-lc iA £~::~8sir:liaries aRt! Affiliates; e.:- +4e-itleAtitieatie~flG-Af.fi.tiatest f The structural relationship between You and TMX Finance TX and/or TitleMax Formatted: Indent: left: 0.75", No bullets or TXYe~::~rg1:18&iEiiaries and /> ftiliatas.; numbering TAe everla13 ef effieer, Eiireeter,-manage!~ia!-er-etAer eFnpleymeRt pesitioos Fonnatted: Indent: Left: 1", No bullets or -13etweeR-¥-e~-eur PareRt CempatTY; numbering g. aREI fl.:. b....__The overlap of officer, director, managerial or other employment positions Fonnat;ted: Indent: Left: 0.25", No bullets or bet\veen You and TMX Finance TX and/or TitleMax TXYe1:1r £yf:;siEiiaries aAE:l Affiliat.es-. numbering ~l:lr finaneial repertiRg h-1 relatieA te Parent-C-.em))aay-afi-G-'?a~ Affiliates, iAeh:~tling l:n:1t net-+iffi.#eEI-ffi.:. a. The freqHeRey, aat1:1re, aREi eeAteAt efYeur £Td8siE!iaries' aAEI AffiliateHneeme; tanatieA, EJUarterly, aAa aRAual r~ &.--+lie maARer a REI n'letheEI ef pre~aring YeHr Su8d8iaries' aRE! AffiliateHneeme, taxatieR, q1:1arterly, aRE! aARllal rej3Sl1S; e:--¥e1:1r iRvekement iR the 1:3re~aratieR er eversight efYe1:1r S1:1lasiEiiaries' aA€1 Affiliates' iAeeme, tanatieA, f11:1arterl), a REi aRA1:1al repe~nd H. AA) efYeur iReeme, ta:catieA, q!darterly and aAnt~al repert:: tHat is seAselielated v fth that efYeur....&-li=Jsieliaries er Affiliates. 4.-.,. Your board of directors, officers, and managers, including but not limited to: a. The identification of Your directors, officers, and managers; 7 0701  b. The responsibilities of Your directors, officers, and managers relating to TMX Finance TX and/or TitleMax TX¥e1:1r S!lBsiEliaries aRB A#iliates aREI'er Ysur PareRt CeA1f.laftJ'-; c. The relationship between Your directors, officers, and managers and the directors, officers, and managers ofTMX Finance TX and/or TitleMax TX¥-oof St~8si6iaries aRd Affiliates aREI/er Ye1:1r PareHt CeR1j3aR); d. The date, length, participants, substance and content of any discussions at any of Your board of director meetings regarding any of Your marketing practices with respect, iReh:IEiiRg 8tH Ret limite8 to solicitation of Customers of Competitorse-empeHters' eustemers, buyouts of Customers of CompetitorseeH-tf1etifefs' loans, refinances of Customers of Competitors~eH-ffiffi' loans, and searches of the DMV databases. ~3. The operations ofTitleMax stores in Texas. specificallyRature ef~~l:lf--bi:I-Sffies.s aR6 Baily BfJeratisAs in Te::as, iRei1.1Eling 9Ht Rat JimiteE:I-t-9: a:----¥-el:IT-erera ti an s; l'l. The iEiel'ltifiearieR efYe1:1r 81:1siness l:IRits er-Ge!**ffilea-t-57 e.:--~eAtifieati en efYetn· 81:1siness I;!Rits eHiepa-FtmeA·ts-tfl.at share eJ3efati..aR.s. with Yeur Su6si6iaries aRB Affi.liates er-¥e·.1r Pare11t Ce!'AJ3Bfl)'; 4Q.o,The locations of each TitleMaxef..¥.el:!f stores in Texas; e:-12:.The dates that each TitleMaxef:.¥.oo.f stores in Texas opened and, if applicable, closed; f£,.. The name and number of the district and region in which each TitleMax store is located; g.-d. The annual, quarterly, and monthly performance and profitability of each of Your stores in Texas; lt:--k:leRtitieatieR ef geAeral rRanagers and stare l'llaRagers that were paie:l any f3erfarFBaAee !:lasee:l l?enldses, inc-ltt6iRg 81:1t net limiteel te any "J3reHt hlen1:1s" er ~aR ve!1:1me" hlenHs; f:.L The identification by name, number, and geographical scope of each of Your districts in Texas; .t.-LThe annual, quarterly, and monthly performance and profitability of each of Your districts in Texas; k lBeAtiHeatieA efBistriet rnaRagers tflat were 13ai8 any l'erfermaAee l:lase6 i?e~WSeS;­ inell:le:ling 9~:t FISt limiteel te any "prefi.t..I:Janu~Aew-1-oan .. OI1:1me" i?an1:1s; I. TAe 6ate(s~ tAat tlistriet iflaAagers v:ere paiS any J3erfenflal'lee Based bsfll:lses, .ffi.€.1..HEling 81:1:t nat liJflitetl te any "13refit i?anl.ls" er "new-+ean "BIHifle" 8a!Tl:J5t mo. The identification by name, number, and geographical scope of each of Your regions in Texas; 8 0702  tr:-h. The annual, quarterly, and monthly performance and profitability of each of Your regions in Texas; e. lBeRtiHeatieA efregieRalmaRagers tRat wefC J3aiel aAy fleHermaRee Base4 beRuses, iReiHEliRg 13Ht net limite9 teaRy "J3refit beRl:ls" er "Rev: leaH vell:lme" eGJW-5f f3. TRe ElateEs) tRat regieRalmanageFS tRat •vere ~aiEl aRy flerfel'ffiaiWe-9ase4 -i:l€HttJ-se5;-i-Acltt4iAg 9\:lt Ret lin=titeEI te any "Fl~Rl:lS" er "Ae'<'o' leaR Yell:lme" b~ Ef.-¥el::lr setH·ee ef re c'eRl;le eameEI in Te::as, ineiHcliFtg iE:!eRtifieatieA efall fees aR6 ~eiateei witA Yetl-F-teaas iR Tenas; aRe! r. AAy traele-er busiAess that Yeld-fef.e!T6elegate, er ethet-v-ise stt8tnit te Yeur PareAt ~aAy, Ye1:1r S~:~bsi8iaries er AffiliatE!s, er aRy tHin! tJarty ··eA8eFS.- &.4. Your corporate policies and procedures with respect to marketing to Customers of Competitors, including but not limited to: a. Your method and manner of developing and adopting Your corporate policies and procedures with respect to marketim! to Customers of Competitors; b. The identification of individuals and entities, including employees ofTMX Finance TX and/or Title Max TX~~J3aA)' an6/er £1::1bsidiaries aAEl Affiliates, involved in the development and/or adoption of Your corporate policies and/or procedures with respect to marketin2. to Customers of Competitors; e:--¥ei:l-f-ffieth-e6 aR8 lEaRRer efEleve!epiRg aA·aa8e~~iAg EBI'f!Bra£e flSiieies aA!:I preeeffilres v·itA Yeetr PareRt CemtJaAy aAEiler 2i1.1l:lsidiarics aRE:! Affiliates; 4£:.Your policies and procedures regarding the use of DMV Databases and DMV Records; e-4.,_Your policies and procedures regarding the development, creation, drafting, review, and approval of marketing materials directed to Customers of Competitors, such as direct marketing mailers and flyers; .f:----¥.e~es aAEl preeeelures regarEiiAg b~;~EigetiAg, e' ·alHatiAg, aAalyi:!:iAg 'f}effenflaRee metries, anEI aOOffing efiEar!i:etiAg 13laRs aAEl/er ~regFams, ~eaf.ieally iAveJniAg 8ireet marlcetiAg with mailers anEl flyers; g:-~ Your policies and procedures relating to the creation, maintenance, and destruction of information in 11 marketing binders" or "buyout binders"; R-:.[_ Your policies and procedures regarding audits of TitleMax¥ffil.F stores and the Hmarketing binders" located in each of the stores; he.. Your policies and procedures regarding buyouts of competitors' loans, marketing practices regarding buyouts of competitors' loans, and solicitation of competitors' customers in order to buyout competitors' loans; 9 0703  f.-!1..Your policies and procedures regarding refina1~ees af eeffifJet#ef.s.!.-IOOR-5; marketing practices regarding refinances of competitors' loans, and solicitation of Customers ofCompetitorseemretf.t.effi!.~F& in order to refinance competitors' loans; t<.h_ Your policies and procedures regarding the development of marketing practices by regional managers, district managers, store managers, assistant store managers, and customer service representatives; hLThe identity of each of Your employees who was responsible for or involved in the development, implementation, and/or approval of Marketing strategies, such as cold calling or lien searching with respect to marketing to Customers of Competitors; m. TAe iRteraaf.eET-ef...¥.el:!F legal e:le~attntefTI=-aft6--¥e1:!f-ffiar·k-efing-Eiepal1ment reganHng the iF.itiatieR ana Bise-entinl:!atien efmarl:eting £3raetiees, inehH!ing j:'l~es iRvolviRg tAe 6~o~ya~:~ts ef esmf.letiters' leans, refiRaRses ofeemp~ leans, MHI seareAes eftRe QH" 9ata8ases By en'lpleyees er thin:! party ··enders feF-fflaflwting f.Jf::ll'J3SSest n. TAe inEeraaf.en-e.f-¥.e~efltlftme~J3artffient Y e1:1r -P-arent Cempany an Eller Yeur Sl;ll:lsidiarieG and AffH-i-at-es-regaffi.ing tHe initiatie& anE! 8iseentin1.1atien ef marl-eting praeti~es, il=tei~::~EiiAg fii'aetiees in· ·el· ·ing tAe .ffitye1;1ts efeeJFJj3ettters!-+eans, reHnanees efeempetiters Jeans, ane:lsearehc.s-e$ tOO 9?4" ldataBases By empleyees eF4hlfd f18I·£y Vi::F!Eiers fa~ e:.k. The sales or Marketing training or instruction You provided to Your employees and/or the employees ofTMX Finance TX and/or Tit! eM ax. TX with respect to marketing to Customers of Competitors; jt:l,_The compliance or noncompliance of Your employees and/or employees of TitleMax. TX or TitleMax Finance TX with Your policies, rules, and/or codes of conduct related to marketine to Customers of Competitorssa.fe-an4!er-er Mafl~ng efear title leans in the state efTenas; ~Ill. Your policies and procedures regarding "customer tracker[s]" or "marketing trackers"; 1 1':!1:..Your policies and procedures regarding the retention ofphysicalloan or customer files; s. TAe GSlFIJ:JiiaAee e~Hee!'flJ3lianee efYe1:1r en1pleyees and'er eJRflleyees sf +itle~'la:: TX e~ffi-:'14Jul't)G-lk-i~r-ee4es-ef eel'l41:!et relateS te rAe reteAtieA efpRysieal or e!eewe!'lie-deE:a1ments aREl.'er ffifu~ ~5. Your policies and procedures relating to information technology, including but not limited to: 1 See Ryan Dep. 16:7~12; 81:5-11; Sudduth Dep. 67:18-68:5. 10 0704  a. Your policies and procedures regarding the retention of computer hard drives and the information and documents contained thereon; b. Your policies and procedures regarding the use of computers and laptops that You own, possess, and/or control; and c. Your policies and procedures regarding the maintenance of computers and laptops that You own, possess, and/or control, including but not limited to maintenance of the hardware and software; d. Your policies and procedures regarding the retention and destruction of information contained on computers and laptops that You own, possess, and/or control when an employee discontinues his or her employment with You; e. Your policies and procedures regarding the use of e~mail addresses You provide to Your employees; f. Your policies and procedures regarding the maintenance ofthe accounts and e- mail addresses You provide to Your employees; g. Your policies and procedures regarding the retention and destruction of sent, received, deleted, and draft email correspondence and documents received through the accounts for the e-mail addresses You provide to Your employees; h. Your policies and procedures regarding the termination of access to computers and laptops that You own, possess, and/or control, and to e-mail addresses You provide to Your employees when an employee discontinues his or her employment with You. g.,.(). Your knowledge of and the actions taken in response to your knowledge of Your employees and/or the employees ofTitleMax TX or TitleMax Finance TX searching DMV Databases (using license plate numbers, lien holder information, or other similar information) for Marketing purposes, including but not limited to: a. The scope of Your knowledge concerning Your employee's or and/or the employees ofTitleMax TX orTitleMax Finance TX's use ofDMV Databases to market to Customers ofCompetitorsfGtential EHstemeFs, including but not limited to the practice of obtaining license plate numbers from vehicles located in Loan Star parking lots and the prevalence of searching DMV Databases by lien holder; b. The date and manner in which You acquired such knowledge; c. Identification by name, title, position, and store of all of Your employees and/or the employees ofTitleMax TX or TitleMax Finance TX that searched the DMV Databases for marketing purposes; d. Identification of by name, title, position, and store of all of Your employees and/or the employees ofTitleMax TX or TitleMax Finance TX that used the results of the searches of the DMV Databases for marketing purposes, including but not limited to the identification of all employees that sent Marketing materials to the individuals on the Overlap List; 11 0705  e. Your reimbursement or denial of reimbursement requests for expenses incurred by Your employees and/or the employees ofTitleMax TX or TitleMax Finance TX for therelatiAg te use of the DMV Databases, iAeil:lEliAg 9Ht-A-e~9-te aeeess fees, late fees, priRtiAg fues,ref'art fees, aAEl pestage fer t'Aailing leH~r flyers te pFespeetive e1:1stemers; · f. The actions taken, if any, in response to acquiring such knowledge· and the identification by name, title, position, and store of all of Your employees and/or the employees ofTitleMax TX or TitleMax Finance TX involved in carrying out those actions; g. T!ie enisteA.ee-a~entifieatiea sfaAy efYeHf-tteeel:!Ris with DM¥-Qata\3as-es, iAel1:.18iRg l:l1:.1t Ae~tl te aAy agreemeAts 8etweeA Ye1:1 aAel the DM" DataBases; aA8 h. T!ie enistenee-afHI-teeAtifisatieA efaRy aeee1:.1Ats efefYe1:.1T-efRpleyees aAEI/ef-tfl.e- ernp·leyees·eH#l~1a:: TX er Title~1a:: fiRaRee TX v·ith Q..t>1'' Datal:lases, iRel1:18iHg 8t:lt net limite8 teaRy agreeAteAts BetweeR Yel:lF etnj3leyees aRElter tHe ~es afTitleMr.S 1 INC. ; TITLEMJ\X OF TEXAS, INC.; FELIX DELEON; and ISHMIIEL HERUJ\NDEZ, • Defendant::: • *HARRIS COUNTY, TEXAS ORAL AND VIDEOTAPED DEPOSITION OF MICllAEL RY}.N Jl.JN'E 25 f 2013 ORAL J\.~ VIDEOTAPED DEPOSITION OF MICHAEL R¥AN, p~Qduced as a ~itn~ss at tb~ instance of the PLAINTIFFS, and duly swo~n, was taken in the above-styled and nunbe~od cause on the 25th of JUNE, 2013, ~~om 11:41 a.m. t.o 1:51 p.m., bofo~e MELISSA PARKHILL, CSR, in and for shorthand, at the law officoe Qf suthe~land h:::bill ~ Brennan, 600 Congress Avenue, Suite 2000, Austin, Travis County, Texae, purzuant to Texas Rules of Civil PrQcedure 0762  2 ' 4 5 APPEARANCES 6 7 FOR ~HE P~IN~IFFS: 8 Jessica C. Casey, Attorney at Law WARGO FRENCH 9 999 Puachtroo Street, NE, 26th Floor Atl~nta, Georqi~ 30309 10 ('l04) 853-1500 jcnscyewargofrench,com 1l 12 13 FOR THE DEFENDANTS 1 THX FINANCE OF TEXJo.S and TITLENAX of TEXAS: 14 Stephen ~. LaBriola, E~q. 15 FELLORS LABRIOLA Suite 2300, South Tower 16 225 Paacht:roo Stroot, NE Atlanta, Georgia 30303 17 (404) 589-9200 slabriolnGfellab.com 19 "20 Geoff Gnnna~ay, Esq. BECK REDDEN, LLP 1221 McKinney Street, Suita 4500 21 Houston, Tu~ns 77010 (713) 951-6263 22 99annawayGbcckreddon.com 23 24 25 0763  Pago 28 1 Q. Did you toll them that? 2 A. Yoah. ' Q. Did you tall anybody else ahout this idctil 4 l:11::tweon September of 2012 and Novealber of 2012 when you 5 learned about tho n=• DataTrax? 6 A. Yeah, in Nov~er I -- I -- I brought i t the attention to the -- to the direct ~arketing that we were B doin~ -- tho direct mailers that wo wore doing to my -- 9 my ~upervi:oor, which was Jim Batterson. Q. We'll coco back to that conversation in just a 11 minute. 12 So once you had the conversation with Lucia and 13 Ishmael in September, what did you do at that point, 14 anything nt"tctr t:l\.llt rt~lated to this infox:mation or theso l.S letters? 16 A. tlo. I -- I told them -- I told the~n that i t 17 :::oundocl. like a great idea. Let's try it. Did you share that information with any of your " Q. 19 other Au:otin atores? 20 A. 'ie.s. 21 Q. How often after that meetinq did you share this 22 info%'ll'..,.tion? 23 A. Exactly I'~ thinking a couple of weeks. 24 Q. Po you recall what storeB you ~hnrcd thiB idea 25 with? 0764  I'age 29 1 A. Specifically Au~tin 9, ~hich is on G~a~lupe 2 Street -- I know the addxess of that one, 37001 [~>ic] 3 Guadalupe -- ~u~tin 10, which is on L~r, and our 4 TitleB1.1~::ks utore, which i:o also on L;unar. 5 Q. Did the 'l'itlcMax r.tores have numbers? I'm 6 :;orcy. 7 A. Yes. Q. I'm sorry. Title Bucks you said? ' A. Title Bucks, yes, Title Bucks of Austin 2. 10 Q. And whore is the Title Bucks 2 store located? 11 A. On Lamar Street, too, as well, North Lamar. 12 Q. Who works or who worked in tho Austin 8 store 13 on Guadalupe at tho time that you shared this 14 i.nf"oram.ticm? 15 A. I believe the G.M. at the time was Jarred 16 Do.:der. 1? Q. Do you recall who the S.M. was? 18 A. I had several s,M,s in that store. So exactly which one, I don't I don't know. " 20 Q. And just so I'm clear in a typical Titl~~x 21 ~to~o. thoro•~ a G,H, ~~dan S.H, Axe tho~o a~y otnor 22 titled ~loyee~? 23 A. Some stores dapendinq on their volumes will 24 have c.s.R.s, customer ~ervice reprc$e~tative$. 25 Q. Do you recall wht did you come to shnre this informD.tion with 10 each of these stores following your visit with Ishmael 11 and Lucia? A. Well, asked Lucia to pull -- pull some data 13 b;t .tip eodO>. And I would -- Shr.a vould 11ivw me that 14 in:fo=ation as;: fa:r; as tho custo;~mo:; infolmiOI.tion, and I 15 would disoominato my zip code~ to those stores that were 16 in that -- whore the custornarll livad at. 17 Q. Do you recall tho first timo that you asked 16 Lucia to attain thiz:o informntion from the web ~>itc? 19 A. Exaetly when, no. I'm thinking Oetober 20 som0timo. 21 Q. So ualk mo through that a li ttlo bit. Did 22 somebody ask you for this information or did you just a~k 23 Lucia for i t on your own or how did i t come to be? A. I asked Lucia on her own so these stores could " 25 participate in a direct marketing program that Ghc waa 0767  Page 1 CAUSE NO. 2013-33584 WELLSHIRE FINANCIAL SERVICES, LLC d/b/a • IN THE DISTRICT COURT LOHES'l'J\R 'l'IZLE LOMI'S and INTEGRIT:i TEXAS FUNDitiG 1 LP, • Ph.intiffs vs. • 152ND JUDICIAL DISTRICT 'rHX FIUJI.NCE HOLDINGS, lHC.; TMX FINANCE, LLC; TMX FINMtCE OF T.E:X11.S 1 • rue.; TITLEHJI.X OF TEXAS 1 I!lC.; FELIX DELEOll; and • ISHHAEL HERNANDEZ, • !il'\nRIS De~endants • COUl!TX, TEXAS ORAL AND VIOEOT,IU'ED DEPOSI'l'IOll OF PATRICK SUDDUTH JUNE: 25, 2013 ***************************************••··············· ORAL AND VIDEOTAPED DEPOSITION OF PATRICK SUDDUTH, produced as a witness at the instance of the PLAINTIFFS, and duly swo~, was taken in the above-styled and numbered cnu~e on tho 25th of JUNE, 2013, ~rom 2:38p.m. to 4:54p.m., bofoxo ~LISSA PARKHILL, CSR, in and for the State of Texas, reported by eomputcr-nssistcd ~chine shorthand, at the law offices of Sutherland Asbill ' Brennan, GOO Con9ross Avenue, Suite 2000, Austin, Travis County, Texas, pursuant to Texas Rules of Civil Procodur~ 0768  I'll90 2 l and tho provi~~on~ stated on the record. 2 3 ' 5 APPEARANCES • i FOR 'I' HE PLAIN'l'IFFS: 8 Jessica C. Caney, Attorney at Law W\RQO Ji'RENCH 9 999 Peachtree Straat, NE, 26th Floor Atlanta, Georgia 30309 10 (404) 853-1500 jcaseyewargofrench.com 11 12 13 FOR 'XHE DEFEHDJ\NTS 1 TMX FlNA.>lCE OF TEXAS and 'l'I'l'LEMAX g£ TEXI\S: Stephen T. LaBriola, Esq. 15 FELLOWS LABRIOLA Suito 2300, South 'l'ower 16 225 Peachtree Street, ~E Atlanta, Georgia 30303 11 (404) 599-9200 slabriola9fellab.com 18 20 --- Geoff Gannaway, Esq. BECK REDDEN, LLP 1221 McKinney Struat, Suita 4500 21 Houston, Texas 77010 (713) 951-6263 22 ggannaway@beckroddan.com 23 " 25 0769  Paqe 17 1 with thaa i~ busin~ss to bu~iness marketing. Like, if we 2 have un auto r~pnir shop, something like that, where, 3 say, a cu~torner needs $2,000 ~or a transmission and they 4 don't havo that money and tho tranG~ssion placo doesn't 5 offer £inancinq. So we would hope to dcv~lop a 6 partncr~hip with that business so that if th~y had n 7 cu=:ton,e:e lik,. tha.t, they :ui9ht would :::end them to us. We 8 could sec if we could loan that amount of money on their 9 car so that they can have their car now, and then they 10 can pay us. 11 Q. lt.ave you ever heard of thO -- you /cnow, 6 ho wa~ ba:!lically like, well, X fiquz;ed out why tho no:r:th 7 uide di:triet wa::r -- hoo been beating you quyo for tho l:zu•t fltv months, And he kind of told me Olbout the, you ' l:no\.f, program that :.'..ike had found out about -- Mike Ryan, 10 And I mean, that was essentially it. He kind of told me 11 there•: a way to find, you know, potential customers 12 through lienholder• or, you know, i t was juot a brief 13 summary I guess of what i t wa~. Q. Did hi!! tell you how anyono a.t Til:l~inx had bceen 15 u~ing that info.mation? 16 A. No. I mean, ho kind of juot told ~e, you know, 17 just it's a way to sort lienholder information. l8 Q. Did ho cuggest what you ~hould do with that 19 inf'orw~.ticm? 20 A, Well, I mean, it 'H'o:L:> kind of like, you kno,.,, 21 it':. appnrently, they're hnving some succcs~ 'H'ith it. 22 So, you kno'H', essentially, you know, get 'H'ith Mike and 23 find out if it's something that might work for y'all. Q. What did he toll you was $UCOCGGfUl -- bCC~UGO 25 you mentioned that h~ told you thay 'H'ere running 0771  Page 19 2 A. Uh-huh. 3 Q. Eut then beyond that, did he tell you anything 5 A. He just told me i t wua -- ba~ically to find out 6 if, you know, we could send ~ letter or whatever to a 7 potential customer that we would hope to buy out from whatever in$titution they were currently with. Q. Was thi:o a telephone call that you had with 10 Jim? 1l A. Yes. 12 Q. Did Jim toll you who had been performing these 13 ccarehes? 14 A. No. 15 Q. You mentioned that Hike Ryan's n~c came up in 16 that conversation? 17 A. Yes. lS Q. What did Jim tell you about Mike? 19 A. He just said, you know, to get if I Yanted 20 to get in touch with Hiko and, you know, got como moro of 21 the detailc. But as far as what Jim told me, i t was 22 just, you know, mainly we can sort by any lienholder, you 23 know, essentially from any sort of third-party lender, I 24 guess, like, any -- any financial institution basically. 25 so ... 0772  Pag~ 20 1 Q, Did Jim mention anyono ~lno•s name during that 2 conversation? 3 A. No. Q. After you had that conversation ~ith Jim, what, 5 if anything, did you do? A ' Well, I mean, obviously given that, you know, 7 we're competitive in nature, I was tired of getting beat. 8 So I roached out to Miko, and I naid, what's -- what'& 9 the deal with thi~. And he kind of just said try and 10 find out any of the third-party lenders for any financial ll institutions in ~-you know, in my port of the city. And 12 if I'd qet that for him, he could sort i t by zip codu and 13 split it up, you know what I mean. 14 Q. Did you do that, did you go out and find that 15 information and provide it to Mike? 16 A. I had-- I'd talked to some of the general 17 managers bccnuae I don't -- quite hono~t~y, I don't 19 ren~ly hnve -- I don't really hnv~ ti~e to do that, But 19 I asked thu~ I guess to me what was I thou9ht was the 20 simplest way to do it was if we h~d ~lready had any 21 doalings -- like, if WR had a~ready maybe bought out n 22 custoaor from a company or whatovor, you know, if we know 23 some of tho~e third-party ~cndc~s based on our 24 interactions with n custo~er, something like thnt. Thnt 25 was pretty much it, 0773  Page 21 1 Q. !loll long after your conversation with Jim 2 Batterson did you get in touch with Hike Ryan? A. ' Probably pretty soon. H4ybe a day or two, 4 something like that. 5 Q. And then you ~ontionvd that after your 6 conversation with Miko, you :;poke to some of your general 7 :r:~anngers? • A. Uh-huh, • Q. Do you recall which general managers you spoke 10 w.ith? 11 A. No, I really don't. 12 Q. Do you recall whether you roached out to all of 13 the general Wl.nagcr:. in your district? 14 A. No, I don't think I reached out to ~1 of them. 15 Q. Why did you reach out to the ones that did you? 15 A. I couldn't tell you ~ecifically. I don't 17 know. That's a-- That's a good question. 18 Q. Had Jim suggested to you any specific stores 19 that could banofit from thosa soarchns? I would say i t was -- uo woro, you know, " 21 thinking lo~ur purfohrninq ~tores waG probably the focus 22 of that. Q. Did Jim identify any of tho~o ~tore~ 24 specifically? 25 A. No. 0774  1 Q. 2 id~ntify any of tho~e sto~eo specifically? 3 A, No. Q. Do you ~ecall ~y of the general managers that ' 5 you ~poke with about the se~rches immediately following 6 your conservation with Mike? 7 A. I would s~y probably -- I think I know I talked to Rad Casillas. ' Q. What Gtc:u~e i~~: :Rad reoponsiblo for? 10 A. That was Austin 3. 11 Q. Do you recall speaking with other -- any other lZ general managers regarding the searches? 13 A. I think I spoke with Jim Griffin. What store is Jim responsible for? " Q. 15 A. He was re~onsible for Austin 13. He's no 16 longer with the company. 17 Q. Do you recall approximately how long ago Jim 18 left Titlf!Max? 19 A. M4ybe February or March, r think, 20 Q, DO you recall who took over as general ~nager 21 in Austin 13 after Jim's departure? 22 Yes. Haria Arring~. He wn~ there for 11 days. 23 Q. Following Mr. Arriaga's brief stint at Austin 24 13, who is the general manager? 25 A. Rudy Perc~. Ho'a still tho G.M. there. 0775  ~---------- Page 1 1 NO. 2013-33584 2 WELLSHIRE FINANCIAL SERVICES, * IN THE DISTRICT COURT LLC, d/b/a LOANSTAR TITLE * 3 LOANS and INTEGRITY TEXAS * FUNDING, LP * 4 * VS. * HARRIS COUNTY, TEXAS 5 * TMX FINANCE HOLDINGS, INC.; * 6 TMX FINANCE, LLC; TMX FINANCE * OF TEXAS, INC.; TITLEMAX OF * 7 TEXAS, INC.; FELIX DELEON; * AND ISHMAEL HERNANDEZ * 152ND JUDICIAL DISTRICT 8 9 10 ******************************************* 11 ORAL AND VIDEOTAPED DEPOSITION OF 12 JAMES ARTHUR GRIFFIN 13 MAY 23, 2014 \ 14 VOLUME 1 15 ******************************************* 16 ORAL AND VIDEOTAPED DEPOSITION OF JAMES 17 ARTHUR GRIFFIN, produced as a witness at the instance 18 of the Plaintiffs and duly sworn, was taken in the 19 above-styled and numbered cause on the 23rd day of May, 20 2014, from 9:08a.m. to 2:09p.m., before Marsha Evans, 21 Certified Shorthand Reporter in and for the State of 22 Texas, reported by machine shorthand, at 600 Congress 23 Avenue, 20th Floor, Austin, Texas, pursuant to the 24 Texas Rules of Civil Procedure and the provisions 25 stated on the record or attached hereto. L.----·-----~-~-------·-~----------·-------···--- _________ __j Veri text Florida Reporting Co. 800-726-7007 305-376-8800 0776  Page 2 APPEARANCES 3 FOR THE PLAINTIFFS: 4 MS. CHRISTINA GOEBELSMANN 5 MS. SARAH F. POWERS WARGO FRENCH 6 1888 Century Park East, Suite 1520 Los Angeles, California 90067 7 310-853-6807/310-853-6859 (fax) cgoebelsmann®wargofrench.com 8 spowers®wargofrench.com 9 FOR THE DEFENDANTS: 10 MR. GEOFF GANNAWAY 11 BECK REDDEN 1221 McKinney Street, Suite 4500 12 Houston, Texas 77010 713-951-6263/713-951-3720 (fax) 13 ggannaway®beckredden.com 14 --and-- 15 MS. VICTORIA NEWMAN (Via Telephone) TMX FINANCE 16 15 Bull Street, Suite 200 Savannah, Georgia 31401 17 912-503-2824/912-629-1538 (fax) victoria.newman@titlemax.biz 18 19 ALSO PRESENT: 20 Mr. Manuel Martin, Videographer 21 22 23 24 25 --------------------·----' Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0777  Page 41 1 knowledge? 2 A. She did. 3 Q. And which store was she general manager? 4 A. The store in the Oak Hill area, kind of West 5 Austin. 6 Q. Did you keep in touch with Sarah or Mayumi 7 after you started in Austin 13? 8 A. We did. We would talk occasionally. I'm 9 still friends with Mayumi on Facebook, so -- we don't 10 discuss TitleMax stuff. We just see each other on 11 Facebook occasionally. 12 Q. When you were still working with TitleMax, 13 would you discuss marketing practices? 14 A. Of course. Absolutely. 15 Q. How often did you discuss your marketing 16 practices? 17 A. Anytime I had a conversation with another GM, 18 marketing inevitably came up. 19 Q. Did you discuss with other GMs the use of DMV 20 records? 21 A. Absolutely. 22 Q. How many times did you have conversations 23 , regarding the use of DMV records? 24 A. I would say every time we talked about 25 marketing we talked about PublicData. And then there L___________________________________________________________________________________________________J Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0778  Page 42 1 was another list that came from our district manager. 2 I don't know what website he got that from, but it was 3 just a -- it was a list that was broken up by zip code 4 that gave a list of names of people who had liens on 5 their vehicles. 6 Q. Who was the district manager that provided you 7 that list? 8 A. Patrick Sudduth. 9 Q. How often did you speak with other GMs? 10 A. Daily. 11 Q. If you had to estimate how many conversations 12 you had with other GMs during the entire time you were 13 with TitleMax, how many conversations would that be? 14 A. Hundreds. 500 times. 15 Q. The ~Ms that you spoke with, where were they 16 working? 17 A. Primarily they were part of the south -- South 18 Austin market. Paul and I, as I mentioned earlier, 19 were good friends. He worked in the North Austin 20 market, so I used to call him. Another lady by the 21 name of Lucia who again was on the north side. 22 Q. What were the names of the GMs that you spoke 23 with? 24 A. Lucia, Paul Walton, Lewis McCall when he was 25 i there,. of course Sarah and Mayumi, Felix, Alberto, the i L - - - ··------ .. - - - - - · ·-··-------~----·---,. .. ------·---- ·-- ·-- ----·--·---··-------·--·----------·-·------·---! Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0779  l Page 43 1 guy who had called me -- and I cannot believe I can't 2 remember his name. The guy who called me the day that 3 I left the company. Another one on South Lamar. I 4 mean, for the most part we were pretty -- we were a 5 pretty close-knit group and we would all talk. 6 Q. Did you speak with any GMs in any other 7 districts? 8 A. Not after training, no. 9 Q. Did you speak with any other employees that 10 were not GMs regarding marketing practices? 11 lL Assistant managers, yes. 12 Q. Who would you speak with? 13 A. Georgina. 14 Q. She was in your store, correct? 15 A. She was for a short period of time. She used 16 to work for Gilberta at another store, and that's when 17 I used to talk to her, and then, of course, when she 18 worked for me. 19 Q. Any other assistant managers? 20 A. The one that worked for the guy that I can't 21 remember, and I don't remember his name either. 22 Q. Was that on the South Lamar store? 23 A. The South Congress store, the second South 24 Congress store. 25 Q. Do you remember where Lucia worked? ~--------·-------·-----------------------·--··--------------------------) Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0780  Page 1 CAUSE NO. 2013-33504 WELLSHIRE FINANCIAL SERVICES, LLC, d/b/a LONESl'AR ~ITLE LOANS INTEGRITY TEMS FUUDING, .,. • IN :m:e: DISl'RIC'X COURT LP, Plaintiffs vs. JIARRIS COUN'XY, ~EXAS • """ FINANCE HOLDIUGS, • INC.; TMX FIN1\NCE, LLC; !I'MX FINANCE OF TEX11.S, • INC.; TITLEHAX OF 'I'EMS, INC. I FELIX DeLEON 1 •n• • ISHMAEL HERNIUIDEl:, • Dmfendants • 152ND JUDICIAL DISTRICT ORJI.l. AHO VIDEOTAPED DEPOSITION OF RICHARD TODD HALE MAY 15, 2014 ~~~~~~····~·~~·~···~···································· ORAL AND VIDEOTAPED DEPOSI'I:ION OF RICHARD TODD HALE, produced a~ a witnos~ at the instance of tho PLAIN'XIFFS, and duly sworn, was taken in tha above-styled and numbered cause on the 15th of HAY, 2014 from 9:06 a.m. to 2:50p.m., before NELISSA P~HILL, CSR, in and for eha st~te of Texas, reported by co~utcr-nssisted machine shorthand, at the law offices of Suthvrland ~bill ' Brennan, 600 Congress Avenue, Suite 2000, Austin, Travis 0781  I'aqe 2 l County, TaKas, pursuant to the Texas Rules of c~v~l 2 Procedure and the provi~ions ~t~ted on the record or 3 attached hereto, 4 s 6 7 a • 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0782  J?nqe 3 1 APPEARANCES 2 3 FOR XHE PLAI~~IFFS: 4 Sll:r:ah F. Powers, Attorney at Law -and- 5 Christin:z~. Goobolsmann, Att.ornoy at LO\w Hl>.RGO FREHCH 6 1898 Century Park East, Suite 1520 Los Anqalas, California 90067 7 (305) 913-8587 spowers~vargofrench.com • 9 10 FOR THE DEFEIIDJ\N'l'S: 11 Geof"t" Ganmway, Elfq. BECK REDDEN, LLP 12 1221 V.cKinnoy, Suito 4500 Houston, Texas 77030 13 (713} 951-6263 qqannaway~beckreddan co~ 14 15 16 ALSO PRESENT: 17 Cody Hnll, Videogrnpher " 19 20 21 22 23 24 25 0783  Page 99 1 A. I believe that was his lazt nnme, yes, ma'am. 2 Q. Ok~y. Erno~t Pa~o? ' A. Ye.:o, ma'OIJII. Q. And Rad Cn$illas? 5 A. ' Q. Okay, And what did they tell you about the 7 concept of searching databases? MR. GANNAWI.Y: Object to :form. Just that, you know, they wore having zuccoss ' A. 10 with it. You know, they were -- they were all doing i t . 11 They also were -- you know, either learned to do it from 12 so~ebody that was there before them or wore instructed to 13 do i t by Patrick. And that i t was being very successful 14 for thl!lll. 15 Q. And in your case how did you get the initial 16 idea to do that? 17 A. It came fro~ my supervisor, Patrick Sudduth. lB Q. And did Patrick Sudduth tell you where he got 19 the idea to do that? 20 A. No, ~na•am. 21 Q. Did Patrick Sudduth tell you that he was using 22 that idea before? 23 A. Yen, ma'am. 24 Q. Okny. And what did he tell you about that? 25 A. About him usinq i t before? 0784  Page 100 1 2 • A. Ccrruct. That it had baun ~ucca~~£u~ in hi~ -- in his 3 prav~cu~ region that ho wac at and that, you know, 4 everybody that wa~ u~ing it here' was Geeing a lot more 5 ~uccass with i t here in the Austin area, ' •• What was Patrick Sudduth's previous region? 7 A. I don't-- I don't know. I don't remember. 8 Q. okay. Did Patrick Sudduth ever work out~ide of 9 Texas, to your knowlodqo? 10 A. Yes, ~·am. My understanding is he cnme into 11 Texas from somewhere else. But I don't reme~er -- I 12 13 14 .. don't know where he came from. okay. So wherever he c~e from before, was it your understanding that he was using the tactic of 15 searching D.H.V. records in order to market to customers 16 of compatitors in that previous area? 17 MR. GANN~WAY: Object to form. 18 A. Yes, ma'am, that'~ ay under$tandinq. 1' Q. Ok3y. And you got that undcr~tanding from 20 conversntionG with Mr. Sudduth? 21 A. ~e~, ma'am. 22 Q. Okay. Now, who set your store's performance 24 A. It was relayed to me from Patrick Sudduth. But 25 ~ undarstandinq from tnlkinq to him, that it waG -- the 0785 Exhibit B 0786  1 MOTION TO COMPEL SEPT~1BER 22, 2014 1 2 REPORTER'S RECORD VOLUME 1 OF 1 VOLUMES 3 TRIAL COURT CAUSE NO. 2013-33584 4 5 WELLSHIRE FINANCIAL SERVICES, LLC d/b/a ) IN THE DISTRICT COURT LOANSTAR TITLE LOANS, d/b/a MONEYMAX TITLE ) ) 6 LOANS, and d/b/a LOANMAX; MEADOWWOOD ) FINANCIAL SERVICES, LLC, d/b/a LOANSTAR ) 7 LOANS, AND d/b/a MONEYMAX TITLE LOANS; and ) INTEGRITY TEXAS FUNDING, LP ) 8 ) vs. ) HARRIS COUNTY, TEXAS 9 ) TMX FINANCE HOLDINGS, INC.; TMX FINANCE, ) ) 10 LLC; TMX FINANCE OF TEXAS, INC; ) and TITLEMAX OF TEXAS, INC. ) 152ND JUDICIAL DISTRICT 11 12 13 14 MOTION TO COMPEL PRODUCTION 15 16 17 On the 22nd day of July, 2014, the following proceedings came on 18 to be held in the above-titled and numbered cause before the Honorable 19 ROBERT K. SCHAFFER, Judge Presiding, held in Houston, Harris County, 20 Texas. 21 Proceedings reported by computerized stenotype machine. 22 23 24 25 CYNTHIA MARTINEZ MONTALVO, CSR 152ND DISTRICT COURT 713-368-6037 cynthiam@justex.net 0787  2 MOTION TO COMPEL SEPTEMBER 22, 2014 1 ~~~s 2 MR. JOHN DANIEL JOHNSON SBOT NO. 24046165 3 SUTHERLAND ASBILL & BRENNAN, LLP 1001 Fannin 4 Suite 3700 Houston, Texas 77002 5 Telephone: 713-470-6100 Fax: 713-654-1301 6 E-mail: Daniel.johnson@sutherland.com Counsel for PLAINTIFFS 7 MS. SARAH F. POWERS 8 SBOT NO. CA. 238184 WARGO FRENCH LLP 9 1888 Century Park F Suite 1520 10 Los Angeles, California 90067 Telephone: 310-853-6300 11 Fax: 310-853-6333 E-mail: Spoers@wargofrench.com 12 Counsel for PLAINTIFFS 13 MR. GEOFF GANNAWAY SBOT NO. 24036617 14 MR. BRYON RICE SBOT NO. 24065970 15 BECK REDDEN 1221 McKinney 16 Suite 4500 Houston, Texas 77010 17 Telephone: 713-951-6263 Fax: 713-951-3720 18 E-mail: Ggannaway@beckredden.com Counsel for DEFENDANTS 19 20 21 22 23 24 25 CYNTHIA MARTINEZ MONTALVO, CSR 152ND DISTRICT COURT 713-368-6037 cynthiam@justex.net 0788  81 MOTION TO COMPEL SEPTEMBER 22, 2014 1 illegal activity. Todd Hale expressly testified under oath that he 2 had a spreadsheet of LoanStar customers and other customers that he 3 maintained on his computer and that when he left it was there. It 4 should be there, and they told us that they can't find it. 5 So, that is why we asked that. 6 MR. GANNAWAY: The only evidence they have of any document 7 that we were not able to find from any of those hard drives was Todd 8 Hale's spreadsheet. 9 I will tell your Honor last week I actually went back again 10 to make sure that we had done our level best to try to find the Todd 11 Hale spreadsheet he said in his testimony. I think that he enlisted 12 20 people on the spreadsheet. It should be have been on his computer 13 in Office No. -- Store No. 20 in Austin. I drove over to Store No 20 14 in Austin. I went through, again, to make sure that we had done our 15 level best. 16 I did find a spreadsheet that has a list of names and 17 addresses, and I have got it here if your Honor would like to see it. 18 It is not -- entitled Todd Hale Database. He has a little folder 19 that he left behind. It is not in his -- I don't know if this is out 20 to Mr. Hale to ask him -- he is a former employee that doesn't like 21 me very much. And I asked him is this the spreadsheet you are 22 referring to. He said that I went to the Harris County website and I 23 read that the Plaintiffs say that you are using a rogue employee 24 defense. If that applies to me, then I am not going to answer your 25 question. So, please describe your rogue employee defense in detail, CYNTHIA MARTINEZ MONTALVO, CSR 152ND DISTRICT COURT 713-368-6037 cynthiam@justex.net 0789  82 MOTION TO COMPEL SEPTEMBER 22, 2014 1 to which I demurred and did not respond. 2 But -- so, any rate, I have a spreadsheet that has a list of 3 names and addresses. I have no other way of knowing that this a good 4 list of names and addresses. But if it is what they want, I got it. 5 THE COURT: Todd Hale is that the name? 6 MR. GANNAWAY: Yes. 7 THE COURT: Have you had any communications with Todd Hale? 8 MS. POWERS: Not since his deposition. 9 THE COURT: So, you don't know if this is the spreadsheet? 10 You haven't asked is this his spreadsheet? 11 MS. POWERS: That's correct. I have not seen it. 12 THE COURT: Wonder how you confirm that that was his 13 spreadsheet that he prepared? Did that come off of his computer? 14 MR. GANNAWAY: It came off -- 15 THE COURT: Well, did that come off a computer that he had 16 access to? 17 MR. GANNAWAY: Yeah. That is true. 18 THE COURT: Make your Request. 19 MS. POWERS: If they'd produced it at the time that we 20 requested, we could have asked it Mr. Hale about it during his 21 deposition. 22 THE COURT: I understand. 23 MR. GANNAWAY: And I'm telling your Honor that I went back 24 and did this again to see if there was anything fitting the category. 25 There is not a search term that I could have run. Doesn't say CYNTHIA MARTINEZ MONTALVO, CSR 152ND DISTRICT COURT 713-368-6037 cynthiam@justex.net 0790  1 OBJECTIONS TO CORPORATE REPRESENTATIVE DEPOSITIONS OCTOBER 10, 2014 1 2 REPORTER'S RECORD VOLUME 1 OF 1 VOLUMES 3 TRIAL COURT CAUSE NO. 2013-33584 4 5 WELLSHIRE FINANCIAL SERVICES, LLC d/b/a } IN THE DISTRICT COURT LOANSTAR TITLE LOANS, d/b/a MONEYMAX TITLE } } 6 LOANS, and d/b/a LOANMAX; MEADOWWOOD } FINANCIAL SERVICES, LLC, d/b/a LOANSTAR } 7 LOANS, AND d/b/a MONEYMAX TITLE LOANS; and } INTEGRITY TEXAS FUNDING, LP } 8 } vs. } HARRIS COUNTY, TEXAS 9 } TMX FINANCE HOLDINGS, INC.; TMX FINANCE, } } 10 LLC; TMX FINANCE OF TEXAS, INC; } and TITLEMAX OF TEXAS, INC. } 152ND JUDICIAL DISTRICT 11 12 13 14 OBJECTIONS TO CORPORATE REPRESENTATIVE DEPOSITIONS 15 16 17 On the lOTH day of July, 2014, the following proceedings came on 18 to be held in the above-titled and numbered cause before the Honorable 19 ROBERT K. SCHAFFER, Judge Presiding, held in Houston, Harris County, 20 Texas. 21 Proceedings reported by computerized stenotype machine. 22 23 24 25 CYNTHIA MARTINEZ MONTALVO, CSR 152ND DISTRICT COURT 713-368-6037 cynthiam@justex.net 0791  2 OBJECTIONS TO CORPORATE REPRESENTATIVE DEPOSITIONS OCTOBER 10, 2014 1 APPEARANCES 2 MR. JOHN DANIEL JOHNSON SBOT NO. 24046165 3 SUTHERLAND ASBILL & BRENNAN, LLP 1001 Fannin 4 Suite 3700 Houston, Texas 77002 5 Telephone: 713-470-6100 Fax: 713-654-1301 6 E-mail: Daniel.johnson@sutherland.com Counsel for PLAINTIFFS 7 MS. CHRISTINA GOEBELSMANN 8 SBOT NO. CA. 273379 WARGO FRENCH LLP 9 1888 Century Park F Suite 1520 10 Los Angeles, California 90067 Telephone: 310-853-6300 11 Fax: 310-853-6333 E-mail: Cgoebelsmann@wargofrench.com; jozmer@wargofrench.com 12 Counsel for PLAINTIFFS 13 MR. GEOFF GANNAWAY SBOT NO. 24036617 14 BECK REDDEN 1221 McKinney 15 Suite 4500 Houston, Texas 77010 16 Telephone: 713-951-6263 Fax: 713-951-3720 17 E-mail: Ggannaway@beckredden.com Counsel for DEFENDANTS 18 19 MR. STEPHEN T. LABRIOLA SBOT NO. 20 FELLOWS LABRIOLA Suite 2300. South Tower 21 225 Peachtree Street, NE Atlanta, Georgia 30303 22 Telephone: 404-586-9200 Fax: 404-529-4028 23 E-mail: Slabriola@fellab.com Counsel for DEFENDANTS 24 25 CYNTHIA MARTINEZ MONTALVO, CSR 152ND DISTRICT COURT 713-368-6037 cynthiam@justex.net 0792  59 OBJECTIONS TO CORPORATE REPRESENTATIVE DEPOSITIONS OCTOBER 10, 2014 1 MS. GOEBELSMANN: I'm not sure. 2 MR. GANNAWAY: And let me give a little more context to 3 this, your Honor. This was the subject of an earlier issue we 4 discussed before your Honor. 5 There -- Todd Hale is one of our former employees. He said 6 when I left Store No. 20 in Austin, I left a spreadsheet that I had 7 listed some marketing folks on and some folks that I wanted to market 8 to on it. I believe some of those were obtained from PublicData. 9 So, I went and looked at Store 20. I actually drove to 10 Austin and looked at their computers. And I found a spreadsheet 11 that looks like a list of addresses. It doesn't -- it wasn't Todd 12 Hale's addresses. 13 If it will put the issue to rest, I will produce that to 14 them even if I don't know it's the right document. If you will 15 recall I said I contacted Todd Hale is this your document. He said 16 go-- I'd rather not tell you. 17 THE COURT: Blow it somewhere else? 18 MS. GOEBELSMANN: And that is part of our concern, as well, 19 is that there may be more out there because these employees got so 20 concerned. 21 MR. GANNAWAY: There is no indication it was destroyed. 22 THE COURT: Objection to 5 is sustained. 23 MS. GOEBELSMANN: And, for the record, they have served the 24 same topic on our corporate representative as well but have indicated 25 that they were only going to be going forward if the Court granted CYNTHIA MARTINEZ MONTALVO, CSR 152ND DISTRICT COURT 713-368-6037 cynthiam@justex.net 0793 Exhibit C 0794  ATTORNEYS EYES ONLY I I Page 1 ATTORNEYS' EYES ONLY 1 I NO. 2013-33584 2 WELLSHIRE FINANCIAL SERVICES, IN THE DISTRICT COURT LLC., d/b/a LOANSTAR TITLE 3 LOANS and INTEGRITY TEXAS FUNDING, LP, 4 Plaintiffs, 5 vs. OF HARRIS COUNTY, TEXAS TMX FINANCE HOLDINGS, INC.; 6 TMX FINANCE, LLC.; TMX FINANCE OF TEXAS, INC.; 7 TITLEMAX OF TEXAS, INC.; FELIX DeLEON; and ISHMAEL 8 HERNANDEZ, 9 Defendants. 10 ______________________ ! 1:(. 12 ATTORNEYS' EYES ONLY 13 VIDEOTAPE DEPOSITION OF LINDA McDONALD 14 TAKEN: Pursuant to Notice by 15 Counsel for the Plaintiffs 16 PLACE: Hunter MacLean 200 E. Saint Julian Street 17 Savannah, GA 31401 18 DATE: Thursday, May 1, 2014 19 TIME: Began: 8:57a.m. Ended: 12:34 p.m. 20 BEFORE: TRACIE L. THOMPSON, RPR, CRR, CLR 21 Notary Public State of Florida at Large 22 23 24 ! 25 I ! I '----··--------------·-··-·-·---·------------· ---- _______________ j Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0795  ATTORNEYS EYES ONLY l Page 2 ATTORNEYS' EYES ONLY 1 APPEARANCES 2 For the Plaintiffs: SARAH F. POWERS, ESQ. CHRISTINA GOEBELSMANN, ESQ. 3 Wargo French 1888 Century Park East 4 Suite 1520 Los Angeles, CA 90067 5 305-913-8587 spowers@wargofrench.com 6 cgoebelsmann@wargofrench.com 7 8 9 For the Defendants: STEPHEN T. LaBRIOLA, ESQ. Fellows LaBriola, LLP 10 225 Peachtree Street, NE Suite 2300, South Tower 11 Atlanta, GA 30303 404-586-9200 12 slabriola@fellab.com 13 14 VICTORIA H. NEWMAN, ESQ. TMX Finance 15 15 Bull Street Suite 200 16 Savannah, GA 31401 912-503-2824 17 victoria.newman@titlemax.com 18 19 Also Present: Diana Gundelfinger, Videographer 20 21 * * * * * * * 22 23 24 25 -------------·-----------------------------·---------·------·-·--J Veri text Florida Reporting Co. 800-726-7007 305-376-8800 0796  ATTORNEYS EYES ONLY Page 76 1 MR. LaBRIOLA: I'm aware of no subpoena. 2 You sent a notice. 3 MS. POWERS: Pardon me? 4 MR. LaBRIOLA: Shorten the time frame and 5 we'll comply with Texas civil procedure. 6 MS. POWERS: Are you planning on producing 7 documents or providing further written response 8 at the end of the 30 day period? 9 MR. LaBRIOLA: Yes, as noted in the 10 pleading file yesterday. 11 BY MS. POWERS: 12 Q Before -- pardon me. Strike that. 13 What prompted you to send the November 2011 14 e-mail you just described? 15 A Our president texted me and said that 16 LoanStar claimed that we were going to their parking 17 lot, that an employee was going to a parking lot. 18 Q In November of 2011? 19 A In November of 2011, and since we had prior 20 discussions that we're not to subscribe to that 21 practice, he asked me to follow up again and make 22 sure that everybody was clear that we should not be 23 following that practice. So I did. I followed up 24 with my regional managers to make sure that they knew 25 and that they spoke to each district manager and that i --·--·--····-- -···-····--·-----------·------------------------··-···-·--·-··-----·--.J Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0797  ATTORNEYS EYES ONLY i I Page 77 1 each district manager spoke to each store that we 2 don't subscribe to that practice. 3 Q And who was the president that texted you? 4 A John Robinson. 5 Q Do you recall what the text said? 6 A It said that LoanStar is claiming we have 7 an employee going to a competitor's parking lot. We 8 need you to check into it and make sure it's not 9 occurring. 10 Q Why do you feel that that practice is a 11 poor business practice? 12 A Again, I think it's not ethical. It's not 13 the right way to do business. It's not an effective 14 way to do business. I just think it's an improper 15 business approach. 16 Q Now, I believe you just testified that 17 prior to November 11 you had heard of the practice of 18 employees going to competitors' parking lots; is that 19 correct? 20 MR. LaBRIOLA: Objection as to form. 21 THE WITNESS: No, I hadn't heard of it. I 22 had -- we have always been coached as employees 23 of TitleMax that we should not do that. We 24 should not go to competitors', any competitors' 25 parking lot and solicit their business because i 1 ··-·--··-····--·---~ Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0798 Exhibit D 0799  NO. 2013-33584 WELLS HIRE FINANCIAL SERVICES, LLC, § IN THE DISTRICT COURT d/b/a LOANSTAR TITLE LOANS, d/b/a § MONEYMAX TITLE LOANS, and d/b/a § LOANMAX; MEADOWWOOD FINANCIAL § SERVICES, LLC, d/b/a LOANSTAR TITLE § LOANS, and d/b/a MONEYMAX TITLE § LOANS; and INTEGRITY TEXAS § FUNDING, LP, § § Plaintiffs, § § v. § OF HARRIS COUNTY, TEXAS § TMX FINANCE HOLDINGS, INC.; § TMX FINANCE LLC; § TMX FINANCE OF TEXAS, INC.; and § TITLEMAX OF TEXAS, INC.; § § Defendants. § 152ND JUDICIAL DISTRICT DEFENDANTS TMX FINANCE OF TEXAS, INC. AND TITLEMAX OF TEXAS, INC.'S RESPONSES TO PLAINTIFFS' SEVENTH REQUEST FOR PRODUCTION AND DEFENDANT TMX FINANCE LLC'S RESPONSES TO PLAINTIFFS' SECOND REQUEST FOR PRODUCTION TO: Plaintiffs by and through their attorneys of record, Kent C. Sullivan, Daniel Johnson, and Robert A. Lemus, Sutherland Asbill & Brennan, LLP, 1001 Fannin, Suite 3700, Houston, Texas 77002; and Joseph D. Wargo, Wargo French, LLP, 999 Peachtree Street, N.E. 26 1h Floor, Atlanta, Georgia 30309. Defendants TMX Finance of Texas, Inc. and TitleMax of Texas, Inc. hereby serve their Responses to Plaintiffs' Seventh Request for Production. Defendant TMX Finance LLC hereby serves its Responses to Plaintiffs' Second Request for Production. 1730.0000 11550071.v I 0800  Respectfully submitted, BECK REDDEN LLP By: /s/Geo((Gannawav David J. Beck State Bar No. 00000070 Geoff A. Gannaway State Bar No. 24036617 Bryon A. Rice State Bar No. 24065970 1221 McKinney Street, Suite 4500 Houston, Texas 770 I 0 Tel: 713-951-3700 Fax: 713-951-3720 Email: clbeck@.beckredden.com g:g:annaway@.beckredden.com brice(i:i'lbeckredden.com Stephen T. LaBriola Christina M. Baugh FELLOWS LABIUOLA LLP Suite 2300, South Tower, Peachtree Center 225 Peachtree Street, N .E. Atlanta, Georgia 30303-1731 Tel. 404 586-9200 Fax: 404 529-4028 Email: slabriola(cil,fellab.com cbaugh@fellab.com ATTORNEYS FOR DEFENDANTS AND COUNTER- PLAINTIFFS TMX FINANCE OF TEXAS, INC., TITLEMAx OF TEXAS, INC. AND TMX FINANCE LLC ("DEFENDANTS") 1730.0000 11550071.v I 2 0801  CERTIFICATE OF SERVICE I hereby ce11ify that I caused a true and correct copy of the foregoing instrument to be served on counsel of record in accordance with Rules 21 and 21 a of the Texas Rules of Civil Procedure on this 27th day of October, 2014, by email: SUTHERLAND ASBILL & BRENNAN LLP Kent C. Sullivan, Esq. Daniel Johnson, Esq. Robert A. Lemus, Esq. Facsimile: (713) 654-1301 Email: kent.sullivan@sutherland.com Email: daniel.johnson@sutherland.com Email: robert.lemus(r:Usutherland.com Email: carla.kellev!cilsuther!and.com WARGO & FRENCH LLP Joseph D. Wargo, Esq. Abigail Joy Stecker, Esq. Sarah Powers, Esq. Christina Goebelsmann, Esq. Email: jwargo@wargofrench.com Email: astecker@wargofrench.com Email: soowers@wargofrench.com Emai I: cgoebelsmann@.wamofrench.com Email: ecastaneda0!wargofrench.com Is/ Geoff Gannaway 1730.000011550071 sl 3 0802  General Objections 1. Defendants object to the Instructions to the extent that they seek to place a burden upon Defendants greater than that provided by the Texas Rules of Civil Procedure. 2. Defendants reserve the right to supplement and/or amend its responses to these Requests for Production in accordance with the Texas Rules of Civil Procedure. 3. Defendants object to the definition of"Documents" as overbroad and unduly burdensome. For example, Defendants object to requests for electronic or magnetic data that include "back-up copies" and "dormant or remnant files" because such data is not reasonably available to the responding party in its ordinary course of business. See TEX. R. CIV. P. 196.4. Consequently, Defendants cannot-through reasonable efforts-retrieve the data or information requested or produce it in the form requested. !d. 1730.0000 1/550071.\·l 4 0803  RESPONSES TO SEVENTH REQUEST FOR PRODUCTION REQUEST FOR PRODUCTION NO.1: All Documents that refer or relate to Your claim for attorneys' fees, including any fee agreements between You and Your counsel (including but not limited to Beck Redden LLP and Fellows Labriola LLP) related to this litigation, time records kept by Your counsel, and invoices for legal services provided to You. RESPONSE: Defendants will produce responsive documents relevant to Defendants' counterclaim, with privileged information redacted. REQUEST FOR PRODUCTION NO. 2: All Documents or Communications received or sent between You or Your counsel, on the one hand, and any third party (whether pursuant to subpoena or otherwise), on the other hand, relating to searches of the DMV Databases. This includes, but is not limited to, communications between You or Your counsel and the Texas Depatiment of Motor Vehicles, the State of Texas, The Source for Public Data, LP d/b/a PublicData.com, DataTrax Services LLC, and Zebec Data Systems, Inc. RESPONSE: Consistent with the Rules, Defendants will produce documents received as a result of subpoenas they served on third parties. To the extent Plaintiffs contend further information should be produced, Defendants object to this Request as overbroad and unduly burdensome, and as seeking information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. REQUEST FOR PRODUCTION NO. 3: All Documents or Communications received or sent between You or Your counsel, on the one hand, and any third party, on the other hand, in connection with or related to any subpoena served on the third party in this lawsuit. RESPONSE: Consistent with the Rules, Defendants will produce documents received as a result of subpoenas they served on third parties. To the extent Plaintiffs contend further information should be produced, Defendants object to this Request as overbroad and unduly burdensome, and as seeking information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. 1730.0000 J"S007J.v I 5 0804 REQUEST FOR PRODUCTION NO. 4: Any and all Documents or Communications received or sent between You or Your counsel and any expert designated by You in this case. RESPONSE: Defendants object that this Request is barred by Texas Rule of Civil Procedure 195.1. REQUEST FOR PRODUCTION NO.5: The Hard Drives of each and every computer in Your possession, custody, or control to which Todd Hale had access while employed by You. RESPONSE: Defendants object to this Request as overbroad and unduly burdensome and as seeking information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. The Texas Supreme Court has recognized that "[p]roviding access to information by ordering examination of a party's electronic storage device is particularly intrusive and should be generally discouraged, just as permitting open access to a party's file cabinets for general perusal would be." In re Weekley Homes, 295 S.W.3d 309, 317 (Tex. 2009) (orig. proceeding). As a threshold matter, the requesting party must show that the responding party has somehow defaulted in its obligation to search its records and produce the requested data. The requesting party should also show that the responding party's production "has been inadequate and that a search of the opponent's [electronic storage device] could recover deleted relevant materials." Courts have been reluctant to rely on mere skepticism or bare allegations that the responding party has failed to comply with its discovery duties. Even if the requesting party makes this threshold showing, courts should not permit the requesting party itself to access the opponent's storage device; rather, only a qualified expert should be afforded such access, and only when there is some indication that retrieval of the data sought is feasible. Due to the broad array of electronic information storage methodologies, the requesting party must become knowledgeable about the characteristics of the storage devices sought to be searched in order to demonstrate the feasibility of electronic retrieval in a particular case. And consistent with standard prohibitions against "fishing expeditions," a 1730.0000 1/55007].\' l 6 0805  court may not give the expert carte blanche authorization to sort through the responding party's electronic storage device. Instead, comis are advised to impose reasonable limits on production. Finally, federal courts have been more likely to order direct access to a responding party's electronic storage devices when there is some direct relationship between the electronic storage device and the claim itself. !d. at 317-19 (internal citations omitted). None of the necessary showings have been made: Defendants have not defaulted on their obligation to search records, and there has been no evidence that a search might recover deleted materials, that retrieval of the data sought might be feasible, "the particular characteristics of the electronic storage devices involved, the familiarity of [Plaintiffs'] expetis with those characteristics, or a reasonable likelihood that the proposed search methodology would yield the information sought." I d. at 311. Moreover, if the Comi orders Defendants to produce hard drives, Defendants request an "order that the requesting party pay the reasonable expenses of any extraordinary steps required to retrieve and produce the information." TEX. R. CIV. P. 196.4. REQUEST FOR PRODUCTION NO. 6: The Hard Drives of each and evety computer in Your possession, custody, or control to which Lucia Grajeda had access while employed by You. RESPONSE: Defendants incorporate by reference the response to Request No.5. REQUEST FOR PRODUCTION NO.7: The Hard Drives of each and every computer in Your possession, custody, or control to which Felix DeLeon had access while employed by You. RESPONSE: Defendants incorporate by reference the response to Request No. 5. REQUEST FOR PRODUCTION NO.8: Documents sufficient to identifY the company or companies that provided mobile phone services for any mobile phone numbers used by any of the Corporate Employees for each month between August 2011 and June 2013. RESPONSE: Defendants object to this Request as overbroad and unduly ! 730.000DI/.'i5007l.v l 7 0806 burdensome and as seeking information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. REQUEST FOR PRODUCTION NO. 9: Any and all Documents and Communications, including but not limited to Text Messages, received, created, or sent by any of the Corporate Employees to/from representatives or employees of DataTrax, PublicData and/or any other DMV Databases. RESPONSE: Defendants object to this Request as overbroad and unduly burdensome and as seeking information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. Defendants further object to the request for "Text Messages" because such data is not reasonably available to the responding party in its ordinary course of business. See TEX. R. CIV. P. 196.4. Consequently, Defendants cannot-through reasonable efforts- retrieve the data or information requested or produce it in the form requested. Id. Lastly, Defendants object to the extent responsive documents have already been produced or Plaintiffs have been informed that no responsive documents exist. Subject to, and without waiving, the foregoing objections, Defendants will produce responsive, non-privileged documents received, created, or sent by any of the Corporate Employees to/from representatives or employees of DataTrax, PublicData and/or any other DMV Databases in Texas. REQUEST FOR PRODUCTION NO. 10: Any and all Documents and Communications, including but not limited to Text Messages, received, created, or sent by any of the Corporate Employees that refer or relate to any of the DataTrax, PublicData and/or any other DMV Databases. RESPONSE: Defendants object to this Request as overbroad and unduly burdensome and as seeking information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. Defendants further object to the request for "Text Messages" because such data is not reasonably available to the responding party in its ordinary course of business. See TEX. R. C!v. P. 196.4. Consequently, Defendants cannot-through reasonable efforts- retrieve the data or information requested or produce it in the form requested.· !d. Lastly, Defendants object to the extent responsive documents have already been produced or Plaintiffs have been informed that no responsive documents exist. Subject to, and without waiving, the foregoing objections, Defendants will produce I 730.0000 !/550071.v l 8 0807 responsive, non-privileged documents relating to use ofDataTrax or PublicData to identify Plaintiffs' customers in Texas. REQUEST FOR PRODUCTION NO. 11: Any and all Documents and Communications, including but not limited to Text Messages, received, created, or sent by any of the Corporate Employees that refer or relate to Marketing to Customers ofLoanStar and/or Integrity. RESPONSE: Defendants object to this Request as overbroad and unduly burdensome and as seeking information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. Defendants further object to the request for "Text Messages" because such data is not reasonably available to the responding party in its ordinary course of business. See TEX. R. CIV. P. 196.4. Consequently, Defendants cannot-through reasonable effotis- retrieve the data or information requested or produce it in the form requested. !d. Lastly, Defendants object to the extent responsive documents have already been produced or Plaintiffs have been informed that no responsive documents exist. Subject to, and without waiving, the foregoing objections, Defendants will produce responsive, non-privileged documents that refer or relate to Marketing to Customers ofLoanStar and/or Integrity in Texas. REQUEST FOR PRODUCTION NO. 12: Any and all Documents and Communications, including but not limited to Text Messages, received, created, or sent by any of the Corporate Employees that refer or relate to employees of TMX Finance, TMX Finance TX, and/or TitleMax TX using the DMV Databases to Market to Customers of Competitors within the State of Texas. RESPONSE: Defendants object to this Request as overbroad and unduly burdensome and as seeking information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. Defendants fmiher object to the request for "Text Messages" because such data is not reasonably available to the responding patiy in its ordinary course of business. See TEX. R. CIV. P. 196.4. Consequently, Defendants cannot-through reasonable efforts- retrieve the data or information requested or produce it in the form requested. !d. Lastly, Defendants object to the extent responsive documents have already been produced or Plaintiffs have been informed that no responsive documents exist. Subject to, and without waiving, the foregoing objections, Defendants will produce 1730.0000 1/550071.\·] 9 0808 responsive, non-privileged documents relating to use ofDataTrax or PublicData to identifY Plaintiffs' customers in Texas. REQUEST FOR PRODUCTION NO. 13: Any and all Documents or Communications, including but not limited to Text Messages, received, created, or sent by any of the Corporate Employees that refer or relate to the possession of search results from the DMV Databases by employees ofT.MX Finance, T.MX Finance TX, and/or TitleMax. RESPONSE: Defendants object to this Request as overbroad and unduly burdensome and as seeking information that is neither relevant nor reasonably calculated to !~ad to the discovery of admissible evidence. Defendants further object to the request for "Text Messages" because such data is not reasonably available to the responding party in its ordinary cqurse of business. See TEX. R. Crv. P. 196.4. Consequently, Defendants cannot-through reasonable efforts- retrieve the data or information requested or produce it in the form requested. !d. Lastly, Defendants object to the extent responsive documents have already been produced or Plaintiffs have been informed that no responsive documents exist. Subject to, and without waiving, the foregoing objections, Defendants will produce responsive, non-privileged documents relating to possession of search results from DataTrax or PublicData conducted to identify Plaintiffs' customers in Texas. REQUEST FOR PRODUCTION NO. 14: Any and all Documents or Communications, including but not limited to Text Messages, received, created, or sent by any of the Corporate Employees that refer or relate to the possession of a list or other compilation of names and/or addresses including customers of Integrity or LoanStar in Texas by employees of T.MX Finance, T.MX Finance TX, and/or TitleMax TX. RESPONSE: Defendants object to this Request as overbroad and unduly burdensome and as seeking information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. Defendants further object to the request for "Text Messages" because such data is not reasonably available to the responding party in its ordinary course of business. See TEX. R. Crv. P. 196.4. Consequently, Defendants cannot-through reasonable efforts- retrieve the data or information requested or produce it in the form requested. Id. Lastly, Defendants object to the extent responsive documents have already been produced or Plaintiffs have been informed that no responsive documents exist. 1730.0000 1!55007J.v I 10 0809 Subject to, and without waiving, the foregoing objections, Defendants will produce responsive, non-privileged documents relating to possession of a list from DataTrax or PublicData conducted to identify Plaintiffs' customers in Texas. REQUEST FOR PRODUCTION NO. 15: Any and all Documents or Communications, including but not limited to Text Messages, received, created, or sent by any of the Corporate Employees that refer or relate to license plate numbers recorded, copied, or acquired during visits by employees ofT.MX Finance, T.MX Finance TX, and/or TitleMax TX to any Non- TitleMax Parking Lots. RESPONSE: Defendants object to this Request as overbroad and unduly burdensome and as seeking information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. Defendants further object to the request for "Text Messages" because such data is not reasonably available to the responding party in its ordinary course of business. See TEX. R. CJV. P. 196.4. Consequently, Defendants cannot-through reasonable efforts- retrieve the data or information requested or produce it in the form requested. !d. Lastly, Defendants object to the extent responsive documents have already been produced or Plaintiffs have been informed that no responsive documents exist. Subject to, and without waiving, the foregoing objections, Defendants will produce responsive, non-privileged documents relating to license plate numbers recorded, copied, or acquired during visits to Plaintiffs' parking lots in Texas. REQUEST FOR PRODUCTION NO. 16: Any and all Documents or Communications, including but not limited to Text Messages, received, created, or sent by any of the Corporate Employees that refer or relate to relating to any of the employees of T.MX Finance, T.MX Finance TX, and/or TitleMax TX recording, copying, or acquiring vehicle identification numbers (or YIN) or license plate numbers of vehicles located in Non-TitleMax Parking Lots. RESPONSE: Defendants object to this Request as overbroad and unduly burdensome and as seeking information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. Defendants further object to the request for "Text Messages" because such data is not reasonably available to the responding party in its ordinary course of business. See TEX. R. CJV. P. 196.4. Consequently, Defendants cannot-through reasonable efforts- 1730.0000 1/550071.\• I 11. 0810 retrieve the data or information requested or produce it in the form requested. ld. Lastly, Defendants· object to the extent responsive documents have already been produced or Plaintiffs have been informed that no responsive documents exist. Subject to, and without waiving, the foregoing objections, Defendants will produce responsive, non-privileged documents relating to license plate numbers or vehicle identification numbers recorded, copied, or acquired during visits to Plaintiffs' parking lots in Texas. REQUEST FOR PRODUCTION NO. 17: Any and all Documents or Communications, including but not limited to Text Messages, received, created, or sent by any of the Corporate Employees that refer or relate to TitleMax's policies, rules, and/or codes of conduct related to the solicitation of Customers of Competitors in the state of Texas by employees of TMX Finance, TMX Finance TX, and/or TitleMax TX. RESPONSE: Defendants object to this Request as overbroad and unduly burdensome and as seeking information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. Defendants fi.Irther object to the request for "Text Messages" because such data is not reasonably available to the responding patiy in its ordinary course of business. See TEX. R. Crv. P. 196.4. Consequently, Defendants cannot-through reasonable efforts- retrieve the data or information requested or produce it in the form requested. ld. Defendants also 0 bject to the extent responsive documents have already been produced or Plaintiffs have been informed that no responsive documents exist. Lastly, Defendants object to the extent this Request calls for documents subject to attorney-client or work product privileges. Subject to, and without waiving, the foregoing objections, Defendants will produce responsive, non-privileged policies, rules, and/or codes of conduct related to the solicitation of Customers of Competitors in the state of Texas. REQUEST FOR PRODUCTION NO. 18: Any and all Documents or Communications, including but not limited to Text Messages, received, created, or sent by any of the Corporate Employees that refer or relate to any noncompliance of employees of TMX Finance, TMX Finance TX, and/or TitleMax TX with TitleMax's policies, rules, and/or codes of conduct related to the solicitation of Customers of Competitors in the state of Texas. 1730.0000 !/550071.v l 12 0811 RESPONSE: Defendants object to this Request as overbroad and unduly burdensome and as seeking information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. Defendants further object to the request for "Text Messages" because such data is not reasonably available to the responding party in its ordinary course of business. See TEX. R. C!V. P. 196.4. Consequently, Defendants cannot-through reasonable efforts- retrieve the data or information requested or produce it in the form requested. ld. Defendants object to the extent responsive documents have already been produced or Plaintiffs have been informed that no responsive documents exist. Lastly, Defendants object to the extent this Request calls for documents subject to attorney-client or work product privileges. Subject to, and without waiving, the foregoing objections, Defendants will produce responsive, non-privileged policies, rules, and/or codes of conduct related to the solicitation of Customers of Competitors in the state of Texas. REQUEST FOR PRODUCTION NO. 19: Any and all Documents or Communications, including but not limited to Text Messages, received, created, or sent by any of the Corporate Employees that refer or relate to the allegations in the complaint, amended complaints, or answers thereto. RESPONSE: Defendants object to this Request as overbroad and unduly burdensome and as seeking information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. Defendants further object to the request for "Text Messages" because such data is not reasonably available to the responding party in its ordinary course of business. See TEX. R. C!V. P. 196.4. Consequently, Defendants cannot-through reasonable efforts- retrieve the data or information requested or produce it in the form requested. ld. Defendants also object to this Request as vague and ambiguous and to the extent responsive documents have already been produced or Plaintiffs have been told responsive documents do not exist. REQUEST FOR PRODUCTION NO. 20: Any and all Documents or Communications, including but not limited to Text Messages, received, created, or sent by the Corporate Employees that refer or relate to the allegations in the Petition and/or Answer. RESPONSE: Defendants object to this Request as overbroad and unduly I 730.00001/55007 I .vI 13 0812 burdensome and as seeking information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence. Defendants further object to the request for "Text Messages" because such data is not reasonably available to the responding party in its ordinary course of business. See TEX. R. CJV. P. 196.4. Consequently, Defendants cannot-.through reasonable efforts- retrieve the data or information requested or produce it in the form requested. ld. Defendants also object to this Request as vague and ambiguous and to the extent responsive documents have already been produced or Plaintiffs have been told responsive documents do not exist. I730,00001155007! .vI 14 0813 Exhibit E 0814  -------------1 I' Page 1 I 1 f NO. 2013-33584 I 2 WELLSHIRE FINANCIAL SERVICES, IN THE DISTRICT COURT I! I LLC, d/b/a LOANSTAR TITLE i 3 LOANS and INTEGRITY TEXAS I FUNDING, LP, 4 Plaintiffs, 5 versus HARRIS COUNTY, TEXAS 6 TMX FINANCE HOLDINGS, INC.; TMX FINANCE, LLC; TMX FINANCE OF 7 TEXAS, INC.; TITLEMAX OF TEXAS, INC.; FELIX DeLEON; and 8 ISHMAEL HERNANDEZ, 9 Defendants. 152nd JUDICIAL DIST. 10 ******************************************************* 11 VIDEOTAPED ORAL DEPOSITION OF 12 RANDY LEE RAINEY 13 JULY 8, 2014 14 VOLUME 1 OF 1 15 ****************************************************** .I 16 VIDEOTAPED ORAL DEPOSITION OF RANDY LEE RAINEY, ! 17 produced as a witness duly sworn by me at the instance 18 of the Defendants, was taken in the above styled and 19 numbered cause on JULY 8, 2014, from 9:03AM to 10:44 20 AM, before Beth Howard, CSR in and for the State of 21 Texas, reported by Machine Shorthand, at the offices of 22 Abby Office Preston Center, located at 5956 Sherry Lane, 23 Suite 1000, Dallas, Texas, pursuant to the Texas Rules 24 of Civil Procedure, Notice, Subpoena, and the provisions 25 stated on the record or attached hereto. iL_ ______________________________________________________________________________________________________________________ ji Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0815  -----------------------------·-----1 Page 2 1 APPEARANCES 2 FOR THE PLAINTIFFS: 3 CHRISTINA GOEBELSMANN, ESQ. Wargo French 4 1888 Century Park East, Suite 1520 Los Angeles, California 90067 5 (310) 853-6807 - FAX: (310) 853-6333 cgoebelsmann®wargofrench.com 6 FOR THE DEFENDANTS TMX FINANCE HOLDINGS, INC.; TMX 7 FINANCE, LLC; TMX FINANCE OF TEXAS, INC.; and TITLEMAX OF TEXAS, INC. : 8 BRYON RICE, ESQ. 9 Beck Redden 1221 McKinney Street, Suite 4500 10 Houston, Texas 77010 (713) 951-6256 - FAX: (713) 951-3720 11 brice®beckredden.com 12 VICTORIA H. NEWMAN, ESQ. (Telephonically) TMX Finance 13 15 Bull Street, Suite 200 Savannah, Georgia 31401 14 (912) 503-2824 Victoria.newman@titlemax.com 15 16 VIDEOGRAPHER: 17 Mr. John Hines Mr. Arthur Estes 18 19 20 21 22 23 24 25 Veritext Florida Repmting Co. 800-726-7007 305-376-8800 0816  ------··----·-----·--·--··--·-, Page 39 1 And another place on Central Expressway 2 somewhere between -- it's on the west side of Central 3 Expressway, somewhere between, like, Spring Valley and 4 Alpha, somewhere in -- somewhere around there, within a 5 mile or half mile. And it was, like, a little odd -- 6 very odd little mom-and-pop kind of place. It was, 7 like, in a weird little office at the end of, like, a 8 motel. I don't kno~1 the name of that place. 9 Q. Was that an auto title loan company? 10 A. I don't know everything -- They did auto 11 loans, the title loans, but I -- they may have had other 12 loan services as well. I'm not sure. 13 I Q. Were there any other places that you 14 i accompanied Tom where you would be writing down license 15 plate numbers? 16 A. If there is, I don't recall. Just those three 17 that I recall. 18 Q. Okay. And those three times you accompanied 19 him, during what month and year did that occur? 20 A. It would have been within the couple weeks 21 after I was -- within a week to two weeks after I was 22 hired; and I would say somewhere between ·the second and 23 fourth, fifth week 24 Q. Okay. You -- 25 A. -- when I was there. ---·---·····-----·-------·-·····-··-·-· Veritext Florida Repotting Co. 800-726-7007 305-376-8800 0817  ,- I Page 40 1 I Q. Would that be November 2011? I 2 A. Yeah. 3 ' I Q. Okay. i 4 A. November -- it may be into early December, but 5 probably not beyond that. 6 Q. Okay. And what exactly did Tom do when he 7 brought you to thes~ parking lots? 8 A. So the first time that we went to -- he went 9 to the one -- and I think -- I know it was at least 10 twice. Maybe I went there more. Maybe three or four 11 times. I'm not sure. But the one on -- the location on 12 Buckingham, I believe it's Buckingham and Belt Line 13 Road, in east Richardson, we would park -- There was 14 some kind of grocery store or something. Like, it was 15 on the corner of the -- of the intersection. 16 So we would park, like, adjacent in the 17 parking lot beside it. And I couldn't really see the 18 license plates, because apparently he had a lot better 19 vision than I did. But sometimes he would call them off 20 and I would write them down. 21 And then he would take his smartphone and 22 just go into, lil~:e, a website and log in, and he would i' 23 find out general information. He told me that that was II 24 a website that -- that he paid for. It was information 25 like -- sometimes there were a phone number, address. I I -----·--·--···---··--· - - ---------------~-----------------_____) Veritext Florida Reporting Co. 800-726-7007 305-376-8800 0818  r----------------------------- ------~ Page 41 'i' ' It definitely told if the car that he was looking at in ' 2 I the parking lot just in front of us had a lien against l I 3 ' .it, you know. 4 I never really questioned the practice, 5 because he said that, you know, he wasn't going on their 6 property, and that this was, you know, public data that 7 he could buy, so .... 8 Q. Do you know what the name was of the website 9 that he used? 10 A. I do not. And I remember he was saying it was 11 maybe 30, 40 bucks a month, something like that; and he 12 got a num a certain number of searches for that, and 13 that could have been like-- I don't remember, 20, 40 14 a -- you know, a month. I don't remember the exact 15 numbers. But it was definitely a dollar amount that he 16 paid for -- I guess you could go up or down on that 17 level and get more searches, and then he -- but he had a 18 set number of searches that he could do monthly. 19 Q. So was it your understanding that Tom had paid 20 for this website service and was able to use it for a 21 i· certain number of searches each month? ' 22 A. Yes. 23 Q. Okay. Did you ever see the smartphone screen 24 when he was performing these searches? 25 I A. um-hmm. Yeah. He showed me I know at least 1 [____________________________________________________________________________________________________ ! Veritext Florida Reporting Co. 800-726-7007 305-376-8800. 0819  ~wher~~h~ ~ind ~ecroll Page 42 1 would of do= end -- It's on 1 2 his iPhone. He would just scroll down and I would see 3 various information about -- that was associated with 4 that license plate. 5 Q. Okay. And do you remember what that screen 6 that you were viewing looked like? 7 A. Just your basic kind of gridded-out screen 8 that you would see, with, you know, like a like a 9 name and, like, information about it, like the -- like 10 name and -- the person's name and address and stuff like 11 that. 12 Q. What color was the screen? 13 A. I don't remember it being any bright colors. 14 It was -- I don't I don't really remember. 15 Q. Okay. And do you remember how many search 16 results would come up when he would search a license 17 plate number? 18 A. Well, just the one result, because it ~10uld be 19 whatever data that that search engine or company or 20 whatever he was using had. 21 Q. Okay. Did he -- did Tom ever tell you whether 22 or not he could search using information other than 23 license plate numbers? 24 A. No. I don't remember anything like that, 25 other than just that method I told you. L_____________________________________________________________________________________________________ _ Veritext Florida Rep011ing Co. 800-726-7007 305-376-8800 0820 Exhibit F 0821 Goebelsmann, Christina From: Geoff Gannaway Sent: Wednesday, June 25, 2014 7:46 PM To: Powers, Sarah; Bryon Rice; 'Johnson, Daniel'; Wargo, Joseph D.; Goebelsmann, Christina; Stecker, Abigail Cc: 'Steve LaBriola'; 'Christina Baugh'; 'kconklin@fellab.com' Subject: RE: Wellshire et al. v. TMX Holdings et al. Sarah: We do not agree to provide the hard drive images. If you have requests for specific documents, we will respond to them through the normal course of discovery. From: Powers, Sarah [mailto:soowers@wargofrench.com] Sent: Wednesday, June 18, 2014 7:40 PM To: Geoff Gannaway; Bryon Rice; 'Johnson, Daniel'; Wargo, Joseph D.; Goebelsmann, Christina; Stecker, Abigail Cc: 'Steve LaBriola'; 'Christina Baugh'; 'kconklin@fellab.com' Subject: Wellshire et al. v. TMX Holdings et al. Geoff- I am writing to request Defendants' production to Plaintiffs of certain hard drives of computers used to conduct the conduct described in Plaintiffs' Petition. As you know, based on the deposition testimony of both Mike Ryan and Todd Hale himself, Mr. Hale maintained a spreadsheet on his computer of customers to whom he had sent marketing materials, after obtaining their contact information from PublicData. We have requested the spreadsheet through a request for production, and Defendants' response was that the spreadsheet could not be located. Accordingly, we would like to submit the hard drive to our forensic computer expert for his analysis. Similarly, because both Felix Deleon and Lucia Grajeda exercised their Fifth Amendment right to refuse to testify regarding their involvement in the illegal conduct, we intend to submit to our forensic expert the computers they used during the relevant time period of their employment with TitleMax. As each of these computers' hard drives has been imaged per the June 28, 2013 Rule 11 Agreement, please also produce the images of these hard drives for comparison. Please call me if you would like to discuss. Sincerely, Sarah F. Powers WARGO FRENCH 1888 Century Park East, Suite I 520 Los Angeles, California 90067 Telephone: (31 0) 853-6453 (direct) Facsimile: (31 0) 853-6333 E-Mail: spowers@wargofrench.com Website: www.\vargofrench.com WARGOIJF= FHENCH Ii Atlanta l Lcs f\nge!es I i·.'li?-ml The information in this message is intended for the addressee only and may contain privileged and confidential information. If you are not the intended recipient, please immediately stop reading this message, delete it from your system and notif'y the sender at spowers@wanrofi·eneh.com that it has been deleted. Any unauthorized reading, distribution, dissemination, copying, or other use of the information in this message is strictly prohibited. 0822 2 0823 Exhibit G 0824  PIUJO l CAUSE NO. 2013-33584 li&LLSHIRE FINANCI1U. IN THE DISTRICT COURT SER~CES, LLC, d/b/~ LONESTAR TITLE LOANS and • INTEGRI'l'Y TEXAS FUliDlNG 1 LP, • Plaintiff:-: • vs. * H.liJUUS COtJWl'!C, TEXAS ~ FINANCE HOLOINGS, l.NC,; '1'MX. FINANe£, l.LC; • TMX FI!IMCE OF TEAAS 1 INC. ; 'I'ITL'EMJ>.X OF TEXAS 1 INC.; FELIX DeLEON; and ISHMl\EL HERNANDEZ, Defendants 152ND JUDICIAL DISTRICT ORAL AND VIDEOTAPED DEPOSITION OF RICHARD TODD HALE H~Y 15, 2014 *************************~****************************** ORAL Nro VIDEO:t'APED DEPOSITION OF 1\IC/J.Aru) !rOOD HALE, produced as a witness at the instance of the PLAINTIFFS, and duly sworn, was taken in the abovc-styl~d and numbered cuu:oe on the 15th of HAY, 2014 from 9:06 a,n, to 2:50p.m., before MELISSA PARKHILL, CSR, in and for the state of Tex~s, roport~d by computer-assisted ~chino uhorthand, at tho law offices of Sutherland Asbill G Brennan, 600 Congress Avenue, Suite 2000, AUstin, Travis 0825  ~ County, Texas, pursu~nt to the Texas Rul~s of Civil 2 Procedure and the provi~ions stated on tho record or 3 attttohed hereto. ' s 6 7 ' lO l1 12 13 " 15 " l7 lB ,. 20 21 22 23 24 25 0826  1 AI'I'&ARANCES 2 3 FOR THE PLAINTIFFS: 4 sarah F. Powc:es, .1\tto>:ney at LllW -pnd- 5 Christina Gocbols1r.:mn, AttoJ::nQ!( at Law WARGO FRENCH 2888 century !'ark East, Suite 1520 ' Los Angelos, California S0067 7 (305) 913-8587 spowors~wa:egofroneh.eom • • 10 FOR THE DEFENDANTS: ll Geoff Gannaway, Esq. BECK nEDDEN 1 LLP 12 1221 MolCinna~y, Suita 4500 HOU$tOn, TCXD$ 77030 l3 (713) 951-6263 qgannnwayGbeekredden.com l4 15 16 ALSO PRESENT: 17 Cody Hall, Vidcogrllphor " 20 21 22 23 24 25 0827  Paqe 102 1 now, I baliavo this is ona of the document& th;~.t w;u: 2 p~odueed to you by ~. G~nawny. Could you look at the 3 docwnQnt and confinn? • A. ~e3, ma'am. ThiG i~ one of the ones that I 5 ~ecoived from -- from him, • Q. Okay. Let's tu~n to the second paq~ of thic 7 document. It's Batec labeled 1338 at the bottom. Do you a sae that? 9 A. the~e's " Q. And an e-mail which appearc to be from 11 you to Patrick Sudduth at the bottom of that paqe. 12 A. 13 Q. Okay, !c this an e-~il from you to Patrick 14 Sudduth? A. " 16 Q. Okay. And i t is dated Septemb~r 15th, 2012; is l7 that correct? 18 A. That i~> co~~ect, l9 Q. Okay. Would you road this e-mail out loud into 20 tho :t:ecord? 21 A. It c~ys, "I c~aat11d. a databa&e u::inq thl! d.at.a 22 that wo qot from PUblieData.com ucinq tho licenGo pl~toG 23 fl:om p;:~.rkod ca.rc-; at ou~ competition, Texnc 'l'itlc next 24 door." 25 "I h;:~.ve about 20 nllmol:l and addre::;.:u:::; in 0828  Page 10.3 1 th~c datab~sc and ~11 h~ve liens on their title~ 2 according to public data." 3 "I then created thill' fo:rzn lattox: :o.nd u::ad 4 m4il merqe to merge in the names and addx:os::; information 5 from tho EXCEL databa:u: to pe.t"sonali:::c the letter." G ''I'm mailin9 thee~. out today." 7 "Todd." 8 Q. Okay. What do you remember, if anything, about Sl thiJ~: e-mail? 10 MR. til'\NNAl-m'!: obJect to form. 11 A. I remember that, as I'd ~lready testified on 12 cax:lior, I had been instructed to use the public databa~c 13 ~nd get the information to mail out. When I -- and if I 14 look on the datu on this a-nw.il, that lines up !lith the 15 date on the firl$t audit: where Patrick SO"Iy::; you're not 16 meeting your goO"Ils; ~ou'rc going to have to do more 17 marketing. And so I started doing that. It was 18 time-con:::Ulning tho original way that he had in::~tructed me 19 to do i t because you ~ould have -- get n~es and 20 info=ntion and I think at that time everybody elGc '!lao 21 just taking dollO n~cs and info~ation :o.nd then w~itinq 22 out an individ -- individuaLi:::ad letter to each 23 individual -- individual on there, Okay. 24 so all I -.ra" trying to convey -.rith thi~ 25 eMmail wa" I've mO"Ide it a little bit oaniar by I eraatcd 0829  Page 104 1 a ~~croso~t EXCEL spreadsheet where I had on there the 2 address and the city, state and :ip oodo. And then u~ed J -~ saved that as a mini databa$o with all of that 4 information and then ueod that in conjunction with 5 Microsoft Word'~ rnerqe proor~ to then ~rqe in the n~~s 6 and info~tion just to mnko it simpler. So then you i only had to type out one letter, and it uuto~tically 8 enumerates i t with the correct narnee in hero instead o~ 9 havinq to do i t -- ouch individual letter. And I was 10 just tolling him of that part o£ tho idea. ll So just to clarify, that waG my idea. Tho 12 idea of where to got that information is -- c~e ~rom 13 Patrick Sudduth. 14 Q. Uow, that EXCEL spreadsheet that you jul'lt 15 testified about, did -~ did you leave that with Titlel".ax ' 16 whun you loft? 17 A. Yes, ~·am. That was on tho computer that I lB waG usinq at the office. 19 Q. Okay. Wa~ there any policy to purqm that =ort 20 of info:rmation while you were there? 21 HR. GJ>.NNA\>IJ'I.Y: Object to form. 22 23 Q. Dia you have a copy of that £XCEL spreadsheet? 24 A. no, ma'na. I didn't keep it. 25 Q. Okay. Was i t saved in any r.ort of onlin~ 0830  Page 105 1 database? A. I didn't nave it en any online database, no, 3 ma'!UII.. ~Aved ' Q, So you just it in a cocputo -- in one S single ~~mputcr; is that correct? 6 '· Ya~, m.D.'. Again, and I've been a~Y.ed th~t ~~e question 2 now three times. I was anked that question ~hen the 3 first L1.dy la\IYftl: c::dlii!d ~r.e a year ngo. I was a::ked that 4 quention again when Mr. Gannaway talked to me.the other 5 da.y, .And now, l'rn asked that quostion now. And it':; tho 6 s~e response, which is it -- I had created i t , I ~aved 7 i t on the cou~uter that was usinq at store office 8 nureber 20. ~d I mean, I had no reason to take it with 9 me. So I just I didn't. And so as far as I know when 10 J: left, i t was still there on the computer that I wAs 11 using at n~er 20. 12 Q, To your recollection, did you ever attach it to 13 any e-mail or e-mail it to anybody so that i t might be saved in a server so~ewherc? " 15 >. I mean, hone.:~tly, I hAd thought that I -- 16 attached it with thi~ e-mail trail, But obviou~ly, was 17 wrong. so z =can, r don't -- I don't -- I guess I 18 didn't. Q. " Okay. And at the time you left, did this 20 oprcadshect include all of the names of the prospective 21 customers th~t you hnd gotten fro~ PublicData.com? 22 ~m. GANNAWAY: Object to form, 23 A. Yes, ~·am, it did. aut I need to clarify thnt 24 i t wasn't only -~ that wasn't tho only place thoro's 25 infoxmation, We also got information from, for instanca, 0832 Exhibit H 0833  NO. 2013-33584 WELLSHIRE FINANCIAL SERVICES, § IN THE DISTRICT COURT LLC, d/b/a LOANSTAR TITLE LOANS § and INTEGRITY TEXAS FUNDING, LP, § § Plaintiffs, § § v. § § OF HARRIS COUNTY, TEXAS TMX FINANCE HOLDINGS, INC.; § TMX FINANCE, LLC; § TMX FINANCE OF TEXAS, INC.; § TITLEMAX OF TEXAS, INC.; § FELIX DeLEON; § and ISHMAEL HERNANDEZ, § § Defendants. § 152"a JUDICIAL DISTRICT DEFENDANTS TMX FINANCE OF TEXAS, INC. AND TITLEMAX OF TEXAS, INC.'S RESPONSES TO PLAINTIFFS' FIRST REOUEST FOR PRODUCTION TO: Plaintiff Wellshire Financial Services, LLC d/b/a LoanStar Title Loans and Integrity Texas Funding, LP by and through their attorneys of record, Kent C. Sullivan, Daniel Johnson, and Robert A. Lemus, Sutherland Asbill & Brennan, LLP, 1001 Frumin, Suite 3700, Houston, Texas 77002; and Joseph D. Wargo, Wru·go French, LLP, 999 Peachtree Street, N.E. 26 111 Floor, Atlru1ta, Georgia 30309. Defendants TMX Finance of Texas, Inc. and TitleMax of Texas, Inc. ("Defendants") hereby serve their Responses to Plaintiffs' Third Requests for Production. \730.00001/5391 SS.vl 0834  Respectfully submitted, BECK REDDEN, LLP By:.~~z_~~=======--= Day' . Beck (__.... State Bar No. 00000070 .,__ Geoff A. Gannaway State Bar No. 24036617 Bryon A. Rice State Bar No. 24065970 1221 McKim1ey Street, Suite 4500 Houston, Texas 77010 Tel: 713-951-3700 Fax: 713-951-3720 Email: dbeck@beckredden.com ggannaway@beckredden .com brice@beckredden.com ATTORNEYS FOR DEFENDANTS TMX FINANCE OF TEXAS, INC. AND T!TLEMAX OF TEXAS, INC. 1730.00001/5J9\55.vl 2 0835  CERTIFICATE OF SERVICE I hereby certify that I caused a true and correct copy of the foregoing instrument to be served on counsel of record in accordance with Rules 21 and 2la of the Texas Rules of Civil Procedure on this 4111 day of April, 2014, by email and facsimile: SUTHERLAND ASBILL & BRENNAN, LLP Kent C. Sullivan Daniel Johnson Robeti A. Lemus Facsimile: (713) 654- I 30 I E-mail: kent.sullivan@sutherland.com E-mail: daniel.j ohnson@sutherland.com E-mail: robert.lemus@sutherland.com WARGO & FRENCH, LLP Joseph D. Wargo Kenneth W. Stroud Jessica C. Casey Facsimile: (404) 853-1501 E-Mail: jwargo@wargofrench.com 1730.00001/5391 SS. vi 3 0836  General Objections 1. Defendants object to the Instructions to the extent that they seek to place a burden upon Defendants greater than that provided by the Texas Rules of Civil Procedure. 2, Defendants reserve the right to supplement and/or amend its responses to these Requests for Production in accordance with the Texas Rules of Civil Procedure. 17JO.OOOO\fSJ91 SS.Vl 4 0837  RESPONSES TO REQUEST FOR PRODUCTION REQUEST FOR PRODUCTION NO. 1: All contracts or agreements by and between any Defendant, on the one hand, and DataTrax, on the other hand, dated from September 1, 2011 to the present. RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants further object to the extent this request seeks information regarding contracts that might have been entered by persons or entities other than Defendants. Subject to those objections, none. REQUEST FOR PRODUCTION NO.2: All contracts or agreements by and between any Defendant, on the one hand, and, The Source for PublicData LP (also known as PublicData), on the other hand, dated from September l, 2011 to the present. RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants further object to the extent this request seeks information regarding contracts that might have been entered by persons or entities other than Defendants. Subject to those objections, none. REQUEST FOR PRODUCTION NO. 3: All emails by, received by, or otherwise in the inbox or deleted items folder for Todd Hale from September 1, 2011 to the present that refer or relate to visiting parking lots of any broker or provider of car title loans. RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants further object pursuant to TRCP 196.4 because they cannot through reasonable efforts retrieve the data or information requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents related to Plaintiffs. REQUEST FOR PRODUCTION NO. 4: All emails sent by, received by, or otherwise in the inbox or deleted items folder for Todd Hale from September 1, 2011 through the present that refer or relate to a "buyout" or refinance of any existing car title loans or loans held by entities other than TitleMax. !730.0000!/53915~.vl 5 0838 RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants further object pursuant to TRCP 196.4 because they cannot through reasonable efforts retrieve the data or information requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents related to Plaintiffs. REQUEST FOR PRODUCTION NO.5: All emails sent by, received by, or otherwise in the inbox or deleted items folder for Todd Hale from September 1, 2011 to the present that refer or relate to The Source for PublicData, LP (also known as PublicData), DatraTrax, or the Texas Department of Motor Vehicles ("DMV"). RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants further object pursuant to TRCP 196.4 because they cannot through reasonable efforts retrieve the data or information requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents related to Plaintiffs. REQUEST FOR PRODUCTION NO.6: The spreadsheet or database used by Todd Hale and identified in the deposition of Patrick Sudduth in which Hale kept track of license plate numbers and other information on potential buyout or refinance customers. RESPONSE: Defendants have not yet been able to locate the document, but will produce it if it is located. REQUEST FOR PRODUCTION NO.7: All emails sent by, received by, or otherwise in the inbox or deleted items or deleted items folder for Ernest Page from September 1, 2011 to the present that refer or relate to visiting parking lots of any broker or provider of car title loans. RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants further object pursuant to TRCP 196.4 because they cannot through reasonable effmts retrieve the data or information requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents related to Plaintiffs. I730.00001(5391 55.vl 6 0839 REQUEST FOR PRODUCTION NO. 8: All emails sent by, received by, or otherwise in the inbox or deleted items folder for Ernest Page from September 1, 2011 through the present that refer or relate to a "buyout" or refinance of any existing car title loans held by entities other than TitleMax. RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discove1y of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants fu1iher object pursuant to TRCP 196.4 because they cannot through reasonable efforts retrieve the data or information requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents related to Plaintiffs. REQUEST FOR PRODUCTION NO.9: All emails sent by, received by, or otherwise in the inbox or deleted items folder for Ernest Page from September 1, 2011 to the present that refer or relate to The Source for PublicData, LP (also known as PublicData), DataTrax, or the Texas Department of Motor Vehicles ("DMV"). RESPONSE: Defendants object to this request as overbroad, unduly bnrdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request knot limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants further object pursuant to TRCP 196.4 because they cannot through reasonable efforts retrieve the data or information requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents r~lated to Plaintiffs. · REQUEST FOR PRODUCTION NO. 10: All emails sent by, received by, or otherwise in the inbox or deleted items folder for Ishmael Hernandez from September 1, 2011 tlll'ough the present that refer or relate to a "buyout" or refinance of any competitor's existing car title loan or loans. RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants further object pursuant to TRCP 196.4 because they cannot tlll'ough reasonable efforts retrieve the data or information requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents related to Plaintiffs. 1130.000011539155. vi 7 0840 REQUEST FOR PRODUCTION NO. 11: All emails sent by, received by, or otherwise in the inbox or deleted items folder for Ishmael Hernandez from September 1, 2011 to the present that refer or relate to The Source for PublicData, LP (also known as PublicData), DataTrax, or the Texas Department of Motor Vehicles ("DMV"). RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants further object pursuant to TRCP 196.4 because they cannot through reasonable effm1s retrieve the data or information requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents related to Plaintiffs. REQUEST FOR PRODUCTION NO. 12: All emails sent by, received by, or otherwise in the inbox or deleted items folder for Felix DeLeon from September 1, 20 11 through the present that refer or relate to a "buyout" or refinance of any competitor's existing car title loan or loans. RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants further object pursuant to TRCP 196.4 because they cannot tlu·ough reasonable efforts retrieve the data or information requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents related to Plaintiffs. REQUEST FOR PRODUCTION NO. 13: All emails sent by, received by, or otherwise in the inbox or deleted items folder for Felix DeLeon from September 1, 2011 to the present that refer or relate to The Source for PublicData LP (also !mown as PublicData), DataTrax, or the Texas Department of Motor Vehicles ("DMV"). RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants further object pursuant to TRCP 196.4 because they cannot through reasonable efforts retrieve the data or information requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents related to Plaintiffs. ! 730.00001/S391SS.v1 8 0841 REQUEST FOR PRODUCTION NO. 14: All ema:ils sent by, received by, or otherwise in the inbox or deleted items folder for Michael Ryan from September 1, 20 II through the present that refer or relate to a "buyout" or refinance of any existing car title loan or loans held by entities other than TitleMax. RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timefl·ame relevant to this lawsuit. Defendants further object pursuant to TRCP 196.4 because they cannot through reasonable efforts retrieve the data or infonnation requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents related to Plaintiffs. REQUEST FOR PRODUCTION NO. 15: All emails sent by, received by, or otherwise in the inbox or deleted items folder for Michael Ryan from September 1, 2011 to the present that refer or relate to The Source for PublicData, LP (also known as PublicData), DataTrax, or the Texas Department of Motor Vehicles ("DMV"). RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants further object pursuant to TRCP 196.4 because they cannot through reasonable efforts retrieve the data or information requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents related to Plaintiffs. REQUEST FOR PRODUCTION NO. 16: All emails sent by, received by, or otherwise in the in box or deleted items folder for Rad Casillas from September 1, 2011 through the present that refer or relate to a "buyout" or refinance of any existing car title loan or loans held by entities other than TitleMax. RESPONSE: Defendants object to this reqnest as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited io matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants futther object pursuant to TRCP 196.4 because they cannot through reasonable efforts retrieve the data or information requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents related to Plaintiffs. 1730.0000 I/Sj9]55.vl 9 0842 REQUEST FOR PRODUCTION NO. 17: All emails sent by, received by, or otherwise in the inbox or deleted items folder for Rad Casillas from September 1, 2011 to the present that refer or relate to The Source for PublicData, LP (also !mown as PublicData), DataTrax, or the Texas Department of Motor Vehicles ("DMV"). RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants fmther object pursuant to TRCP 196.4 because they cannot through reasonable efforts retrieve the data or information requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents related to Plaintiffs. REQUEST FOR PRODUCTION NO. 18: All emails sent by, received by, or otherwise in the inbox or deleted items folder for James Batterson from September 1, 2011 through the present that refer or relate to a "buyout" or refinance of any existing car title loan or loans held by entities other than TitleMax. RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants further object pursuant to TRCP 196.4 because they cannot through reasonable efforts retrieve the data or infonnation requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents related to Plaintiffs. REQUEST FOR PRODUCTION NO. 19: All emails sent by, received by, or otherwise in the inbox or deleted items folder for James Batterson from September 1, 2011 to the present that refer or relate to The Source for PublicData, LP (also known as PublicData), DataTrax, or the Texas Department of Motor Vehicles ("DMV"). RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of relevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. Defendants further object pursuant to TRCP 196.4 because they cannot through reasonable efforts retrieve the data or information requested. Subject to those objections, Defendants will run keyword searches to locate responsive documents related to Plaintiffs. 1730.0000115391 SS.vl 10 0843 REQUEST FOR PRODUCTION NO. 20: All documents referring or relating to divisional meetings held by You from September 1, 2011 to the present, including but not limited to meeting minutes and itineraries. This request is limited to those divisional meetings involving the stores identified in Your response to Intenogatory No. 1 of Plaintiffs' Second Set oflnterrogatories, served concurrently herewith. RESPONSE: Defendants object to this request as overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery ofrelevant evidence. The request is not limited to matters relevant to this lawsuit, or to the timeframe relevant to this lawsuit. 1130.000G \/5391 SS.vl 11 0844 Exhibit I 0845  Page 1 CAUSE NO. 2013-33584 WELLSHIRE FINANCIAL ) IN THE DISTRICT COURT SERVICES 1 LLC 1 d/b/a ) LOANSTAR TITLE LOANS ) and INTEGRITY TEXAS ) FUNDING 1 LP 1 ) Plaintiffs, ) ) vs. ) OF HARRIS COUNTY 1 TEXAS ) TMX FINANCE HOLDINGS 1 ) INC.; TMX FINANCE 1 LLC; ) TMX FINANCE OF TEXAS 1 ) INC.; TITLEMAX OF TEXAS 1 ) INC; FELIX DELEON; and ) ISMAEL HERNANDEZ 1 ) Defendants. ) 152ND JUDICIAL DISTRICT ORAL VIDEOTAPED DEPOSITION FELIX DELEON June 24 1 2013 ORAL VIDEOTAPED DEPOSITION OF FELIX DELEON 1 produced as a witness at the instance of the Plaintiffs and duly sworn 1 was taken in the above-styled and numbered cause on June 24 1 2013 1 from 2:53p.m. to 3:21 p.m. 1 before Teresa Saucier 1 Certified Shorthand Reporter in and for the State of Texas 1 reported by computerized stenotype machine at the offices of Sutherland Asbill & Brennan 1 1001 Fannin 1 Suite 3700 1 Houston 1 Harris County 1 Texas 1 pursuant to Notice and the Texas Rules of Civil Procedure. Carlisle Reporting 713-864-4443 0846  Page 2 ~ APPEARANCES 2 3 FOR THE PLAINTIFFS: 4 MR. JOSEPH WARGO (VIA TELEPHONE) WARGO FRENCH, LLP 5 999 Peachtree Street, N.E., 26th Floor Atlanta, Georgia 30309 6 7 FOR DEFENDANTS TMX FINANCE OF TEXAS, INCORPORATED AND 8 TITLEMAX OF TEXAS, INCORPORATED: 9 MR. GEOFF GANNAWAY BECK REDDEN ~0 122~ McKinney Street, Suite 4500 Houston, Texas 77010 ~~ Telephone: 7~3 95~-6263 E-mail: ggannaway@beckredden.com ~2 and MR. STEPHEN T. LABRIOLA 13 FELLOWS LABRIOLA 225 Peachtree Street, NE 14 Suite 2300, South Tower Atlanta, Georgia 30303 15 Telephone: 404 586-9200 E-mail: slabrio~a@fellab.com 16 17 FOR DEFENDANT ISMAEL HERNANDEZ: 18 MR. REECE RONDON HALL MAINS LUGRIN, PC 19 2800 Post Oak Boulevard, 64th Floor Houston, Texas 77057 20 Telephone: 713 871-9000 E-mail: rrondon@hallmaineslugrin.corn 21 22 FOR DEFENDANT FELIX DELEON: 23 MS. CHRISTINA A. BRYAN SMYSER KAPLAN & VESELKA, LLP 24 700 Louisiana, Suite 2300 Houston, Texas 77002 25 Telephone: 713 22~-2345 Carlisle Reporting 7~3-864-4443 0847  Page 3 1 APPEARANCES (Cont.) 2 3 ALSO PRESENT: 4 Mr. Nicholas D'Angelo (Videographer) 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Carlisle Reporting 713-864-4443 0848  Felix DeLeon - June 24, 2013 Examination by Mr. Wargo Page 12 1 A. I invoke my Fifth. 2 Q. You were aware, were you not, that you 3 could not search the Datatrax database for purposes 4 of discovering customers of your competitors so that 5 you could then solicit those competitors? 6 MR. GANNAWAY: Object to form. 7 MS. BRYAN: Form. 8 A. I invoke my Fifth. 9 Q. Do you understand that in order to search 10 the Datatrax database, you were required to certify 11 that you were using the data for a permissible 12 purpose, correct? 13 MR. GANNAWAY: Object to form. 14 A. I invoke my Fifth. 15 Q. Did you provide such a certification? 16 MS. BRYAN: Form. 17 A. I invoke my Fifth. 18 Q. What certification did you provide to 19 Datatrax? 20 MS. BRYAN: Objection, form. 21 A. I invoke my Fifth. 22 Q. You did certify to Datatrax, did you not, 23 sir, that you would not use information that you 24 obtained from Datatrax to solicit customers? 25 A. I invoke my Fifth. Carlisle Reporting 713-864-4443 0849  Felix DeLeon - June 24, 2013 Examination by Mr. Wargo Page 13 1 Q. Isn't it true, sir, that you have searched 2 the Datatrax databases for information related to 3 Loanstar or Integrity customers? 4 MS. BRYAN: Form. 5 A. I invoke my Fifth. 6 Q. When did you perform such a search for the 7 first time? 8 MS. BRYAN: Objection, form. 9 MR. GANNAWAY: Form. 10 A. I invoke my Fifth. 11 Q. How many customer how many customers did 12 you identify throughout all of the searches that 13 you've done of the Datatrax database related to 14 Loanstar or Integrity? 15 MR. GANNAWAY: Objection, form. 16 MS. BRYAN: Objection, form. 17 A. I invoke the Fifth. 18 Q. Approximately how many customers did you 19 identify per search of the Datatrax system? 20 MR. GANNAWAY: Object to form. 21 MS. BRYAN: Objection, form. 22 A. I invoke the Fifth. 23 Q. Is i t true -- i t is true, is i t not, sir, 24 that you performed such searches of the Datatrax 25 system within the scope of your employment with Carlisle Reporting 713-864-4443 0850  Felix DeLeon- June 24, 2013 Examination by Mr. Wargo Page 14 1 TitleMax? 2 MR. GANNAWAY: Object to form. 3 A. I invoke the Fifth. 4 Q. What searches did you perform on the 5 Datatrax system -- I'm sorry, on the Datatrax 6 database that was, in any way, related to Loanstar or 7 Integrity customers? 8 MS. BRYAN: Objection, form. 9 A. I invoke the Fifth. 10 Q. Did you do a search for the Austin, Texas 11 area related to Integrity or Loanstar customers on 12 the Datatrax database? 13 MR. GANNAWAY: Object to form. 14 A. I invoke the Fifth. 15 Q. Did you do a search for Integrity or 16 Loanstar customers in the Dallas area on the Datatrax 17 database? 18 MR. GANNAWAY: Object to form. 19 A. I invoke the Fifth. 20 Q. Did you do a search on the Datatrax 21 database for Loanstar or Integrity customers in the 22 Houston, Texas area? 23 MR. GANNAWAY: Object to form. 24 A. I invoke the Fifth. 25 Q. Did you target specific area codes or zip Carlisle Reporting 713-864-4443 0851  Felix DeLeon - June 24, 2013 Examination by Mr. Wargo Page 15 1 codes in any search of.the Datatrax database system? 2 MR. GANNAWAY: Object to form. 3 MS. BRYAN: Form. 4 A. I invoke the Fifth. 5 Q. Did any of your bosses or superiors 6 instruct you to perform any search of the Datatrax 7 database? 8 A. I invoke the Fifth. 9 Q. Who instructed such a search? 10 MS. BRYAN: Objection, form. 11 MR. GANNAWAY: Object to form. 12 A. I invoke the Fifth. 13 Q. Sir, did you obtain any reports containing 14 the names of Loanstar or Integrity customers as a 15 result of a search of the Datatrax database? 16 MR. GANNAWAY: Object to form. 17 MS. BRYAN: Objection, form. 18 A. I invoke the Fifth. 19 Q. Sir, it's true that you solicited customers 20 on behalf of TitleMax using information that you 21 obtained from the Datatrax system? 22 MS. BRYAN: Form. 23, MR. GANNAWAY: Object to form. 24 A. I invoke the Fifth. 25 Q, Sir, it's true that you solicited customers Carlisle Reporting 713-864-4443 0852  Felix DeLeon - June 24, 2013 Examination by Mr. Wargo Page 16 1 in order to make more money, those customers being 2 Loanstar or Integrity customers, that you identified 3 from the Datatrax database? 4 MR. GANNAWAY: Object to form. 5 MS. BRYAN: Form. 6 A. I invoke the Fifth. 7 Q. Sir, it's true that you solicited over a 8 hundred customers using the Datatrax database that 9 you identified let -- let me rephrase that, 10 please. 11 Sir, it's true that you solicited 12 using the Datatrax data -- database over a hundred 13 customers who, in fact, were Integrity and Loanstar 14 customers? 15 MS. BRYAN: Form. 16 MR. GANNAWAY: Object to form. 17 A. I invoke the Fifth. 18 Q. Sir, you sent letters and flyers to 19 customers you identified through the -~ the Datatrax 20 database. Isn't that true? 21 MS. BRYAN: Objection, form. 22 MR. GANNAWAY: Object to form. 23 A. I invoke the Fifth. 24 Q. And those customers were customers who were 25 Integrity or Loanstar customers, were they not? Carlisle Reporting 713-864-4443 0853  Paqe l NO. 20J.J-J3SB4 WELLSHIRE FINANCIAL IU THE DISTRICT COURT SERVICES, LLC, D/B/A LOJUIS"rt\R TITLE LOANS Pt..>m IN'l'EGRI'l'~ TEXAS FUNDING, LP, Plaintiffs, vs. HARRIS COUN'TY, TEXAS TMX FINANCE HOLDINGS, INC.; TWX FINANCE, LLC; 'l'HX Fiw.NCE OF 'l'EXAS 1 INC. ; 'XITLEMAX OF TEXAS, INC. ; FELIX DELEON; AND IS~L HERNANDEZ, Dc:fcndanto, 152NO JUDICIAL DISTRICT ORAL ANO ~OEOTAPEO DEPOSITION OF LUCIA GRA.JEDA June 27, .2013 ORAL AND VIDEO'l'AFED DEPOSITION OF LUCIA GRAJEDA, p~oduced a~ a witne~s at the instance of the PlAintiffs, and duly sworn, was t~ken in the nhovo-stylGd and numbered cause on the 27th of June, 2013, from 10:19 a.a. to 12:53 p.m., before Heidi Morrison, CSR, RPR, Certified Shorthand Reporter in and for the State of Texas, reported by computerized stenotype machine at tho offices of Weisbart Sprin9cr Hayes, LLP, .212 Lavaca Street, Suite 200, Austin, Texas 7B70J., pursuant to the Texas Rules of Civil Procedure and the provisions stated on tho record or attached hereto. 0854  1 APPE.l\.RANCES 2 3 FOR THE PLAINTIFFS: 4 Ml:. Kenneth w. Stroud WMIGO FRENCH 5 999 Pa.a.chtrce Strcut, NE 26th Flocu: 6 Atlnnta, Georgia 30309 Telephone: (404) 853-1500 7 Fax: (404) 853-1569 E-mail: k~troud~warqofrench.com • FOR THE DEFENOAN'l' LUCIA GRI\Jl'.:OA: ' Mr. Tim Cleveland 10 WEISBAR'l' SPRINGER Hl\YES, LLP 212 Lavaca Street, Suite 200 11 Au:;~tin,Taxa:; 78701 Talaphona: (512) 652-5780 12 Fax: (512) 682-20?4 E-mail: tclevelandGw~hllp.com 13 FOR THE DEFENDANTS 'l'HX FINANCE OF TEXAS 1 INC. 1 lllTO 14 TIT!.EM1>.X OF TEXAS, INC. : 15 Mr. Bryon A, Rice SE:Cll: REDDEN 16 1221 McKinney St. , Sui to 4500 Hou~ton,Texas 77010 17 Telephone: (713) 951-6256 Fax: (713) 951-3720 18 E-mail: brice[!bcckredden. com 19 ALSO PRESENT: 20 Cody Hall, Videographer Sarah Sibley 21 22 23 " 25 0855  Page 16 1 MR. CLEVELAND: I:;; that ~groeable? 2 MR. STROUD: That's ~gr~oable, yos. 3 {By Hr. Stroud) As a qaneral Danagcr, did you 4 l.EL HERliANDEZ, produced as a ~itnes~ at the instance of the Plaintiff" and duly sworn, unu taken in the above-styled and numbered cause on June 24, 2013, from 1:52 p.m. to 2:40p.m., before Teresa saucier, Certified Shorthand Reporter in and for the State of Texas, reported by computerized stenotype machine at the offices of Sutherland Asbill ' Brennan, 1001 Fannin, Suite 3700, Houston, Harris County, Texas, pursuant to Notice and th• Taxas Rules of Civil Procedure. 0859  Paqe 2 1 APPSARJ\liCES 2 3 FOR THE PLAINTIFFS: 4 MR. JOSEPH Wl\RGO (VIA TELEPHONE) Wl\RGO FRENCH 1 LLP 5 999 Pc;~chtree St:r.:cct, N.E,, 26th Floor Atl~nta, Goorqia 30309 ' 7 FOR DEFENDANTS TMX FlRhNCE OF TEXAS, INCORPORA~ED AND 9 TITLE!.~ OF TEXAS, INCORPORATED: 9 HR, GEOFF GANNAWAY BECK REDDEtl 10 1221 McKinney Street, Suita 4500 Houston, Texas 77010 11 '!'elcphonc: 713 951-6263 E-mail: qqannawayQbcckrcddcn.eom 12 and MR, S!l'EPHEU T. IJI.BRIOLA 13 FELLO'I~S IJ\BR:IOLA 225 Peachtree Street, NE 14 Suite 2300, South Tower Atlanta, Georgia 30303 15 Telephone: 404 586-9200 E-mail: slabriola2fellab.com " 17 FOR DEFEUDANT ISHI\EL HERll1.NDEZ: 18 MR. REECE RO~IDO!t HALL ~.£ZI.INS LUGRIU 1 PC 1!1 2800 Post 03.k Boulevard, 64th Floor Houston, Texas 77057 20 Tclephon~~:: 713 071-9000 21 22 FOR DEFENDANT FELIX DELEON: 23 MS. CHRISTINA A. BRYJUl SM'iSElt KAPLAN G VESELKA, LLP 24 700 Loui.IJiana, Suito 2300 Houston, Texas 77002 25 Telephone: 713 221-2345 0860  Page 3 1 APPEJI.RAl.NNAWJI.'i: Object tc fo.z:m. 23 A. ~ plead the Fifth. 24 Q. Oid you ever ~cek information f~om 25 Datat~ax•s database fo~ Inteq~ity custo~ers in the 0868  Page 18 1 HOUGton, TCX.tl!l i\l:Oll.? 2 MR. GANNAW1\.Y: Object to forn.. 3 '· I plend the Fifth. HR. WARGO: Wa..z: thora an objection to 5 for.n? 6 HR. GJ\NN'Al>ll\Y: The.~:c wan . 7 HR. HARGO: Whnt is the objection? 8 MR. GANNAWAY: It':; vaque and Sl ambiguous. 10 MR. W~GO: As to what te=ro or phra:;o? 11 MR., GANNAWAY: N:: to ..,hotho::< he :t'iiO 12 :;ca:t"chc:; in tho Houston aran. It':; u vaquo and 13 ambiguou!l to~ and -- and i:; equally susceptible to 14 permis!lible pu:t"pO!IC senrches. 15 Q. Sir, did any of your superiorn o.~: bosson 16 in!lt::ouct you to perform senroho!l of any kind on the 17 Datatrax databa.z:o? lB 19 20 .. Q. HR., GJ\NlTAW1\.Y: I plcnd the Fifth. Object to form. Who in:;t.uoted you to perform .z:uch 21 :~carche:;? 22 MS. BRYAll': Objection, form. 23 '· I plead the Fifth. 24 Q. Did you obtain reports containing the n~o.!l 0869  Page 19 2 a ~earch of the Datntrax d~tab3se? MS. BRY~J: Objection, form. ' 3 MR. G~lAWAY: Object to form. • A. I plo~~ tho Fifth. 5 Q. Sir, what did you do with the names of G Loans tar or Integrity cu~torner~ that you received 7 from Dntatrax Genrches? 9 ~m. RONDON: Object to form. 9 MS. BRYAN: Objection. 10 A. l plead the Fifth. 11 Q. Sir, isn't i t true that you solicited 12 Lonnstnr or Integrity customers using information you 13 obtained from Dntatrax datubnse searches? 14 15 15 .. Q. ~m. GANNAWAY: 1 plead the Fifth . Object to form, Isn't i t true, sir, that you solicited over 17 a hundred such Loanstar or Integrity customers? ,. 19 20 A. Q. ~m. GANNAWAY: plead the Fifth. Object to form. Isn't it true that you solicited over a 21 hundred such Integrity or Loanstar customers usinq 22 info~tion you ~aceivad f~om 4 Datat~ax databa~c 23 search? 24 MR. GANNA~Y: Object to fo~. 25 A. P~e~d tho Fifth, 0870  Page 20 l Q. Isn't i t t~u~, ~ir, that you ~ent letter~ 2 and flyerc offering- to buy out existing loans held by 3 Int:eqrity using Datntra.x da.ta.buu infor=tion? 4 Mn, RONDON: Objection, form. 5 A. I plead the Fifth, ' Q. Isn't i t true, sir, that you sent over a 7 hundred buyout letters to Loanstnr and Integrity 8 customers using Oatatrax database information? ' MR. Gh.'mAWAY: Object to for.n. 10 A. I plead the Fifth. ll Q. Isn't i t true that you nrc n~-rare of 12 Loanstar or Inteqrity customers who stopped doin9 13 business with Lonnstar or Integrity and started doing 14 business with ~itlaMax as a result of your finding 15 their n~es on Datatrax and sending buyout letters or 16 other solicitations to those customers? 17 MR. GAl:mAW11.'!: Object to fo=. lS A. I plead the Fifth. 19 Q. Isn't i t true th~t the do11~r amount of 20 1oan:; fo:: cu:!ltomers that 'l'it1cHa.>r. --I'm. :~orry, that 21 you ~witched over from Lonnst~r or Inteqrity to 22 Tit18Max wa~ in exces~ of $10,000? 23 HR. GJUruAWI.Y: Object t.o form. 24 A. I plond tho Fifth. 25 Q. Isn't. i t t.rue that. tho do1l~r amount of 0871  Paql! 21 1 loans for customers that you sw~tcheC over from 2 Loan~tar or Integrity to TitluV~x exceeded $SO,OOO? 3 MR. GANNM.N:ttAWA'l: Object to form. " 15 rephrase, p1e~se? MR. RONDON: Would you -- would you Q. Okay. Mr. Hernandex, isn't i t true th~t 17 the dollar amount of loans for customers that you 18 switchQd ovor from Loanstar or Integrity to TitlaMnx 19 using info~tion obt~nod from Datatrnx was in 20 eXCC55 of $50,000? Object to form. " MR. GJ>.NllAWJ\.Y: 22 A. I plead the Fifth. 23 Q. The same question. Waa i t in excesn of 24 $100,000? 25 MR. GANNAWAY: Sarno objection. 0872  CAUSE NO. 2013-33584 WELLSHIRE FINANCIAL • IN THE DISTRICT COURT SERVICES, LLC, d/b/~ LONES'l'AR TITLE LOANS and • INTEGRITY TEXAS FUNDING, * LP, • • Pl.aintiff!l' • vs. • HARRIS COTJNTX 1 TEKJI.S TMX FINANCE HOLDINGS, • Il.ttorncy at L<'lW W).RGO Ftu:NCII 6 1889 Cantury Park EaJ:t, suit111 1520 Los Angalen, California 90067 7 (305) 913-8587 spoworcGwargc£rcnch,com • cqocbel~munnGw3rgofrench.com • 10 FOR Tll.E DEFENDAN'l'S: 11 Bryon Rie~, Esq. 12 (Not Pre~ont) -and- 13 Geoff Gannaway, £sq. BECK REDDEN, LLP 1221 HcKinncy, Suito 4500 Houston, Texas 77030 15 (713) 951-6263 qgannaway@bockrodden.co~ 16 17 18 ALSO PRESENT: 19 Jercr:~y Garrott, Videographcr Victoria Na~, Attorney at Law 20 (PriiiUIIInt Eloetronically) 21 22 23 " 25 0876  Paqo 110 l Q. Did ~he tell you what to do ~ith thi~ 3 A. Yo:.. 4 Q. What did Lucia tell you to do with this 5 infoX'l!l3tion? 6 A. To mail the flye~c to the cuctomcrc. ' Q. And when you !lay, "mail t.he flyers," lfhioh 9 fly~trs ara you referrinq to? 9 A, Tho ones we went over a few minutes aqo, the 10 buyout flyers. 11 Q. So that would have been the flyers that 12 appeared in Exhibit Number 4? 13 A. YeG. 14 Q. Did Lucia tell you why thecc cu~tomcrc should lS be sent those flyers that were identified in Exhibit 4? 15 A, We wanted to poscibly buyout their current 17 loans. Q. And After you received this list or similar 19 lists from Lucia, would you, in fact, send those buyout 20 flyers to the customarc that were listed on the list? 2l A. Ye:L 22 Q. llow ::w.ny times did Lucia provide you li~:~tn that 23 looked like th~ list in Exhibit 5? 24 HR. GJ>.NN)I.WA:i: Obj act to f'orm. 25 A. Three or four times. 0877  1 Q, Wa~ that three or ~our times during your entire 2 time in Au~:t:l.n 2? 3 A. Yc~. Q. And how long ~ere each of those li~ts that you ' 5 received from Lucia, to your recollection? ~pproximately 30 to 40 page~. ' A, 7 Q. Do you recall how many different customers 8 names ~pp~ar~d on the li~t= that Lucia provided to you? 9 A. No. 10 Q. "To your rocollC!Ction, did those lists inclt~de 11 information ro~arding the current lienholder that held a 12 lien on tho vehicle owned by that cu~:tomcr? 13 A. Yes. Did that include lienholder info~ation related " Q. 15 to a company called Integrity Tc~a$ Funding? GA.~NAID\.Y: " 17 A. MR. boliove no, Object to fo=. Q, And so referring to Exhibit 5, could you please " 19 sho~ us generally ~here you would locate the contact 20 information for n custo~c~ using the cx~lo of the 21 individual that appca~s in the top ono-thi~d of this 22 doc~~nt unde~ the n~o Alexnnde~ ~Barra? 23 A. It qives tho nnmc :md the addrt~ss in tha vury 24 top lines t.op two lineD. 25 Q. So whnt -- In ordo.t: t.o mail 11. flyer to, for 0878  Paqe 1 CAUSE NO. 2013-33584 WELLSHIRE FINANCIAL IN THE DISTRICT COURT SERVICES, LLC d/b/n LONESTAR TITLE LOANS ~nd • INTEGRITY TEXAS FUh~ING, • LP, Plaintiffs vs. 152ND JUDICIAL DISTRICT TMX FINANCE HOLDINGS, INC,; TMX FINANCE, ttC; • TMX: FU&ARANCES CONTINUED 2 3 FOR THE DEFEtiDANT, v.R. DELEON: • Chri$tin• A. SMYSER KAPLAN ' B~an, Atto~oy ~t ~~ VESELKA, LLP 5 700 Loui~iann, suite 2300 Houston, Texas 77002 (713) 221-2345 ' cbry:e of these Gtorcs wore 15 getting information directly from Lucia? 16 A. Just by conversation. 17 Q. How many convar~ation~ do you think you had of 18 that nllturc? 19 A. A couple. 20 Q. Do you recall what ~toreG were getting their 21 infor=tion directly fro= Lucia? 22 A. Ju~t thQ ona~ that I n3mod. And then the only 23 addition~! one~ would p~obably be Au:tin 12 and Au=tin 4. 24 I gave you th~co -- th~co ~to~oa 1 and the only othe~ two 25 that were added on thnt li~t were Austin 2 nnd Austin 4. 0883  Pttqe 47 1 Q. Who ~as tho G.M. ~t Au~tin 12 at the time? 2 A. Jay Wilkerson [W~lkin:on). Did Mr. Wilkar~on tell you that h2 was getting ' Q. 4 this information directly £rom Lucia? 5 A. No; no. I ~- I -- Thoso were the adaitional 6 ~torus that r startect requestin9 information for. Q. Oh, I'm sorry. ' Who was tho G.M, for Austin 4? ' Jose Jo.t"1%1ulo.. ' A. 10 Q. What stores d~ you believe were getting 11 information dirRctly £rom Lucia? 12 A. Prob~ly Austin 20, 13 MR. HENNESSY: And understo.nd, don't be 14 guos~~oing, 15 A. MR. HENNESSY: If you know, answer. " I don't know; I don't know. " 10 A. MR. HENNESSY: If you don't answer -- 19 don't know, don't guess. 20 A. :r don't know, 21 Q. Did anyone vvvr tell you that stores were 22 getting their information directly from Lucia? 23 11.. No. 24 Q. Why do you think that this wa~ the c~~o? 25 A. Tho.t they ueren' t t81I2 56/23 75/Is 75/16 8s/9 102!19 156/3 '57/Io happened [6] 84/17 89/6 109/14116/I 157/11 117/22153/15 G going [166] happening [1] 48/16 GA[1] 2/10 gone [2] 67/3 152/16 happens [71 6/9 34/14 49/23 53/16 56/8 game [2] 5/7 49/21 good [8] 22/14 33/6 33/22 59/13 60/2 91/14113/25 gamesmanship [1] 152/2 60/21135/4 144/24 happy [6] 74/22 89/IO 89/11121/4131/20 GANNAWAY [54] 3/3 4/16 4/1712/17 good-faith [1] 144/24 161/10 15/2516/1517/1317/2417/2518/1919/4 goodness [1] 18/1 harassing [1] 39/22 34/25 36/12 39/17 44/4 46/2 54/13 70/6 Google [1] 153/8 harassment [1] S0/3 73/9 75/176/1176/24 81/25 82/4 82/21 goose [1] 24/15 hard [26] 23/810S/SI36/2146/I9147/22 83/18 86/14 88/9 89/16 90/14 91/14 94/19 Gordon [3] 67/21113/14113/16 147/23148/11148/14148/18148/24149/1 95/7 99/4103/9 105/9 106/4108/22 109/2 Gordon's [1] 69/8 149/5 149/11149/12149/14149/17150/3 111/1112/11119/9120/16121/2127/5128/4 gosh [3] 55/15 71/19 75/21 150/5150/11151/8 151/8 153/1153/2 153/3 135/14136/4150/8150/25153/14154/3 got [45] 4/2212/18 13/10 14/1416/3 16/7 153/7153/9 160/13 161/14 16/2417/2217/23 23/5 25/12 26/9 27/9 harm [19] 61/8 62/4 65/23 65/25 65/25 Gannaway's [5] 46/15 84/15 85/16 12o/16 27/2131/132/23 34/24 35/135/4 36/141/18 66/6 66/15 66/17 66/22 67/7 67/10 68/18 120/21 49/2153/1157/8 s8/7 68/3 68/4 68/8 68!12 69/7 69/16 69/23 70/172/172/25 72/25 Garcia [5] 4/215/3 5/4 73/17160/25 75/20 79/13 80/12 82/12 82/13 90/7 98/12 harmed [2] 37/20 69/6 Gates [1] 59/10 109/21110/11113/9 119/13 122/5 135/3 harming [1] 157/11 gave [12] 7/216/20 68/20 69/8 70/11 75/7 150/11152/6158/6 HARRIS [5] I/81/19 163/2 163/5163/20 77/12 77/12 78/12 82/10109/4129/18 gotten [5] 95/4 104/11104/2o 115/15 138/15 has [106] 5/16 S/177/Io 7/22 8/119/411/2 gee [1] 71/1 Grajeda [1] 149/6 11/1511/1813/513/2017/1717/2017/22 general [17] 8/5 8/I2I0/6I4/314/I7 47/2 grant [5] 73/22158/7158/20159/11159/15 24/20 26/22 27/127/20 35/16 36/137/11 47/5 47/9 47/'7 48/148!3 49/2 s8/9 94/4 granting [1] 100j16 38/17 38/24 39/20 40/142/20 44/5 45/14 141/19 143/11145/17 great [1] 13/6 45/22 46/2 46/3 46/9 47/20 50/13 50/25 generally [1] 31/3 GREENBERG [1] 3/10 51/22 52/8 52/8 52/15 53/4 53/6 53/6 53/19 generate [3] 93/7 97/10 98/7 groan [1] 159/17 56/10 56/24 s7/s 59/8 s9/8 59/12 63/24 generated [3] 78/3 83/13 108/3 ground [1] 6j2o 64/12 65/7 65/12 69/13 69/14 70/9 71/13 gentleman [3] 109/4 109/10 123/23 grunt [1] 159/17 71/23 74/25 75/9 76/8 77/7 78/9 78/10 78/11 GEOFF [8] 3/3 4/1717/2417/25 70/1182/2 gtlaw.com [1] 3/13 78/22 87/20 89/4 89/24 94/9 96/18 96/18 94/19 94/21 guess [9] 5/22 11j1o 24/11 68/8 68/Io 74/9 96/22 97/2 97/3 97/10 99/199/4 99/19 Geoff's [1] 69/3 97/19151/18 161/25 105/24106/6107/5107/14108/1108/1 geographic [1] 133/21 guessed [1] 124/20 108/14108/15113/4113/5116/24117/3 Georgia [13] 2/13 82/182/182/2 82/13 guessing [1] 17/IS 117/21121/1123/24131/13 132/5134/21 84/12 84/14 85/13 86/4 92/5 92/6 97/19 Guru [3] 93/13 96/18 96/25 135/11137/9142/3 144/4149/13150/23 156/s gut [1] 125/20 154/6157/17157/18 get [52] 4/6 6/12 I0/22 IS/19 18j10 18j12 guy [22] 46/8 46/18 48/19 49/3 51/24 53/19 hasn't [2] 62/24 156/14 '9/3 21!8 21!8 24!12 28/2s 35/23 38/s 4'/'4 53/22 54/24 54/25 54/25 ss/11s6/4 s6/8 hate [1] 115j16 46/1152/12 55/10 55/23 57/25 59/6 59/7 56/12 57/2 57/Is 57j2o 58/16 58/17 s9/2o have [415] 59/10 64/8 66/4 66/18 77/18 90/9 91/21 153/17154/6 haven't [22] 18/4 37/19 41/20 43/2 51/1 94/19 97/2199/8 104/8 111/13 115/23 119/3 >mvs-i4i' 2~/20 47/611oi16r<"/" 52/10 53/14 69/25 8oj2o 97/16 102j6 120/19 121/8 122/1124/18 126/11132/18 104/20 105/5 113/10115/11115/14115/14 132/19 135/20 137/2 138/1144/17150/3 H 132/25133/14 133/19142/6 149/17 150/5 152/11160/16161/11162/2 habeas [1] 159/23 having [8] 29/12 30/1130/12 43/20 59/2 gets [3] 40/22 158/1158/17 had [82] 4/23 4/24 6/19 6/20 6j22 6j22 63/9 68/13 111/19 getting [11] 7/1019/155/1155/16 63/10 8/8 8/14 8/2313/1616/13 19/1119/22 19/23 he [93] 4/22 4/2413/19 17/13 17/1417/15 91/4 91/17 92/21112/7121/11157/23 20/4 20/5 20/6 20/6 20/16 21/22 22/15 23/6 17/1717/2217/24 22/2 22/2 30/14 35/15 Ggannaway [1] 3/7 24/6 25/14 33/18 33/23 41/3 42/25 49/8 35/16 40/20 46/8 46/16 46/17 47/23 49/3 Gilstrap [1] 159/24 so!2o ss/25 58/19 6o/I65/7 66/7 68/8 50/4 50/4 50/7 50/19 50/2152/8 53/15 give [30] 10/713/12 16/11 21/14 30/3 30/3 68/19 68/24 70/5 70/14 71/171/13 71/16 75/1 53/Is 53/19 55!22 55/25 56/5 57/3 57/s 30/8 41/24 60/14 61/172/14 90/14109/3 78/7 78/9 81/2s 82/25 8s/6 88!21 88!22 57!22 58/16 58/2o 59/4 59/8 59/9 59/11 112/5 115/22 134/9 134/19 136/18 138/17 89/8 89/18 92/24103/17103/20 104/5 104/6 70/12 70/12 71/1171/13 71/15 71/23 75/2 75/2 141/5143/2144/2149/2149/4151/3151/9 105/25 109/6 109/12 110/9118/23 121/10 76/9 83/3 83/4 84/4 84/16 84/2o 85/3 85/17 151/11151/23152/4158/21 121/10122/4128/14132/16134/14135/23 87/25 88/9 88/1188/12 89/4 89/11 90/15 given [9] 44/7 62/24 74/15 8oj11 81/24 139/7 142/17148/1148/8 148/15 148/17 90/16 91/10 99/7 99/22 103/20 103/20 87/8 104/12 151/3 152/16 149/11150/14152/11152/13 161/7161/24 103/22 103/23 108/14108/14108/15 109/6 gives [2] 98/3 158/12 hadn't [3] 70/5 73/2 96/25 109/6109/12110/2114/4114/6116/18 giving [2] 63/23 157/21 Haegen [1] 40/7 123/25 135/8 136/23 148/12 148/21150/10 glad [1] 30/8 hair [1] 41/14 150/20 150/23 153/14153/15 161/5 go [69] 6/I47/2I8/2412/I713/2I4/15 Hale [4] 148/9 148/21149/14 150/19 he's [40] 17/1817/2217/23 19j22 24/22 16/1117/1618/13 22/2123/16 32/16 34/17 Hale's [2] 149/1151/22 39/12 40/17 46/16 46/18 46/18 48/10 48/19 1062  HOLDINGS [1] I/9 impermissible [1] n8/I H hole [1] 94/22 implicated [1] 135/10 he's ••• [28] 48/19 48/20 48/2148/21 50/15 home [3] 68/5 68/7 70/n important [4] 58/20 126/8 137/3 143/21 s•/•s2/s 53/22 53/22 56/4 57/10 58/17 Homes [1] 150/5 importantly [1] n6j12 70/13 70/13 71/171/2174/2174/25 76/20 honestly [2] 35/15 43/ll impossible [1] 26/22 85/17 85/18 85/25 99/24100/2 120/16 Honor [476] impressed [1] 161/21 120/22135/8 161/6 Honor's [12] 23/16 30/17 50j10 78/180/3 improper [5] 47/I4I07/5125/I8I27/10 heading [1] ll4/6 84/22 Bs/17 91/5 92/1151/13 156/6159/5 132/6 heads [1] H?/5 Honorable [1] I/19 improperly [1] 69/13 hear [5] 8/24 88/9 108/23 135/21135/25 hope [1] 34/23 inapplicable [1] 69/15 heard [14] 20/24 28/IO 28/12 29/12 47/6 hopefully [1] 93/ll inappropriate [4] 43/ll43/I4 66/14152/5 50/7 61j15 95/196/25 108j22 109/6 ns/3 hot [1] 158/17 INC [5] I/9 1j1o I/10 79/20 79/20 141/19 159/17 hours [1] 161/25 incentive [1] 138/2 hearing [24] I/14 6/Io 8j2218/18 21j23 Houston [7] I/19 2/5 3/5 3/12 72/ll92/4 inclined [1] 158/7 25/24 26/24 36j2 49/8 49/15 50j2o 6o/8 163/21 include [10] 8/10 20j16 20j17 25/14 25/17 79/12 82/25 84/17 88/2 89/5 89/15 92/25 how [44] 9/23 9/2510/2314/416/1217/2 62/8 106/I4lll/2 129/5144/23 100/25105/4107/15ll0/2162/3 28/1 28/n 28j19 29j12 30j19 31/5 32/6 included [1] 163/8 hearings [4] 25/7 85/6 89/8 105/13 37/24 5•/•6 53/2156/15 56/18 63/23 67/17 includes [3] 29/16128/16129/10 Heatller [1] ll4/I8 86/16 95/16 96/10 98/6100/5 109/ll109/21 including [6] 7/12 96/6 131/12139/17 heavy [1] 51/1 ll0/17ll2/12 ll4/5 ll5/25 122/25 123/10 141/10 153/4 held [2] I/18 I/19 124/7126/1132/23 136/7 136/12 146/1153/13 incomplete [1] 20/25 help [3] 126/13 141/20141/21 154/9155/14157/18 158/1 Incorporated [1] 96/18 helpful [1] 157/23 however [4] 5/25 29/15 89/18 ll5/2I incorrect [3] 27/2 72/8121/9 her [22] 51/13 51/13 SI/14 109/24 noj24 huh [1] 81/16 incorrectly [1] 17/5 lll/2 lll/7lll/14lll/IS ll5/I6 n6/I3 121/9 hurl~!~ 6~~~1 increase [1] 129/7 121/19121/19 122/19 126/21128/8 129/25 hurt 1 6o 11 incremental [1] 7/21 I31/23147/6•47/7•6of•6 1 incur [1] 121/to here [105] 4/19 6/15 12/712/23 13/23 13/24 incurred [1] 32/9 I4/I6I5/HI8/I2 21/3 21/5 23j2o 23/22 I'd [3] 42/22 70/17159/23 independent [1] 43/22 25/13 25/25 25/25 26/126/2129/20 31/2 I'll (4] 6/13 73/In8/I8132/19 indicate [1] 155/9 32/24 36/24 38/23 39/10 43/24 45/24 46/25 I'm [83] 10/1712/6 12/13 12/1412/20 15/25 indicated [6] 8/15 14/5 40/I 74/IS ll4/8 48/20 49/5 50/10 51/17 51/24 52/14 52/14 16/516/16 17/19 22/23 23/7 23/2126/15 38/I 145/20 53/2 54/14 54/25 57/IS 62/24 63/18 64/18 38/23 42/3 43/3 43/24 44/19 53/18 53/20 indicates [2] 108/24 152j22 68/16 68/17 68/24 69/14 69/17 70/171/2 54!2o 54/24 55/2 56/2 57/8 s?/8 s?/•3 indicating [1] 8j16 71/10 71/20 72/8 72/19 72/20 74/9 74/10 s8/I2 64/16 69/2s 7o/6 7•/n 72/1o 73/22 indication [4] 123/19 124/17133/5 156/18 74/22 78/21 82/3 83/10 84/13 84/20 84/22 79/6 79/17 81/21 85/13 88/9 91/2 91/6 91/8 indicative [1] 112j12 85/5 85/10 87/19o/6 90/8 90/I9 9I/7 95/'3 91/17 92j2 92/14 93/12 93/18 98/5102/13 individual [15] n/2 19/2 24/19 48/13 96/3 97/16 99/16 99/22 101/7102/13 102/14 102j23 ll4/I5 n9/8 ll9/2II23/5 124/S 50/23 99/16 99/17 99/18 101/23 103/19ll0/9 noj2o n3/8 n5/24 n6/17n8/3 n8/5 H9/7 125/23 130/13 130/15 130/23 131/6 131/8 ll0/20 ll7/25121/lll29/22 124/17126/19 126/24128/6 128/25129/24 132/18137/6138/13140/7140/25144/ll individuals [19] 22/17 29/17 35/7 40/9 132!19 '35/s '35/•8 •4•/•8 146/3 146/s 144/20148/4149/3152/3153/17154/2 59/2 68/4 81j2o 88/7105/2 105/Slll/19 154/3 156/24158/10 158/l1158/15 158/17 156/13158/25159/4159/5160/14160/16 lll/20 ll2/4ll9/lll29/6130/lll3I/23 159/22160/3 161/5 161/2 161/20 161/23 139/16 142/7 here's [5] SI/8 55/12 55/12 72/23 96/17 I've [22] 9/2412/18 12/24 21/22 46/s so/13 Industrial [1] s8/I4 hereby [1] 163/5 S0/14 s8/I7 62/6 62j23 63j22 74/10 74/16 industry [4] 56/9 56/13 s6/I7 75/21 Hernandez [1] 103/19 78/5 81!24 87/15 89/8 95/1128/?•so/• inevitably [1] 31/17 hey [7] 10/214/4 30/15 40/20 55/13135/15 153/1158/6 infancy [1] 75/15 135/20 Ida (1] ll4/I8 infinitesimal [1] 136/9 hide [1] 145/2 idea [4] 41/24 59/13 I36/I4 156j23 information [142] 8/2 8/2012/412/7 higher [3] 101/19 104/9 136/1 identical [2] 36/20 82j16 12/15 13/15 13/16 13/21 13/24 14/8 14/ll higher-level [1] 104/9 identifiable [1] 39/14 14/1214/13 14/2114/2415/115/7 15/715/18 highjacked [1] 29/6 identification [1] 104/24 I5/I8I7/3I8/6I8/9I8/9 2ojn2o/14 2oj16 him (36] 28/IO 30/15 30/15 33/16 35/17 identified [1o] 78/13 78/13 8oj2 96/18 20/17 20/21 21/1 21/9 24/124/21 25/2 25/18 35/18 46/16 soj2 so/8 50/H5I/I2 52/6 52!7 96/22 99/17 99/19 104/14 132/21132/24 27/21 31/16 31/2132/2 32/15 36/19 37/5 53/22 53/24 55/2 55/22 65/19 65/19 68/9 identifies [1] 23/25 37/•o 37/13 37/Is 37/'7 38/2 38/5 39/n 68/10 68/12 76/17 85/18 90/14 94/20 103/23 identify [24] 4/517/518/12 23/7 23/8 39/23 40/15 41/18 43/4 43/5 43/8 43/9 106/5 108j13 H4/3 n6/I7l16/I9 n6/I9 24!23 40/I3 72j21 79/'9 79/25 8o/s 83/n 44/14 47/14 49/25 50/2 50/22 52/9 52/15 144/22148/22160/5 86/16 87/2 88/3 88/6 88/8 94/10 105/2 53/13 54/18 56/25 6o/3 6o/6 6o/7 63/3 63/4 hired [1] 35/16 n6/I3 132j2o 133/21134/7134/8 63/10 63/IS 63/20 64/25 67/12 68/9 68/14 his [36] 17/17 24j22 46/9 46/10 46/15 50/15 identifying [3] 83/24136/2 137/10 69/5 69/8 69/20 70/10 73/13 76/6 76/8 80/4 55/'9 56/n56/14 57/2 57/2 57/5 70!16 71/I identity [4] 22/9 22j16 40/4132/23 85/8 9'/'7 91j22 94/7 96/6 97!12 104/8 71/ll 71/ll 71/20 84/20 84/22100/6 107/15 if evidence [1] 43/18 104/12 104/16104/17105/1105/16 106/17 107/I7I08/II08/I4 ll3/24 n6/I5 n6ji8 ignorance [3] 70/23 71/5 159/I 106j18106j20 107/I8I08/I3 lll/17lll/24 u6j2o 123j24 124j2 130j22 148/15 150/n ignore [1] 59/I l12/6n2/7H3/I9H5/6n9/2ll9/4ll9/6 153/17153/17156/15 illegal [20] 25/10 26/3 40/19 47/6 68/19 l19/8 120!5 I20/I3 120j23 121j3 122j17 history [2] 63/13 134/4 70/14 70/17 71/2 71/16 97/6 98/18 100/10 122/20 123/10 124/6125/22 126/UI26/I2 hit [1] 94/21 104/5 lll/7l12/25 n3j2o n8/II33/I3 135/4 126/17 127/1127/7127/15 127/18 128/7 hold [19] nj2o 13/17 23/19 34/6 35/3 36/16 135/15 133/25 134/19 135/14136/21137/24137/25 36/16 40/24 63/13 65/17 67/6 67/6 75/24 imaged [1] 36/23 142/6142/23147/17149/24150/6 157/6 101/14121/21130/13132/4132/23 140/1 immune [1] 62/9 infringement [1] 59/n holder [4] 108/llll3/I8 123/8 150/13 impact [1] 94/22 initial [5] 6/24 7/23 9/I 9/IO 161/9 holders [3] 98/14109/24 120/I impacts [1] 68/23 initially [1] 22j10 holding [2] 45/ll IOI/16 impeach [1] 43/10 Injunction [10] 95/25 98/19 102/3 102/22 1063  132/16138/12140/4141/19147/23148/3 June 15th [2] 159/25160/18 I 149/1149/19 151/8 151/9 151/10 June 2013 [3] 103/2117/1132/22 Injunction ••• [6] 103/1108/6 113/1113/21 issued [4] 32/20 42/22 93/16 104/25 ~urisdiction [1] 62/9 117/5 118/2 issues [14] 5/1412/19 21/3 41/1142/9 44/24 ~ury [16] 15/317/9 53/18 53/2154/20 55/11 ink [2] 16/21 35/11 49/22 77/6 92/23 93/17 97/10 97/23104/23 55/24 56/2 63/19 64/17 65/18 66/23 69/19 inquired [3] 83/17 83/18 84/1 148/18 84/12 84/13 138/1 inquiry [1] 157/8 it [410] ~ust [112] 4/4 4/23 6/14 9/2410/3 10/14 instance [8] 59/14 61/17 78/12 117/15 119/17 It'll [1] 132/18 11/8 11/20 13/1713/23 14/13 14/19 15/4 15/16 122/25 136/16 143/2 it's [132] 7/9 8/23 10/9 10/9 10/10 11/6 14/3 15/19 16/117/13 18/2 21/22 25/24 26/126/20 instances [4] 77/24 109/24 111j11111j11 14/5 15/8 18/8 18/8 19/18 19/25 20/22 28/1 29/20 31/13 32/19 34/3 35/7 35/9 35/25 instructed [1] 8oj15 28/15 35/19 35/24 37/16 37/2139/22 39/24 38/6 39/14 40/22 40/24 43/4 43/6 45/1 instruction [1] 78/7 41/3 41/22 41/22 44/15 44/15 44/15 44/17 47/16 50/7 51/25 52/2 55/7 57/16 6oj18 instructive [1] 75/13 44/18 44/20 45/2 46/22 49/151/16 53/8 61/15 64/17 65/10 65/16 65/2166/17 67/21 instrumental [1] So/ 4 53/25 54/154/4 54/6 54/8 54/22 55/2 55/6 68/17 70/11 70/17 73/16 74/15 75/24 76/1 insurance [3] 64/23 64/25 65/1 55/B 55/23 56/17 58/8 58/9 58/22 59/14 79/17 82/19 84/19 87/2 87/3 87/14 89/12 insurers [1] 64/25 59/15 59/17 60/20 60/20 63/172/23 73/23 89/14 90/7 91j12 93/24 97/25 98/16 100/5 INTEGRITY [56] 1/7 95/5 98/14 99/7 74/20 75/12 75/24 76/7 78/10 79/11 82/7 101/14103/17105/7106/7106/20108/18 99/10 99/21105/21105/25 106/1106/3 82/16 86/12 86/23 86/25 87/2 90/12 90/12 111/7112/7112/20113/11116/1116/11116/23 106/9 108/11109/9 109/10109/12109/20 91!2 91/3 92j2192/22 94/23 95/1196/5 96/B 117/14117/22119/21123/1126/16126/21 109/24111/25113/19117/10117/19119/22 96/9 98/9 102/7106!4 106/5 107/1107!21 127/18128/12128/20129/4129/9129/17 119/22 120/1122/1122/9 122/16122/16 108/4109/9113/8113/11114/20115/19 130/6136/10 136/13 136/14136/24137/17 122/20 122/21123/9 123/15 123/21123/24 115/19116/23117/8119/4119/4119/19121/6 140/20 141/5142/16 143/2 151/21151/21 124/7124/14124/22124/23124/24125/4 121/13121/25123/14124/4128/4128/5 153/14157/5 159/8 160/16 125/6 132/3 141/12 141/15 142/13 143/13 129/12 130/1130/3 131/19134/12 134/21 Justice [1] 71/3 143/17148/13149/20 150/13 152/24154/19 136/9 139/1139/24140/19 142/9 142/22 r Jwar~o ii 2ii, 154/19 154!22154!23 155/8 144/20145/15146/11146/11149/3 150/7 intend [2] 14/24 100/19 150j12 151/16151/18153/6153/8156/4 K intent [1] 43/19 156/23 157/1 Karen [1] 114/17 interest [3] 8/1710/9 15/17 it's the [1] 8/23 keep [6] 27/24 31/23 38/17 39/12 90/4 interested [4] 83/9 84/5 120/8137/25 item [2] 15/2131/6 128/24 interesting [8] 8/13 31/17 49/13 49/14 items [11] 8/5 42/24 81/5 83/24 90/23 keeps [1] 134/10 49/23 53/25 100/25 150/25 126/14127/6138/19138/20138/22140/20 kept [2] 108j17 108j17 interfaces [2] 61/17 65/5 its [7] 7/23 39/7 44/5 47/20 47/2154/19 key [4] 21/3 39/9 81j18 142/5 interfered [6] 8/416/2217/617/2519/6 149/23 keys [1] 122/19 19/8 itselfftl q'/21 killed [1] 72/15 interference [1] 16/24 kills [1] 73/21 interject [2] 69/10 92/17 J kind [16] 13/15 13/1616/20 31/20 44/5 internally [1] 77/17 James [5] 131/2 131/6 131/13 131/14132/1 57/22 63/18 92/12 97/4106/15117/7121/13 International [1] 67/22 January [1] 158/6 133/8144/17144/18 156/18 interpreted [1] 91/19 'ive [1] 103/17 kinds [1] 35/8 Interrogatories [1] 18j22 'ob [2] 79/2188/3 knew [7] 6/25 55/24 55/25 56/2 57/22 Interrogatory [4] 18/23 84/9 87/16 88j16 Joe [3] 4/12 4/15 20/24 127/13 136/11 interrupt [1] 139/22 JOHN [1] 2/3 knock [1] 93/11 interrupting [2] 23j2o 114/22 JOHNSON [28] 2/3 4/7 4/8 4/20 15/14 knocking [1] 59/6 interruptions [1] 23/21 16/1616/18 23/5 28/3 29/12 30/16 37/3 74/4 know [134] 7/9 7/910/1110/2411/211/3 interview [1] 137/11 74/20 74/25 83/184/4 84/8 84/10 84/16 11/611/2013/515/1315/2019/4 20/2121/12 intuitively [1] 124j2o 90/14 95/10100/6135/23140/15 154/4 21/14 21j18 21j2121j25 23j12 23j21 24/5 invective [1] 66/25 160/11161/14 24/7 24/8 24/18 25/18 26/8 26/11 26/12 invectives [1] 65/21 JOSEPH [1] 2/10 26/23 29/14 29/15 30/2130/2134/17 35/6 investigate [5] 104/3 104/13 120/9 120/11 ozmer [1] 2/22 35/9 37/17 41/18 42/3 42/15 44/2147/16 126/18 'udge [22] 1/19 4/17/5 7/6 21/23 23/10 49/10 49/13 51!13 52!18 55/13 55/24 56/I investigated [1] 77/17 24/18 24/20 26/20 35/14 35/19 42/18 60/16 56/12 56/14 56!15 56/18 58/8 59/9 62!25 investigating [2] 111/7111/8 70/8 76/8 76/14101/9 156/15 156/25 157/8 64/19 65/17 66/3 68/25 71/4 72/8 74/19 investigation [1] 78/14 157/16 159/24 74/20 74/25 75/183/8 85/20 86/7 89/6 Investigations [1] 93/13 Judge's [1] 156/21 90/12 90/12 91/10 91/15 92/8 92/21 94/10 invoices [2] 31/10 32/19 JUDICIAL [2] 1j10 35/17 95/3 95/15 96/9 97/18100/14109/11110/17 involve [1] 139/15 July [12] 14/10 20/15 75/16 79/12 89/15 112/3 112/25 114/7115/7115/12 115/18 116/1 involved [14] 38/6 68/4 79/2180/1180/17 102/24 107/15108/3 109/7113/24 159/1 116/3116/7116/14117/1117/24118/13120/4 84/14 88/3 88/7 97/8104/4105/2117/18 159/2 122/25 123/10124/7124/16 125/5 125/19 134/8 152/2 July 17th [1] 102/24 125/22 129/17 131/25 133/10 133/11133/16 involvement [1] 111/7 July 18th [3] 79/12 89/15 107/15 134/11134/21135/1135/7135/22 136/1136/1 involving [2] 87/11141/2 July 23 [1] 109/7 136/18141/20141/22142/24144/14145/11 irrelevant [4] 10/20 37/5 93/8105/19 July 24th [1] 113/24 150/14150/20150/23151/17151/22154/4 is [sBsl ~uly/September [1] 75/16 154/6156/20156/24157/16159/19 is correct [1] 26/17 ump [1] 11j16 knowing [1] 117I 4 Ishmael [1] 103/19 umping [4] 8/23 14/2 22/7 66/23 knowledge [14] 53/13 53/19 55/14 55/21 isn't [to] 12j2o 30/2137/15 37/19 39/19 urn ping-off [1] 8/23 55/23 58j2o 5Bj2o 59/9 71/7 73/16 81!17 57/19 72/20 74/19123/19153/22 umps [1] 84/16 81/19 85/14104/9 issue [45] 6/4 6j22 7/910/1412/2313/1 June [20] 21/23 24/4 37/19103/2117/1 known [9] 27/13 68/19 70/14 70/17 71/1 13/3 16/616/8 18/19 33/135/2 35/12 36/24 132/22 158/8 158/9 158/12 158/20 159/2 71/13 71/16 71/19 88/25 42j2o 46/17 49/9 63j21 65/2 78/1178/13 159/11159/12159/16 159/16 159/17159/18 knows [9] 10/23 42/2150/19 56/13 59/11 78/13 82/25 93/193/9 98/10 102/23 103/23 159/25 160/2160/18 61/6 95/24 144!21156/5 105/3 112/24124/11126/14128/25 131/21 June 13th [1] 37/19 1064  lie [11 55125 loaner [11 8117 L lien [131 47114 98114105125 10811110919 loaner-related [11 8117 lady [11 109122 109111109112 109124 11011113118 12011 LOANMAX [11 116 lag [11 10913 12318 150113 loans [201 115 1l61l71l718l1918l2119l1 laid [11 10015 lienholder [11 10611 2417 2511125125 38114 38119 39119 39121 Lakers [11 72110 lienholders [11 10719 40116 40119 88125 109123 119123 122116 landing [11 2518 liens [51 9917 99110 103112109116 117119 LOANSTAR [361 115 116 20118 22110 2311 landscape [11 1314 lies [11 14413 24124 26113 26115 27110 27119 271212817 langnage [41 42120 6318 64124 68121 life [11 158l15 28116 291173815 3817 3817 38118 3914 3915 Lap [11 13413 light [11 63113 41113 41125 5311156112 72125 97120100121 large [11 66119 like [531 1115 1312114113 1514 20114 2519 100123 100124111125 141112 14211414317 last [321 5124 7112 18117 2418 24110 24113 3517 36110 3918 4311 431114417 45118 4718 143113 143117152124 2511135125 3713 3819 42120 42122 44122 53123 s8ls 63l8 6318 6412 6sl4 69112 7011 LoanStar's [21 124113 14111 5317 57110 74114 7719 82112 82113 91110 751118017 8411184116 8412188114 94123 locate [71 6415 6416 106l7126l5129l16 91119 92124 961199118 10119 10111110219 10217 102111106114 109118 114110 114112 12912014016 104119 11012 137123 147123 148122 114I21121I1121I7127I13130I2131I22133I11 located [41 131112 13518 13518 13818 late [21 90112 92121 135115135116 1361613713 14417145115 15119 locating [11 105116 later [61 2612 28l7 41113 87117113125 1531615318 154119154123 lock [21 87125 89l12 125125 likely [51 12711214211814311414811215011 log [41 sol16 sol16 90125 140121 lanndry [11 6315 likewise [11 36110 logic [11 96114 law [201 4617 49119 52124 5711457115 6ol4 limit [71 9711511213 12711127l5127l24 long [31 41l9113l4160l3 6613 68125 70116 70118 70120 70123 7114 1441114617 longer [31 1011214719 15613 7115 71113 71119 73117 991113216153117 limitations [31 4311 66119 151112 look [401 1619 16l16 3114 39118 4019 40121 · lawsuit [91 1511145114 4717 56125 5919 limited [121 3612173118 881219512 97116 41125 49112 5119 52123 52123 5419 64121 5911159122 6711414416 97123111122 126114126119 126120131112 64125 73117 82115 8418 92119 9419 95122 lawsuits [21 156l5 157119 133114 105123 109115 11015 112123 11312 11313 11415 lawyer [31 ssl6 5914 60111 limits [11 117I 4 117111122125 124111124113 127122128110 lawyers [21 s611 57114 Linda [21 51112 147I 4 1321113211138123 1391114315 149116 155111 lead [101 37l16136l2o 138110 158l11158l21 line [41 721117412510911511314 looked [131 59112 6819 75120 10216 102114 15919 16013 16016 160114160122 link [31 64113 64114 95118 105117109122 116117116119 148117148118 leads [11 125117 linkage [11 69l16 148125 152123 learn [11 99l2o linking [11 134122 looking [311 6l12 1212015125 25125 2611 least [91 81711171714 21117 2214 2217 links [11 11417 26115 3113 5319 8312 8316 8318 8611194118 64123 119120161123 list [1041 715 716 7122 8123 911919 9110 102113 10517110115 110117113111113116 leaving [11 11114 9I1110I711I111I111I22 11125 14110 15120 1141211611311611811711511711812418 led [21 63110 113120 1817181101811218115181221812419110 127111130113 131111391141401614111 left [31 4219 10117136113 191111912019123 19124 2018 20115 20I2o looks [31 3517 12117 130125 legal [211 53117 54119 61110 61114 6215 20125 2118 21112 21118 2219 22113 22115 Lopez [11 4017 62112 62l17 62124 6sl3 65112 66ls 7DI9 22116 22123 22124 23115 23125 24112413 Los [41 212172110 10118 158l14 70110 71112 951219612 9716 97114 9818 2413 2418 24112 24118 24122 2616 26123 loses [11 70112 10018 105114 29124 3018 30113 3513 35110 35113 35120 losing [11 161122 legislative [11 63113 351213711138125 39110 39110 39113 39124 loss [111 9125 1117 12115 13124 14l114l16 legitimate [21 54119 9819 4014 40114 4118 41117 6315 74111 74123 141211515 4314 4317 4319 legwork [11 13719 75110 75114 75122 7614 7619 76115 77110 losses [51 1012113111311214118 37118 lender [11 24119 77115 77125 7813 7817 78114 78117 91125 lost [201 6125 7117115 7119 7l2o 7123 8l16 lenders [11 109l18 105I1108I11117I1128I15 132111331313413 8117 8117 81171318 1319 131111413 14114 length [11 13912 13412414116 14411144116144117151116 15115 15117 21125 21125 26123 less [41 57l2o 98l1101l5137l18 151119153110156114156119 15711157121 lot [131 31112 40114 5917 63124 70121 78110 let [191 25l18 25119 36l16 4015 42123 57117 listed [61 61113 81120 142112 142115 150113 9616 103122 106112109116 13012143111 68125 91112 100117112114123118 12812 16116 143116 1311251401114519 151121151125154118 listen [11 136124 lots [31 47112 63124 64112 15918 lists [61 20119 30112 4ol8 81l2o 8513 Louisiana [11 3111 let's [141 3215 3416 46123 65l18 651217414 161113 love [11 15415 7611 92110 10117102110 12715 1321613915 lit [11 86124 LOVETT [121 319 4119 517 8113 9122 19115 145124 literally [51 17115 53114 961313412313515 2112o 48122 52119 5814116111160119 letter [241 4714 4715 47l1o 47125 48ls 4817 litigation [91 48117 97171031181261313411 low [21 80123 9514 48l2s 54122 54123 5518 s6l9 s6l19 s612o 156l6157l11157l15158l2 low-level [11 8ol23 56122 58l6 s9l1s 59116 s9121s9l24 6ol10 little [121 16l7 2512175111 76l186l24 90I8 LP [11 117 66112 8ol18 93113 13918 90110 104I11158I31S8I4158I5158I13 Lucia [11 14916 letterhead [41 48ls 49115319 59117 live [11 114119 llvin" r~i 16i"16 letters [201 51215122 612 5913 79121 85l1 living [21 19116 s8l17 8519 85l1185l13 8616 8814 9313 9314 93116 LLC [141 115 1l61l10 4519 4612 4613 4712 M 9415 9619 96115 10011413616 158110 4818 4819 48121491159115 8911710418 ma'am [31 65114 6912 7215 level [61 78115 8ol23 8119 83113 101119 LLP [31 214 2119 3110 machine [11 1121 10419 load [11 15317 made [3o1 2212 26ls 3111140110 41114112 liability [31 61123 6219 73120 loaded [11 65l2o 4113 421143125 4415 5119 51115 54113 54125 liable [31 6211 62112 62113 loan [471 914 9114 91171312 15l2116l6 1618 5514 5516 6513 68113 71123 86110 98112 license [261 47112 6818 9916 99110 99112 1819 18118 1912 2419 24111 24113 24114 98I23102I9104I3117I16119I1120I7128I7 9912110819 11015113113114110115119 11614 24123 24123 25112 25114 25114 2611 2616 150111156124 11616116119 124117124119124121125116 2618 2619 2619 261112816 38118 3914 3915 mail [61 217 2115 2122 317 3113 11211 125I17125I21126I2127I14129I2130I12 4012141l8 41113 41114 41l16 8318 85l2 mailer [11 6417 14211414312 10916 10918 11018 11019 110114113123 mailers [11 83114 lick [11 19112 113125116115117122117122122121 mails [11 142113 1065  97/25 100/5 100/17100/22 101/5102/11 money [1] 94(23 M 112(14113(6 115(2 115(24 116(9 116(11119(13 MONEYMAX [2] 1(5 1(7 maintain [2] 34/13 71(18 119/20119/20119/23123/4123/18127/17 monitoring [1] 47/11 maintained [1] 47(15 128/2129/25132/18137/1137/2137/15 Montalvo [3] 163(4 163(17163(18 majority [1] 66(19 138/17140/1141/3141/5 141/20 141/21 month [7] 10(12 37(19 57(10 82(12 82(13 make [40] 19(14 22(3 22(7 28(3 33(136(1 141/23 145/7148/16148/16148/21148/21 105/24 113/25 36/12 37/7 41/23 42/3 42/12 42/17 44/11 149/16 149/17151/20 154/14154/18 159/7 monthly [1] 13(25 44/23 48/13 48/15 52/10 53/2153/23 57/8 159/8 163/10 months [10] 7(1219(1219(16 25(10 25(10 57(2165/10 75/5 84(13 97(25 97(25106/5 MEADOWWOOD [1] 1/6 26/2 88(18 89(6156(11159(2 112(9118(18 120(14125(23126(13129(4 mean [18] 6/23 23(20 26(2 29(3 32(18 Moran [6] 113(14113(16 113(23 114(17124(1 140/10 144/20144/23 145/8 146/22 150/20 59/10 65/18 66/22 72/16 73/23 100/10 106/3 124/14 157/8 113/10115/9 120/2120/18 124/19 143/1 Moran's [1] 114(18 makes [4] 50(8 69(12 69(24129(14 meaning [1] 151(20 more [23] 6(12 8(5 8/5 49(14 64(20 76(21 making [14] 7/4 17(11 29(1153(10 54/23 means [8] 59/4 60(5 64(14 73(17 73(23 76/22 76/23 84/1185/12 90/10 92/23 106/19 57/10 57/1163/18 70/9 71/1120/8147/15 98(24 99(1113(12 106/22115/23116/4116/12117/14128/10 149/3 151/18 mediation [6] 32(15 33/3 33/7 34/9 34(20 145/8 148/24 151(8 156/3 manageable [2] 146(11146(12 157/23 moreover [1] 122/15 Management [1] 48(8 mediator [1] 33/23 morph [1] 7/5 manager [11] 48(2153(7 81(7 82(19 83(19 meet [10] 50(23 61/1168(17 71(14 71(22 most [5] 104(19 106(19 108(7121(8 145(3 84/2 132/20 132/23 133/3 134/24135/7 88/22138/6148/1148/3 149/11 Motion [78] 5(17 5(20 6(3 6/8 6(16 6(16 managers [7] 47(20 83(18 84(24133(23 meet-and-confer [4] 88(22 148(1148/3 7/25 8/18/810/110/3 10/1310/1411/911/10 137/17137/18 137/19 149/11 11/16 12/3 12/13 12/2012/2112/25 33/11 manner [1] 67(15 meeting [1] 21(22 42(9 43(16 44/9 44/1145/3 45/5 54/1 6o/8 mantras [1] 154(20 meets [1] 141(16 60/17 60/22 71/11 71/11 72/19 73/22 74/2 many [17] 13(6 32/6 42(21 71(14 72/9 75/3 member [2] 48(2153(6 74/7 75/1177/778/5 90/4 90(119o/12 91(3 77/24 96/10114/11126/5132/24135/19 mention [1] 58(10 91/20 93/5 93/17 93/18 93/20 94/4 96/16 135/24136/12154/9155/14157/18 mentioned [1] 14/2 96/24 100/13 100/15 101/15 101/18 101/22 marginally [1] 9/7 mere [1] 67(4 101/25 102/2 102/17108/2112/24118/12 marked [1] 131(9 merely [1] 37(6 118/18132(15137(23138/14138/15138/22 market [3] 104/5 131(17133(13 mess [1] 159/5 138/23 139/8 149/18 152/19 152/23 155/22 marketing [40] 47(11 66(10 79/4 79(25 message [4] 57(6147(5147(8147/10 155/24158/7 80(4 80(11 81(1 81(12 83(9 86(4 86(17 87(3 messages [7] 139(12 139(17141(10 141(13 MOTIONS [23] 1/14 5/9 5(115(14 5(16 5(17 87/9 87(1o 87(14 87(2188/5 88/8 88(24 146/21146/23 147/2 5(19 5(215(22 6/2 6/10 46/5 74(22 90(10 88(25 89(1104(10 111(8 118(1125(11128(25 messaging [1] 147(14 91/5 91/12 92/3 93/193/15 101/12101/21 130/11131/12 131/14140/25141/11141/15 met [4] 51/162(24150(4154(25 102/17 104/24 142/14143/6143/8143/20143/24144/4 method [1] 82/10 motor [4] 47(15 57(19109(17114/8 144/4 145/15 methodology [1] 138/8 mouth [1] 136(6 ' markets [2] 14(1 36(22 Michael [1] 81(7 move [6] 31/6 45/3 89(17 89(18 92(11 Marshall [1] 159(19 middle [7] 13(814(15 38(4 69(2186(12 152/11 Martinez [4] 134(16 163(4 163(17 163(18 113/2113/5 moved [3] 84(20 85(5 92(25 MARY [2] 3/9 4(19 might [30] 5(25 6/2 6/6 7/8 29(10 34/4 moving [6] 12(25 111(10 128(24 131(8131(9 MARY-OLGA [2] 3/9 4(19 41/1141(1141(12 58(23 62(9 64/3 65(1 132/15 Master [13] 7/7 7(13 20(20 25(2 30(2 30(11 68/24 69/193/6 95/23 97/13 97/18105/25 MR [51] 2/3 2(10 3/3 4/7 4(16 4(215(3 5/4 37/10 77/10 77/2178/8 78/18 91/25117/3 116/24120/16123/19 124/1124/21145/5 12(1715(1315(2516(1516/1616/1817/13 matched [1] 155(7 145/16 148/8 148/19 149/16 18/1919/4 21/22 23/5 23/19 27/14 28/2 material [1] 93/7 Mike [1] 134(16 29/12 30/15 33/25 36/25 44/4 49/2 50/24 materials [2] 70(4 88(25 million [1] 144(5 56(22 58/11 59/5 70(21 74(13 76(24 82(21 matter [20] 6/9 26(1127(5 28(1151(9 millions [1] 145(20 86/14 87/24 95/7 95/10100/8105/9109/2 55/14 57(13 57/14 57/15 58/23 70(15 70(18 mind [4] 10(22 39/13 54/8 92/19 112/11119/8 120/21126/16136/4150/19 70(20 70(22 84/7 96/17125(7125(7125(10 mine [1] 23(10 154/2 160/13 160/22 minimal [1] 71(22 Mr. [74] 34(25 36(12 37/3 39(17 40(24 46(2 matters [3] 6/8 84/11 97/22 minor [1] 128(12 46/15 47/23 49/2 50/150/3 50/14 51/2 54/13 Matthiesen [5] 33(14 33(20 33(2133(22 minute [12] 17(2119(22 23(19 27(14 67(6 56(2o 56(24 59/3 6o(1o 70/6 72/6 72(12 33/25 67/6112/20122/5130/13132/23140/1140/1 73/9 73(2174(4 74(20 74(25 75(176(11 may [62] 12(1612/1617(417(517(918(14 minutes [2] 101(5 101(5 81/25 82/4 83/18 84/4 84/8 84/10 84/15 20/22 21/15 25/22 26/4 27/2 29/23 35/18 mirror [1] 36(23 84/16 85/16 88/9 89/16 90/14 90/14 90/23 37/6 45(23 47(24 58(24 59/9 59(13 6o(24 misconduct [4] 21(6 22(4 28(13 28(17 91/14 94/19 99/4100/6100/6103/9106/4 60/25 61/24 62/163/3 63/4 67/20 69/10 misheard [1] 52/1 108/22 111/1114/18120/16120/16 121/2 69(11 73(10 73(11 75(18 79(14 79(15 81(3 misrepresented [1] 66/1 124/1124/14127/5128/4135/14135/23 81(22 81(23 86(18 86(19 92(17 93(23 96(2 misses [1] 20/to 140/15 146/4 146/20 149/1149/8 149/14 96/20105/4107/18112/18 115/3119/21 missing [5] 20(17 77(15 77(25 119(21134(3 150/8150/25151/22153/14154/4160/11 120(14125(22125(22125/24127(9130/15 misstatement [1] 60(19 160/25 138/12 141/19 144/23 145/8 151/12 152/3 mistake [2] 78/16 78/17 Mr. DeLeon [2] 100(6149(8 158/14 159/13 159/19 misunderstands [1] 114/4 Mr. Gannaway [30] 34(25 36(12 39(17 maybe [11] 10(12 21(13 21(17 25(15 55(25 mitigate [1] 51(21 46/2 54(13 70(6 73/9 75(176(1181(25 82(4 74/16124/5130/13 138/6144/17161/11 mobile [1] 146(25 83(18 88/9 89(16 90(14 91(14 94/19 99/4 Mayor [1] 4(22 model [20] 6(216(23 7(2 7(16 7(18 9(25 103/9106/4108/22111/1120/16121/2127/5 McDonald [2] 51(12147/4 10/811/1915/1617/919/18 25/13 25/15 128/4135/14150/8150/25153/14 McKinney [1] 3/4 25/18 26/4 27/3 35/2136/1137/12157/6 Mr. Gannaway's [4] 46(15 84(15 85(16 me [72] 4/24 5/5 13/15 15/13 16/116/20 modify [1] 84(20 120/16 26/9 26/15 30/15 35/14 36/16 40/5 41/24 mol [1] 3(13 Mr. Hale [1] 149(14 44/4 44(2o 49/5 57/17 57(23 59/7 65(2o moment [3] 16(157(25 67(21 Mr. Hale's [2] 149(1151(22 65/2179/10 80/10 83/15 83/17 90/15 92/19 Monday [1] 101/3 Mr. Hancock [1] 160(25 1066  24/8 24/12 40/16 49/25 78/6 78/7 78/9 108/10 116/4129j2130/12141/3141/5145/11 M 78/10 78/14 156/14 numbers where [1] 13j21 Mr. Jolmson [14] 37/3 74/474/20 74/25 next[18] 31/633/434/945/345/550/1 numerous [2] 27/23 90/13 84/4 84/8 84/10 84/16 90/14100/6135/23 50/1150/2158/22 60/14 60/17 63/16 63/22 nut [1] 61/3 140/15154/4160/11 113/18 113/22123/8 140/23 159/25 nu~fll 14d/21 Mr. Moran [2] 124/1124/14 next time [1] 33/4 Mr. Moran's [1] 114/18 nexus [1] 73/3 0 Mr. Wargo [8] 40/24 51/2 56/20 72/6 no [116] 1/3 2/3 2/19 3/3 3/10 9/6 9/119/19 o'clock [4] 23/23 75!24128/4128/5 72/12 90/23146/4146/20 15/2115/2415/2517/2117/2117/2318/15 oath [1] 106/7 Mr. Wargo's [1] 73/21 21/14 21/19 24/2 26/25 27/14 27/14 33/15 object [6] 99/2 99/25100/3 100/24140/11 Mr. Young [8] 47/23 49/2 50/150/3 50/14 34/3 35/4 37/2139/20 39/22 40/5 40/18 141/13 56/24 59/3 6oj10 46/7 48/20 52/2 52/7 52/7 52/12 52/24 54/5 objection [3] 29/19 42/10 95/10 MS [29] 2/112/18 5/7 8/13 9/22 19/15 21j2o 57/24 57/25 58/7 6o/10 64/10 64/2o 66/16 objections [3] 36/3 38/2 137/12 48/22 52!19 58/4 69!22 105!15 106!12 66/17 66/17 66/20 70/23 72/1172/19 75/9 obtain [1] 104/2 108/23 110/23 113/15114/1116/11119/23 75/22 78/20 78/25 79/23 79/24 80/2 80/25 obtained [5] 45/15105/15 125j22 126/1 121/18 121/22 122/4 122/18 123/14 124/12 81/4 87/14 87/20 87/24 88/7 88/16 88/22 144/12 124/20 126/18 127/19 160/19 91/2 91/24 96/14 97/7 97/9 97/10 97/15 98/9 obtaining [4] 47/12 47/13 60/5 137/25 much [20] 8/23 8/24 10/23 30/2145/17 101/4101/11102/13104/16110/12116/17 obviously [5] 6/22 11/16 49/3 115/24 104/20107/1117/14139/20139/24145/21 116/20117/4123/20124/16124/20130/14 124/24 146/1146/4154/4155/21155/24158/1158/4 130/19131/2131/6131/9131/10133/4137/2 occasion [2] 17/4115/5 158/5 160/21 139/11140/12141/4143/8143/8144/9 occur [1] 89/15 multiple [1] 94/8 146/23146/24147/8147/9148/24149/10 occurred [3] 106/10 109/21163/10 multiplication [2] 157/11157/14 149/13 150/24 151/5 151/8 153/6 153/20 occurrence [1] 133/8 must [4] 33/9 100j10 105/21135/3 153/22154/16155/10156/10 156/231S7/17 occurring [1] 112j1o mutual [1] 31/14 non [4] 83/12 98/16 107/8 141/14 October [9] 18/18 32/20 32/2S 34/8 34/8 my [39] 4/4 4/216/19 7/913/S 24/17 27/9 non-company [1] 83/12 49/8 49/1S 49/24 77/14 30/17 43/19 44/7 S1/2S S4/1154/22 SS/11 non-further [1] 141/14 October 10th [1] 49/1S s6j12 s6j12 s6/23 67/172/1174/16 76/10 non-secular [1] 98/16 October 23rd [1] 49/24 81/2S 84/186/18 90/4100/S100/11113/11 non-TitleMax [1] 107/8 off [12] 8/23 14/2 23/17 24/6 3S/3 41/13 128/7136/13 141/19 144/111S6/4 1S7/71S7 /7 none [6] S/1S 140/14140/1S 140/20 142/3 74/4 74/6 74/1S 101/16 10S/19 1S0/10 1S7/11 :1~141~~~13161/24 142/9 offered [2] 122/18 163/12 ffi.;,self 1 iAa ..1a- nonentity [1] S1/1S offering [1] 8s/2 nonstarter [1] 46/22 office [12] S9/7 S9/8 81/4 81/1S 86/11 N normal [3] 64/2 64/9 92/4 13S/1S13S/16 13s/16 136/s 136/s 136/7136/7 name [15] 18/2 18/8 22j22 22/24 72/16 nose [1] S9/24 officer [1] 1S2/1 79/20 8oj23 88/3 97/2 97/3 10oj6116j16 not [255] offices [1] 70/4 124/2133/2113S/18 Notably [1] 111/1 Official [2] 163/4 163j19 named [7] 80/2S 81/7 82/1 82/8 99/16 notate [1] 38/20 often [1] 109/11 103/19 103/19 notation [3] 39/6 39/18 41/6 oh [6] 4/23 S4/18 71/19133/16136!6161/4 names [13] 19/22 20/8 27/13 27/24 39/16 notations [3] 38/11 38/24 42/1 okay [115] s/6 5/9 s/16 7/4 9/110/1S11/11 47/1313S/20 136/10137/10 1S1/161S1/19 note [4] 40/4 40/8 40/11108/13 11/1812/3 12/612/1213/1714/1218/1219/4 1S7/21S7/S noted [2] 39/4 66/24 21/4 21/20 22/16 23/19 2S/3 26/19 26/19 Nancy [1] 40/7 notes [5] 38/2139/4 41/141/2123/6 27/18 28/4 28/2128/2129/9 29/24 30/24 narrative [4] 9/23 9/2410/6 18/20 nothing [21] 10/13 49/7 so/19 so/2S so/2S 30/24 31/132/1132/13 33/24 34/20 34/23 narrow [2] 83/3 94/16 s2/8 s2/13 54/24 65/8 6s!2o 9S/24 98/21 3S/2 35/17 36/8 37/22 38/138/9 41/23 42/7 narrowed [1] S/1S 123/2S 134/22 140/8 140/9 140/10 144/S 44/19 4S/3 4S/13 46/6 46/16 46/23 46/2S native [1] 39/7 1S1/16 1S3/2S 1S4/14 48!22 s4/1o s4/17 s6j12 s6/13 s8/2 6oj13 nature [1] 153/3 notice [2] 49/24 so/1 60/22 62/18 6S/17 68/6 73/22 74/18 76/12 nay [1] 26/16 noticed [4] so/1150/22 60/9 136/14 76/14 76/24 77/8 82/2183/2187/10 89/20 NE [1] 2j12 notion [1] 99/1 89/20 92/10 99/20 100/13 101/7101/14 nearly [1] 36/20 November [6] 1/17 48/7 49/2176/10102/4 102/6102/10102/14106/4107/24108/22 necessarily [8] S/23 8/10 90j22 98/23 138/18 113!9 118/16 122j14 123/8 123j18 12S/14 108/21126/10 140/3 144/13 November 12 [1] 138/18 126/4129/25130/1131/8132/13137/6 necessary [2] 112/8 134/12 November 13th [1] 49/21 137j2o 137/21139/9140/13140/17140/18 need [36] 8/710/213/416/1116/1819/7 November 15th [1] 48/7 141/5145/3 148/10 1S4/12 1SS/18 1SS/19 23/25 2S/9 41/24 42/12 42/15 S4/8 S5/22 November 5th [1] 102/4 1S8/7159/71S9/1S 1S9/17160/2 161/11 6oj2 61!19 62j1162/13 62j16 6s!1 6s/s 83!2 now [54] 7/4 7/1710/111/113/4 14/10 16/3 161/19 85/14 88/12 110/22110/24112/8 114/22 16/9 16/1S16/15 18/1219/119/24 20/23 24/1 old [2] 6j2o 61/24 124/18 125/11133/10134/11135/7138/23 26/2129/11 30/7 31/10 31/16 34/20 37/3 OLGA [2] 3/9 4/19 140/13 155/12 161/11 37/4 37/12 41/18 43/2144/7 47/16 50/3 omission [1] 61/9 needed [3] s8/2o 91j22 104j12 S4/12 60/13 61/19 64/18 69/4 72/13 72/23 . once [13] 14/6 15/19 18/10 18/1120/19 needing [2] 92/24111/S 7S/18 7S/24 76/14 77/7 83/24 90/2 104/23 20/19 3S/9 3S/12 3S/13 35/20 39/24 66/11 needs [7] 19/20 26j12 36/1s 43/12 S4/21 106/4108/1S111/16117/3149/S149/10 11S/16 118/22150/4 1S1/241S2/9 1s2/10 1s6/s 1s6/11 one [162] 6/4 6/4 6/6 7/14 7(23 9/310/18 negate [1] S3/16 number [41] 8/2014/3 21/14 61j13 77/21 11/211/711/1411/2017/419/1319/1419/17 neglects [1] 31/18 77/22 77/2S 82/16102/8 110/10 111/24113/S 21/3 21/4 21/S 21/17 21/2122/4 23/12 29/17 negligence [3] 61j20 61j21 66/4 113!13 113!13 114!12 115/s115!19 116/5 116/6 31/8 31/17 32/25 34/9 3S/9 38/24 39/139/1S negligent [3] 61/9 61/20 136/9 116j19 118/10 118j13 118/18 124/17124!19 40/10 41/16 41/23 42/10 43/4 43/22 44/19 neither [4] 47/11 92/13 11s/21116/9 12S/16 12S/17126/2 126/14127/14133/22 44/22 46/3 48/12 sols s1!1151/12 s1/18 never [16] 50/13 S0/14 57/24 s8/17 70/6 134/4134/14139/9139/16143/20143/22 S1/19 S1/22 S2/2 S2/S S2/7 S3/4 S3/6 S3/7 8oj2 8o/6 8oj1187/8 90j16 97/310S/17 143/25 146/11146/12 1S4/3 53/7 s3/15 s3/23 s4/4 s4/8 ss/10 s6/4 56/4 106/7109/22123/15 1S3/1 numbered [2] 1/18 163/9 57/2 s7!15 57/16 57/16 58/16 s8/17 59/2o new [16] s/7 20/20 21/9 21/13 21/21 24/7 numbers [12] 13/2113/24 43/7 47/12 47/13 60/10 61/25 63/2164/6 6S/16 67/16 68/4 1067  132/6 132/16133/3 138/12138/14139/8 p 0 145/21146/2 146/14149/5 152/18153/25 one ••• [87] 69/472/2074/1077/677/20 157/23 163/7 package [2] 123/1127/7 79/179/7 80/3 80/25 81/4 81/25 82/2 82/2 other's [2] 30/12 38/19 page [24] 12!24 16/5 29/8 36/8 54/154/12 82/3 82/6 82/8 82/8 82/10 82/12 82/13 others [4] 54/9 105/15121/3 132/9 61/2 62/6 62/23 63/16 63/16 63/22 63/23 84/1187/20 88/22 91/16 92/3 92/1192/13 otherwise [5] 14!2518/23118/17137/9 64/2195/20 113/15113/18 113/22114/5114/6 92/23 93/10 93/24 94/1194/25 95/4 96/12 161/18 123/1123/8 150/12 150/12 98/9100/17101/2 101/3 101/11101/15 101/15 ounce [1] 135/9 pages [1o] 95/22103/10 106/5 109/16 101/19 101/21102/6 102/16104/18 104/24 our [132] 4/20 6/8 7/20 8/15 8/20 9/7 9/23 109/24115/23121/18 121/21121/24122/5 105/11106/11109/17113/14113/16 114/9 10/8 12/13 14/114/3 14/714/23 15/15 15/17 paid [4] 41/13 135/2163/15 163/15 114/23 116/9 118/8 118/8 120/15 120/18 121/5 17/8 17/8 18/1218/1718/23 18/2419/3 21/6 paid/will [1] 163/15 121/10121/11124/12125/11130/4130/5 21/10 22/4 25/12 26/4 27/3 29/20 29/2131/9 paper [3] 47/198/7149/22 130/6130/16 131/1131/9 132/2135/1135/13 33/23 36/3 36/1136/15 37/2 37/5 37/11 papers [4] 66/18 75/9 94/9 111/11 135/15 144/23 147/2 147/4148/7148/19 37/23 37/24 37/24 38/2139/20 39/2140/3 paradox [1] 50/25 149/21149/22 150/12 150/15 151/25154/1 40/19 42/14 42/17 45/25 46/6 46/2147/1 Paragraph [6] 79/9 79/12 79/17 80/21 154/19 154/20 47/5 55/17 55/18 57/7 58/13 65/23 65/25 80/22 87/8 onerous [1] 108/13 66/6 66/8 66/9 66/13 69/15 69/19 69/20 parallel [1] 68/16 ones [15] 13/113/2 69/6 69/22 69/22 75/12 69/23 70/15 71/3 73/3 73/5 75/5 75/9 75/20 paraphrasing [1] 17/4 79/3 94/25 122/17122/19 126/20 140/24 78/14 78/15 82/9 83/13 84/3 85/5 85/8 Pardon [1] 100/22 143/12 143/14 143/17 85/10 86/6 86!12 90!12 92!23 93/5 94/9 parens [2] 48/9 48/9 Online [3] 93/13 96/18 96/25 99/14102/20 102/20103/17104/22 105/24 parent [2] 45/9 45/10 only [64] 14/2315/1130/20 37/15 42/8 106/23 108/16 108/16109/6 110/14110/14 parenthetically [1] 38/7 46/18 46/18 47/22 47/23 48/10 48/12 48/19 110/25112/9116/21117/5117/21118/1118/18 Park [1] 2/20 48/19 48/20 48/2148/2149/2 49/4 50/5 120/6 121/14125/1125/11125/23 126/5 parking [1] 47/12 50/12 50/17 51/22 52/2 53/18 53/22 54/4 126/13132/10134/20135/1136/1137/17 parlay [1] 134/25 54/8 54/24 54/25 55/10 56/4 57/15 63/4 139/8 145/5 146/24147/1150/5152/15 part [18] 5/2411/17 25/18 39/20 56/18 63/1 67/5 69/2171/171/13 71/16 71/19 73/23 75/10 152/19153/7157/20158/10160/15161/8 79/2 80/15 85/21 85/21 87/7104/19 129/21 89/17 90/5 103/14103/15 105/16 107/22 161/15 131/16150/25152/19154/24157/20 108/24111/3 111/21111/25 114/17116/14 ours [1] 39/14 participated [2] 40/9 87/21 122/17132/10134/1145/5147/9147/10155/1 ourselves [2] 30/9 100/19 particnlar [13] 19/140/1179/9 116/2 127/6 157/7158/11160/4161/25 out [88] 10/2311/313/4 27/9 32/8 33/1 129/7 137/23 138/2 138/7139/3 139/15 open [1] 163/10 38/18 38/19 38/24 39/139/5 39/5 39/18 139/17 146/21 operate [1] 154!21 39/19 39/2140/16 40/19 40/2141/9 41/12 Particnlarly [1] 68/16 operation [1] 103/20 41/16 42/142/2 44/22 46/1153/22 59/13 parties [19] 6/15 7/1120/12 21/16 24/21 operations [1] 14/16 61/21 62/6 64/7 67/16 69/14 69/22 70/6 70/7 31/14 32/9 38/19 49/8 49/15 61/5 73/12 94/3 opinion [1] 54/11 71/17 71/20 72/2 73/16 75/14 79/21 80/18 99/23 100/3100/19117/2163/8 163/13 opportunity [3] 7/11110/3 134/14 83/7 83/14 85/2 86/6 88/4 88/17 93/11 PARTIES' [1] 1/14 oppose [1] 155/25 93/12 94/2 94/14 94/24100/5 103/21109/6 Partnership [1] 73/18 opposing [7] 102/9 107/14108/1108/12 109/23111/15115/23116/11117/5117/21 parts [1] 8/16 110/4151/24156/2 119/10 122/17123/11124/5 124/21125/15 party [17] 5/20 31/18 43/22 60/23 65/24 opposite [1] 129/17 125/24126/7127/11127/15127/21128/3 72/16 72/2173/5 88/25 93/1 94/6 96/10 99/2 opposition [1] 108/2 134!11135/18 135/20 135/25 136/5 136/8 99/2 99/25 101/16134/7 oral [2] 1/14 54/14 136/11139/3 142/13 146/2147/16 149/24 Paso [1] 73/18 orchestrated [2] 56/3 56/5 153/18 157/8 passes [1] 25/11 order [48] 6/14 7/3 7/18 8/913/14 23/16 outrank [1] 161/1 past [2] 25/23 90/3 34/23 34/25 37/3 38/142/14 42/2142/22 outs [3] 38/14 41/19 42/1 patent [1] 59/11 43/144/25 45/6 58/2170/4 71/14 76/3 77/12 outstanding [1] 126/22 pause [1] 75/7 78/179/5 79/6 8o/3 82!23 84/18 84/22 85/7 over [17] 7/12 9/10 21/12 49/17 50/10 58/16 pay [2] 78/18 100/12 87/8 89/22 89/25 90/23 92/20 100/13 '63/21 74/23 107/11117/5 120/22 134/1134/3 payment [3] 109/7116/15 116/20 100/15 100/15 100/16 101/1104/2104/12 134/16134/17157/17157/18 Peachtree [1] 2/12 110/21111/12133/7134/7136/17157/4 overbroad [3] 98/22 131/18 131/19 pen [4] 16/21 29/16 35/1135/13 159/14 overlap [66] 7/6 7/23 8/23 9/1 9/9 9/10 pen-and-ink [1] 35/11 ordered [24] 6/19 6/23 9/22 10/612/7 9/1110/711/111/2211/25 14/10 15/20 18/7 pending [2] 91/20 133/7 12/1413/5 13/15 14/9 21/136/22 42/25 46/9 18/10 18/12 18/15 18/2218/2419/10 19/20 Penny [35] 105/11105/15 105/23 106/6 46/14 48/18 49/22 58/2160/9 76/17 77/11 19/23 19/23 20/8 20/15 20/20 22/22 22/24 107/4107/19107/21108/7108/18109/5 78/6 79/16 80/16 91/1 23/15 24/8 24/18 24/22 26/23 29/24 30/13 109/7109/16 110/11112/2 112/16 115/13117/9 ordering [1] 92/14 35/3 35/10 35/13 35/20 35/2137/1138/25 117/11120/15 120/19 120/20 120/24120/25 orders [10] 74/2 74/8 74/10 77/177/5 39/10 39/10 39/13 39/24 40/4 40/8 40/14 121/7127/22127/25129/6129/10129/22 78/23 85/17104/15111/9 156/9 41/8 41/17 74/1174/23 75/10 75/14 76/3 76/9 131/21132/7132/11142/12145/19146/7 ordinary [1] 90/18 76/15 77/15105/1117/1128/15156/14156/19 people [71] 7/5 7/6 8/21 9/10 16/2116!22 organization [2] 55/19 58/10 157/20157/21 17/1618/1319/1219/17 20/22 21/16 27/6 organizations [2] 53/2 54/16 overloaded [1] 66/13 27/8 27/23 27/24 39/14 40/140/6 52/25 original [1] 11/1 overly [2] 39/22 41/22 54/18 55/18 61/5 62/8 68/25 69/17 70/1 originally [2] 20/16 98/12 overrnle [1] 38/2 71/25 8o/23 8o/23 84/13 84/25 85/3 85/18 originated [2] 28/6 28/9 overrnled [3] 36/4137!12138/10 86/12 92/10 94/24 96/6 97/17 98/13 102/3 other [68] 8/510/22 18/7 21/5 21/5 21/16 overseeing [1] 53/10 104/13 106/16 113/13 114/12114/13 114/19 21/16 23112 25/9 31!18 38/5 38/6 38!18 overstatement [1] 75/9 116/2116/12119/22120/23127/13127/13 38/24 39/2 43/8 43/22 45/2 45/15 45/15 own [7] 50/15 53/9 54/19122/16146/24 129/18 134/8 134/17135/12 135/14135/19 50!6 53/16 53/23 54/18 59/22 6o/5 6of7 146/25 158/13 135/19 135/20 135/24136/2 136/10 136/20 61/9 61/14 64/23 65/166/4 67/17 68/8 75/12 owned [1] 117/25 138/2138/4140/5147/5153/16158/15 79/9 82/2 91/25 95/2 97/22101/22103/17 owner [1] 96/5· people's [2] 70/13 156/25 104/23111/19112/2114/23117/7117/24 owns [2] 45/1145/12 Peoples [7] 24/18 24/20 35/14 76/8 76/14 123/15 124/11125/6 128/24129/6 130/21 156/15 157/9 1068 p 30/1130/14 30/15 30/17 35/23 35/25 37/2 proceeds [1] 28/11 39/10 44/7 45/24 46/6 53/23 57/14 70/6 process [4] 75/8 78/18 78/19 117/3 per [9] 7/2 7/17 8/2 9/25 10/8 11/13 11/24 73/16 91/9 91/13 92/17 99/13100/14109/10 produce [51] 12/713/5 13/15 14/12 14/13 12/4 63/4 109/12112/13114/24125/24127/21128/2 14/2515/9 18/18 31/10 32/8 32/13 32/14 per-customer [8] 7/2 7/17 8/2 9/2510/8 128/12138/13 144/1151/17152/12 32/25 34/12 35/12 35/13 36/2138/2 40/25 11/1311/2412/4 pointed [5] 19/15 69/14 69/22116/11127/11 42/14 43/4 43/5 43/8 43/13 44/18 78/6 78/7 percent [6] 65!25103/11107/11108/18 pointing [3] 53/8 110/15115/9 92/14 95/12 97/12 97/25 106/13 106/18 108/20108/25 points [2] 72/1127/8 106/20108/4111/24115/17119/5128/7 percentage [2] 21/17109/19 poke [1] 150/21 139/20 140/3 141/14141/20141/24141/25 perfectly [3] 97/14 98/9 100/8 policy [5] 62/25 83/13 89/2158/10 158/15 151/15 153/3154/7155/11155/13 157/22 perform [1] 153/2 pop [1] 145/16 produced [44] 8/1910/1613/2013/2118/4 performance [3] 135/4138/6154/24 popped [1] 113/13 18/4 20/19 31/12 32/7 33/18 37/14 43/18 performed [4] 112/17127/24152/22 153/1 portion [2] 79/4 80/7 43/2144/13 44/15 44/23 46/10 50/12 50/16 perhaps [2] 75/3 157/8 portions [1] 163/7 76/11 89/25 95/19 97/11104/18 106/12 period [16] 15/6 20/5 24/9 74/24 76/7 87/3 position [10] 25/6 26/2128/6 28/8 37/4 106/18 111/3 113/19 121/21121/24140/12 96/19104/25111/3128/17129/12133/4134/1 44/7 46/13 47/2196/3146/24 149/22 150/6150/15 151/22152/20 154/19 134/5160/7160/7 possess [1] 96/20 155/2 155/17 156/14 156/19 156/23 156/25 perjured [1] 129/18 possession [2] 17!17108/14 157/1 permissible [2] 63/5 69/1 possible [3] 75/13 77/18 126/3 producing [3] 13/15 115/17 119/2 permitted [3] 64/23 97/4159/14 possibly [3] 84/5106/10 114/13 product [2] 17/8 37/4 person [42] 9/417/5 24/8 24/10 24/13 postnre [2] 72/19 72/20 production [41] 12/25 15/2131/20 35/22 24/15 25/9 40/13 41/12 47/22 50/13 50/14 potentially [2] 21/9 104/17 35/24 46/12 97/17 98/13 102/5 103/9 104/1 51/12 53/15 55/5 55/10 57/3 57/7 57/16 59/25 pound [1] 148/22 104/6104/7105/4110/25111/18112/4117/13 61/7 62/1 68/8 68/12 68/12 69/5 72/15 72/15 practical [1] 157/24 118/20120/6 121/15 123/14128/14128/16 78/9 78/10 80/1186/17 87/3 96/18 96/22 practice [7] 40/140/2 47/2198/9 111/8 129/5 133/7137/24138/20138/25 139/2 105/24108/8 109/17121/16 123/6 124/8 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[37] 8/9 9/23 14/814/1614/20 105/18 106/8 109/23 129/16 129/20 135/10 previous [3] 25/7 25/24 73/20 14/22 15/115/5 15/19 15/19 16/117/2 20/20 plane [1] 23/23 previously [10] 8/19 103/18 104/18 105/25 21/132/135/10 36/1138/23 42/25 77/12 plans [1] 142(14 108/2 128/14134/1135/23 142/21150/15 77/20 80/16 89/20 94/6101/3102/11102/19 plate [10] 47/12 68/8 99/6 99/21108/9 primary [1] 77/22 107/18 108/13 110/20126/17127/18 137/24 110/6129/2 130/12 142/14143/2 principal [1] 71/12 142/8155/5155/5157/4 play [1] 38/4 print [1] 153/18 provided [27] 7/118/1216/818/2120!12 played [2] 85/1 85/19 printed [1] 118/7 36/15 50/16 76/6 76/8 77/25 78/14 78/17 plea [1] 157/7 prior [11] 6/19 18/2118/22 21(17 34/12 78/22 80/3110/2110/8114/6117/17117/20 plead [1] 73/17 73/19101/24102/24105/4108/15110/1 123/1123/14127/7133/19 140/21150/17 pleaded [1] 94/20 private [1] 146/25 152/17 152/21 pleading [19] 58/13 61/12 64/18 65/3 65/11 privilege [6] 50/16 50/16 58/23 59/5 90/25 provider [2] 63/12 68/13 65/20 66/17 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163/11 163/15 ln=amid 1 "'" Corporate officers, agents. and filed petition for writ of mandamus. The Supreme employees Court, Abbott, J., held that competitor was not entitled Party seeking the apex deposition of a to take apex depositions of executives. high-level corporate official is required to pursue less intrusive means of discovering Petition denied. the information only when that party cannot make the requisite showing concerning unique or superior knowledge. West Headnotes (9) 14 Cases that cite this headnote Ill Mandamus 151 Pretrial Procedure /-· Ren1edy at Law >-'- Corporate officers, agents. and Mandamus employees -~---· Nature of acts to be commanded Competitor failed to show that corporate Mandamus relief is available only to defendant's chairman and chief executive correct a clear abuse of discretion when officer (CEO) had unique or superior there is no other adequate remedy at law. personal knowledge of discoverable infonnation, so as to entitle competitor 3 Cases that cite this headnote to obtain apex deposition of CEO in competitor's action for theft of trade secrets; at most, competitor 121 Mandamus ."'-• Discretion of lower court demonstrated that CEO would have discoverable information, but not that When a party alleges that the court of CEO's knowledge was unique or superior. appeals abused its discretion by granting mandamus relief, Supreme Court focuses 4 Cases that cite this headnote on whether the trial court's ruling was an abuse of discretion. 161 Pretrial Procedure In re Alcatel USA, Inc., 11 S.W.3d 173 (2000) .-"'"-' Corporate officers, agents, and Business disputes provide no greater employees license than any other kind of suit Testimony that a corporate executive to explore by apex deposition whether possesses knowledge of company policies a high-level corporate executive knows does not, by itself, satisfy the requirement anything relevant to the case. for obtaining an apex deposition of that Cases that cite this headnote executive based on executive's unique or superior personal knowledge. 2 Cases that cite this headnote Attorneys and Law Firms 171 Pretrial Procedure *174 Timothy S. Durst, Dallas, Bob E. Shannon, /"" Corporate officers, agents. and Austin, Joseph D. Cheavens, Houston, Joseph R. employees Knight, Joe R. Greenhill, Austin, Samara L Kline, Competitor failed to show that corporate Dallas, Scott Partridge, Houston, Michael P. Lynn, defendant's former chairman had unique Eric W. Pinker, John Jesse Kendrick, Robert E. or superior personal knowledge of Goodfriend, Dallas, for relator. discoverable information, so as to entitle competitor to obtain apex R. Laurance Macon, San Antonio, Jack Hightower, deposition of CEO in competitor's action Austin, David .1. Healey, Houston, Nina Cortell, for theft of trade secrets; at most, Dallas, Lynne Liberato, Houston, Mike A. Hatchell, competitor's evidence established that Tyler, Stephan B. Rodgers, Karen Kroesche Guide, fanner chairman received information Melanie Goins Cowart, San Antonio, Ana E. Kadala, related to underlying facts of case, but Stephen L. Lundwall, Houston, Sharon N. Freytag, others had the same information. Debra Janece McComas, Dallas, for respondent. I Cases that cite this headnote Opinion Justice ABBOTT delivered the opinion of the Court, 181 Pretrial Procedure in which Chief Justice PHILLIPS, Justice HECHT, Corporate officers, agents. and Justice OWEN and Justice GONZALES join. employees The issue in this mandamus proceeding is whether To obtain apex deposition of high- the trial court abused its discretion by allowing DSC level corporate official based on official's unique or superior personal knowledge, Communications 1 to take the apex depositions of two there must be some showing beyond mere high-level Samsung executives. The court of appeals relevance, such as evidence that a high- conditionally granted mandamus relief, concluding level executive is the only person with that DSC failed to prove that the executives had personal knowledge of the information "unique or superior knowledge that is unavailable sought or that the executive arguably through less intrusive means."-- S.\V.3d - - , 1998 possesses relevant knowledge greater in WL 851123. We hold that DSC failed to present any quality or quantity than other available evidence that arguably shows that the executives have sources. unique or superior personal knowledge of discoverable information. Thus, the court of appeals did not err in 13 Cases that cite this headnote conditionally granting the writ of mandamus because the trial court abused its discretion by overruling 191 Pretrial Procedure Samsung's 2 motion to quash the depositions. We _,_ Corporate officers, agents, and therefore deny Alcatel's request for mandamus relief. employees Ne:.:t In re Alcatel USA, Inc., 11 S.W.3d 173 (2000) 43fex:sup. Central Petroleum Corp. v. Garcia, 904 S. W.2d 125 (Tex.l995), the coutt of appeals held that DSC I had failed to prove that it was entitled to take the DSC filed this suit alleging that Samsung engaged apex depositions and conditionally granted mandamus in a plan to steal a new DSC telecommunication relief. DSC filed a petition for writ of mandamus in technology known as "intelligent network" and "next this Court, arguing that the court of appeals abused its generation switching" systems. DSC asserts that discretion by granting the writ because the trial court Samsung identified and lured a team of *175 did not abuse its discreti-on. engineers away from DSC and then specifically assigned them to develop the same type of product they had developed at DSC. DSC claims that Samsung's II actions were the direct result of a plan engineered at the highest level ofSamsung's executive structure, and Ill 121 Mandamus relief is available only to that highest-level Samsung executives were involved correct a "clear abuse of discretion" when there is in the plan's execution at all stages. no other adequate remedy at law. See Walker v. Packer, 827 S.W.2d 833, 839-44 (Tex.l992). When DSC noticed the depositions of two high-level a party alleges that the cou1t of appeals abused its Samsung executives, Jin-Ku Kang and Kun-Hee Lee. discretion by granting mandamus relief, this Court Kang served as Chaiiman of defendant Samsung focuses on whether the trial court's ruling was an abuse Electronics Co., Ltd. (SEC) during the earliest events of discretion. See in re Meador, 968 S.W.2d 346, giving rise to this case and is currently Chairman 350 (Tex.l998) (citing Johnson v. Fourth Court of" Emeritus of that corporation. Lee is currently Appeals, 700 S.W.2d 916.918 (Tex.l985)). We agree Chairman and CEO of SEC and fonnerly served as with the court of appeals that the trial court's ruling was the Chairman of the Samsung Chaebol 3 during the an abuse of discretion and therefore we deny DSC's earliest events at issue in this case. DSC and Samsung request for mandamus relief. agree, and therefore we assume, that the Kang and Lee depositions qualifY as apex depositions. III Samsung moved to quash both depositions. At the first evidentiary hearing on the issue, the special discovety This Court first adopted the apex deposition guidelines master assigned to the case deferred ruling until after in Crown Central Petroleum Corp. v. Garcia. 904 the deposition of Mr. K.H. Kim, the former President S.W.2d 125 (Tex.l995). We held that the apex 4 deposition guidelines apply "[w]hen a party seeks and CEO of SEC at all times relevant to this matter. After Kim's deposition, DSC renewed its request for to depose a corporate president or other high level the Kang and Lee depositions and moved to compel corporate official." /d. at 128. A party initiates the Croll'n Central guideline proceedings by moving for both. After holding another evidentiary hearing, the special discovety master denied Samsung's motion protection and filing the corporate official's affidavit to quash and ordered that both depositions proceed. denying any knowledge of relevant facts. The trial Samsung appealed the special discovety master's court evaluates the motion first by deciding if the party seeking the deposition has "arguably shown that the order to the trial court. The trial court reviewed the transcripts of these hearings and conducted a third official *176 has any unique or superior personal knowledge of discoverable information." !d. "If the hearing. The trial judge denied Samsung's appeal and affirmed the special discovery master's order. Samsung party seeking the deposition cannot show that the official has any unique or superior personal knowledge moved for reconsideration. After a fourth hearing on Samsung's motion to reconsider, the trial judge denied of discoverable information, the trial court should" not allow the deposition to go forward without a showing, the motion. after a good faith eff01t to obtain the discovery through less intrusive means, "(I) that there is a reasonable Samsung filed a petition for writ of mandamus with the court of appeals. Basing its decision on Crown indication that the official's deposition is calculated Ne:·:t In re Alcatel USA, Inc., 11 S.W.3d 173 (2000) to lead to the discovery of admissible evidence, and specifying the reasons. Accordingly, mandamus is not (2) that the less intrusive methods of discove1y are appropriate if the trial courfs order can be sustained unsatisfactory, insufficient or inadequate." !d. under either Crown Central test. We consider first whether DSC arguably showed that Lee or Kang have J31 141 While we agree with the court of appeals' unique or superior personal knowledge of discoverable conclusion that mandamus relief was appropriate, we information. disagree with that court's phrasing of the Croll'n Central guidelines. The court of appeals stated: "A party requesting an apex deposition must show that the LEE corporate official to be deposed has an [sic] unique or superior personal knowledge that is unavailable !51 The most comprehensive discussion ofKun-Hee through less intrusive means." - S.W.3d - - , Lee's knowledge as it relates to this lawsuit is found 1998 WL 851123. That phrasing of the guidelines in a document submitted by DSC titled: "Kun-Hee improperly collapses the two discrete inquiries into Lee's Significance and Connection to This Lawsuit." In a single test. Under Crowu Central. if the party that document, DSC urges several reasons why Lee's seeking the deposition has "arguably shown that deposition is necessary. First, under the heading "Kun- the official has any unique or superior personal Hee Lee Sets Sam sung's Course," DSC claims that (I) knowledge of discoverable information," the trial court Lee is the leader of the Samsung Chaebol, (2) Lee should deny the motion for protection and the party sets the overall vision for the Samsung companies, seeking discovery should be entitled to take the apex and (3) Samsung's goal is to be one of the world's top depositions. Crown Cent., 904 S.W.2d at 128. The five telecommunications companies by 2005. Second, party seeking the apex deposition is required to pursue under the heading "Kun-Hee Lee's Ties To The less intrusive means of discovering the information Lead Defendant, Samsung Electronics Co., Ltd.," DSC only when that party cannot make the requisite states that Lee ( 1) was the chief executive officer and showing concerning unique or superior knowledge. president of SEC, (2) was a long-standing director of See id We recognize that these guidelines could be SEC, and (3) is *177 the largest single owner of read as requiring trial courts to undertake two hearings Samsung and its subsidiaries. and issue two orders: First, a hearing on whether to grant a protective order and, if one is granted, Evidence tending to support these allegations does then a second hearing, after less intrusive methods of not satisfy the first Crown Central test; it merely discovery have been explored, to determine whether demonstrates that Lee is a long-time company the protective order should be dissolved. We believe leader who sets the company vision with lofty that such a mechanical application of the Crown goals. Virtually eve1y company's CEO has similar Central guidelines is unnecessary when, as here, the characteristics. Allowing apex depositions merely parties have already unde1taken extensive discovery because a high-level corporate official possesses apex- and the court has sufficient information to consider level knowledge would eviscerate the very guidelines both prongs of the guidelines. established in Crown Ce11tral. Such evidence is too general to arguably show the official's knowledge is In this case, when Samsung moved for the unique or superior. protective orders the pa1ties had already engaged in significant discovery, including more than 300 161 In AM/I Corp. v. EnhM, 926 S.W.2d 640 hours of depositions. At this stage of discovery, (Tex.App.-Fort Worth 1996, no writ), the Second nothing in Cml!'n Central precluded the trial court Court of Appeals addressed a somewhat similar from considering whether DSC had attempted to argument. In .1MR Corp., an American Airlines gain the information by less intrusive means and passenger became intoxicated on his flight and otherwise satisfied the second Crown Central test. later had a traffic accident with the plaintiff. The The parties argued both Crown Central tests in the plaintiff sued AMR Corp. and American Airlines trial court, and both the discovery master and trial under the Dramshop Act. The plaintiff sought the judge denied the requested protective orders without apex deposition of Robert Crandall, AMR's president, In re Aicatei USA, Inc., 11 S.W.3d 173 (2000) 'i'Hex~- suf)c\7278__ _ ~'-~~--·--~-~-·-~---·-·--~-·~ -----·---~- -~~-~~--~--~-~-~~----~-~ ----~~---~-· CEO, and chairman of the board, and American Airlines, Inc.'s CEO and chairman of the board, KANG arguing that he "wish[ed] to depose Robett Crandall in order to determine where the authority lies within [7[ J.K. Kang served as Chairman of defendant the organization for making those [alcohol service SEC during the earliest events that gave rise to this and flight attendant training] policy decisions so that case and is currently *178 Chairman Emeritus of Plaintiffs can understand how and why those policy that corporation. DSC contends that Kang's unique or decisions were made and what precisely the policies superior personal knowledge is arguably shown by the in place were." !d. at 643. The court of appeals deposition testimony of Dr. Joo Hyung Lee, an SEC held that "[t]his testimony amounts to nothing more manager who personally oversaw the establishment than the simple, obvious recognition that the highest- of Samsung's Dallas laboratory. Contrary to DSC's ranking corporate officer of any corporation has the contention, Joo Hyung Lee's deposition conveys that ultimate responsibility for all corporate decisions and Kang may have been made aware of information falls far short of the [Crown Cenlra! ] standard." contained in reports prepared by others, but still does ld at 644. We agree with the AM/I C01p. court not show why Kang's knowledge may be unique or of appeals. Testimony that a corporate executive superior. possesses knowledge of company policies does not, by itself, satisfy the first Crown Central test because it In his deposition, Joo Hyung Lee testified that does not show that the executive has unique or superior he prepared a status rep01t of the next-generation knowledge of discoverable information. See In re El switching system and presented it to, among Paso l/eal!hcare c~:vs., 969 S. W.2d 68. 74 (Tex.App. others, Song, the Samsung executive in charge ~EI Paso 1998, no writ) ("A generalized claim that of telecommunications, and Kang. Joo Hyung Lee a corporate president has ultimate responsibility for characterized the report as an overview that did not last all corporate decisions or has knowledge of corporate very long-it was "kind of a simple thing." He further policy is insufficient to establish that the corporate testified that, other than that single presentation, he president has unique or superior personal knowledge had no other communication with Kang concerning the of discoverable information."); see also AMR Corp., next-generation switching system. Further probing by 926 S.W.2d at 644. DSC during Joo Hyung Lee's deposition indicated that none of the project's details were conveyed to Kang Under the heading "The Samsung Project At Issue In by Joo Hyung Lee; instead, it was Joo Hyung Lee and This Case Smacks Of Chairman-Level Importance," Song who were involved in the details: DSC claims that (1) the "[t]echnology at issue in this case involved huge investments and expected Q. And I believe section 1.3 [of the document revenue," (2) "SEC's commitment to technology in entitled "The Current Status of the Next- this case is significant to execution" of its plan to be Generation Switch System"] provides the time in the top five companies in its industry, (3) "[t]he line for the next-generation system as you [Joo significance of the project is illustrated by the claims Hyung Lee] contemplated it at that time? made in this case," 5 and (4) "Kun-Hee Lee has A. Yes, that's right. been involved with Samsung's telecommunications business." Proof of the imp01tance of the project to Q. And if you turn to the next page, I believe this Samsung, combined with the allegation that the issue page addresses the-what is called a progress in this case "smacks of chairman-level importance," report, and Section 2.1 addresses employment at most tends to show that the chairman-level official status; is that right? whose deposition is sought may possess discoverable information. It does not, however, arguably show A. Yes, that's correct. that the official's knowledge is unique or superior. Q. And the-the box is indicating the number of Consequently, the first prong of the Crown Central people that you had interviewed as well as the guidelines has not been satisfied with regard to Lee. Next In re Alcatel USA, Inc., 11 S.W.3d 173 (2000) response to your advertisements, things like that; is that co!Tect? *179 Q. And that was my question. Were these matters presented to Chainnan Kang during the A. That's correct. presentation? Q. And at that time, you we~e indicating to A. No. I don't think there-that would have been Chairman Kang that you had 15 total people necessary vis-a-vis the chailman. that you were engaged in employment contract negotiations with? Q. Would these have been discussed with Mr. Song? A. Well, Pm thinking, you know, again, that this and A. Yes. the subsequent stuff, you know, I don't think we necessarily made a report on that to the chairman. Additionally, DSC claims that an index of computer files produced by Sam sung contains numerous listings Q. Are you saying that the items in part two, you're of computer files identified as reports to J.K. Kang on unce1iain whether they were presented to the Samsung's next generation switching system. One of chairman? these reports that Kang apparently received a copy of was titled "Action Plans for the Development of the A. I'm thinking that we probably did not specifically Next Generation Telecommunication System." make a report on this to him. I mean, this is, you know, all too detailed a level for it to be, you 181 This evidence arguably shows that Kang may know, reported to the chairman. have discoverable information. But the first Crown Central guideline requires more; it requires that the person to be deposed arguably have "unique Q. Did you discuss this with Mr. Song? or superior personal knowledge of discoverable information." This requirement is not satisfied by A. Yeah, because that's a matter of the progress, just merely showing that a high-level executive has in a simple fashion. some knowledge of discoverable information. If "some knowledge" were enough, the apex deposition Q. With respect to item three of the document, guidelines would be meaningless; they would be which I believe concerns the status report on virtually indistinguishable from the scope of general the facilities or the buildings that you were discovery. Although Crown Ce11tral did not elaborate considering, did you discuss that with Chairman on what character of knowledge makes it unique or Kang? superior, there must be some showing beyond mere relevance, such as evidence that a high-level executive A. l don't recall that I did. is the only person with personal knowledge of the Q. Did you discuss it with Mr. Song? information sought or that the executive arguably possesses relevant knowledge greater in quality or A. Yes. We just kind of briefly told him about how quantity than other available sources. there was something like this. At most, DSC's evidence establishes that Kang Q. And would you turn to the folll1h matter in the received information related to the underlying facts document on the last page. of this case. A recipient's knowledge of the contents A. Yes. of a report is not unique or generally superior to the author's, of course. The record shows that Joo- Q. Which I believe is addressing proposed matters; Hyung Lee's and Song's knowledge of the reports to is that co!Tect? Kang is comparable, if not superior, to the knowledge possessed by Kang. Although both Joo-Hyung Lee A. Well, proposed, well, basically I, you know, kind and Song were deposed by DSC, the record does not of presented my opinions during this time of the show that Kang possessed information not possessed -the report. 'i: In re Alcatel USA, Inc., 11 S.W.3d 173 (2000) by Lee and Song and does not show that Kang had may well be true that many tort claims arise without relevant knowledge that was greater in quantity or the knowledge or involvement of a high-level officer. quality than Lee or Song. Combined with other factors, Conversely, it may also be true that many business receipt of such a rep01t could arguably support that disputes directly involve the decisions or actions of Kang had unique or superior knowledge. But evidence a high-level officer. Regardless of the truth, vel non, that an apex official received information requires of these suppositions, the fact remains that the Crown something more to establish that the apex has unique Central guidelines must be applied. or superior knowledge of discoverable information. v IV Because DSC failed to arguably show that either DSC seeks to distinguish busil)ess-related cases like Kang or Lee possesses unique or superior knowledge this from tort-related cases like Crmvn Central and of discoverable information, the trial court's order AMR Cmp. DSC contends that the trial cou1t, cannot be supported under the first Crown Central in allowing the depositions to proceed, considered test. Nevertheless, DSC argues that it has pursued that "this litigation involves two giant international less intrusive means and therefore is entitled to the multinational corporations suing each other over depositions under Croll'n Central's second guideline: trade secrets and corporate direction, policy and defamation." DSC argues that, "(i]n contrast to cases If the party seeking the like ... Crown Central, this is the very kind of lawsuit deposition cannot show that in which high-level executives would be expected the official has any unique or to pmticipate." (Emphasis in original). The special superior personal knowledge of discovery master apparently agreed with this reasoning discoverable information, the by stating: trial court should grant the motion for protective order and [T]his is not the same situation first require the party seeking as in Crown Central or the the deposition to attempt to Wal-1\1art case, the original obtain the discovery through apex deposition case. Mr. Lee less intrusive methods .... After appears to be the one person making a good faith effort to at the very top of the chain obtain the discovery through at Samsung, and it may ve1y less intrusive methods, the well be that he does not party seeking the deposition know anything that's relevant may attempt to show (I) to this case, and that can be that there is a reasonable determined very quickly. But I indication that the official's think that DSC ought to have an deposition is calculated to opportunity to test that. lead to the discovery of admissible evidence, and (2) (Emphasis added). that the less intrusive methods of discovery are unsatisfactory, !91 Even if a lawsuit concerns a business dispute insufficient or inadequate. If rather than a tort claim, and regardless of whether high- the party seeking the deposition level executives would be expected to participate in makes this showing, the a decision relevant to the dispute, the Crown *180 trial cmut should modifY or Central prerequisites must still be met. Business vacate the protective order disputes provide no greater license than any other kind as appropriate .... If the party of suit to explore by apex deposition whether a high- seeking the deposition fails level executive knows anything relevant to the case. It  In re Alcatel USA, Inc., 11 S.W.3d 173 (2000) 43Tex~Sup~Ct. J. 2iif" to make thfs showing, the its discretion in overruling Samsung's motion to quash trial court should leave the the depositions ofKang and Lee. protective order in place. Croll'n Cent., 904 S.W.2d at 128. ***** From the record before us, DSC has not shown We agree with the court of appeals' conclusion that that it attempted to obtain the information it sought the trial court abused its discretion when it refused from Kang through less intrusive methods. DSC to qua~h the depositions of Kang and Lee because . based its contention that Kang has unique or superior it failed to properly apply the guidelines set forth in knowledge largely on his presence at a written and oral Crown Central v. Garcia. Accordingly, we deny the presentation concerning the next generation switching mandamus relief requested by DSC. system. But, DSC was allowed to depose Joo-Hyung Lee, who presented the report to Kang and Song. Also, DSC deposed Song, the Samsung executive in charge of telecommunications, who also attended Justice ENOCH filed a dissenting opinion, in which the presentation. Yet, DSC has failed to identify any Justice BAKER and Justice O'NEILL join. relevant information that it seeks from Kang that it Justice HANKINSON did not participate in the attempted and failed to obtain from either Joo-Hyung decision. Lee or Song. Justice ENOCH, joined by Justice BAKER and Justice In addition, DSC failed to establish that it attempted to O'NEILL. obtain the information that it sought from Lee through This Court has held that the proper place to amend or less intrusive methods. DSC argued that Lee has promulgate a rule is through rulemaking, not judicial unique and superior knowledge regarding Samsung's fiat. 1 Yet today, from mere guidelines intended to policies. But the special master allowed DSC to depose aid a trial court's decision to allow or prevent apex Kim, the president and CEO ofSEC during the relevant depositions in the context of discovery harassment, time. Yet, DSC failed to ask Kim any questions the Court effectively forges an apex deposition about Samsung's "vision" for telecommunications or rule--one, significantly, not found in our recently any of the other issues DSC now contends justify promulgated discovery rules. This new rule erects an an apex deposition of Lee. DSC also did not issue improperly high barrier, imposing a special protection interrogatories, requests for admissions, or any other for corporate officials. forms of discovery to Samsung regarding its corporate policies. The record simply does not show that the The apex guidelines arose from an evaluation of information sought from Lee was sought by less the existing Rules of Civil Procedure, which have intrusive means or that the information sought was long a1iiculated a deponent's right to protection "from unobtainable from other sources. undue burden, unnecessary expense, harassment, Absent a showing that an executive arguably has [or] annoyance ... .'' 2 The progenitor of Texas cases unique or superior personal knowledge, a comi has analyzing the propriety of apex depositions is Wa/- no discretion to allow an apex deposition unless Mart ,)'tores. Inc. v. Street. 3 In that case, this Court the party seeking the deposition establishes that it examined a business invitee's assertion in a slip-and- has attempted to obtain the information through fall case that he should be allowed to depose the less intrusive methods. The special master provided chair ofWal-Mart's Board of Directors, Sam Walton. DSC with the opportunity *181 to depose other We held that the trial judge abused his discretion Samsung executives who at least arguably possessed by ordering the deposition to be taken at a location the information DSC seeks. Yet, DSC either failed to other than Walton's residence or place of business. 4 take advantage of that opportunity or failed to preserve Our decision in Street recognized the potential for its attempts in the record. Thus, the trial court abused harassment that high-level corporate officials face Ne:.:t In re Alcatel USA, Inc., 11 S.W.3d 173 (2000) 43 Tex. Sup. ct. J. 278 ------ when a corpOration is routinely subjected to litigation, a trial court's discretion to allow or prevent an apex and when the official's connection to the case is as deposition. Petiinent to this case, the trial court's tenuous as Walton's connection to a slip-and-fall case discretion was to be guided by whether DSC arguably in one of hundreds ofWal-Mari stores. showed that Kang or Lee had any unique or superior personal knowledge of discoverable information, and, Despite the Court's concerns signaled in Street, generally, whether the depositions were sought to litigants continued to seek the depositions of highest harass. 12 The Court's decision today raises a barrier ranking executives of large corporations in what to many otherwise legitimate apex depositions by appeared to be nothing more than an effort to harass divesting the trial court of its discretion, and by or pressure settlement by needlessly increasing the substituting this Court's judgment for the trial court's. costs of litigation. 5 Deciding that it was appropriate to alert com1s to such undue discovery burden and harassment, we established parameters to guide a LEE trial court's discretion. 6 While I strongly support the protection from harassment that our apex deposition In AMR Corp. v. Enlow. 13 the plaintiffs argued that guidelines provide, I do not countenance a de facto they could depose AMR CEO Robert Crandall in rule, unavailable to any other potential deponent, that their dramshop negligence case because Crandall had extends a privilege to corporate officials to avoid ultimate authority on all of AMR's policies. The court depositions by virtue of their position. of appeals prevented the deposition, concluding that ultimate policy authority is insufficient evidence and Consistent with this Court's holding in Crown that pmiies must articulate facts implicating the apex Central. 7 I would hold that when *182 there official's personal knowledge. 14 The allegations and is evidence that arguably shows that a high-level mandamus evidence in this case point to Lee in the corporate official has any unique or superior personal same way the AM/I plaintiffs pointed to Crandall. knowledge of discoverable information, a trial court DSC's record evidence reflects such nebulous items as does not abuse its discretion by allowing an apex the fact that Lee sets the overall vision for Samsung, deposition. But when the evidence suggests only that a is a principal Samsung shareholder, and believes high-level official's deposition is being sought because Samsung should actively pursue status as a top-five the official has ultimate decisionmaking authority, global telecommunications company. Allegations that "this amounts to nothing more than the simple, obvious a CEO should be deposed because that is where recognition that the highest-ranking corporate officer the buck stops are not evidence arguably showing of any corporation has ultimate responsibility for all unique or superior personal knowledge of discoverable corporate decisions," s and falls far short of supporting information. As such, I believe the Comi correctly a trial court's discretion to allow the deposition. adopts the AM/I standard with regard to Lee. But Consequently, I disagree with the court of appeals' while I agree with the Court's result on Lee, my conclusion in this case protecting Kang from being decision would hinge only on the AAfR rationale. The deposed, but agree that Lee cannot be deposed. l would F011 Worth Cowt of Appeals described and answered therefore conditionally grant mandamus in part against the problem succinctly. I would not go beyond that the court of appeals, and allow the Kang deposition to rationale in analyzing whether the trial court abused its proceed. discretion by allowing Lee's deposition. To determine whether the court of appeals improperly granted mandamus relief, this Court focuses on *183 KANG whether the trial court1s mling was an abuse of discretion. 9 A trial COllli is vested with broad The mandamus record reflects that the special discovery master, Judge Andrews, sat through more discretion in the area of discove1y. 10 Indeed, the than thirty hearings on more than sixty discove1y reviewing CQUrt may not substitute its judgment for motions. The record also reflects that Judge Andrews the trial court's. 11 Crown Central's guidelines infom1 In re Alcatel USA, Inc., 11 S.W.3d 173 (2000) 43 tex. sup. cCJ 2?8 understood that this was not a case in which the facts As evidence that Kang did not reach this level of driving the litigation are extremely remote from the knowledge, the Comi offers Dr. J.H. Lee's deposition CEO and trickle up the corporate structure. Here, testimony that: (I) the repmt was a simple thing that corporate policy and directives may have pushed did not last long; (2) outside of the report, Dr. Lee the events driving this litigation down the corporate had no other communication on the next-generation hierarchy. Inevitably, the policies driving corporate network switch system with Kang; and (3) Dr. Lee action and personal knowledge of actions taken in conveyed no project details to Kang. 16 In support pursuit of such policies intersect. One federal court of its conclusion, the Court announces the new apex has held that at this intersection, "when the motives deposition rule that a party must make a showing behind corporate action are at issue, an opposing party beyond mere relevance with evidence "such as ... that usually has to depose those officers and employees " (1) a high-level executive is the only person with who in fact approved and administered the particular personal knowledge of the information sought or (2) 15 action." While it is not this Colllt's role to say the executive arguably possesses relevant knowledge whether Kang arguably was at the intersection of greater in quality or quantity than other available Samsung's corporate policy and the events driving this sources." 17 Relying on this new rule, the Comi litigation, given the evidence before it, the trial court surmises that Kang cannot be deposed because, at best, did not abuse its discretion by doing so. Dr. Lee's deposition '~conveys that Kang may have been made aware of information contained in reports Only after an exhaustive review of the evidenCe prepared by others, but still does not show why Kang's DSC presented did the trial court conclude that Kang knowledge may be unique or superior." 18 This new arguably had unique or superior personal knowledge rule and its rationale are problematic. of discoverable information. DSC offered evidence that Kang was directly involved in Samsung's next * 184 The Court's conclusion is problematic because generation switching system project and had been it would require a litigant seeking to depose a specifically informed of Samsung's efforts to obtain CEO regarding a board-level decision, about which DSC technology. There was also evidence that Kang all present at the board meeting have the same received a written and oral presentation in 1996 about information, to depose a lower-level board member the status of Samsung's next generation switching and not the CEO. Why should a litigant be forced to system project in the United States, and that numerous depose the least qualified witness when it could depose reports were provided to Kang on the same project the most qualified if they have the same information? around the time of the events giving rise to this While the CEO and a lower-level official may have suit. One of the reports apparently contained an the same information, they have different levels of organizational chart for Samsung's telecommunication knowledge. As one federal comi has concluded, an project that contained the names of DSC employees apex official's knowledge may be deemed unique and -who were still with DSC at the time. When asked the deposition allowed, even if other corporate officials why he made the presentation to Kang, a lower-level . "I ar know Ie dge. 19 possess sum Samsung official responded "because [Kang] had a Jot of interest in the information telecommunications side of the business." While this evidence shows Moreover, the Court's opinion treats "knowledge" as Kang's personal knowledge of relevant information, though it were only the bare facts communicated the question Crown Cemra/ requires the trial comi to Kang and nothing more. But knowledge is more to consider before allowing the deposition is whether than mere information. The Comi ignores the role DSC arguably showed that the knowledge was unique that Kang's, or any apex official's, position within the or superior. corporation plays on the information received. When the policies driving corporate action and personal Substituting its judgment for the trial court's, the Court knowledge of actions taken in pursuit of such policies concludes that Kang could not be deposed because intersect, a new level of knowledge arises. When DSC did not arguably show that Kang's knowledge the motives behind corporate action are at issue, of discoverable information was unique or superior. arguably the knowledge created at that intersection ,_. i j In re Alcatel USA, Inc., 11 S.W.3d 173 (2000) 43 rex sup ci.Ti?a is unique to the corporate officer. And certainly that and the official's corporate role arguably combine to level of knowledge is "greater in quality" than the level form unique or superior knowledge, the trial com1 does not abuse its discretion to allow the deposition. For possessed by the individual who communicated only this Court to decide that the trial court *185 abused the bare facts. its discretion here, invades the trial court's discretion in the type of judgment call where it is uniquely This does not mean that an apex official who implicated. merely receives information will automatically be deposed. Trial courts must continue to employ the As Crown Central counsels, trial courts should Rules of Civil Procedure to protect all potential carefully balance litigants' need for information deponents from "undue burden, unnecessary expense, against the potential for abuse apex depositions pose. harassment, [or] annoyance ... .'' 20 Moreover, as the And while the discovering pmty may not initially Fort Worth Court of Appeals correctly recognized, be entitled to the deposition if they fail to make for corporate officials, bald allegations of final the requisite showing, the matter is not foreclosed. policymaking authority will not constitute sufficient Crown Cenfral counsels that after a party has failed to evidence to justify an apex deposition. Likewise, mere offer some evidence that arguably shows the official's allegations that the apex official both forms policy unique or superior knowledge, the party may still and has personal knowledge of facts relevant to the pursue a good faith effort to discover the information litigation do not arguably show unique or superior through less-intrusive methods, and then attempt to knowledge. Rather, there should be some evidence that the confluence of the official's policy-forming take the apex deposition . 22 role and personal knowledge of activities related to A trial court clearly abuses its discretion if "it such policies arguably creates unique o1· superior reaches a decision so arbitrary and unreasonable knowledge of discoverable information. as to amount to a clear and prejudicial en·or of The Court's reliance on the amount of Kang's law." 23 Given the evidence before it, and the knowledge that Dr. Lee's deposition testimony special master's intimate familiarity with the case, I "conveys" is also troublesome. Benefitted by cannot say that the trial judge's decision to permit numerous hearings and direct contact with the litigants Kang 1s deposition was arbitrary and unreasonable. and the evidence, the special master and the trial judge DSC presented evidence that supports the trial court's had no need to rely on the mere inlplications of the decision because it arguably shows that Kang had evidence. Indeed, trial courts have the best vantage unique or superior discoverable knowledge. And with point from which to determine whether an apex respect to resolution of factual issues or matters official's receipt or use of information communicated committed to the trial court's discretion, the reviewing by lower-level officials arguably shows unique or court may not substitute its judgment for that of superior knowledge. the trial court. 24 Finally, Judge Andrews was not unmindful of the possibility that the depositions were To make this determination, trial com1s should sought to harass. He therefore specifically limited the consider the context of the allegations the discovering depositions to matters raised in the parties' claims party raises, the type of information sought from and counterclaims. Thus, the trial court did not abuse the official, any evidence of the official's role in its discretion when it refused to quash the deposition the specific act or transaction underlying the suit, of Kang. Consequently, I would conditionally grant and the official's role within the corporation relative mandamus in part against the com1 of appeals, to the corporation's size. In addition, if the party allowing Kang's deposition to proceed, but preventing merely seeks factual information an apex official Lee's. receives, the trial court may limit such discovery if the information "is obtainable from some other source that is more convenient, less burdensome, or less Parallel Citations expensive." 21 But if the discovering party presents 43 Tex. Sup. Ct. J. 278 some evidence showing that the receipt of information In re Alcatel USA, Inc., 11 S.W.3d 173 (2000) 4·3 Tex. Sup ct. J278 Footnotes In September 1998, DSC Communications Corporation merged with and changed its name to Alcatel USA, Inc. We refer to Relator throughout this opinion as DSC, as it was referenced in the trial court and the court of appeals. 2 The real parties in interest are James L. Bunch, Michael Bray, David Fox, Kevin Gallagher, Bhushan Gupta, Nancy Korman, James Olivier, Leo Putchinski, Martin Wu, Samsung Electronics Corp., Samsung Electronics Co., Ltd., and Samsung Telecommunications America, Inc. They are collectively referred to as "Samsung." 3 A chaebol is a Korean conglomerate in which subordinates are extremely deferential to their hierarchical superiors. 4 Mr. Kim currently serves as the CEO and Chairman of Samsung Americas. 5 DSC states that ( 1) "SEC claims $300 million in damages caused simply by a delay in this project,'' (2) ;'DSC's damages are $1.3 billion, including present value of $922 million for Sam sung's ill~gotten profits,'' and (3) ·'OSC's claims for punitive damages arise, in part, from Samsung's corporate culture and strategic directives, which have been set by the highest level ofSamsung management, including Kun-Hee Lee," See State Dep't of/-liglnFa)'s & Pub. Tramp. v. Pqvne, 838 S.W.2d 235. 241 (Tex.1992); Alvarado\'. Farah 1\·(f..~. Co .. 830 S. W.2d 911. 915 (Tcx.l992). 2 TEX.R. CIV. 1'. 192.6(b). 3 754 S.W.2d 153 (Tcx.19XS). 4 See id. at 155. 5 See Monsanto Co. v. Mczv, R89 S. W.2d 274 (Tcx.1994) (opinion on denial ofleave to file petition fOrwritofmandamus). 6 See Crown Cent. Petmleum Corp. v. Garcia. 904 S. \V .2d 125. 128 (Tex. 1995). 7 See id. 8 AMR Corp. v. Enlow, 926 S.W.2d 640. 644 (Tcx.App.-Fort Worth 1996. orig. proceeding). 9 See In re Afeador. 968 S. W.2d 346, 350 (Tcx.I99R). 10 See Ginsberg v. F[(lh Court of Appeals. 686 S. W .2d I 05. I 08 (Tcx.1985). II See Brady v. Fourteenth Court a./Appeals, 795 S. W.2d 712. 714 (Tex.l990). 12 See Crown Central, 904 S.W.2d at 128 (emphasis added). 13 926 S.W.2d 640 (Tex.App.~Fort Worth 1996. orig. proceeding). 14 See id. at 644. 15 )i-awlcrs //ental Co. v. t·-.. Determination and disposition examination of witnesses at prison Where there was no evidence that named disciplinary proceedings, except where state prison inmates, who alleged that prison officials could justify their denial procedures used in prison disciplinary of such privileges on grounds that would proceedings violated their rights to satisfy court of law, effectively preempted due process and equal protection, were area that had been left to sound discretion subject to "lesser penalty" of loss of of prison officials. privileges but rather were charged with 53 Cases that cite this headnote "serious misconduct," Court of Appeals acted prematurely to extent it required procedures such as notice and opportunity 1121 Prisons to respond even when inmate is faced .·"'""" Cross-examination and confrontation with temporary suspension of privileges. Prisons U.S.C.A.Const. Amend. 14. >;c. Determination and disposition: statement of reasons 64 Cases that cite this headnote Since there is no general right to confront and cross-examine adverse witnesses at prison disciplinary proceedings, and since due to particular environment of prison setting it may be that certain facts **1553 Syllabus " relevant to disciplinary determination *308 Respondent state prison inmates in No. 74-1194 may not come to light until after formal filed an action for declaratory and injunctive relief hearing, such facts need not be excluded alleging that procedures used in prison disciplinary from consideration; however, allowing proceedings violated their rights to due process and consideration of such facts in no way equal protection of the laws under the Fourteenth diminishes requirement that there be Amendment. The District Court granted relief, and written statement by fact finder as to the Court of Appeals affirmed, holding that minimum evidence relied upon and reason for notice and a right to respond are due an inmate faced disciplinary action. even with a temporary suspension of privileges, that 231 Cases that cite this headnote an inmate at a disciplinary hearing who is denied the privilege of confronting and cross-examining Baxter v. Palmigiano, 425 U.S. 308 (1976) 96-s~cc 155f 4frEa~.2d a10-~ "-~-~-----~-~-~.-~-·~ ---·~~·-~·-----~--~-~·~----~··· ~-~---·- ----·---~-~~-·---- witnesses must receive written· reasons or the denial (c) Mandating that inmates should have the privilege will be deemed prima facie evidence of abuse of of confrontation and cross-examination of witnesses at discretion, and that an inmate facing prison discipline prison disciplinary proceedings, except where prison for a violation that might also be punishable in officials can justify their denial of such privilege on state criminal proceedings has a right to counsel grounds that would satisry a comt of law, effectively (not just counsel-substitute) at the prison hearing. pre-empts the area that Wolff, supra, left to the sound Respondent state prison inmate in No. 74-1187, upon discretion of prison officials, and there is no evidence being charged with inciting a prison disturbance, was of abuse of such discretion by the prison officials in summoned before prison authorities and informed No. 74-1194. Pp. 1559-1560. that he might be prosecuted for a violation of state law, that he should consult an attorney (although the (d) Where there was no evidence that any of the attorney would not be permitted to be present during respondents in No. 74-1194 were subject to the "lesser the disciplinary hearing), and that he had a right to penalty" of loss of privileges, but rather it appeared remain silent during the hearing but that if he did that all were charged with "serious misconduct," the so his silence would be held against him. On the Court of Appeals acted prematurely to the extent it basis of the hearing, at which respondent remained required procedures such as notice and an opp01iunity silent, he was placed in "punitive segregation" for to respond even when an inmate is faced with a 30 days. He then filed an action for damages and temporary suspension of privileges. Pp. 1560-1561. injunctive rei ief, claiming that the disciplinary hearing violated the Due Process Clause of the Fourteenth No. 74-1187,510 F.2d 534; No. 74-1194,510 F.2d Amendment. The District Court denied relief, but the 6 13, reversed. Court of Appeals reversed, holding that an inmate at a prison disciplinary proceeding must be advised of his right to remain silent, that he must not be questioned Attorneys and Law Firms fu1iher once he exercises that right, that such silence Ronald A. Dwight, Providence, R. 1., for petitioners. may not be used against him at that time or in future proceedings, and that where criminal charges *309 *31 0 Stephen J. F01tunato, Jr., Pawtucket, R. 1., for are a realistic possibility prison authorities should respondent. consider whether defense counsel, if requested, should be permitted at the proceeding. Held: The procedures Opinion required by the respective Comts of Appeals are either Mr. Justice WHITE delivered the opinion of the Court. inconsistent with the "reasonable accommodation" reached in 1Yo1Jrv. Mc/Jonne/1, 418 U.S. 539,94 S.Ct. These cases present questions as to procedures 2963, 41 L.Ed.2d 935, between institutional needs and required at prison disciplinary hearings and as to the objectives and the constitutional provisions of general reach of our recent decision in Wolff v. McDonnell, application, or are premature on the basis of the case 418 U.S. 539,94 S.Ct. 2963.41 L.Ed.2d 935 (1974). records. Pp. 1556-1561. (a) Prison inmates do not "have a right to either retained or appointed counsel in disciplinary A. No. 74-1194 hearings." Wolff, supra, at 570,94 S.Ct. at 2981.41 L.Ed.2d at 959. P. 1556. Jll J2J Respondents are inmates of the California penal institution at San Quentin. They filed an action under 42 U.S.C. s 1983 seeking declaratmy and (b) Permitting an adverse inference to be drawn injunctive relief and alleging that the procedures used from an inmate's silence at his **1554 disciplinary in disciplinary proceedings at San Quentin violated proceedings is not, on its face, an invalid practice, and their rights to due process and equal protection of there is no basis in the record for invalidating it as the laws under the Fourteenth Amendment of the' applied to respondent in No. 74-1187. Pp. 1556-1559. Constitution. 1 After an evidentiary *311 hearing, Baxter v. Palmigiano, 425 U.S. 308 (1976) 96s~ct.155~47 L.Ed.id s1o the District Court granted substantial relief. Clutchette of the counsel-substitute provided for by prison rules v. Procunier. 328 F.Supp. 767 (N.D.Cal.l971 ). The and renlained *313 silent during the hearing. The CoUit of Appeals for the Ninth Circuit, with one judge Disciplinary Board's decision was that respondent be dissenting, affirmed, 497 F.2d 809 ( 1974), holding placed in "Punitive segregation" for 30 days and that that an inmate facing a disciplinary proceeding at San his classification status be downgraded thereafter. Quentin was entitled to notice of the **1555 charges [3[ Respondent filed an action under42 U.S.C. s 1983 against him, to be heard and to present witnesses, to for damages and injunctive relief, claiming that the confront and cross-examine witnesses, to face a neutral disciplinary hearing violated the Due Process Clause and detached hearing body, and to receive a decision of the Foutteenth Amendment of the Constitution. 2 based solely ,on evidence presented at the hearing. The The District *314 Court held an evidentiary **I 556 court also held that an inmate must be provided with hearing and denied relief. The Court of Appeals for counsel or a counsel-substitute when the consequences the First Circuit, with one judge dissenting, reversed, *312 of the disciplinary action are "serious," such as holding that respondent "was- denied due process prolonged periods of" isolation." !d., at 821. The panel in the disciplinary hearing only insofar as he was of the Court of Appeals, after granting rehearing to not provided with use immunity for statements he reconsider its conclusions in light of our intervening might have made within the disciplina1y hearing, and decision in Wolff, supra, reaffirmed its initial judgment because he was denied access to retained counsel again with one judge dissenting but modified its prior within the hearing." 487 F.2d 1280, 1292 ( 1973 ). We opinion in several respects. 510 F.2d 613 (1975). The granted certiorari, vacated the judgment of the Court Court of Appeals held that minimum notice and a of Appeals, and remanded to that court for fUJther right to respond are due an inmate faced even with consideration in light of Wolff v. McDonnell, supra, a temporary suspension of privileges, that an inmate decided in the interim, 418 U.S. 908, 94 S.Ct. 3200.41 at a disciplinary helping who is denied the privilege L.Ed.2d 1155 ( 1974). On remand, the Court of Appeals of confronting and cross-examining witnesses must affirmed its prior decision but modified its opinion. receive written reasons for such denial or the denial 510 F.2d 534 (1974). The Court of Appeals held that "will be deemed p~ima facie evidence of abuse of an inmate at a prison disciplinary proceeding must be discretion," Id., at 616, and reaffirming its initial advised of his right to remain silent, that he must not view that an inmate facing prison discipline for a be questioned further once he exercises that right, and violation that might also be punishable in state criminal that such silence may not be used against him at that proceedings has a right to counsel (not just counsel- time or in future proceedings. With respect to counsel, substitute) at the prison hearing. We granted cettiorari the Court of Appeals held: and set the case for oral argument with No. 74-1187. 421 U.S.I010.95S.Ct.2414,44L.Ed.2d678(1975). "(I)n cases where criminal charges are a realistic possibility, prison authorities should consider whether defense counsel, if requested, should not be let into the B. No. 74-1187 disciplinmy proceeding, not because Wolff requires it Respondent Palmigiano is an inmate of the Rhode in that proceeding, but because Miranda (v. Arizona. Island Adult Correction Institution serving a life 384 U.S. 436,86 S.Ct. 1602. 16 L.Ed.2cl 694 (1966)) sentence for murder. He was charged by correctional requires it in light of future criminal prosecution." !d., officers with "inciting a disturbance and disrupt(ion) at537. of (prison) operations, which might have resulted in a riot." App. 197 (No. 74-1187). He was summoned We granted cettiorari and heard the case with No. before the prison Disciplinary Board and informed that 74-1194.421 U.S. I 010,95 S.C!. 2414,44 L.Ed.2d 678 he might be prosecuted for a violation of state law, that (1975). he should consult his attorney (although his attorney was not permitted by the Board to be present during the hearing), that he had a right to remain silent during II the hearing but that if he remained silent his silence would be held against him. Respondent availed himself Ne:~t Baxter v. Palmigiano, 425 U.S. 308 (1976) 96Tct155'C47CEd.2CfiHi5-~-·~~-~---~--·--··~·-····-·~·-·-·--- ..----···--------·- In Wolffv. McDonnell, supra, drawing comparisons to Gagnon v. Scarpelli. 411 U.S. 778,93 S.Ct. 1756,36 *316 III L.Ed.2d 656 ( 1973), we said: 1 Palmigiano was advised that he was not required 'The insertion of counsel into the (prison) disciplinary to testify at his disciplinary hearing and that he process would inevitably give the proceedings *315 could remain silent but that his silence could be a more adversaty cast and tend to reduce their utility used against him. The Court of Appeals for the First as a means to further correctional goals. There would Circuit held that the self-incrimination privilege of the also be delay and very practical problems in providing Fifth Amendment, made applicable to the States by counsel in sufficient numbers at the time and place reason of the Fourteenth Amendment, forbids drawing where hearings are to be held. At this stage of the adVerse inferences against an inmate from his failure development of these procedures we are not prepared to testify. The State challenges this determination, and to hold that inmates have a right to either retained or we sustain the challenge. appointed counsel in disciplinary proceedings." 418 161 As the Court has often held, the Fifth Amendment U.S .. at 570, 94 S.Ct., at 2981, 41 L.Ed.2d. at 959. "not only protects the individual against being involuntarily called as a witness against himself in Relying on Miranda v. Arizona, 384 U.S. 436, 86 a criminal prosecution but also privileges him not S.Ct. 1602. 16 L.Ed.2d 694 ( 1966), and Mathis v. to answer official questions put to him in any other United States. 391 U.S. I, 88 S.Ct. 1503,20 L.Ed.2d proceeding, civil or criminal, formal or informal, 381 ( 1968), both Courts of Appeals in these cases where the answers might incriminate him in future held that prison inmates are entitled to representation criminal proceedings." Lefkowitz v. Turley, 414 U.S. at prison disciplinary hearings where the charges 70, 77, 94 S.Ct. 316, 322, 38 L.Ed.2d 274, 281 involve conduct punishable as a crime under state (1973). Prison disciplinary hearings are not criminal law, not because of the services that counsel might proceedings; but if inmates are compelled in those render in connection with the disciplinary proceedings proceedings to furnish testimonial evidence that might themselves, but because statements inmates might incriminate them in later criminal proceedings, they make at the hearings would perhaps be used in later must be offered "whatever immunity is required to state-court prosecutions for the same conduct. supplant the privilege" and may not be required to "waive such immunity." ld., at 85, 94 S.Ct.. at 326, Neither Miranda, supra, nor Mathis, supra, has any 38 L.Ed.2d, at 286; Garrity v. New Jersey. 385 substantial bearing on the question whether counsel U.S. 493, 87 S.Ct. 616, 17 L.Ed.2d 562 ( 1967); must be provided at "(p)rison disciplinary hearings Gardner v. Broderick, 392 U.S. 273, 88 S.Ct. 1913, (which) are not part of a criminal prosecution." Wolff 20 L.Ed.2d I 082 ( 1968); Sanitation Men v. Sanitation v. McDonnell. supra, 418 U.S., at 556. 94 S.Ct .. at Comm'r, 392 U.S. 280. 88 S.Ct. 1917, 20 L.Ed.2d 2979. 41 L.Ed.2d, at 956. The Court has never held, I 089 ( 1968). In this line of cases from Garrity to and we decline to do so now, that the requirements of Lefkowitz, the States, pursuant to statute, sought to those cases must be met to render pretrial statements interrogate individuals about their job performance admissible in other than criminal cases. or about their contractual relations with the State; 141 [51 We see no reason to alter our conclusion insisted upon waiver of the Fifth Amendment privilege so recently made in Wolff that inmates do not "have not to respond or to object to later use of the a right to either retained or appointed counsel in incriminating statements in criminal prosecutions; disciplinary hearings." 418 U.S., at 570, 94 S.Ct., and, upon refusal to waive, automatically *317 at 2981,41 L.Ed.2d, at 959. Plainly, therefore, state terminated employment or eligibility to contract authorities were not in error in failing to advise with the State. Holding that the State could not Palmigiano to the contrary, I. e., **1557 that he was constitutionally seek to compel testimony that had entitled to counsel at the hearing and that the State not been immunized by threats of serious economic would furnish counsel if he did not have one of his reprisal, we invalidated the challenged statutes. own. G Baxter v. Palmigiano, 425 U.S. 308 (1976) 96·s:ci 15sf.47I.£d.2a s1o -- ~~~~~-~--- ·· ~~-~~~- ····················-·~~-···-~--~---~-~-~~~ reflection of the evidentiary significance of the choice The Court has also plainly ruled that it is constitutional to remain silent. error under the Fifth Ame_ndment to instruct a jury in a criminal case that it may draw an inference of guilt from a defendant's failure to testifY about facts Had the State desired Palmigiano's testimony over relevant to his case. Griffin v. California, 380 U.S. 609, his Fifth Amendment objection, we can but assume 85 S.Ct. 1229, 14 L.Ed.2d 106 (1965). This holding that it would have extended whatever use immunity is paralleled the existing statutory policy of the United required by the Federal Constitution. Had this occurred States, id., at 612, 85 S.Ct., al 1232, 14 L.Ed.2d, at 108, and had Palmigiano nevertheless refused to answer, it and the governing statutory or constitutional rule in the surely would not have violated the Fifth Amendment overwhelming majority of the States. 8 J. Wigmore, to draw whatever inference from his silence that the Evidence 425-439 (McNaughton rev. 1961 ). circumstances warranted. Insofar as the privilege is 171 The Rhode Island prison rules do not transgress concerned, the situation is little different where the the foregoing principles. No criminal proceedings are State advises the inmate of his right to silence but also or were pending against Palmigiano. The State has not, plainly notifies him that his silence will be weighed in contrary to Griffin, sought to make evidentiary use of the balance. his silence at the disciplinary hearing in any criminal 181 Our conclusion is consistent with the prevailing proceeding. Neither has Rhode Island insisted or asked rule that the Fifth Amendment does not forbid adverse that Palmigiano waive his Fifth Amendment privilege. inferences against parties to civil actions when they He was notified that he was privileged to remain silent refuse to testify in response to probative evidence if he chose. He was also advised that his silence could offered against them: the Amendment "does not be used against him, but a prison inmate in Rhode preclude the inference where the privilege is claimed Island electing to remain silent during his disciplinary by a party to a Civil cause." 8 J. Wigmore, Evidence hearing, as respondent Palmigiano did here, is not in 439 (McNaughton rev. 1961). In criminal cases, where consequence of his silence automatically found guilty the stakes are *319 higher and the State's sole interest of the infraction with which he has been charged. is to convict, Grifjin prohibits the judge and prosecutor Under Rhode Island law, disciplinary decisions "must from suggesting to the jury that it may treat the be based on substantial evidence manifested in the defendant's silence as substantive evidence of guilt. record of the disciplinary proceeding." Morris v. Disciplina1y proceedings in state prisons, however, Travisono, 310 F.Supp. 857, 873 (R.l.l970). It is thus involve the cotTectional process and important state undisputed that an inmate's silence in and of itself interests other than conviction for crime. We decline is insufficient to support an adverse decision by the to extend the Griffin rule to this context. Disciplinary Board. In *318 this respect, this case is very different from the circumstances before the 191 It is impmtant to note here that the posJtJon Comt in **1558 the Garrity-Lefkowitz decisions, adopted by the Comt of Appeals is rooted in the where refusal to submit to interrogation and to waive Fifth Amendment and the policies which it serves. It e Fifth Amendment privilege, standing alone and has little to do with a fair trial and derogates rather without regard to the other evidence, resulted in loss than improves the chances for accurate decisions. of employment or opportunity to contract with the Thus, aside from the privilege against compelled self- State. There, failure to respond to interrogation was incrimination, the Court has consistently recognized treated as a final admission of guilt. Here, Palmigiano that in proper circumstances silence in the face of remained silent at the hearing in the face "" Nature and form of remedy Coalme~, Lynn K. Coalmer, James W. Dunbar, Water Code provision, limiting Raynoldo Garcia, Laura P. Garcia, Shaun purchaser1s remedy for failure to provide C. Hills, Carla D. Hills, Linda Lanier, John required written notice to purchasers M. Simmons, Diane M. Simmons, Ronald that the prope11y could be subject to H. Vitulli, and Connie S. Vitulli, Appellants, utility district taxes, did not apply v. to preclude recovery by homeowners alleging that developer and builder BRIGHTON BUILDERS, INC., actively misrepresented reason for low George Wimpey, Inc., and George prope1iy taxes to induce them to purchase Wimpey Of Texas, Inc., Appellees. their homes. V.T.C.A., Water Code § 50.30 I (Repealed). No. 14-99-00535-CV. July 6, 2000. I Rehearing Overruled Sept. 21, 2000. Cases that cite this headnote Several homeowners sued developer and builders from whom they purchased homes, alleging fraud, fraud in 121 Appeal and Error· a real estate transaction, breach of warranty, violation ..,= Cases Triable in Appellate Cmni of the Deceptive Trade Practices Act (DTPA), When a trial court dismisses a case upon negligence, negligence per se, promissory estoppel, spe_cial exceptions for failure to state a and other causes. The 61 st District Comt, Harris cause of action, that issue of law is County, John Donovan, J., after first severing various reviewed under a de novo standard; the defendants and plaintiffs, entered summary judgment appellate court must accept as true all in favor of developer and a builder. Homeowners material factual allegations and all factual appealed. The Court of Appeals, Wittig, J., held that: statements reasonably inferred from the (I) notice provision of Water Code did not apply to allegations set forth in the respondenfs limit recovery by homeowners alleging that developer pleadings. and builder actively misrepresented facts about low utility district taxes to induce them to purchase their 6 Cases that cite this headnote homes; (2) similarity of representations by sales agents of both developer and builder as to why prope11y taxes 131 Statutes were so low was insufficient to raise a genuine issue Giving effect to statute or language: of material fact on issue of conspiracy; (3) genuine construction as written issue of material fact existed as. to whether builder Statutes and developer intended that homeowners rely on Context representations of sales agents, precluding summary judgment for builder and developer on homeowners 1 Statutes claim for promissory estoppel; and (4) release as to an , Superfluousness 0 "' adjacent easement did not release claims in this case; Court of Appeals must give full effect to and (5) homeowners were consumers under the DTPA. an unambiguous statute according to all of its terms and context. Affirmed in part and reversed and remanded in part. Cases that cite this headnote Boales v. Brighton Builders, Inc., 29 S.W.3d 159 (2000) ~~~----~----~-~----"--~--~~. v. legitimate business reasons why the parties did not Poole. 732 S.W.2d 306.312 (Tex.l987). Because as wish to file their agreements of record. This failure to a matter of law, the acts complained of-the failure file, being a lawful act, does not constitute a violation to file the sale and purchase agreements-do not of the DTPA. As for section 32.47 of the Penal Code, 2 constitute a violation of the Penal Code, as alleged, this Penal Code section deals with the switching of such acts cannot constitute a basis for a negligence price tags or the alteration of a trade mark. It is not per se claim. The DTPA facially does not establish. intended to require parties to file business agreements an applicable standard of care for imposing liability of record when state Jaw does not otherwise require based on negligence per se. The act, rather, is a such filing. comprehensive consumer-protection plan establishing its own penalties. See Johnson v. Sawyer. 47 F.3d Appellants argue that the trial court's language stating 716, 729 (5 th Cir.1995) (recognizing that Texas that the failure to file the agreements is not a has no law creating common law cause of action violation of the Penal Code or the DTPA are advis01y for statutory violation for which violation there is opinions. We construe the court's orders as either express and comprehensive statutory cause of action). summary judgment orders or dismissals on special Any presumed violation of the DTPA here does not exceptions related to certain conspiracy-related causes. constitute negligence per se sufficient to establish The failure of appellants to raise a material fact liability. We overrule appellants' fourth point of error. issue regarding meeting of the minds, discussed above, entitled appellees to summary judgment on il:' Beales v. Brighton Builders, Inc., 29 S.W.3d 159 (2000) --~----- 455 (Tex.Civ.App.-Tyler 1971, no writ), nothing in the rules prohibits them from pleading such E. Promissory Estoppel issues. To the extent that the trial court dismissed Jill In their fifth issue, appellants complain the ratification, estoppel, and adoption as causes of action, trial comt erred in dismissing their claims based on it did not err. *167 To the extent that the trial promissory estoppel. Although the trial court does not court may have stricken from plaintiff-appellants' specifically state whether it was granting summary pleadings contradefensive allegations regarding the judgment or special exceptions as to promissory issues, it erred. Such error is harmless, however. estoppel, we presume the trial court acted on grounds See TEX.R.APP. P. 44.1. If appellees later asse11 a that plaintiff-appellants failed to state a cause of action. defense that the sales representatives lacked authority, appellants would be free at that point to counter the 1121 JI3J Although promissory estoppel is usually defense with pleadings and evidence of ratification, a defensive plea, it can be used by a plaintiff as an adoption, or estoppel. We overrule appellants' sixth affirmative ground of relief. See Donaldson v. Lake point issue. Vista Comnnmify lmproveme11t Ass'n. 718 S.\V.2d 815. 818 (Tex.App.-Corpus Christi 1986. writ rel'd n.r.c.). The requisites of promissory estoppel are (I) G. Release a promise, (2) foreseeability of reliance thereon by the promisor, and (3) substantial reliance by the Jl5l In its seventh point of error, appellants complain promisee to his detriment. See E11glish v. Fischer, 660 that the trial court erred in granting partial summmy S. W.2d 521, 524 (Tex.\983). The misrepresentations judgment in favor of appellees as to Ronald and Connie alleged by appellants may not be promises in the strict Vitulli on grounds that the Vitullis had released any sense, that is, promises that the property taxes will claims against Brighton. not rise; however, plaintiff-appellants make clear in their pleadings their complaint. Appellants allege that The Vitullis allege that Leta Fitzgerald, a Brighton appellees made certain representations that appellees sales representative, made certain representations intended appellants to rely upon, that appellants regarding an easement adjacent to their property. The foreseeably relied on the representations, and that Vitullis on appeal allege that they signed a release appellees are estopped to deny the foreseeability of concerning only misrepresentations as to the easement. appellants' reliance. The trial court erred in dismissing Brighton agues that the release contains language appellants' claims based upon promissory estoppel. We releasing all claims against Brighton. sustain appellants' fifth issue. The release provides, in part, as follows: WHEREAS, it has come to Brighton's attention F. Ratification, Estoppel, and Adoption lhat Leta Fitzgerald may have mistakenly advised the Purchasers [Vitullis] lhat nothing would be 1141 Appellants in their sixth point of error complain built adjacent to their fence behind the Property that the trial court erred in granting Wimpey's special since there was a Southwestern Bell Telephone Co. exceptions concerning ratification and adoption and easement behind their lot; and Brighton's special exceptions concerning ratification and estoppel. At the trial court level, appellees argued WHEREAS, improvements can be built on the that ratification, adoption, and estoppel are not causes commercial property between the Southwestern of action and should be dismissed. Appellants did Bell Telephone Company easement and the rear not plead the issues as causes of action but rather as property line of the Prope1ty, and contradefensive issues, that is, to counter any possible argument by appellees that the acts of their sales WHEREAS, without admitting liability or representatives could not be attributed to appellees. culpability, Brighton agrees to settle this Althongh appellants were not required to plead such misunderstanding ... issues, see ..\lcDonuld v. Clemens, 464 S.\~l.2d 450, Ne:-:t Boales v. Brighton Builders, Inc., 29 S.W.3d 159 (2000) from all possible misrepresentation claims. The trial court erred in granting summary judgment to Brighton as to the homeowner Vitullis on the grounds of release. The Purchasers hereby RELEASE, ACQUIT AND We sustain appellants' seventh issue. DISCHARGE Brighton ... from all matters, causes of action, accounting, suits, controversies, agreements, damages, claims and demands, known or unknown, arising out of pertaining to, or H. Protective Order associated with any statement by Leta Fitzgerald regarding the property. In their eighth point of error, appellants complain the trial comt erred in issuing a protective order The Purchasers intend "claim" to mean any and concerning plaintiffs' attempt to depose John Krugh, all demands, rights, claims, damages, exemplary general counsel for Perry Homes. After appellants damages, lawsuits, common law, federal statutory sought to depose Krugh, Perry Homes sought a or federal constitutional causes of action, costs, protective order on grounds that Krugh is an "apex" judgment, penalties, executions, and attorneys' employee and that any information sought is protected fees ... that they have or ever may have against by the lawyer-client privilege. Appellants countered Brighton that have arisen or ever may arise directly by arguing that Krugh is not an "apex" employee, that or indirectly out of !his claim. [Emphasis added.] even if he is an "apex" employee, he has unique and superior knowledge of discoverable facts, and that the I I 61 II 71 liS I JI 91 120 I Releases must bnaterial is not protected by the lawyer-client privilege. construed like all other contracts. See /Filliams v. G!ash. 789 S.W.2d 26 I (Tex.l990). If a release is 12IJ 1221 1231 We review a trial court's decision capable of a certain or definite legal meaning or regarding a discovery-related protective order under interpretation, then effect must be given to the parties' an abuse of discretion standard. See Blo.ved v. General intentions as expressed within the language of the Motors Corp.. 881 S. W.2d 422. 437 (Tex.App.- release. See Coker v. Coker, 650 S. \V.2d 391, 393 Texarkana I994), ajj'd, 916 S.W.2d 949 (Tex.l996). (Tex.I983). A release will be construed in light of Under the lawyer-client privilege, the client may refuse the facts and circumstances surrounding its execution. to disclose and may prevent any other person from See Trir.:entrol Oil hading, Inc:. v. Annesley. 809 disclosing confidential communications made for the S.W.2d 2I8. 221 (Tex.l991). A general, categorical purpose of facilitating rendition of legal services to release clause must be construed narrowly. See San us/ client. See TEX.R. EVID. 503(b); Keene Corp. v. New York !.!f"e Health Plan, Inc. v. Dube~,)'eybold--- Calchl'el/, 840 S.W.2d 7I5. 719 (Tex.App.Houston 5'uther/and ,Hanagement. Inc., 837 S.\V.2d 191, 197 [14 th Dist.] 1992, no writ). The privilege extends (Tex.App.-Houston [I st Dist.] I 992. no writ). Any to all matters concerning litigation or business claims not clearly within the subject matter of a release transactions, regardless of whether the matters are are not discharged, even if such claims existed at pertinent to the matter for which the attomey was the time the release was executed. ld The releasing employed. See /Filliams "· /Filliams, lOS S.W.2d 297, instrument must "mention" the claim to be released. 299 (Tex.Civ.App.-Amarillo 1937, no writ). The See l"'ictorht Bank & {rust Co. v. 11rac6 1, & 11 S.W .2d statements and advice of the attomey to the client are 931. 938 (Tex.l991 ). as protected as the communications of the client to the attomey. See Boring & Tunneling Co. of Am. v. Here, the release by its own language concerns Sa/a;ar, 782 S.W.2d 284,289 (Tex.App.-Houston [I the misrepresentations made regarding the adjacent st DisL] 1989. orig. proceeding). easement. Any claims Fitzgerald may have made about tax rates or whether certain commercial properties fell 1241 First, we note that the "apex" doctrine does within the district do not *I68 clearly fall within the not apply. Appellants do not seek to depose Krugh release nor are they mentioned in the release. We must merely because of his corporate position. Rather they construe the general release language narrowly and do seek to depose him because they allege he has first- not find that the parties intended to release Brighton hand knowledge of certain facts, that is, the advice he l_j :::, Boales v. Brighton Builders, Inc., 29 S.W.3d 159 (2000) ~-~ ~-~-~---~·-~,-~~----~--~-----· -------~---· -~~~-~--~---~·~~-·-- --·~- -~- ~--------~·-·---·-·--~-~ -·~- "consumer" status. See TEX. BUS. & COtvi.CODE gave to a Perry Homes vice president during contract ANN.§ 17.45(4) (Vernon 1987); Melody Home Mfg. negotiations between Peny Homes and Wimpey and Co. v. Barnes. 741 S.W.2cl 349. 35.1-52 (Tex.l987). to Perry Homes' sales representatives during training Additionally, the goods or services purchased must sessions regarding buyer disclosure and the DTPA. See form the basis of the plaintiffs complaint. See Melody .)'imonv. Bridewell, 950 S. W .2d 439. 442 {Tex.App.- Home, 741 S.W.2cl at 352. The DTPA is designed to \1../aco I997, no writ) ("apex" doctrine applies where protect consumers from any deceptive trade practice corporate officer has been noticed for deposition made in connection with the purchase or lease of goods merely because of officer's corporate position; an or services. See Cameron v. Terrell & Garrett. fm:., officer with first-hand knowledge of relevant facts 618 S.W.2d 535,541 (Tex.l981). Goods include real cannot avoid deposition because of"apex" status). property purchased or leased for use. See§ 17.45( 1). 1251 Under the lawyer-client privilege, the legal 1291 The DTPA can make actionable, advice given to Perry Homes employees and to misrepresentations about real estate. See Chastain v. the Perry Homes vice president during contract Koonce. 700 S. W.2d 579. 581 (Tex.l985) (purchasers negotiations with Wimpey likely are protected by the oflots, who complained of misrepresentations relating lawyer-client privilege. Although appellants argue that to other nearby lots, were "consumers" even though third-parties were at the training sessions between they complained about lots other than the lots Krugh and Perry Homes sales representatives and purchased); Sanchez v. Guerrero, 885 S. W.2d 487,490 thus the lawyer-client privilege does not apply, the (Tex.App.-El Paso 1994, no writ) (broker's failure record before us does not show that third patties were to mention that home's previous owner was child present during the sessions. Because the evidence molester supports finding of DTPA violation). Here, sought by appellants likely is significantly protected appellants complain about the tax rates on their homes by the lawyer-client privilege, the trial court did not and allege that appellees made misrepresentations to abuse its discretion by granting appellees' motion for a induce them to buy the homes. The appellants are protective order. We overrule appellants' issue. complaining about an aspect of the real estate and the transaction involved. See Chastain. 700 S.W .2d at 581. The trial court did not err in denying summary I. DTPA judgment in favor of appellees on grounds that appellants were not consumers under the DTPA. We 1261 In a single crosspoint, appellees complain the overrule appellees' single crosspoint. trial comt erred in denying their motion for summary judgment on grounds that appellants below as a matter *169 of\aw were not "consumers," as defined by the DTPA. III. Conclusion We sustain appellants' second, fifth, and seventh 1271 1281 On appeal, in the interest of judicial issues, and overrule all of appellants' other points. economy, we may review grounds for summary We overrule appellees' single crosspoint. We affirm judgment asserted at trial and preserved for appeal the trial court's judgment concerning all conspiracy- even if such grounds. were rejected by the trial court. related and negligence per se claims. We reverse See Cincinnati !.{fe Ins. Co. v. Cates, 927 S.W.2d the judgment as to all other causes of action and 623, 626 (Tex. I 996); Augusta Courl Co~Ownen,· 1 remand for a trial on the merits or other proceedings in Ass'n v. l.evin. Roth & 1\asner, P.C., 971 S.W.2d accordance with this opinion. 119, 123 (Tcx.App.~Houston [14th DisLJ 1998. writ denied). A DTPA plaintiff must plead and prove Footnotes I Amending TEX. WATER CODE§ 50.301; current version at TEX. WATER CODE ANN. § 49.452 (Vernon 2000). 2 The Penal Code provides, in part, as follows: Next Boales v. Brighton Builders, Inc., 29 S.W.3d 159 (2000) it: (a) A person commits an offense with intent to defraud or harm another, he destroys, removes, conceals, alters, substitutes, or otherwise impairs the verity, legibility, or availability of a writing, other than a governmental record. (b) For purposes of this section, ·'writing'' includes: (I) printing or any other method of recording information; (2) money, coins, tokens, stamps, seals, credit cards, badges, trademarks; (3) symbols of value, right, privilege, or identification; and (4) labels, price tags, or markings on goods. * TEX. Pr:N.CODE i\NN. 32.47 {Vernon 1994). End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works . -····-··· -- -· Tab 4 In re BP Products North America Inc., Not Reported in S.W.3d (2006) ··················-··-··---~-- -·····-·-----~--· We conditionally grant the petition for writ of 2006 WL 2192546 mandamus. Only the Westlaw citation is currently available. SEE TX R RAP RULE 47.2 FOR DESIGNATION AND SIGNING OF OPINIONS. 4 Bacl.plosion March 23, 2005 Coordinated Discove1y Proceedings, No. 05- CV0337-A (212th Dist. Ct., Galveston County, Tex.). 5 Pursuant to the Texas Rules of Civil Procedure, "[a] person has knowledge of relevant facts when that person has or may have knowledge of any discoverable matter. The person need not have admissible information or personal knowledge of the facts.'' TEX.R. CIV. P. 192.3(c). 6 /11 rt~ Genco L.P., 169 S. \V.3d 764, 768 (Tcx.App.- Waco 2005, orig. proceeding); In re CenteJ]Joinr Energ)'. Inc., No. I 0-05-00244-CV. 2005 \VL 1531827, at *3 (Tex.App.- Waco 2005, orig. proceeding) (not designated for publication). 7 The merits ofBP's motion for protection are not before this Court; rather, this mandamus proceeding solely concerns whether the ai'Jidavit was properly stricken as insufficient to constitute proper support for a motion for protection under Crown Central. Having determined that the affidavit is sufficient, we reinstate the motion for protection and the trial court moves forward to hear and determine the motion. We conditionally grant BP's petition without prejudice to requesting relief on the motion for protection. End of Document © 2015 Thomson Reuters. No claim to original U S. Government Works Ne:~t ') Tab 5 Butnaru v. Ford Motor Co., 84 S.W.3d 198 (2002) A temporary injunction's purpose is to preserve the status quo of the litigation's KeyCite Yellow Flag- Negative Treatment subject matter pending a trial on the Distinguished by Lynd \'. I3ass Pro Outdoor World, Inc.• merits. Tex.App.-Da!las, March 12, 2014 141 Cases that cite this headnote 84 S.W.3d 198 Supreme Court of Texas. 121 Jnjunction Hanan BUTNARU and ~= Extraordinary or unusual nature of Gil Butnaru, Petitioners, remedy v. A temporary InJunction is an FORD MOTOR COMPANY, Respondent. extraordinary remedy and does not issue as a matter of right. No. 00-0513. Argued Feb. 14, 2001. I Decided June 27, 2002. 38 Cases that cite this headnote Potential buyers of automobile dealership filed action asserting claims against dealership, its shareholder, 131 Injunction and another potential buyer for breach of purchase ~'~ Issues, proot: and variance and sale agreements and claims against manufacturer To obtain a temporary injunction, the for tOttious interference. The 63rd Judicial District applicant must plead and prove three Court, Val Verde County, George M. Thurmond, J., specific elements: (I) a cause of action granted temporary injunction to prevent manufacturer against the defendant; (2) a probable right from exercising right of first refusal to buy dealership. to the relief sought; and (3) a probable, Manufacturer appealed. The Comi of Appeals, 18 imminent, and irreparable injury in the S. W.3ct 762, dismissed appeal in part, dissolved interim. temporary injunction, and remanded case. Potential buyers filed petition for review. The Supreme Court, 256 Cases that cite this headnote James A. Baker, J., held that: (I) amended provision of Motor Vehicle Commission Code granting Motor 141 Injunction Vehicle Board exclusive, original jurisdiction to .-= Irreparable injury regulate aspects of distribution, sale, and leasing of Injunction motor vehicles as governed by Code constitutionally v= Adequacy of remedy at law applied retroactively; (2) potential buyers' tortious interference and declaratory judgment claims fell Injunction oUtside purview of Board's exclusive jurisdiction, but /'"' Recovery of damages Board had primary jurisdiction over claims; and (3) An injury is irreparable, for purposes trial court did not abuse its discretion in issuing a of a temporary injunction, if the injured temporary injunction. party cannot be adequately compensated in damages or if the damages cannot Reversed and remanded. be measured by any certain pecuniary standard. 120 Cases that cite this headnote West Head notes (21) 151 lnjuuction Ill Injunction ~= Discretionary Nature of Remedy """'"· Preservation of status quo ~-~~--~-~~ ~---~~~~~·~-~~~ Ne:·:t , '!' ", -l iv ,- ':,c-1 iii:::: >>, ~-:c:---,:r,, l-'> ,,,, .• .,,,., 1: Butnaru v. Ford Motor Co., 84 S.W.3d 198 (2002) 45 fex.Sup: Ct. nH6···- ··----~--~~--~-----·-·-·· ··~·~~~~--~-.--~-~--~-~-~-·-···~- .. ~------··- Whether to grant or deny a temporary Vernon's Ann.Texas Civ.St. mt. 4413(36). injunction is within the trial comt's sound § 3.0 I (a). discretion. 4 Cases that cite this headnote 89 Cases that cite this headnote J9J AntitJ"Ust and Trade Regulation Appeal and Error ~"""' Exclusive and Concurrent Remedies >- Injunction or Laws A reviewing court should reverse an order Antitl'ust and Trade Regulation granting injunctive relief only if the trial .= Exhaustion court abused that discretion. Although amended prov1s1on of Motor Vehicle Commission Code granted 50 Cases that cite this headnote Motor Vehicle Board exclusive, original jurisdiction to regulate those aspects of 171 Appeal and Error the distribution, sale, and leasing of motor .-· Abuse of discretion vehicles as governed by Code, tottious A reviewing cou11 must not substitute its interference and declaratory judgment judgment for the trial court's judgment claims asserted by potential buyers of unless the trial court's action was so automobile dealership against dealership, arbitrary that it exceeded the bounds of its shareholder, and another potential reasonable discretion. buyer were not governed by Code and, thus, fell outside the purview 42 Cases that cite this headnote of the Board's exclusive jurisdiction, such that potential buyers did not have Antitrust and Trnde Regulation to exhaust any administrative remedies JSJ _,~. Retroactive operation before raising claims in trial court. Vernon's Ann. Texas Civ.St. art. 44 I 3(36), Statutes § 3.0 I (a). '-#·'"' Administrative agencies and proceedings 5 Cases that cite this headnote Statutes >"' Trade or business JIOJ Torts Amended provision of Motor Vehicle -= Contracts in general Commission Code granting Motor To establish their tortious interference Vehicle Board exclusive, original claim, potential buyers of automobile jurisdiction to regulate those aspects of dealership had to show: (I) a contract for the distribution, sale, and leasing of sale of dealership existed between them motor vehicles as governed by Code and dealership, its sole shareholder, and constitutionally applied retroactively in property owners; (2) dealership willfully action brought by potential buyers and intentionally interfered with that of automobile dealership against contract; (3) the interference proximately dealership, its shareholder, and another caused potential buyers damage; and (4) potential buyer; amended provision was buyers suffered actual damage or loss. jurisdictional statute that did not alter parties' rights or obligations or remove 49 Cases that cite this headnote any available remedies, and parties did not have vested right in choosing what tribunal would initially resolve all Jill Torts issues and claims governed by Code. Butnaru v. Ford Motor Co., 84 S.W.3d 198 (2002) 45 rex:suP":' cCJ:9f6- -~~-- -·-· --------- .. · · - - - _,__. Defense, justification or privilege in Motor Vehicle Commission Code did general not abrogate any previously existing Defendant could defeat liability for common-law rights and, thus, trial cou11 tortious interference claim by proving the had immediate jurisdiction to adjudicate affirmative defense that its conduct was common-law claims for breach of the privileged or justified, so long as that purchase and sale agreements asserted by conduct was not illegal or tortious. potential buyers of automobile dealership against dealership, its shareholder, 13 Cases that cite this headnote and another potential buyer. Vernon's Ann. Texas Civ.St. art. 4413(36). 1121 Antitrust and Trade Regulation Cases that cite this headnote "-~Judicial remedies prior to or pending administrative proceedings JISJ Antitrust and Trade Regulation Motor Vehicle Board had primary p- Particular cases jurisdiction over tortious interference and declaratory judgment claims asserted by Reliance by potential buyers of potential buyers of automobile dealership automobile dealership on general against dealership, its shareholder, and equitable principles did not relieve another potential buyer, which claims buyers of their burden to show raised Motor Vehicle Commission Code an inadequate legal remedy, in construction issue that was within Board's seeking tempora1y injunction against special competence and expe1iise; thus, manufacturer's exercising its right of first trial court should abate lawsuit and refusal to purchase dealership on the same suspend finally adjudicating tortious terms and conditions as proposed buyers. interference and declaratory judgment 7 Cases that cite this headnote claims until Board had a reasonable opp011unity to act on the matter. Vernon's Ann.Texas Civ.St. art. 4413(36), § [161 Antitrust and Tntde Regulation 5.0\B(d). Pm1icular cases Evidence that potential buyers of 15 Cases that cite this headnote automobile dealership would lose not only their right to purchase real 1131 Constitutional Law prope1ty, in addition to the dealership, if ~= Abrogation, modification, or manufacturer exercised its right of first recognition of remedies refusal was sufficient to establish that State Constitution's open courts provision potential buyers had a probable right to prohibits the Legislature from abrogating recove1y and that injunctive relief was well-established, common-law claims necessmy to preserve the status quo. unless the reason for doing so outweighs 31 Cases that cite this headnote a litigant's constitutional right of redress. Vernon's Ann.Texas Canst. Art. L § 13. J171 Injunction 4 Cases thal cite this headnote .~- Contracts Injunction [14[ Antitrust nnd Trade Regulation --- Breaches in general Exclusive and Concurrent Remedies Generally, a cow1 will not enforce or Laws contractual rights by injunction, because a party can rarely establish an irreparable Butnaru v. Ford Motor Co., 84 S.W.3d 198 (2002) 45 Tex. Sup. Ct. J. 916 ---- injury and an inadequate legal remedy when damages for breach of contract are Attorneys and Law Finns available. *200 Jonathan Scott Miles, Andrew L. Kerr, Holland 26 Cases that cite this headnote & Knight LLP, San Antonio, Byron W. Hodge, Lowry Foster & Hodge, Del Rio, Larry G. Berkman, Jenkens & Gilchrist, San Antonio, for Petitioner. JIB I Appeal and Error Injunction Paul S. Francis, Jon David lvey, Baker & Hostetler, Under an abuse of discretion standard Alfi·ed V. Sumpter, Oritz & Sumpter, Del Rio, for for reviewing an injunction, the court of Respondent. appeals cannot overrule the trial court's Opinion decision unless the trial court acted unreasonably or in an arbitrary manner, Justice BAKER delivered the opinion of the Court. without reference to guiding rules or principles. On December 6, 2001, we granted Ford's motion for rehearing. We withdraw our opinion dated July 7, 88 Cases that cite this headnote 200 I, and substitute the following in its place. Jl91 Appeal and Error In this case, we detetmine whether the Texas Motor .= Substituting reviewing court's Vehicle Board has exclusive jurisdiction over a judgment prospective car dealership transferees' claims that raise an issue about how to construe the Texas The comi of appeals cannot substitute its judgment for the trial court's reasonable Motor Vehicle Commission Code. 1 We conclude judgment even if it would have reached a the Board has exclusive jurisdiction to resolve only contrary conclusion. those claims and issues the Code governs. Moreover, we conclude that this exclusive jurisdiction does not 8 Cases that cite this headnote extend to the prospective transferees' claims here, and thus, they do not have to exhaust administrative remedies before bringing their claims in the trial 1201 Appeal and Error court. Instead, because of the Board's special expe1tise ~"-· Reasonably supported findings in interpreting the Code, the trial comt should A trial cotut does not abuse its discretion abate the prospective transferees' to1tious interference if some evidence reasonably supports the and declaratory judgment claims so the Board may trial cou1t's decision. exercise its primary jurisdiction to *201 determine the Code construction issue raised with those claims. 152 Cases that cite this headnote We further conclude that the trial court did not abuse its discretion by entering a temporary injunction. 1211 Equity Accordingly, we reverse the court of appeals' judgment w""~ Prope1ty and rights therein in general and remand the cause to the trial court for further A trial comi may grant equitable relief proceedings consistent with this opinion. when a dispute involves real property. I Cases that cite this headnote I. BACKGROUND Mm1in Graf is the sole shareholder of Graf Ford, Lincoln, Mercury, Inc., a dealership in Del Rio, Texas. The dealership's agreement with Ford provides that if Graf Ford proposes to transfer the dealership, Ford f'.Jext · '' 4  Butnaru v. Ford Motor Co., 84 S.W.3d 198 (2002) 45Tex. sup ct: J ~mr·~ shall have a right of first refusal to purchase the unenforceable and a declaration about the parties' dealership on the same terms and conditions that the rights and obligations under the agreements. Finally, proposed buyer agreed to, "regardless of whether the the Butnarus requested a temporary injunction to proposed buyer is qualified to be a dealer." A Ford prevent Ford or its assignees from exercising its right representative testified that this provision 1s purpose, of first refusal during the suit. Ford opposed this and the purpose of similar provisions in other standard request and filed a plea to the jurisdiction. Ford Ford dealership agreements, is "to be able to put argued that the Board has exclusive jurisdiction to into business dealers who [Ford feels] are qualified determine whether a manufacturer has violated the whenever [Ford has] the opportunity." Code's provisions. The trial com1 denied Ford's plea and granted the injunction. · In 1999, Hanan and Gil Butnaru contracted with Grafto buy the Graf dealership. They also contracted Ford sought interlocut01y review of the trial court's separately to buy the real property upon which tempormy injunction. See 18 S.\V.3d at 762. The the dealership was located. Graf and J.M. Barton court of appeals first noted that the Legislature did owned the property and executed that contract. not confer any rights on prospective transferees under Graf told the Butnarus about Ford's right of *202 the Code to seek relief for the Code violation first refusal. Additionally, both agreements were the Butnarus allege. Then, the court of appeals held "expressly conditioned upon approval by Ford of that the trial cou11 did not have jurisdiction over the Hanan Butnaru as a[sic] authorized sales and Butnarus' claims, "to the extent their claims are based service dealer" and warranted that neither agreement on violations of the [Code]," because the Code grants conflicted with any prior agreement to which Graf or the Board exclusive jurisdiction over alleged Code Barton were parties. violations. 18 S.W.3d at 767. The coUit also held that the Code does not violate the Texas Constitution's open In September I 999, Graf told Ford that he intended courts provision, which prohibits the Legislature from to sell the dealership to the Butnarus. The Butnarus unreasonably abrogating well-established common- then filed a Prospective Dealer Application with law claims. The court explained that the Code merely Ford, seeking approval as an authorized dealer. A confers new statutory rights on motor vehicle dealers month later, Ford informed Graf that it intended to and leaves "all others in the same position they exercise its right of first refusal and offered to pay the previously occupied." 18 S. W.3d at 768. Therefore, the Butnarus' reasonable expenses incurred in negotiating court concluded that "the Butnarus can sue Ford ... for the purchase and sale agreements. On the same day, tortious interference with contract, breach of contract, Ford assigned its right of first refusal to an existing and declaratory relief. They simply cannot base those Ford dealer. Ford and Graf agreed that Ford would causes of action on [Code] violations .... " 18 S.\V.3d at indemnify Graf against damages arising from Ford's 768. The court of appeals then remanded the claims exercising its right of first refusal and that Graf not based on Code violations and, holding that the would cooperate with Ford in defending any action Butnarus did not establish an inadequate legal remedy, challenging the right. dissolved the trial court's tempora1y injunction. 18 S.W.3d at 769-70. Anticipating their breaching the purchase and sale agreements, the Butnarus sued Graf, Graf Ford, and The Butnarus petitioned this Court to review the Ba11on for breach of those agreements. The Butnarus court of appeals' opinion. Typically, jurisdiction over also sued Ford for t011iously interfering with the an order granting or denying a tempora1y injunction agreements. They alleged Ford tortiously interfered is final in the courts of appeals. See TEX. GOV'T because Ford's right of first refusal violates a Code CODE§ 22.225(b)(4). However, because the court of provision that prohibits a manufacturer from denying appeals' decision here conflicts with another court of or preventing a dealership transfer to a qualified appeals' decision, this Court has jurisdiction. See TEX. applicant. See TEX.REV.CIV. STAT. art. 4413(36), GOV'T CODE§ 22.225(c). Specifically, the COUI1 of §§ 5.01B(c). 5.02(b)(8). Thus, the Butnarus souglit appeals' holding that the Code does not violate the a declaration that Ford's right of first refusal was Texas Constitution's open courts provision conflicts Butnaru v. Ford Motor Co., 84 S.W.3d 198 (2002) 45-fex-sup ctT-916-. ------·-· · --- ·-·--·-·· with /)avid .\.fcDa\'id :Vissan. Inc. v. Subaru. Inc., 10 S.W.Jd 56, 68 (Tex.App.·Dallas 1999), affirmed in (a) The board has the part, reversed in part, and remanded on rehearing, 84 exclusive, original jurisdiction S.W.3d 21~ (Tex.2002). In Dm:id McDavhf Nissan, to regulate those aspects of the the court of appeals held that the Code abrogated distribution, sale, and leasing of the plaintiffs common-law claims without reasonably motor vehicles as governed by substituting another remedy and thus contravened this Act and to do all things, the open com1s provision. I 0 S. W.3d at 67-68. We whether specifically designated granted the Butnarus' petition, as well as the petition in in this Act or implied herein, David McDavid Nissan, to resolve this conflict. or necessary or convenient to the exercise of this power At the time the trial courts and courts of appeals here and jurisdiction, including and in David AfcDavid Nissan determined whether the the original jmisdiction to Board had exclusive jurisdiction, section 3.01 of the determine questions of its own Code provided: jurisdiction. (a) The board has the general and original power and TEX.REV.CIV. STAT. m1. 4413(36), § 3.01(a) jurisdiction to regulate all aspects of the distribution, (emphasis added). The Legislature made this sale, and leasing of motor vehicles and to do all amendment "effective immediately" after receiving things, whether specifically designated in this Act the necessary votes, which occurred on May 18, 200 I. or implied herein, or necessary or convenient to the See Act of May 18, 200 I, 77th Leg., R.S., ch. !55, § exercise of this power and jurisdiction, including 5, 2001 Tex. Gen. Laws 313, 317. The Legislature's the original jurisdiction to determine questions of amendment did not change section 3.0\(b). its own jurisdiction. In addition to the other duties placed on the board by this Act, the board shall Today, we determine (!) whether section 3.01 's enforce and administer the terms of Chapter 503, current or former version applies, (2) whether the Transportation Code. applicable provision grants the Board exclusive jurisdiction and how this affects the trial court's (b) Unless otherwise specifically provided by Texas jurisdiction here, and (3) whether the trial court abused law not in conflict with the terms of this Act, all its discretion by issuing a temporary injunction. aspects of the distribution and sale of motor vehicles shall be governed exclusively by the provisions of this Act. IL APPLICABLE LAW TEX.REV.CIV. STAT. art. 4413(36). § 3.01 (Vernon Supp.!998), amended by Act of May 18, 200 I, 77th A. DAVID MCDAVID NISSAN, INC. Leg., R.S., ch. !55,§ 5, 2001 Tex. Gen. Laws 313. 1. Retroactive application of Section 3.01 In our original opinions in this case and in David McDavid Nissan, we concluded that this Today, in David klcDaFid Nissan, we held that section provision granted the Board primary-not exclusive- 3.0 I 's current version constitutionally retroactively jurisdiction over Code issues and claims. Moreover, applied to the pending claims a licensed motor vehicle we concluded that section 3.0 !(b) does not grant the dealer had raised against a manufacturer. Da\'id Board exclusive jurisdiction because, *203 by its JicDavid Nissan, 84 S.\V.3d at 218. We explained that plain language, that subsection only establishes that the this jurisdictional provision is procedural and remedial Code governs this area of law and trumps other laws if and did not affect a vested right. David McDavid they conflict with the Code. Nissan, 84 S.W.3d at 219 (citing Landgr(!(v. US/ Film Prod<., 511 U.S. 244, 273. 114 S.Ct. 1483 (1994); However, orily weeks before we issued our opinions, Baker Hughes, Inc. v. Keco, R & D. Inc., 12 S.\V .3d 1, the Legislature amended section 3.0 I (a) to provide: 4 (Tex.l999); City ofl)'/er v. Likes, 962 S.W.2d 489. Butnaru v. Ford Motor Co., 84 S.W.3d 198 (2002) 4srex. 502 (Tex.l997); Ex parte .·/bell. 613 S. W.2d 255. 260 I I I 121 131 141 A tempora~y injunction's purpose (Tex.l981 ); McCain v. Yost, 155 Tex. 174.284 S.W.2d is to preserve the status quo of the litigation's subject 898. 900 ( 1955); Middleton v. Texas Power & Light matter pending a trial on the merits. IYa/ling v. Co .. 108Tex.96.185S.W.556,560(1916);Bionstein Metcalf"e, 863 S.W.2d 56. 57 (Tex.1993); Electronic v. lilonstein. 831 S. W.2d 468,472 (Tex.App.-Houston Data 5j•s. Corp. v. Powell. 508 S.W.2d 137, 139 (14th Dist.] 1992. \\Tit denied); .':)outhwester/1 Bell (Tex.Civ.App.-Dallas 1974. no writ). A temporaty Tel. Co.''· City of"Koum=e. 543 S.W.2d 871.874-75 injunction is an extraordinary remedy and does not (Tex.C'iv.App.-Beaumont 1976, no writ)). issue as a matter of right. Walling. 863 S.W.2d at 57. To obtain a temporary injunction, the applicant must plead and prove three specific elements: (1) a cause of action against the defendant; (2) a probable right to 2. Exclusive Versus Primary Jurisdiction the relief sought; and (3) a probable, imminent, and Furthermore, in David McDavid Nissan, we explained irreparable injllly in the interim. Walling. 863 S.W.2d the significant differences between the primary and at 57; Sun Oil Co. v. /Vhitaker, 424 S. W.2d 216, 218 exclusive jurisdiction doctrines. David i\1cDavid (Tex.l968). An injury is irreparable if the injured pat1y Nissan, 84 S.\V.3d at 218. We held that, unlike cannot be adequately compensated in damages or if the its former version, section 3.0 I(a) 's current version damages cannot be measured by any certain pecuniary expressly confers exclusive jurisdiction on the Board standard. Canteen Corp. v. Republic (?f Tex. Props .. to initially determine issues or claims that the Inc .. 773 S. W.2d 398, 40 I (Tex.App.-Dallas 1989, no Code governs. David McDavid Nissan, 84 S.W.3d writ). at 218. We based our decision on the provision's plain language, and the Legislature's intent when it lSI 161 171 Whether to grant or deny a temporary amended the provision to include the express exclusive injunction is within the trial coUit's sound discretion. jurisdiction language. David kfcDavid Nissan, 84 I-Va/ling. 863 S.W.2d at 58; State v. /Va/ker, 679 S. W.3d at 218. (citing Cash Am. !nt'l!nc. v. Bennett, 35 S. W.2cl484, 485 (Tex.1984). A reviewing court should S. W.3d 12, 15 (Tex.2000); Conrinental C~ffee Procb. reverse an order granting injunctive relief only if the Co. v. Co=are=. 937 S.W.2d 444. 447 (Tex.1996); trial cow1 abused.that discretion. Walling. 863 S.W.2d SENATE COMM. ON STATE AFFAIRS, BILL at 58; lValker, 679 S.W.2d at485. The reviewing court ANAL YSlS, Tex. H.B. 1665, 77th Leg., R.S. (200 I)). must not substitute its judgment for the trial court's judgment unless the trial COUI1's action was so arbitrary that it exceeded the bounds of reasonable discretion. Jolmsonv. Fourth Ct. a/Appeals, 700 S.W.2d 916.918 *204 3. Open Courts Challenge (Tex.l985); Davis v. Huey, 571 S.W.2cl 859,861--62 (Tex.l978). In David k!c!Javid Nissan, we also concluded that, as applied to the motor vehicle dealer in that case, the Code did not violate the Texas Constitution's open cou11s provision. David 1\IcDcn•id Nissan. 84 S. W .3d at Ill. ANALYSIS 227; see also TEX. CONST. art. I.§ 13. We explained that the Board's exclusive jurisdiction over issues and A. WHETHER AMENDED SECTION claims the Code governs-all matters derived from 3.01 RETROACTIVELY APPLIES the Code and not the common law-did not abrogate any of the motor vehicle dealer's common-law rights. 181 In David i\IcDavid Nissan, we concluded Dal'id .HcDavid Nissan, 84 S.W.3d at 227 (citing that section 3.0 I (a), a jurisdictional provision, is Texas Ass'n qf Bus. v. Texas Air Control Bd, 852 a procedural and remedial statute that applied S. W.2d 440. 448 (Tex.l993 )). retroactively because it did not affect a vested right in that case. See David AfcDavid Nissan. 84 S.\V .3d at 219 (citing Landgraf," 511 U.S. at 273. 114 S.Ct. B. TEMPORARY INJUNCTIONS 1483; Likes. 962 S.W.2d at 502; Abell. 613 S.W.2d at ~60; Phil J-1. Pierce Co. v. IVatkins, 114 Tex. 153,263 Butnaru v. Ford Motor Co., 84 S.W.3d 198 (2002) S.W. 905. 907 (1924); Middle/on. 185 S.W. at 560: tribunal will do this. See Landgraf, 511 U.S. at 273, !Jionstein, 831 S.W.2d at 472; City of Kountze, 543 114 S.Ct. 1483; David McDavid Nissan. 84 S.W.3d S. W.2d at 874-75). However, section 3.0 I (a) still may at 222; 1898454: Middle/on. 185 S. W. at 559: Cily not constitutionally retroactively apply in this case if it qf Konntoe. 543 S.W.2d at 874-75. Accordingly, we affects a vested right. See Baker Hughes, 12 S. W.3d at conclude that amended section 3.0 I(a) constitutionally 4; Middle/on. 185 S.W. at 560. applies retroactively in this case. The Butnarus do not allege that section 3.0l(a) affects any vested right. Instead, they contend that the B. APPLYING SECTION 3.01'S CURRENT Legislature did not expressly make the amendment VERSION TO THE BUTNARUS' CLAIMS to section 3.0l(a) retroactive, and therefore, we should apply the Code Construction Act to conclude 191 Ford contends that section 3.0 I 's current section 3.0 I (a)'s current version does not retroactively version grants the Board exclusive jurisdiction, and apply. See TEX. GOV'T CODE §* 311.022 ("A thus, the Board has the sole authority to make statute is presumed *205 to be prospective in the initial determination about the alleged Code its operation unless expressly made retrospective."), violation here. The Butnarus, on the other hand, 311.031 ("[T]he ... amendment ... of a statute does not argue that section 3.01 does not oust the trial court's affect ... the prior operation of the statute or any prior jurisdiction because the Board does not have authority action taken under it."). to award damages for their well-established common- law claims. Therefore, the Butnarus assert that the But the Butnarus misplace their reliance on the Code Board only has prima~y jurisdiction to decide whether Construction Act. That statute applies only to "each Ford's right of first refusal violates the Code. code enacted by the 60th or subsequent legislature as pati of the state's continuing statutory revision The Butnarus 1 pleadings currently reflect four claims, program." TEX. GOV'T CODE § 311.002. When the first two of which are based on Ford's allegedly the Legislature recodifies a statute under Texas's violating the Code. First, the Butnarus seek a judicial continuing statutory revision program, the statute declaration that Ford!s right of first refusal violates the will indicate this. See, e.g., TEX. LOCAL GOV'T Code. Second, the Butnarus allege that Ford tortiously CODE § 1.00 I ("This code is enacted as a part of interfered with the purchase and sale agreements by the state's continuing statutory revision program .... "). attempting to exercise its allegedly invalid right of first And, though we refer to the Motor Vehicle Code refusal. Third, the Butnarus seek a declaration about as "the Code," nothing in the Code's language or the parties! rights and obligations under the purchase legislative history shows that it is pati of our State's and sale agreements. Fomih, the Butnarus claim that "continuing statutory revision program." TEX. GOV'T Graf and Bmion have breached or are about to breach CODE § 311.002; Robbins CheVJ·olel Co. v. Molor the purchase and sale agreements by permitting Ford Vehicle Bel.. 989 S. W.2d 865, 867 (Tex.App.-Austin to exercise its right of first refusal rather than requiring 1999. pet. denied); see also Knight l'. lnt'l Harvester Ford to determine the Butnarus! eligibility under the Credil Cmp .. 627 S. W.2d 382. 385 (Tex.1982). Code for the dealership transfer. Section 3.0 I(a) is a jurisdictional statute that, in this The court of appeals, after analyzing section 3.01 !s case, does not alter the patiies' rights or obligations former version, concluded that the Board has exclusive or remove any remedies already available. See David jurisdiction; *206 however, it held that the Butnarus McDavid Sisson. 84 S.W.3d at 222; Likes, 962 S. W.2d do not have standing as prospective car dealership at 502. This provision merely determines the tribunal transferees to seek relief from the Board for the Code that must initially resolve all issues and claims the violation they allege. The court of appeals further Code governs. See Landgrql 511 U.S. at 273, 114 determined that the Butnarus' lack of standing to obtain S.Ct. 1483; David McDavid Nissan. 84 S.W.3d at relief from the Board did not give them a right to seek 222: Cily qf Kmtnloe, 543 S.W.2d at 874-75. The damages for the alleged Code violation in the trial parties do not have a vested right in choosing what court. 18 S.W.3d at 767-68. Accordingly, the court 1'-Je:·:t Butnaru v. Ford Motor Co., 84 S.W.3d 198 (2002) of appeals held that the Butnarus could maintain their to "fail to give effect to or attempt to prevent any sale breach of contract and tortious interference claims; or transfer" of a dealership "except as provided by however, the Butnarus could not "base those causes of Section 5.0 I B." TEX.REV.CIV. STAT. mt. 4413(36). action on [Code] violations." 18 S.W.3d at 768. § 5.02(b)(8). As discussed above, we disagree that section 3.01 Additionally, the Code provides a dealer a remedy 's former version granted the Board exclusive if the manufacturer "unreasonably" denies a dealer's jurisdiction. But we conclude that section 3.0l(a) 's application to transfer its franchise ownership. The current version, which applies here, grants the Board Code's definition of"dealer" includes licensed dealers exclusive jurisdiction over issues and claims the Code but not prospective transferees. See TEX.REV.CIV. governs. Thus, we must determine if the Butnarus' STAT. art. 4413(36), § 1.03(7). The dealer may file claims fall within the Board's exclusive jurisdiction. a protest with the Board. TEX.REV.CIV. STAT. art. 4413(36), § 5.01B(d). The issue would be Because motor vehicle distribution and sales affects whether the prospective transferee is qualified, and the our State's economy and citizens' welfare, the Code's manufacturer must prove the prospective transferee's primary purpose is "to insure a sound system inadequacy. TEX.REV.CIV. STAT. mt. 4413(36), §§ of distributing and selling motor vehicles through 5.01B(d)-(e). If the Board determines the prospective licensing and regulating manufacturers ... and dealers transferee is qualified, the Board shall enter an order of those vehicles." See TEX.REV.CIV. STAT. art. reflecting this, and the manufacturer must accept 4413(36), § 1.02. To accomplish this, the Code strictly the transfer. TEX.REV.CIV. STAT. art. 4413(36), § regulates conduct by or between franchise dealers 5.01B(e). and manufacturers. See TEX.REV.CIV. STAT. art. 4413(36), §§ 4.01-.07, 5.01-.05. For example, *207 [10[ Jllj Here, the court of appeals' analysis the Code establishes how a dealer must request presumes that the Butnarus' trial court claims simply a transfer, assignment, or sale of its franchise seek monetary damages based on their allegation that agreement. TEX.REV.CIV. STAT. mt. 4413(36), § Ford's exercising its right of first refusal and denying 5.01B. Under that process, the Code also determines the dealership transfer violated section 5.01B. But the circumstances under which a manufacturer may the Butnarus' trial com1 claims involve something withhold its consent to the dealer's request. See different. The Butnarus seek relief for Ford's alleged TEX.REV.CIV. STAT. art. 4413(36), § 5.01B(c). tortious interference, and this claim, in turn, raises a Code construction issue. To establish their tortious Specifically, to transfer a dealership the dealer must interference claim, the Butnarus must show: (1) a file a written application with the manufacturer contract exists between Graf, Graf Ford, Barton and to transfer the dealership. The application must the Butnarus; (2) Ford willfully and intentionally identity the prospective transferee and any pertinent interfered with that contract; (3) the interference agreements about the proposed transfer. See proximately caused the Butnarus damage; and (4) TEX.REV.CJV. STAT. art. 4413(36 ). § 5.0 I B(a)( I)- the Butnarus suffered actual damage or loss. See (4). The manufacturer must timely advise the dealer Texas Beef Cattle Co. v. Green. 921 S.W.2d 203. in writing if the prospective transferee is qualified 210 (Tex.l996); Hoiimvczv v. Skinner. 898 S.W.2d or if the transferee is not acceptable. TEX.REV.CIV. 793, 795-96 (Tex.l995). But Ford may defeat liability STAT. art. 4413(36), § 5.01B(b). The Code prohibits by proving the affirmative defense that its conduct a manufacturer from "unreasonably'' withholding was privileged or justified-so long as that conduct its consent to a dealer's transfer application if the was not illegal or tortious. See Prudential Ins. prospective transferee is "of good moral character" and Co. (?l Am. v. Financial Review Servs., Inc .. 29 otherwise meets the manufacturer's predetermined, S.W.3d 74, 80 (Tex.2000); ACS investors, inc. v. written standards, if any, about a transferee's McLaughlin 943 S.W.2d 426, 431 (Tex.l997); Texas business experience and financial qualifications. Bee/ Cattle, 921 S. W.2d at 210. It is the Butnarus' TEX.REV.CIV, STAT. art. 4413(36), § 5.01B(c). position that Ford does not have a justification Fm1her, the Code makes it unlawful for a manufacturer defense, because rights of first refusal contravene Butnaru v. Ford Motor Co., 84 S.W.3d 198 (2002) 45-rex sup~ci J 9T6 certain Code provisions and, accordingly, are void inability to award monetary damages-demonstrate and unenforceable. See TEX.REV.CIV. STAT. m1. the contrary. Thus, this case is analogous to Cash 4413(36), § 5.01B(c) (prohibiting a manufacturer America, in which we held that the plaintiff did from unreasonably denying a dealership transfer); not have to exhaust administrative remedies under TEX.REV.CIV. STAT. art. 4413(36), § 1.04 (making the Pawnshop Act because "nothing in the statutory an agreement to waive the Code's terms void and scheme indicate[ d] that the Legislature intended to unenforceable). The Butnarus also request that the trial replace a pledgor's common-law remedies with the court enter a declaratory judgment that rights of first like-kind replacement remedy" available under the refusal violate the Code. statute. Cash Am., 35 S. W.3d at 18. Similarly, because the Code does not indicate the Legislature's intent to We conclude that the Butnarus' tortious interference replace the prospective transferees' remedies here, the and declaratory judgment claims fall outside the Butnarus do not have to exhaust any administrative purview of the Board's exclusive jurisdiction. In David remedies before suing Ford for tortious interference or Mc:DaPid N;.~·swl, we held that the Board's exclusive declaratory relief. jurisdiction under section 3.0l(a) required the dealer in that case to exhaust its administrative remedies 1121 But our inqui1y does not end here. Though to obtain a final Board finding to support its Code- the Legislature did not confer exclusive jurisdiction based DTPA, bad faith, and oral contract claims. David on the Board to resolve the Butnarus' claims, we i\IcDavid Nissan, 84 S.\V.3d at 226. In concluding still must decide whether the Board has primary that the Board's exclusive jurisdiction applied to the jurisdiction to resolve the Code construction issue that dealer's Code-based DTPA and bad-faith claims, we those claims raise. See, e.g, Cash Am.. 35 S.W.3d explained that the Code provides a hybrid claims- at 18 (recognizing that, though an agency does not resolution process by which a dealer or manufacturer have exclusive jurisdiction, the policies underlying the may seek damages for certain Code violations. David primary jurisdiction doctrine may require the agency 1\lcDavid Nissan, 84 S.\V.3d at 226 (discussing to initially decide an issue). In David klcDavid Nis:..-an. TEX.REV.CIV. STAT. m1. 4413(36), §§ 6.06(a), (e)). we explained that the primary jurisdiction doctrine Based on this process, we held that the dealer had requires trial courts to allow an administrative agency to exhaust its administrative remedies under the Code to initially decide an issue when: (1) an agency is to obtain supporting Board findings before a trial typically staffed with experts trained in handling the court could finally adjudicate the dealer's damages complex problems in the agency's purview; and (2) request for its Code-based claims. See David klcDavid great benefit is derived from an agency's uniformly Nissan. 84 S.\V.3d at 227. Additionally, in requiring interpreting its laws, rules, and regulations, whereas the dealer to obtain a Board finding before pursuing com1s and juries may reach different results under its oral contract cla.ims, we relied on a Code provision similar fact situations. David 1HcDavid Nissan, 84 mandating that a dealer obtain the Board's approval S.W.3d at 221 (citing United States v. JVestern l'oc. and a license before operating a franchise in a certain R.R. Co .. 352 U.S. 59, 64, 77 S.Ct. 161, I L.Ed.2d area. See David AfcDavid Nissan. 84 S.W.3d at 227 126 (1956); Cash Am., 35 S.W.3d at 18; /0(Jree v. (discussing TEX.REV.CIV. STAT. art. 4413(36). §§ Cro11•n Cent. Pefroleum Corp., 431 S.W .2d 312, 316 4.02(c). 4.06(a)-(e)). (Tex.1968); Gregg v. De/hi-Taylor Oil Corp .. 162 Tex. 26. 344 S. W .2d 41 I, 413 ( 1961 ); Kavanaugh Here, however, no Code provision extends the Board's v. Undet'll'riters L{/e Ins. Co., 131 S.W.1d 753, exclusive jurisdiction to resolving the Butnarus' 755 (Tex.Civ.App.-Waco 1950. writ refd); Travis, tortious interference and declaratory judgment claims Comment, Primwy Jurisdicfion: A General The01y so that they must exhaust any administrative remedies and Its Application to the Securities Exchange Act, before seeking judicial relief. In fact, the Code's failing 63 CAL. L.REV. 926, 927 ( 1975)). We noted that, to establish any procedure through which the Board when the primary jurisdiction doctrine requires a may resolve a prospective transferee's claim that a trial court to defer to an agency to make an initial manufacturer unlawfully refused to *208 accept a determination, the court should abate the lawsuit and dealer's transfer request-coupled with the Board's suspend finally adjudicating the claim until the agency Butnaru v. Ford Motor Co., 84 S.W.3d 198 (2002) 4HeX:SU-p~cTJ91s~----·~---- has an opportunity to act on the matter. David AkDavid 1131 The Butnarus contend that if the Board has Nissan, 84 S.W.3d at 221 (citing Central Power & exclusive jurisdiction over all Code issues and claims, Ught Co. l'. Public Uti/. Comm'n, 17 S. W.3d 780, 787 this violates our Constitution's open courts provision. (Tex.App.-Austin 2000. pet. denied); Roberls Express. TEX. CON ST. arl. I, § 13. This provision prohibits Inc. v. /~\pert Trunsp., Inc., 842 S.\:V.2d 766. 771 the Legislature from abrogating well-established, (Tex.App.-Dallas 1992, no writ)). common-law claims unless the reason for doing so outweighs a litigant's constitutional right of redress. We conclude that the primary jurisdiction doctrine See Texas Ass'n of Bus.. 852 S.W.2d at 448. applies in this case. The Butnarus' tortious interference and declaratory judgment claims raise a Code Jl4J But we have already concluded that the Board's construction issue that is within the Board's special exclusive jurisdiction does not extend to the claims competence and expertise. See Cash Am., 35 S.WJd in this case. Accordingly, the Code does not abrogate at 18. As discussed above, the Legislature has any previously existing common-law rights here. The specifically authorized the Board to resolve disputes trial coutt has immediate jurisdiction to adjudicate between a manufacturer and dealer when the dealer the Butnaru's common-law claims for breach of the alleges that the manufacturer violated section 5.0 I B purchase and sale agreements. And, after deferring by unreasonably withholding consent to transfer a to the Board so it has an opportunity to decide dealership. See TEX.REV.CIV. STAT. art. 44\3(36), the Code construction issue, the trial court may § 5.0 I B(d). The Board's expe11ise in construing finally adjudicate the tortious interference and related section 5.0 I B in these disputes, and the State's declaratory judgment claim. interest in a uniform interpretation of the Code, requires the trial comi to abate the lawsuit and suspend finally adjudicating the tortious interference D. TEMPORARY INJUNCTION and declarato1y judgment claims until the Board has a reasonable opportunity to *209 act on the The trial court temporarily enjoined Ford or its matter. See David McDal'id Nissan. 84 S.W.Jd at assignees from exercising its right of first refusal ~28: Central Power & Light. 17 S. W .3d at 787; during the suit. The court of appeals dissolved the Roberts t~:Ypress, 842 S.\V .2d at 771. Accordingly, temporary injunction, agreeing with Ford's contention the trial cou1i should abate the claims pending the that the Butnarus did not establish an inadequate legal Board having an opportunity to exercise its primary remedy. 18 S. W.3d at 769. In so concluding, the court jurisdiction to determine, at least in the first instance, of appeals noted that generally a court will not enforce whether a right of first refusal violates the Code. In contracts by injunction because a suit for damages sum, we hold that section 3.0 I (a) confers exclusive is deemed to be an adequate remedy. 18 S.\V.3d at jurisdiction on the Board but only over issues and 769. The Butnarus respond twofold. First, they argue claims the Code governs. Here, the Code does not that they were not required to show an inadequate govern the Butnarus'-as prospective transferees- legal remedy because an alleged statutory violation tortious interference and declaratory judgment claims. relieves a movant of that burden. See Furr v. Hall, Consequently, the Butnarus do not have to exhaust any 553 S.W.2d 666, 672 (Tex.Civ.App.-Amarillo 1977, administrative remedies before raising these claims in writ refd n.r.e.). They assert that courts have a duty to the trial court. However, because these claims raise enjoin statutory violations. See Priest v. Texas Aninwl a Code construction issue, the primary jurisdiction Heallh Comm'n, 780 S.W.2d 874, 876 (Tex.App.- doctrine requires the trial court to abate the claims Dallas 1989, no writ). Second, the Butnarus argue pending the Board having a reasonable opportunity to that they have otherwise established the temporary- determine whether a right of first refusal violates the injunction elements. On the inadequate legal remedy Code. element, they argue that Ford's exercising its right of first refusal would deprive them of the opportunity to purchase two unique assets: real property and the C. OPEN COURTS CHALLENGE dealership located on the property. See, e.g., Home S'av. of Am. v. Van Cleave /)ev. Co .. 737 S.W.2d 58, Butnaru v. Ford Motor Co., 84 S.W.3d 198 (2002) 59 (Tex.App.-San Antonio 1987. no writ) (noting that purchase the real property and dealership would be lost "each and every piece of real estate is unique" and that if Ford exercised its right of first refusal, and, therefore, "is ce1iainly an element to be considered in deciding injunctive relief was necessary to preserve the status whether there [will be] irreparable damages"). quo. At the temporary injunction hearing, the Butnarus presented the following evidence: (1) their agreement *2IO I. Statutory Violation with Grafand Ba11on to purchase the real property, (2) j15J The Butnarus' misplace their reliance on FwT their agreement with Graf and Graf Ford to purchase See Furr. 553 S.\V.2d at 672. Furr does not generally the dealership, (3) Graf Ford's agreement with Ford propose that an alleged statutory violation relieves containing the right of first refusal that allegedly the plaintiffs burden to show an inadequate legal violates the Code, (4) the Code provisions that remedy. Rather, the party seeking injunctive relief in allegedly prohibit Ford's right of first refusal provision, Furr relied on a specific statute giving the right to and (5) the Butnarus' dealership application to Ford an injunction, and the court of appeals concluded that detailing their business experience and financial the statutory right relieved the party from proving an qualifications. Additionally, Hanan Butnaru testified inadequate legal remedy. Furr. 553 S.W.2d at672. The about his agreements with Graf, GrafFord, and Barton court relied on Republic Insurance Co. v. O'Donnell to purchase dealership and the real prope11y in Del Rio. Afotor Co., which explains: He stated that in planning to establish "a dealership, he was only looking within a I 00 mile radius of San The general rule at equity is Antonio, which includes Del Rio. He also explained, that before injunctive relief can and the agreements entered in evidence showed, that be obtained, it must appear the Butnarus agreed to pay $1.2 million for the real that there does not exist an prope11y and only $500,000 for the dealership. adequate remedy at law. This limitation, however, has no Based on the Butnarus' allegations and this evidence, application where the right the trial court granted the temporary injunction. The to relief is predicated on a trial court stated in the order that the Butnarus would statutory ground other than on be irreparably harmed if Ford exercises its right of the general principles of equity. first refusal "in that the issues and rights sought to be adjudicated will become moot and [the Butnarus] will 289 S.W. 1064. 1066 (Tex.Civ.App.-Dallas 1926. no have lost the opportunity to purchase the Dealership vvrit). and the Real Prope11y." Here, the Butnarus rely on general equitable principles, The com1 of appeals, however, dissolved the not a statutory injunctive-relief right, to enjoin Ford's temporary injunction after concluding that the conduct. Thus, Furr does not apply. And the Butnarus Butnarus did not establish an inadequate legal remedy: had to establish in the trial court, in addition to the other temporary-injunction elements, an inadequate The Butnarus are not interested legal remedy. in the real property for its own resources or aesthetics. Their interest in the property results solely from the fact that 2. Temporary Injunction Elements the dealership is located on [I 6[ In the trial court, the Butnarus alleged that Ford's it. Thus, their true complaint exercising its right of first refusal would tortiously relates to their inability to interfere with the Butnarus' contract to purchase purchase the dealership. The the real property and the contract to purchase the uniqueness *211 of the real dealership. They further contended that their right to property is therefore itTelevant Next  to the adequacy of their legal not arbitrary and unreasonable and was not made remedy. without reference to guiding rules and principles. And, because the trial court's determination was not an abuse I 8 S.W.3d at 769. The court of appeals' holding is of discretion, the court of appeals should not have predicated upon its assumptions that the real property substituted its judgment for that of the trial court. is neither unique nor pertinent to this dispute and Beaumont Bank, 806 S.\V.2d at 226. that the Butnarus are only interested in purchasing the dealership. Ford contends that the court of appeals could have also detennined that the Butnarus did not establish a [17[ [18[ [19[ [20[ We agree with the cour\>robable right to recovery. We disagree. The trial court of appeals that, generally, a com1 will not enforce could reasonably conclude, based on the Butnarus' contractual rights by injunction, because a party can allegations and the evidence previously discussed, that rarely establish an irreparable injury and an inadequate the Butnarus had a probable right to recovery. See Sun legal remedy when damages for breach of contract are Oil. 424 s. W.:?.d at 218 (stating that the temporary available. Can/een Corp .. 773 S. \V.2d at 40 I; Chevron injunction applicant is not required to establish that it U.S.A .. Inc v. Stoker, 666 S.W.2d 379,382 (Tex.App.- will prevail on final trial and need only plead a cause of Eastland 1984. writ clism'd). But under an abuse action and show a probable right to the relief sought). of discretion standard, the cow1 of appeals cannot Because this conclusion was not "so arbitrary as to overrule the trial court's decision unless the trial com1 exceed the bounds of reasonable discretion," CRC·" acted unreasonably or in an arbitrary manner, without Evans Pipeline tnt'!. Inc. v. Afyers, 927 S.W.2d 259, reference to guiding rules or principles. Beaumont 262 (Tex.App.-Houston [I st Dist.] I 996. no writ), the Bank v. Buller, 806 S. W.2d 123, 126 (Tex. I 99 I); trial court did not abuse its discretion in finding a Davis, 571 S.W.2d at 861-62. Moreover, the cou11 probable right to recovery. of appeals cannot substitute its judgment for the trial comes reasonable judgment even if it would have Accordingly, we conclude that there is evidence to reached a contrary conclusion. f.Va/ker v. Packer, 827 support the trial court's decision to issue the temporary S.W.2d 833,839-40 (Tex.J992); Beaumont Bank 806 injunction. See Davis. 571 S.W.2d at 862. Thus, the S.W.2d at 226. The trial court does not abuse its *212 trial court did not abuse its discretion, and discretion if some evidence reasonably supports the we reverse the court of appeals' order dissolving the trial cou11's decision. Davis, 571 S. W .2d at 862. temporary injunction. [211 The evidence shows this is a case involving two contracts: a contract to purchase land and a contract to purchase a business. There is some evidence that IV. CONCLUSION the Butnarus desired valuable land located at this Section 3.0 I(a) grants the Board exclusive jurisdiction specific Del Rio location. Thus, the evidence before but only over the issues and claims the Code the trial court supports its conclusion that this dispute governs. Because the Code does not govern, or is about the right to purchase real property wmih expressly authorize the Board to resolve, the Butnarus' at least $1.2 million and not just the dealership tortious interference and declaratory judgment claims, itself. See /lome SaF.. 737 S.W.2d at 59 (upholding these prospective transferees need not exhaust any tempormy injunction in dispute involving land worth administrative remedies before the trial court has $1.5 million). And a trial court may grant equitable jurisdiction over these claims. However, under the relief when a dispute involves real prope1ty. See primary jurisdiction doctrine, the trial court should llenne/1 v. Copeland, 149 Tex. 474. 235 S.W.2d abate these claims to the extent that may be necessary 605. 609 (I 95 I); 10.1. DuPont de Nemours & Co. F. to allow the Board a reasonable opportunity to resolve Za/e Corp., 462 S.W.2d 355, 359-60 (Tex.Civ.App.- the Code construction issue they raise. Finally, the Dallas 1970, writ refd n.r.e. ); llumellv. Mitchell, I58 trial court did not abuse its discretion in granting S.W. 800, 801-02 (Tex.Civ.App.-Fort Worth 1913, the temporary injunction. Thus, we reverse the court writ re-rd). Thus, the trial comt's conclusion that the of appeals' judgment and remand the cause to the Butnarus do not have an adequate legal remedy was trial court for further proceedings consistent with this Parallel Citations opinion on rehearing. 45 Tex. Sup. Ct. J. 916 Footnotes Unless otherwise indicated, ';the Code" refers to the Texas Motor Vehicle Commission Code, and "the Board" refers to the Motor Vehicle Board. See TEX.REV.CIV. STAT. nrt. 4413(36). End of Document © 2015 Tt10mson Reuters. No c!alm to original U.S. Government Work:s. Tab 6 City of Houston v. Harrison, 778 S.W.2d 916 (1989) was filed and in holding attorneys in contempt for their failure to do so, despite 778 S.W.2d 916 attorneys' contentions that answers Court of Appeals of Texas, would divulge privileged attorney~client Houston (14th Dist.). communications and privileged attorney CITY OF HOUSTON, Diana Kay Ball, work product. and Robert John Collins, Relators, Cases that cite this headnote v. Hon. Ken HARRISON, Judge, 165th Judicial District Harris County, Respondent. Attorneys and Law Firms No. B14-89-00821-CV. Nov. 2, 1989. *917 Diana K. Ball, Robert J. Collins, Houston, City and city attorneys filed motion for leave to file Russell H. McMains, Corpus Christi, Byron Lee, petition for writ of mandamus requesting court to order Houston, for relators. county COUit judge to vacate his orders holding city attorneys in contempt for refusing to answer certain Paul Spradlin, W. James Krenzer, Houston, for deposition questions. The Court of Appeals held that respondent. judge did not abuse his discretion in ordering attorneys to answer certain questions and in holding them in Before MURPHY, ROBERTSON and SEARS, JJ. contempt for their failure to do so. Motion overruled. OPINION PER CURIAM. West Headnotes (2) On September I, 1989, relators filed a motion for leave to file petition for writ of mandamus requesting this Court to order respondent to vacate his orders signed Ill Mandamus August 28, 1989. ___;. Remedy at Law Mandamus issues only to correct clear The orders of August 28, 1989, held both Diana abuse of discretion or violation of duty Kay Ball and Robert John Collins in contempt of imposed by law when there is no other court for failing to answer questions propounded to adequate remedy by law. them during a deposition. The order further commands Ball and Collins to answer the objectionable Cases that cite this headnote questions. Respondent suspended the sentence pending mandamus review. Diana Kay Ball and Robert Contempt John Collins refused to answer the questions on ..-:-, Disobedience to Mandate. Order, or the grounds their answers would divulge privileged Judgment attomey~client communications of the City and Where city's bill of review made several privileged attomey work product. Collins additionally specific and serious allegations against invoked the party communications privilege. worker's compensation benefits claimant, trial court did not abuse its discretion Jay Howard Hill sought worker's compensation in ordering city attorneys to answer benefits from the City and damages for the City's certain deposition questions propounded alleged breach of the duty of good faith and fair dealing to discover what reasonable inquiry in handling his claim. Respondent rendered a total and attorneys had made before bill of review permanent incapacity judgment for Hill. The breach of good faith and fair dealing was severed from the ~it~.o~ Houston v. Harrison, 778 S.W.2d 916 (1989) *918 TEX.R.CIV.P. 13 provides: The signatures of worker's compensation claim and tried separately in a attorneys or pmties constitute a certificate by them that bench trial. On September 7, 1988, respondent signed they have read the pleading, motion, or other paper; the judgment awarding damages to Hill. The City was that to the best of their knowledge, information, and unaware of the judgment until May 1989, when Hill belief formed after reasonable inquby the instrument made a demand for payment. is not groundless and brought in bad faith or groundless and brought for the purpose of harassment. Sanctions The City filed a bill of review on June 19, 1989. In its petition the City made several specific are available for the violation of this rule. and serious allegations that "Hill, acting by and through Hill's attorney of record, Mr. James !II [2[ It is clear that the questions propounded sought to discover what reasonable inquiry had been R. Spradlin, fraudulently, wrongfully, knowingly, made before the bill of review was filed. Mandamus and intentionally, or accidentally and mistakenly" issues only to correct a clear abuse of discretion or committed several wrongful acts. On August 1, 1989, the violation of a duty imposed by law when there is Hill subpoenaed Ball, an attorney for the City, to no other adequate remedy by law . .Johnson v. Fourth testify by deposition. On August 2, 1989, Hill filed a Court ofAppeais. 700 S.W.2d 916 (Tex.l985 ). A trial motion for sanctions under TEX.R.CIV.P. 13. At the court abuses its discretion when it reaches a decision so deposition, Hill sought to discover what inquiries Ball arbitrary and unreasonable as to amount to a clear and made into the bill of review allegations before signing prejudicial error of law. Jd. A relator who attacks the and filing the petition. Ball refused to answer these ruling of a trial court as an abuse of discretion labors questions contending the information is privileged. under a heavy burden. !d. The relator must establish, Respondent ordered her to answer the questions and under the circumstances of the case, that the facts and found her in contempt of court for failing to answer. law permit the trial court to make but one decision. !d. This the relators have failed to do. We find respondent Hill noticed the deposition of Collins. At the did not abuse its discretion in ordering Ball and Collins deposition, Collins refused to answer questions, to answer certain questions and in holding Ball and similar to the ones asked of Ball, claiming the Collins in contempt for their failure to do so. information is privileged. Respondent ordered Collins to answer the questions and found him in contempt of Accordingly, we overrule relators' motion for leave to cou1t for refusing to answer. file petition for writ of mandamus. End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works. Tab 7 In re Continental Airlines, Inc., 305 S.W.3d 849 (201 0) --·----- Cases that cite this headnote 305 S.W.3d 849 Court of Appeals of Texas, Houston (14th Dist.). 121 Appeal and Error '--- Abuse of discretion In re CONTINENTAL A trial comt abuses its discretion if AIRLINES, INC., Relator. it reaches a decision so arbitrary and unreasonable as to constitute a clear and No. 14-09-00952-CV. Feb. 4, 2010. prejudicial error of Jaw, or if it clearly fails to correctly analyze or apply the Jaw. Synopsis Background: After plaintiffs in negligence suit Cases that cite this headnote involving airline crash noticed deposition of airline's chief executive officer (CEO), airline moved to quash the deposition, and plaintiffs moved to compel it. The 131 Mandamus II th District Court, Harris County, Mike Miller, J., .-""' Proceedings in civil actions in granted motion to compel. Airline field petition for general writ of mandamus. Mandamus is an appropriate remedy when a trial court allows an apex deposition to go forward in violation of the standard governing such discovery. Holdings: The Cow1 of Appeals, Charles W. Seymore, J., held that: Cases that cite this headnote [1] plaintiffs failed to arguably show that the CEO had any unique or superior knowledge of discoverable 141 Pretrial Procedure ~;o;. Corporate officers, agents. and information, and employees [2] plaintiffs failed to show that less intrusive methods If the party seeking the apex deposition of discovery were inadequate to obtain information of a high-level corporate official cannot they were seeking. show that the official has any unique or superior personal knowledge of discoverable information, the trial cou1t Writ conditionally granted. should not allow the deposition to go forward without a showing, after a good faith effort to obtain the discovery through less intrusive means, ( 1) that there is a West Headnotes (8) reasonable indication that the official's deposition is calculated to lead to the Ill Mandamus discovery of admissible evidence, and ___ Remedy by Appeal or Writ of Error (2) that the less intrusive methods of Mandamus discovery are unsatisfactory, insufficient ~-··" !\.'tatters of discretion or inadequate. To be entitled to extraordinary relief in a I Cases that cite this headnote writ of mandamus, the relator must show the trial court clearly abused its discretion and there is no adequate remedy by 151 Pretrial Procedure appeal. -"'"' Corporate officers. agents, and employees In re Continental Airlines, Inc., 305 S.W.3d 849 (2010) Plaintiffs in negligence suit arising from airline accident failed to arguably show I Cases that cite this headnote that, following airline 1s chief executive officer's (CEO) public statements, he had 181 Pretrinl Procedure any unique or superior knowledge of ~-= Corporate officers. agents, and discoverable information, as required to employees support motion to compel his deposition; Plaintiffs in negligence suit arising from CEO stated that information he gave at airline accident failed to show that press conference was provided to him less intrusive methods of discovery by other airline employees, that he did were inadequate to obtain information not discuss with "deadheading'' pilots they were seeking regarding negligence, what occurred before, during, and after proximate cause, or damages, as accident, and that he had not received required to support motion to compel information about cause of accident in deposition of airline's chief executive executive briefs. officer (CEO); although plaintiffs I Cases that cite this headnote had deposed some crew members, they had not noticed depositions of airline's corporate representative, other 161 Prctrinl Procedure individuals present in meetings where Corporate ofticers, agents. and CEO received information about accident, employees other employees who were more directly The testimony that a corporate executive involved in supporting ongoing National possesses knowledge of company policies Transportation Safety Board (NTSB) does not, without more, satisfy arguable investigation, or those described by CEO showing that executive has unique in his affidavit as having responsibility in or superior knowledge of discoverable particular areas of inquiry. infmmation, as required to support motion to compel deposition of such official. 2 Cases that cite this headnote I Cases that cite this headnote Pretrinl Procedure Attorneys and Law Firms 171 ,= Corporate officers, agents. and *850 George Lucas Ashley, John H. Martin, Dallas, employees TX, Juan Carlos Garcia. Sr., Morgan Lindsey Gaskin, Requirement that patty seeking Houston, TX, for Relator. deposition of a corporate president or other high level corporate official Jason A. Gibson, Houston, TX, for Real Party in must first attempt to obtain discovery Interest. through Jess obtrusive means is not perfunctorily met by any showing that the Panel consists of Chief Justice !·lEDGES and Justices party employed le~s-intrusive discovery SEYMORE and SULLIVAN. methods, but by whether discovering party made a reasonable effmt to obtain discovery through less-intrusive methods; OPINION merely completing some less-intrusive CHARLES W. SEYMORE, Justice. discovery does not trigger an automatic right to depose the apex official. November 12,2009, relator, Continental Airlines, Inc., filed a petition for writ of *851 mandamus in this ~Je:-:t In re Continental Airlines, Inc., 305 S.W.3d 849 (2010) Court. See Tex. Gov't Code Ann.* 22.221 (Vernon deadheading pilots aboard Flight 1404 and personally 2004); see also Tex.R.App. P. 52. In the petition, awarded commendation plaques to crew and flight relator asks this Comt to compel the Honorable Mike members; and (5) Kellner, who serves on the Board Miller, presiding judge of the II th District Cowt of of Directors for Air Transport Association of America Harris County, ·to set aside his October 26, 2009 ("ATA"), an airline industry organization dedicated to order compelling the deposition of Larry Kellner, ensuring the safety of airline passengers, has superior Chief Executive Officer and Chairman of the Board of knowledge as to Continental's implementation of Directors of Continental. We conditionally grant the ATA's policies. On October 19, 2009, Continental petition. filed a motion for protective order and response to the motion to compel, with Kellner's affidavit in which he testified that he has no unique or superior knowledge. BACKGROUND On October 26, 2009, the trial cowt held a hearing On December 20, 2008, Continental Flight 1404 was on the plaintiffs motion to compel and Continental's involved in an accident when it departed from the motion for protection.· The trial court granted the runway during takeoff from the Denver International motion to compel Kellner's deposition, and orally Airport. There were no fatalities, but 37 passengers and stated that the deposition was limited to two hours and crew were transported to the hospital. to actions and statements by Kellner relating to the crash of Flight 1404. On October 26, 2009, the trial Larry Kellner, Continental's Chief Executive Officer court signed the order granting the motion to compel, and Chairman of the Board of Directors, gave denying the motion for protective order, and granting a statement and answered questions at a press the motion to quash. *852 However, the trial cou1t conference following the accident. On December 22, did not mention the above limitation on the deposition 2008, Kellner sent a letter to the passengers expressing in its order. 2 his concern for the accident. The plaintiffs brought suit against Continental for negligence. 1 MANDAMUS STANDARD OF REVIEW On October 6, 2009, the plaintiffs noticed the deposition of Kellner for November 5, 2009. On Ill [21 131 To be entitled to extraordinary relief October 9, 2009, Continental filed a motion to quash in a writ of mandamus, the relator must show the the deposition, arguing that Kellner has no unique trial court clearly abused its discretion and there is no or superior knowledge of discoverable information adequate remedy by appeal. !nre Team Rocket. 1".1'., and the plaintiffs have not attempted to obtain 256 S.W.3d 257,259 (Tex.2008) (orig. proceeding). A discovery through less intrusive methods. See Crown trial court abuses its discretion if it reaches a decision Cent. Petroleum Corp. v. Garcia. 904 S.W.:2d so arbitrary and unreasonable as to constitute a clear 125 (Tex.l995) (orig. proceeding). Continental also and prejudicial error of law, or if it clearly fails to objected to the time and place set forth in the notice correctly analyze or apply the law. In re C:erherus because Kellner had prior commitments requiring him Capital ,\.~gmt .. L.l'., 164 S.W.3d 379,382 (Tex.2005) to be out of town on that date. (orig. proceeding) (per curiam); JYa/ker v. Packer, 827 S.W.2d 833, 839 (Tex.l992) (orig. proceeding). On October 9, 2009, the plaintiffs moved to compel Mandamus is an appropriate remedy when a trial court Kellner's deposition, arguing that he has unique or allows an apex deposition to go forward in violation superior knowledge of discoverable information as of the standard governing such discovery. E.g., In re shown by the following: (I) Kellner immediately Pmd,. X. :lm., Inc., No. 01-06-00613-CV, 2006 WL briefed media members on details of the crash; (2) :219:2546, at *:2-3 (Tex.App.-Houston [1st Dist.] Aug. Kellner stated, on numerous occasions, he would learn 4, 2006. orig. proceeding) (mem. op.). the cause of the crash to prevent future crashes; (3) Kellner sent personal letters to Flight 1404 passengers after the crash; (4) Kellner interviewed the In re Continental Airlines, Inc., 305 S.W.3d 849 (2010) discove1y and the comt has sufficient information to consider both prongs of the guidelines. !d. CROWN CENTRAL GUIDELINES The standard governing apex depositions originates in Crown Central Petroleum Corporation, 904 S.W.ld ANALYSIS at 128. The Crown Cenlra/ guidelines apply "[w]hen a party seeks to depose a corporate president or other high level corporate official and that official Unique or Superior Knowledge (or corporation) files a motion for protective order to Continental asse1ts that it met its burden for invoking prohibit the deposition accompanied by the official's the apex procedure set f01th in Crown Central. In his affidavit denying any knowledge of facts .... " ld affidavit, Kellner testified, in relevant part: A party initiates the CroH'n Cenfral guidelines by moving for protection and filing the corporate official's ... While I have knowledge affidavit denying any knowledge of relevant facts. In of some facts relating to reA!ca/el li.SA. Inc .. II S.W.3d 173, 175 (Tex.2000) the accident by reason of (orig. proceeding). my position as CEO, I do not possess any unique or 141 151 "The trial court evaluates the motion first superior personal knowledge by deciding if the pmty seeking the deposition has beyond that of other senior 'arguably shown that the official has any unique or management personnel at superior knowledge of discoverable information.' " Jd Continental who are involved at 175-76 (quoting Crown Cent. Pe/ro/ewn Corp .. 904 in the day-to-day management S.W.2d at 128)." 'If the party seeking the deposition of the airline's operations cannot show that the official has any unique or superior generally and who were knowledge of discoverable information, the trial court involved in the response should' not allow the deposition to go forward without activities as a result of the a showing, after a good faith effort to obtain the accident specifically. discovery through less intrusive means, '(I) that there is a reasonable indication that the official's deposition The plaintiffs claim they seek to depose Kellner is calculated to lead to the discovery of admissible because he has first-hand knowledge of relevant facts evidence, and (2) that the Jess intrusive methods such as information about the events leading up of discovery *853 are unsatisfactory, insufficient to and during the crash of Flight 1404, and how 6r inadequate.' " ld at 176 (quoting Croll'n Cenl. Continental planned to handle passengers' claims and Petroleum Corp., 904 S.W.2d at 128). prevent similar crashes in the future. Continental argues that it is not sufficient to show that Kellner In In re Alcalel U5>1, the Texas Supreme Court has unique or superior knowledge of some facts or recognized that these guidelines could be read as matters concerning the subject matter, but of facts requiring trial courts to unde1take two hearings or matters relevant to the contested fact issues of and issue two orders. !d. "We recognize that these the litigation, i.e., whether Continental's negligence, guidelines could be read as requiring trial courts to if any, proximately caused the accident, and what unde1take two hearings and issue two orders: First, a injuries and damages, if any, each plaintiff sustained. hearing on whether to grant a protective order and, if one is granted, then a second hearing, after less The plaintiffs contend that Kellner began his hands- intrusive methods of discovery have been explored, on involvement when he held a press conference just to determine whether the protective order should be hours after the crash at which he stated that Continental dissolved." !d. Therefore, a "mechanical" application "will do whatever we can to learn the cause of of the Crown Central guidelines is not necessary this accident so that we can prevent a recurrence at when the pmties have already undertaken extensive Continental or at any other airline." 'I In re Continental Airlines, Inc., 305 S.W.3d 849 (2010) At the press conference, Kellner generally stated In his affidavit, Kellner stated that the information he that Continental "will do everything we can for provided at the press conference was not unique or the passengers, their families, and our coworkers." superior individual knowledge because it was given Kellner further recited the basic facts of the accident, to him by other individuals at Continental. Moreover, that a number of injuries had been reported, Continental argues that none of Kellner's public and passengers and crew had been transported to statements made after the accident have anything to area hospitals. Kellner also stated that Continental do with whether the flight crew acted negligently, or was mobilizing its "Accident Go Team," which whether the passengers actually sustained any injuries is comprised of Continental experts-people from in the accident. safety, air traffic control, engineering, maintenance, and flight operations-to assist in the investigation. The plaintiffs further assert that the December 22, 2008 Kellner concluded his statement by saying: "We will letter sent after the crash to each passenger reiterates continue to do eve1ything we can for the passengers, Kellner's involvement. The December 22, 2008 Jetter crew, and their families. We will also do whatever we states: can to learn the cause of this accident so that we can prevent a reoccurrence at Continental.. .. " Let me begin by expressing my deep personal concern for the distressing experience you had as In response to questions at the press conference, a passenger aboard our flight 1404 on December Kellner stated: 20, 2008. We regret that you had to go through this experience and are working diligently with the • "We'll work with each of the passengers individually National Transportation Safety Board to determine to do what's best for them. Obviously this has been a the cause of the accident and to help make sure very difficult evening for them, even if they weren't that something like this never again occurs at injured and didn't go to the hospital, and so we'll Continental or any other airline. address that on a passenger-by-passenger basis." I would like to personally thank you for your quick *854 • "I know at this time, Jive given you all the facts response during the evacuation of the aircraft and I know. As I mentioned, we'll have our Go Team apologize for what you had to go through. The safety going up there later this morning. A few hours, of our passengers and crew is our highest priority. they'll leave here. We'll work with the NTSB and there'll be a full and thorough investigation." On behalf of my co-workers at Continental, please allow me to express once again my deepest regret "Again, all we know is that it was taking offi.] for your experience on board flight 1404. It was about 6:00 p.m. Mountain Standard Time and that it veered off the runway, slides were The plaintiffs contend that the information Kellner deployed, but we're not really ... Again, we'll do a states he intends to uncover while working with the full investigation. NTSB will do a full-will lead a NTSB is discoverable because it pertains directly to the full investigation. We'll assist with that; and as those basis oftheir claims. In this affidavit, however, Kellner facts come out, we'll give them to you." stated that he has no unique or personal knowledge of the investigation into the cause of the accident. • "I don't want to go into too much of it and what Kellner explained that the NTSB, not Continental, is was in the weather there. There's nothing specific conducting the official investigation into the cause of that's come up on the weather as far as snow or the accident, and Continental continues to cooperate those type [sic] of items. But I really want to Jet the with the NTSB investigation. investigation more [sic] forward to figure out what happened as far as the cause of the accident. But Federal Jaw provides that the NTSB, not Continental, there's nothing specific I'd comment on the weather is to conduct the investigation of the accident, and at this moment." will determine the cause or probable cause of the accident. 3 Continental, as a pmty designated *855 by the NTSB to participate in the investigation, is In re Continental Airlines, Inc., 305 S.W.3d 849 (2010) prohibited from conducting its own inVestigation into the cause of the accident during the pendency of *** the NTSB investigation. 4 Here, Continental is not Q. (BY MR. GJBSON)-when something like this conducting the investigation to determine the probable happens? cause of the accident. A. 1-I'm sure it is. Moreover, Kellner stated that Toby Can-oil is Continental's representative relative to the NTSB Q. And what does an executive summary consist of? investigation. The plaintiffs have not stated whether they have taken Carroll's deposition or, if so, that they *** were unable to elicit the information they are seeking. Therefore, Kellner has shown that he does not have A. Well, in my opinion, it would be just the- the facts as we know them and the circumstances unique or superior knowledge relative to the cause of surrounding the-the incident, accident, whatever the accident. the situation was. The plaintiffs further argue that the information *856 Q. (BY MR. GIBSON) Do you know who's and facts Kellner has learned about the cause of responsible for preparing that brief? the accident in executive briefs provide him with unique and superior knowledge. They assert that A.No. the deposition testimony of Continental's chief pilot shows that based on Continental's standard operating Q. Have you reviewed the executive brief in this procedure, Kellner received executive briefs about case that was given to Mr. Kellner? "'what's going on and what's happening in this case." Andrew Jost testified: *** Q. Do you know anybody that's talked to Mr. A. 1-I have-! can't even say that it exits. I'm just Kellner personally about this crash? thinking it does, so .... A.No. In his affidavit, Kellner states, in the days immediately following the accident, that he received briefing about Q. Not that it hasn't happened; you just don't know the accident, "primarily related to the status and about it? effectiveness of the passenger and family assistance efforts in Denver and Houston, the general health A. Correct. and well-being of the passengers and crew, and Q. Would Mr. Kellner-based on the policies and Continental's media response to the accident." 5 procedures that you know that are in place internally Therefore, he did not acquire any unique or superior at Continental Airlines, Mr. Kellner would have knowledge about the cause of the accident as a result a pretty good idea of what's going on and what's of post-accident briefings. A review of lost's testimony happened in this case, don't you think? shows that he has never reviewed an executive brief and that he does not know what information an *** executive brief contains. Therefore, Jest's testimony does not contradict Kellner's statement that no unique A. Well, I'm sure Mr. Kellner has received a or superior personal knowledge has been acquired executive brief or----or some briefing in some through these briefings. fashion. Q. (BY MR. GIBSON) It is standard operating The plaintiffs further claim that Kellner continued procedure of Continental for-for Mr. Kellner or to take an active role in learning the details of the CEO of-of the airline to receive an--executive what caused the accident when he interviewed the summary- deadheading pilots on·Fiight 1404, Richard Lowe and ---~ --~~--~ .. --~---·----·~---··-·--- Ne~:t d;;;::Y· tt. i!C: i:Di U .~~ In re Continental Airlines, Inc., 305 S.W.3d 849 (2010) Richard Green. 6 According to the plaintiffs, when Are you okay? Wow, great job. What do you need? Lowe and Green arrived back in Houston, Kellner What can we do for you? met with them to discuss what occurred before, Q. Not what happened. during, and after the crash. Kellner also awarded recognition plaques to the crew and pilot members, A. 1-1 really don't recall that.... And 1-1 think which evidences Kellner's "hands on" involvement. more than anything there was a concern for-for our wellbeing and-and more along the lines of, hey, Todd Green testified regarding the identity of those we'll figure out what happened later. What can we do who attended the meeting, but did not recite what was for you? And so that's-that's what I seem to recall. said at the meeting: Green's and Lowe's testimony refute the plaintiffs' A. And there was a-a brief-] should say a short claim that Kellner interviewed them to discuss what debrief that was agreed upon there at the airport. occurred before, during, and after the accident. Moreover, consistent with Lowe's testimony, Kellner *** stated, in his affidavit, that he spoke briefly with Q. Lefs talk about that meeting when you got back each crew member and the deadheading pilots after to Houston. When was that? the accident, "but the purpose of these conversations was to express my concern for their health and well- being .... I did not seek to uncover any details about *** activities in the cockpit or what may have caused the Q. And Mr. Kelleher [sic]? accident, and none were provided." A. He was there briefly. He was there-met the Lowe's testimony confinns the plaintiffs' claim that flight, and he did come in and-and talk to us once recognition plaques were awarded to the crew and pilot or twice. He talked to everyone on the airplane members. Lowe received "a recognition-type plaque initially. that was-that was given to me at the CEO exchange as well as the other crew members, pilot members But I did meet with him. There may have been that were there." It is difficult to see how awarding some other people, also. I don't remember the ALPA recognitions plaques to the crew and member pilots representatives that were there. There weren't any is evidence of hands-on involvement in determining ALPA lawyers, but there-an-an ALPA from our the cause of the crash or that Kellner has unique or superior personal knowledge of the events surrounding Q. Pilots. the accident. A. union. Pilots, yes. The plaintiffs further argue that Kellner, as a board- member for the Air Transpoti Association of America And Richard and I, Kelly, those two gentlemen- ("ATA"), has superior and unique knowledge as to oil, Kip Commodore, one of our assistant chiefs- Continental's implementation of operational and safety chief pilots, and I believe that was all in the room practices. The plaintiffs rely on the following ATA when were based-when we were talking. mission statement: *857 Richard Lowe testified about what occurred at ATA serves its member the meeting: airlines and their customers by assisting the airline Q. In this meeting, were they asking all of you what industry in continuing to happened? provide the world's safest system of transpOiiation; A. It-it wasn't geared towards that. It was more of, transmitting technical expe1iise you know, how are you doing? How are you feeling? and operational knowledge to -------- Next 2(;•; Th~·n ·~.e;~-~ r:~euters 1-Jo _.ia:rYl (!! In re Continental Airlines, Inc., 305 S.W.3d 849 (201 0) improve safety, service and inquiry is what effect, if any, the statement has on efficiency ... a particular passenger, not what Kellner subjectively intended by the utterance. The plaintiffs contend that Kellner has unique and superior knowledge of how Continental works with 161 In addition, the testimony that a corporate the AT A to provide the "world's safest" system executive possesses knowledge of company policies of transportation and how Continental implements does not, without more, satisfy the first Crmm technical expetiise and operational knowledge to Central test because such evidence does not show that ensure the safety of its passengers. the executive has unique or superior knowledge of discoverable information. In re .•1/cate/ USA, inc., II In his affidavit, Kellner states that his position "on S.W.3d at 177; see also AMR C01p. v. Enlow, 926 the Board does not give me any 'superior or unique S.W.2d 640. 641 (Tex.App.-Fort Worth 1996. orig. knowledge as to Continental's imJ?lernentation of proceeding) (holding testimony that AMR's president, operational and safety practices' as alleged by the CEO, and chairman of board would have ultimate plaintiffs." Kellner further explained that Captain Don authority over any policy because he had "about all Gunther has direct responsibility for implementation the authority he needs on most issues in business" of operational and safety practices at Continental amounted to "nothing more than the simple, obvious and also serves as Continental's representative on the recognition that the highest-ranking corporate officer AT A's safety committee. The plaintiffs have not stated of any corporation has the ultimate responsibility for whether they have deposed Gunther or that he has all corporate decisions and falls farshort of the [Croll'n not or will not be able to provide the information Central] standard"). 7 they seek. Kellner has demonstrated that he does not have unique or superior knowledge regarding of Here, Kellner has shown that he does not have Continental's implementation of operational and safety unique or superior knowledge regarding what occurred practices. before and during the accident or the cause of the accident. Kellner stated that the information he gave The plaintiffs also rely on Kellner's statement about at the press conference was provided to him by other individual passengers and how Continental will handle Continental employees; he provided the name of the each case on a passenger-by-passenger basis: Continental employee who is its pmiy representative to the NTSB investigation; he did not discuss with We'll work with each of the the deadheading pilots what occurred before, during, passengers individually to do and after the accident; he has not received information what's best for them. Obviously about the cause of the accident in the executive this has been a very difficult briefs; and he named the Continental employee who *858 evening for them, even has direct responsibility for the implementation of if they weren't injured or didn't operational and safety practices at Continental and go to the hospital, and so we'll serves as Continental's representative on the ATA address that on a passenger-by- safety committee. See In re Daisy .Hamtfhcturing passenger basis. Company, 17 S.W.3d 654. 659 (Tex.2000) (orig. proceeding) (per curiam) (explaining that even ifDaisy In support of their mental anguish claims, the plaintiffs Manufacturing's CEO were deposed, he had little first- contend it is vital to know what Kellner meant by hand information about areas of inquiry). this statement, pmiicularly in consideration of those passengers who suffer from mental anguish, but did not sustain serious physical injuries. They argue that Less Intrusive Methods Kellner is the only person who knows what he meant by that statement, which imbues him with unique 171 The plaintiffs argue, even if they failed to show knowledge regarding how Continental will handle that Kellner has unique or superior knowledge, that the claims of each passenger. However, the relevant there are no less intrusive methods or other discovery Ne:-:t In re Continental Airlines, Inc., 305 S.W.3d 849 (2010) has been insufficient to gain information regarding See id ("Merely completing some less-intrusive discovery does not trigger an automatic right to depose what Kellner meant by his public statements or what the apex official."). Here, the plaintiffs have not shown he has learned about the cause of the accident. that less intrusive methods are inadequate to obtain the The requesting partis burden is not perfunctorily met by any showing that the pmty employed less- information they are seeking. intrusive discovery methods.ld at658. Crmvn Central With regard to the plaintiffs' assertion that there is Petro!l!um Corporation instructs the courts to measure no one other than Kellner who could testify as to whether the discovering party made a reasonable effort what he meant by his various public statements, to obtain discovery through less-intrusive methods. Continental concedes that Kellner is best able to ld "Merely completing some *859 less-intrusive address his own subjective intent in making his discove1y does not trigger an automatic right to depose the apex official." Jd. generalized public statements following the accident. However, Kellner's subjective intent in making the subject public statements does not establish anything 181 The plaintiffs assert that, in trying to find regarding negligence, proximate cause, or damages. evidence about the cause of the accident and Kellner's The plaintiffs have not shown a reasonable indication statements, they have conducted the following that deposing Kellner would lead to the discovery of discove1y: (1) 110 requests for production; (2) 74 admissible evidence. interrogatories; and (3) 11 depositions of pilots, crew and management of personnel of Continental, totaling over 50 hours of deposition testimony. CONCLUSION Continental asserts that while the plaintiffs have deposed some crew members and other field The trial court abused its discretion by compelling personnel, they have not noticed the depositions the apex deposition of Larry Kellner. Accordingly, we of Continental's corporate representative, other conditionally grant Continental's petition and direct individuals present in any meetings where Kellner the trial cmut to set aside its October 26, 2009 order received information about the accident, other compelling Kellner's deposition. The writ will issue employees who are more directly involved in only if the trial court fails to act in accordance with this supporting the ongoing NTSB investigation, or those opinion. employees described by Kellner in his affidavit as having responsibility in the particular areas of inquiry. Footnotes On March 12, 2009, Continental moved for transfer and consolidation or all pending and future cases pursuant to Texas Rule of Judicial Administration 13. On May 7, 2009, the Multidistrict Litigation Pane[ granted Continental's motion, and designated the I I th District Court of Harris County as the Pretrial Court. The underlying proceeding is styled In re Continental Airlines Flight /404, MDL No. 2009-33036. There are 29 plaintiffs in 14 cases consolidated into the MDL proceeding. 2 The order states verbatim: On the 26th day of October 2009, the Court considered Plaintiffs' Motion to Compel the Deposition of Larry Kellner, Continental Airlines, Inc.'s Motion for Protective Order, and Continental Airline, Inc.'s Motion to Quash the Deposition of Larry Kellner. All parties appeared by and through their representative counsel. The Com1, after considering the pleadings, the motions, the sworn affidavit of Larry Kellner, and the arguments by counsel, finds as follows: IT IS ORDERED that Plaintiffs' Motion to Compel the Deposition of Larry Kellner is GRANTED, Defendant Continental Airlines, Inc.'s Motion for Protective Order is DENIED, and Defendant Continental Airlines, Inc.'s Motion to Quash is GRANTED. The Court acknowledges that Continental Airlines, Inc. may seek appellate review of this order by way of mandamus. In the event that Continental Airlines, Inc. files a petition for writ of mandamus on or before November I 6, 2009[,] then this Court's order granting Plaintiffs' Motion to Compel the deposition of Larry Kellner simi! be ~Jext In re Continental Airlines, Inc., 305 S.W.3d 849 (2010) stayed until the final disposition of all mandamus proceedings related to this order. In the event no petition for mandamus is tiled on or before November 16, 2009, then the deposition of Larry Kellner shall occur by December 30, 2009. 3 Federal law provides that the NTSB investigates the accident: (a) Gencral.-(1) The National Transportation Safety Board shall investigate or have investigated (in detail the Board prescribes) and establish the facts, circumstances, and cause or probable cause of- (A) an aircraft accident the Board has authority to investigate under section I 132 ofthis title or an aircraft accident involving a public aircraft as defined by section 40102(a)(37) of this title other than an aircraft operated by the Armed Forces or by an intelligence agency of the United States; ... 49 U.S.C.A. ~ 1131 (a)( I )(A} (West 2007). 4 Federal regulations provide: (a) All investigations, regardless of mode. (1) The investigator-in-charge designates parties to participate in the investigation. Parties shall be limited to those persons, government agencies, companies, and associations whose employees, functions, activities, or products were involved in the accident or incident and who can provide suitable qualified technical personnel actively to assist in the investigation. Other than the FAA in aviation cases, no other entity is afforded the right to participate in Board investigations. (b) Participants in the investigation (i.e., party representatives, party coordinators, and/or the larger party organization) shall be responsive to the direction of Board representatives and may lose party status if they do not comply with their assigned duties and activity proscriptions or instructions, or if they conduct themselves in a manner prejudicial to the investigation. 49 C.c.R. ~ S31. t I (a), (b). 5 Kellner further stated, in his affidavit, that he continued to receive periodic ·'privileged'' briefings from Continental's General Counsel, Vice President of Safety and other senior management and legal personnel about the accident, status of the NTSB investigation. and the status of passenger claims and litigation. 6 .;Deadheading" refers to those crew members who are travelling on an aircraft free of charge but not working because they are located in the wrong place and need to travel to take up their duties. 7 At the hearing on the plaintiffs' motion to compel, the trial court opined that ;'it is reasonable to be able to ask the person in charge of the enterprise ultimate questions about responsibility and safety issues and so forth. That doesn't seem to have been what the Supreme Court has done in these cases." This statement indicates that the trial court acknowledged controlling authority. End of Document © 2015 Tt10mson Reuters. No claim to original U.S. Government Works Tab 8 Crown Cent. Petroleum Corp. v. Garcia. 904 S.W.2d 125 (1995) rights. Vernon's Ann.Texas Rules Civ.Proc .. Rules 166b. subds. 1. 2, par. a, KcyCitc Yellow Flag~ Negative Treatment 5, 200. Declined to Follow by State ex rd. Ford Motor Co. v. Messina, Mo., April9, 2002 :2 Cases that cite this headnote 904 S.W.2d 125 Supreme Court of Texas. 121 Pretrial Procedure > Protective Orders Before CROWN CENTRAL PETROLEUM Examination CORPORATION and Crown Central "Apex depositions," i.e., depositions of Pipe Line Company, Relators, persons in upper level management v. of corporations often involved in The Honorable Carolyn lawsuits, present problems which GARCIA, Judge, Respondent. should reasonably be accommodated in discovery process. Vernon's Ann.Texas No. 9S-0174· Argued March 23, Rules Civ.Proc., Rules 166b, subds. 1, :2, 1995. I Decided June 29, 1995. 5, 200. I Rehearing Overruled Aug. 1, 1995. I Cases that cite this headnote Estate of deceased employee sued corporations for negligence, in connection with death of employee Pretrhd Procedure allegedly caused by asbestos exposure. Plaintiff '"= Protective Orders Before noticed deposition of CEO and chairman of the Examination board of corporations, and trial court ordered CEO to attend deposition. Corporations petitioned for writ When party seeks to depose corporate of mandamus to Supreme Co mi. The Supreme Comi, president or other high level corporate Hightower, J., held that writ would be denied without official, and that official, or the prejudice to allow trial cou1i to reconsider its order corporation, files motion for protective denying corporations' motion to quash deposition in order to prohibit deposition accompanied light of new guidelines. by officer's affidavit denying any knowledge of relevant facts, trial court Writ denied without prejudice. should first determine whether patty seeking deposition has arguably shown Gammage, J., dissented. that official has any unique or superior personal knowledge of discoverable information; if showing is not made, the trial court should grant motion West Headnotes (5) for protective order and first require party seeking deposition to attempt to Ill Pretrial Procedut·e obtain discove1y through less obtrusive __, Protective Orders Before measures, such as the depositions of Examination lower level emp~Oyees, deposition of corporation itself, and interrogatories and While Rules of Civil Procedure permit requests for production of documents a parly to take the deposition of "any directed to corporation. Vernon's person," person noticed for deposition Ann.Texas Rules Civ.Proc., Rules \66b. also has the right to protection from subds. 1, 2, par. a, 5, 200. undue burden, unnecessary expense, harassment or annoyance, or invasion 40 Cases that cite this headnote of personal, constitutional, or property  Crown Cent. Petroleum Corp. v. Garcia, 904 S.W.2d 125 (1995) 141 Pretrial Procedure HIGHTOWER, Justice, delivered the opinion of ....,, Protective Orders BefOre the Court, in which PHILLIPS, Chief Justice, Examination and GONZALEZ, HECHT, CORNYN, ENOCH, After making good faith effort to obtain SPECTOR and OWEN, Justices, join. discovery through less intrusive methods, Opinion pa1iy seeking to take apex deposition of corporate president or other high level corporate official may attempt to show GAMMAGE, Justice, notes his dissent. that there is reasonable indication that In this original proceeding, we consider the propriety official's deposition is calculated to lead of an "apex" deposition, the deposition of a corporate to the discovery of admissible evidence, officer at the apex of the corporate hierarchy. Relators and that less intrusive methods of Crown Central Petroleum Corporation and Crown discove1y are unsatisfactory, insufficient, Central Pipe Line Company seek a writ of mandamus or inadequate; if party seeking deposition directing the trial court to vacate its orders of makes this showing, trial court should Januaty 18 and 25, 1995 concerning the deposition of modify or vacate protective order as Henry Rosenberg, Jr., the chairman of the board and appropriate. Vernon's Ann.Texas Rules chief executive officer of Crown Central Petroleum Civ.Proc., Rules 166b, subds. I, 2. 5, 200. Corporation (Crown Central). Today this court adopts guidelines for depositions of persons at the apex of the 40 Cases that cite this headnote corporate hierarchy. 1 Because these guidelines had not been adopted prior to the trial court's orders, we Pretrial Procedure deny the writ of mandamus without prejudice so that ~·-·" Protective Orders Before the trial court may reconsider its ruling in light of Examination today's opinion. 2 Pretrial Procedure 7 Time and place of, and procedure •• " ' Otto L. Carl, Jr. was employed by Crown Central at its for, taking Pasadena refinery for many years. Carl retired in 1981. Pretrinl Procedure In 1992, Carl died oflung cancer allegedly as the result 0 .·' ' Limiting scope of examination of asbestos exposure. In late 1992, Margaret Carl, individually and as representative of the estate of Otto As with any deponent, trial court retains L. Carl, Jr., deceased, Otto L. Carl, Ill and Margaret discretion to restrict duration, scope, E. Nowak (Plaintiffs) sued Crown Central and Crown and location of apex deposition of Central Pipe Line Company for gross negligence. corporate president or other high level In July 1994, Plaintiffs filed a motion to require corporate officials. Vernon's Ann.Texas Crown Central to produce Rosenberg for a video Rules Civ.Proc., Rules 166b, subds. I. 2. deposition. The motion also included a subpoena duces 5, 200. tecum for Rosenberg to produce sixteen categories of 18 Cases that cite this headnote documents. Crown Central responded with a motion to quash deposition accompanied by Rosenberg's affidavit. Among other things, the affidavit stated: "I have no personal knowledge of Mr. Carl or his Attorneys and Law Firms job duties, job performance, or any facts concerning alleged exposure to asbestos by Mr. Carl. I was *126 Jack G. Carnegie, James L. fvloore and M. not involved in the day-to-day maintenance decisions Michael Meyer, Houston, for relators. made at the Refinery. I have no expertise in industrial hygiene, toxicology, or the health effects of asbestos t John E. Williams, Jr., Eric Bogdan, John E. Williams, exposure." 3 Crown Central complained that Plaintiffs Jr. and Richard N. Countiss, Houston, for respondent. had not exhausted less intrusive means of discovery ~Jext Crown Cent. Petroleum Corp. v. Garcia, 904 S.W.2d 125 (1995) before attempting to depose Rosenberg and that the any documents requested in the subpoena duces tecum motion to produce Rosenberg for a video deposition until after they are afforded a reasonable opportunity to was filed solely for *127 harassment purposes. have their objections to the production considered by Concerning the subpoena duces tecum, Crown Central the court. On January 25, 1995, the trial court denied asserted that Rosenberg was not the custodian of the the emergency motion for reconsideration. requested documents and that a substantially identical request was made by the Plaintiffs in a request for production to which Crown Central had responded I. and filed objections. Neither motion was heard or acted upon. In mid-December 1994, Plaintiffs filed Crown Central argues that the trial court abused its a notice of intention to take the oral deposition discretion when it granted Plaintiffs' motion to produce of Rosenberg. The notice also included a subpoena Rosenberg for video deposition and denied Crown duces tecum for Rosenberg to produce thirty-two Central's motion to quash. categories of documents. Crown Central responded with a motion to quash deposition and motion for Ill It is undisputed that a "party is entitled to protective order. Crown Central continued to complain discovel)' that is relevant to the subject matter of the about Rosenberg's lack of personal knowledge, the claim, and which appears reasonably calculated to lead harassment of Rosenberg and the subpoena duces to the discovery of admissible evidence." Afonsanto tecum for Rosenberg to produce thirty-two categories Co. v. May, 889 S.W.2d 274,276 (Tex.!994)'(0pinion of documents. In late December 1994, Plaintiffs filed on denial of leave to file petition forwritofmandamus) their first amended notice of intention to take the (Gonzalez, J., joined by Hecht, J., dissenting) (citing oral deposition of Rosenberg which reset the date for Tex.R.Civ.P. I 6Gb( I), (2)(a)). Rule 200 of the Texas Rosenberg's deposition. The notice also included the Rules of Civil Procedure permits a party to take same subpoena duces tecum concerning production the deposition of "any person." However, the person of thirty-two categories of documents. Crown Central noticed for deposition also has the right to protection again responded with a motion to quash deposition "from undue burden, unnecessmy expense, harassment and motion for protective order. Crown Central or annoyance, or invasion of personal, constitutional, continued to complain about Rosenberg's lack of or property rights." Tex.R.Civ.P. I 66b(5); Monsan/o personal knowledge, the harassment of Rosenberg and Co. v. Mc(v. 889 S. W.2d at 276. the subpoena duces tecum for Rosenberg to produce thirty-two categories of documents. Although not previously addressed by this cou11, the propriety of "apex" depositions-depositions of a On January 18, 1995, after a telephone hearing, the trial corporate officer at the apex of the corporate hierarchy court granted Plaintiffs' motion to produce Rosenberg -has been addressed by other courts. See Uberty for video deposition and denied Crown Central's Afutual fns. Co. v. Superior Court of San Afateo motion to quash. The trial court ordered Crown Counly. 10 Cai.App.4th 1282, 13 Cai.Rplr.2d 363 Central to produce Rosenberg for deposition and that ( 1992); Broadband Communications Inc. v. !-lome Rosenberg produce all documents requested in the Box O.ffice, Inc .. 157 A.D.2d 479, 549 N.Y.S.2d subpoena duces tecum. 4 On January 20, 1995, Crown 402 ( 1990); Saller v. UJJjolm Co., 593 F.2d 649 Central filed an emergency motion for reconsideration (5th Cir.l979); Baine v. General Afotors Corp., requesting that the trial court quash the deposition, 141 F.R.D. 332 (M.D.Aia. 1991 ); *128 'fi·ovelers compel the Plaintiffs to serve Rosenberg with written Renlal Co .. Inc. v. Ford Mo/or Co .. 116 F.R.D. 140 interrogatories concerning the extent of his knowledge (D.Mass. 1987); Mulvey v. Chi)'Sier Ccup .. I06 F.R.D. concerning this action which would be answered 364 (D.R.I.I985 ); 1\Iiu·hel/ v. :f merican Tobacco Co .. within five days, limit the duration of Rosenberg's 33 F.R.D. 262 (M.D.Pa.1963); Armstrong Cork Co. deposition to one hour, reconsider its ruling concerning v. Niagara Mohawk Power Corp., \6 F.R.D. 389 the production of documents in the subpoena duces (S.D.N. Y.l954); M.A. Poraozi Co. v. The Mormac/ark, tecum, and amend its prior order so that neither Crown 16 F.R.D. 383 (S.D.N.Y.!95! ). Central nor Rosenberg would be required to produce Next ) Crown Cent. Petroleum Corp. v. Garcia, 904 S.W.2d 125 (1995) Liberty Mutua/Ins. Co. v. Superior Court qjSan Ala/eo the protective order and allow County is particularly instructive. In Libert}/ kfulual the deposition to proceed. fns. Co., the court held: 13 Cal.Rptr.2d at 367 (citation omitted). that when a plaintiff seeks to depose a corporate president or other official at the II. highest level of corporate management, and that official 121 As virtually every court which has addressed moves for a protective order the subject has observed, depositions of persons in to prohibit the deposition, the upper level management of corporations often the trial court should first involved in lawsuits present problems which should determine whether the plaintiff reasonably be accommodated in the discovery process. has shown good cause that From the decisions of these other courts, we distill the the official has unique or following guidelines for addressing the problems. superior personal knowledge of discoverable information. If 131 141 151 When a party seeks to depose a not, as will presumably often corporate president or other high level corporate be the case in the instance of official and that official (or the corporation) files a a large national or international motion for protective order to prohibit the deposition corporation, the trial court accompanied by the official's affidavit denying any should issue the protective knowledge of relevant facts, the trial court should first order and first require determine whether the party seeking the deposition the plaintiff to obtain the has arguably shown that the official has any unique necessary discovery through or superior personal knowledge of discoverable less-intrusive methods. These information. If the party seeking the deposition cannot would include interrogatories show that the official has any unique or superior directed to the high-level personal knowledge of discoverable information, the official to explore the state trial court should grant the motion for protective order of his or her knowledge and first require the party seeking the deposition to or involvement in plaintiffs attempt to obtain the discovery through less intrusive case; the deposition of methods. Depending upon the circumstances of the lower-level employees with particular case, these methods could include the appropriate knowledge and depositions of lower level employees, the deposition involvement in the subject of the corporation itself, and interrogatories and matter of the litigation; and requests for production of documents directed to the the organizational deposition of corporation. After making a good faith effort to obtain the corporation itself, which the discovery through less intrusive methods, the party will require the corporation to seeking the deposition may attempt to show (I) that produce for deposition the most there is a reasonable indication that the official's qualified officer or employee deposition is calculated to lead to the discovery of to testify on its behalf as admissible evidence, and (2) that the Jess intrusive the specified matters to be methods of discovery are unsatisfactory, insufficient raised at the deposition. Should or inadequate. If the party seeking the deposition these avenues be exhausted, and' makes this showing, the trial court should modify or the plaintiff make a colorable vacate the protective order as appropriate. As with any showing of good cause that deponent, the trial court retains discretion to restrict the the high-level official possesses duration, scope and location of the deposition. If the necessa1y information to the party seeking the deposition fails to make this showing, case, the trial court may then lift T' Crown Cent. Petroleum Corp. v. Garcia, 904 S.W.2d 125 (1995) its order denying Crown Central's motion to quash the trial court should leave the protective order in place. Rosenberg's deposition. The stay order previously issued by this co uti remains * 129 in effect only so long as necessary to allow the trial court to act. Because these guidelines had not been adopted prior to the trial court's orders, we deny the writ of mandamus without prejudice so that the trial court may reconsider Footnotes· This court has sought to address the propriety of"apcx" depositions on several previous occasions, but the cases were mooted by settlement or withdrawal of the notice· of deposition. See State Farm Mutual A wo ins. Co. l'. !1o11. JenJ' A. Dl!l!ana. No. D-34g9. 36 Tcx.Sup.Ct.J. 661 (March 24, 1993) (plaintiff withdrew the deposition notice before argument, and the petition was dismissed as moot); Cessna Aircraft Co. v. Hon. Eugene Chambers, No. 94-0079, 37 Tex.Sup.Ct.J. 759 (May II, 1994) (settlement by the parties). But see ,Honstmto Co. 1'. lion Robert .Hay, 889 S.W.2d 274 (Tex.l994) (motion for leave to file petition for writ of mandamus overruled). 2 See Phoeni.r Founders. Inc. v. Marshall. 887 S.W.2d 831 (Tex.l994); National Tank Co. 1'. Hrothaton, 851 S.W.2d I93 {Tcx.l993). 3 Rosenberg's complete anidavit stated: My name is Henry A. Rosenberg, Jr. I am over the age of 18 years, of sound mind, have never been convicted of a felony, and am fully competent to make this affidavit. I have personal knowledge of the facts stated herein and they are true and correct. I am Chairman of the Board and Chief Executive Officer of Crown Central Petroleum Corporation (''Crown Central"). Crown Central employs approximately three thousand employees; therefore, I do not have personal knowledge of each employee's job duties or performance. I was a member of the American Petroleum Institute in 1987, which I understand was several years after Otto Carl retired from Crown Central. The letter to Mr. Carl dated June 24, 1980, a copy of which was attached to the Plaintiffs' Motion to Produce lvfr. Henry Rosenberg, Jr. for Video Deposition, was a form letter sent to all employees who worked during a work stoppage which occurred at Crown Central's Pasadena refinery (the ''Refinery''). I have no personal knowledge ofMr. Carl or his job duties, job performance, or any facts concerning alleged exposure to asbestos by Mr. Carl. I was not involved in the dayMtoMday maintenance decisions made at the Refinery. I have no expertise in industrial hygiene, toxicology, or the health effects of asbestos exposure. 4 Apparently, the trial court did not consider Crown Central's objections to production of the documents described in the subpoena duces tecum. End of Document © 2015 Thomson Reuters. No clmrn to original U.S. Government Worl" Corporate officers. agents, and civil case arising out of fatal shooting employees at shopping mall which partnership, in Apex official cannot find safe harbor which cochairs were general partners, in apex deposition doctrine when record allegedly owned and managed and for shows that party seeking deposition has which partnership allegedly provided previously attempted less intrusive means security; positions with corporation had of discovery. no bearing on amenability to deposition as corporation had no ownership interest in 3 Cases that cite this headnote mall at time of shooting, plaintiff seeking discovery had already exhausted other 1101 Pretrial Procedure avenues for conducting discovery, and -~ Persons Who May Be Examined cochairs were named parties in lawsuit. General partners of limited partnership I Cases that cite this headnote are subject to deposition in legal actions involving partnership. 171 Pretrial Procedure Cases that cite this headnote .~-. Corporate officers. agents, and employees Corporate officer is not exempt from deposition by apex doctrine merely Attorneys and Law Firms because he is corporate official; rather, doctrine may be invoked only when *440 Scott Patrick Stolley, John A. Mackintosh & deponent has been noticed for deposition Rachelle H. Glazer, Thompson & Knight, P.C., Dallas, because of his corporate position. Angus E. McSwain, Fulbright, Winniford, Bice & Marable, P.C. Waco, for Relators. 3 Cases that cite this headnote Kathryn J. Gilliam, Waco, John Holman Barr, M. Forrest Nelson & John Howell House, Burt Barr & 181 Pretrial Procedure Associates, L.L.P., Dallas, John R. MacLean, Dan .·- Corporate officers, agents, and Boulware & Sydney Hewlett, MacLean & Boulware, employees Cleburne, for Real Parties in Interest. If protective order under apex deposition doctrine is issued, party seeking Dennis W. Bridewell, Cleburne, pro se. deposition may, after making good faith Before DAVIS, C.J., and CUMMINGS and VANCE, effort to obtain discovery through less JJ. intrusive methods, attempt to show that there is a reasonable indication that official's deposition is calculated to lead to discove1y of admissible evidence, and that MEMORANDUM OPINION the less intrusive methods of discovery are PER CURIAM. unsatisfactory, insufficient or inadequate; if party seeking deposition makes this Relators Melvin Simon and Herbert Simon filed showing, trial court should modifY or a motion seeking leave to file a petition for writ vacate protective order as appropriate. of mandamus against Respondent, the Honorable Simon v. Bridewell, 950 S.W.2d 439 (1997) ......... .. ..............- ................................................................................................................ - .......... _ . ._ Wayne Bridewell, Judge of the 249th Judicial District Relators filed their initial objections and responses Court, Johnson County. Cynthia Joy Bacon ("Bacon"), to these discovery requests on December 1. Bacon individually, as personal representative of the Estate continued to conduct discovery for over a year. of Kevin Reuss Bacon, and as next friend of Amber She considered Relators' responses to her discovery Gayle Bacon and Robyn Nicole Bacon, minors, is the inadequate. Thus, she noticed Relators for oral real party in interest. Relators seek a writ of mandamus depositions on April 14, 1997. torequire Judge Bridewell to vacate his order of May 30, 1997, denying Relators' motion for a protective Relators filed a motion to quash their depositions on order from notices of deposition served on them by the same day, 1 alleging that *441 Bacon sought Bacon. them solely for purposes of harassment and that the infonnation Bacon sought could be obtained On July 18, we granted Relators' motion for leave "from other readily available sources who have closer to file the petition for mandamus relief. After contact and more personal knowledge of any subject having considered Relators' petition, Bacon's reply, the matters that could be relevant to this litigation." Judge exhibits, and arguments of counsel, we will deny the Bridewell set the matter for hearing on May 30. petition. Relators filed a supplemental motion for protection on May 23, which asserts that because they are co- FACTUAL BACKGROUND chairs of the board of directors of Simon DeBm1olo Group, Inc. 2 the depositions sought by Bacon "are Bacon filed suit against Relators Melvin and Herbert necessarily 'apex' depositions .... " See Crown Cenl. Simon and others. The factual basis of Bacon's f'elroleum Corp. v. Garcia. 904 S.W.2d 125, 128 suit stems from the fatal shooting of her husband (Tex.l995 ). Relators also argued in the motion that Kevin in the food court of the Irving Mall on the "apex" deposition doctrine applies "[b]ecause of December 27, 1993. Relators were general partners · the relative positions that they held in their respective of Irving Mall Development Company, L.P (the companies in 1993 and the comparable positions that "Irving partnership"), a Texas limited partnership. they hold today .... " They collectively owned a 73.99 percent interest in the Irving partnership. According to Relators' mandamus petition the Irving partnership owned Irving Mall until December 20, The two other general partners of the Irving 1993, seven days before the fatal shooting. Relators partnership, Irving Mall, Inc., and M.S.A. § Shopping allege that on that date they and their other pattners Malls, Inc. ("MSA"), collectively owned a 1.1 percent transferred their respective interests in the Irving interest in the partnership. Irving Mall, Inc., was a pm1nership to a newlyformed entity known as Simon wholly-owned subsidiary of MSA. M.S.A. § is a Property Group, L.P ("SPGLP"). 3 SPGLP in turn closely-held corporation with Relators each owning a transferred ownership of the mall to Simon Property fifty percent interest in the corporation. Group (Texas), L.P., a Texas limited partnership (the "Texas partnership"). Relators allege that the Irving Bacon sued Relators and the Irving partnership for pa1tnership dissolved in December 1994 by the filing negligence, gross negligence, DTPA violations, and of a ce11ificate of cancellation of the certificate of breach of contract. The suit alleges that the Irving limited partnership with the office of the Secretary of partnership owned and managed the Irving Mall at the time of the shooting and that Relators were then State. 4 SeeTEX.REV.CIV. STAT. ANN .. art. 6132a- general partners of the Irving partnership. Bacon also l. § 1.03(a) (Vernon Supp.!997). alleges that the Irving partnership provided security for the mall at the time of the shooting. Bacon began Golden Ring Mall Company, L.P. ("Golden Ring"), pretrial discove1y by serving Relators and the Irving is the sole general pm1ner of the Texas partnership. partnership on August 29, 1995, with interrogatories, Simon Property Group (Delaware), Inc. ("SPG requests for admission, and requests for production. Delaware"), is the sole general partner of Golden Simon v. Bridewell, 950 S.W.2d 439 (1997) Ring. Relators are co-chairmen of the board of SPG 23, 1994, the date on which Relators allege it Delaware. SPGLP is the sole limited partner of Golden dissolved. 6 It also is evidence that the pmtnership Ring. Bacon has named SPGLP, the Texas partnership, continued to provide security for the mall after the Golden Ring, and SPG Delaware as defendants in her alleged date of dissolution. Thus, Bacon produced suit. some evidence that the Irving partnership was responsible for mall security on the date of the fatal Bacon asserts that the Irving pa11nership continued to shooting. exercise ownership and management responsibilities over the mall after December 20, 1993. As evidence At the hearing on Relators' motion, the court reviewed she cites a lease amendment between the Irving the pleadings, accepted documentary evidence, and partnership and Frozen Fox, Inc. dated August4, 1994. heard argument of counsel before ruling. The court However, because Bacon did not offer this document denied Relators' request to quash the deposition in evidence at the hearing, Relators have filed a notices. motion to strike or disregard it. We may not consider evidence which the proponent did not present to the [11 121 131 The relator in a mandamus proceeding trial couJi. 5 Sabine Off.s·hore Serv., Inc. v. City of Pori bears the burden of showing it has no adequate remedy Arthur, 595 S.W.2cl 840, 841 (Tex.l979); Intercity by appeal and that the court abused its discretion Management Corp. v. Chambers. 820 S.W.2d 811, in taking the action of which the relator complains. 813 n. 4 (Tex.App.-Houston [I st Dist.] 1991, a rig. Canadian !-!e/icopters Ltd v. f.Vittig, 876 S.\V.2d proceeding). Thus, we grant Relators1 motion to strike. 304, 305 (Tex.l994 ). With respect to disputed factual issues, we may not substitute ow· judgment for the trial Bacon also contends that regardless of the ownership court's. Easter v. McDonald. 903 S.W.2d 887. 889-90 of the mall, the Irving partnership continued to provide (Tex.App.-\Vaco 1995, orig. proceeding). Relators security for the mall after December20, 1993. Relators "must establish that the trial court could reasonably claim that "(t]he responsibility for security at [the] mall have reached only one decision." fd at 890. rests with the mall manager and the director of security at the ... mall (]."They allege that after December 20, 1993, SPG Texas owned and managed the mall and THE "APEX" DEPOSITION DOCTRINE thus was responsible for mall security. 141 151 Our Supreme Court adopted the "apex" At the hearing, Bacon introduced an April 1994 deposition doctrine in 1995. Crow11 Cent. Petroleum, request by the Irving partnership to renew its security 904 S.\V.2d at 126. The doctrine applies in suits where license with the Texas Board of Private Investigators "a party seeks to depose a corporate president or other and Private Security Agencies. Bacon also introduced high level corporate official.. .. " !d. at 128. The "apex" a certificate of license issued by the Board to the doctrine is invoked when the corporate official files Irving partnership on March I, 1996. This certificate a motion for protection accompanied by an "affidavit renewed the partnership1s security *442 license denying any knowledge of relevant facts .... " !d. The through February 28, 1997. In addition, Bacon offered burden of persuasion then shifts to the party seeking a July 1993 lease signed by Relator Herbert Simon the deposition to show that the official possesses some as president of Irving Mall, Inc. with La Fata, pertinent personal knowledge of relevant facts. !d. Inc. The lease expressly provides that the Irving If the party seeking discovery does not make this partnership "will operate, manage, [and] maintain ... showing, the court should grant the motion "and first the Common Area of the [mall]." Among other things, require the party seeking the deposition to attempt to the partnership agreed in the lease to provide "police obtain the discove1y through less intrusive methods." protection [and] security and security patrol" for the /d. common area. 161 From the record before us, we conclude that The security license constitutes some evidence that the the "apex" doctrine does not apply to this case for a Irving partnership continued to exist after December number of reasons. Simon v. Bridewell, 950 S.W.2d 439 (1997) evidence, and (2) that the Jess intrusive methods of discovery are unsatisfactory, insufficient THE CORPORATE OFFICIAL'S or inadequate. If the party "APEX" STATUS MUST BE seeking the deposition makes RELEVANT TO THE DEPOSITION this showing, the trial court 171 A corporate officer is not exempt from deposition should modify or vacate the by the "apex" doctrine merely because he is a corporate protective order as appropriate. official. Rather, the doctrine may be invoked only !d. when the deponent has been noticed for deposition because of his corporate position. For example, if the president of a Fortune 500 corporation personally 191 In this case, the record suggests that Bacon attempted less intrusive means of discovery prior to witnesses a fatal car accident, he cannot avoid a seeking Relators' depositions. Judicial economy is not deposition sought in connection with a resulting served by granting a protective order where the record wrongful death action because of his "apex" status. affirmatively reflects that the party seeking discovery Thus, Relators' positions with Simon DeBartolo has already exhausted other avenues for conducting Group, Inc. have no bearing on their amenability to discovery. Thus, we conclude that an "apex" official deposition because that corporation had no ownership cannot find safe harbor in the "apex" doctrine when interest in the mall at the time of the shooting. the record shows that the party seeking the deposition has previously attempted less intrusive means of discove1y. Cf id. THE "APEX" DOCTRINE IS UNAVAILABLE IF LESS INTRUSIVE MEANS OF DISCOVERY HAVE ALREADY BEEN EMPLOYED APPLICABILITY OF THE "APEX" Bacon attempted to conduct discovery for over DOCTRINE TO PARTNERSHIPS eighteen months by means of interrogatories, requests Relators filed affidavits denying personal knowledge for production, and requests *443 for admission with their motion for protection. However, by before noticing Relators for oral depositions. Although introducing evidence of the continued existence of the Relators filed numerous objections to these discovety Irving partnership at least for security purposes, Bacon requests, they did not object to them on the basis has raised a potential fact issue with respect to what of their "apex" status, and they attempted to answer organization was truly responsible for security at the many of the discovery requests subject to their stated mall on the date of the fatal shooting. lf the Irving objections. 7 partnership was responsible for security, as Bacon's evidence suggests, then it might be liable to Bacon !81 Ordinarily, once a court grants an "apex" under one or more of the theories asserted in her suit. protective order, the patty seeking discovery can return to the cmut after attempting other avenues of discovery Relators essentially controlled over 75 percent of and seek to have the order overturned. the Irving partnership as general partners. Relators' evidence suggests that the partnership continued its After making a good faith existence for at least twelve months after the fatal effort to obtain the discovery shooting. The records of the Texas Board of Private through less intrusive methods, Investigators and Private Security Agencies reflect that the party seeking the deposition the partnership renewed its security license after the may attempt to show (1) shooting and continued to possess the license through that there is a reasonable February I 997. indication that the official's deposition is calculated to lead to the discovety of admissible Simon v. Bridewell, 950 S.W.2d 439 (1997) II 01 As general partners, Relators are liable for the Moreover, Relators are named parties to Bacon 1s suit. obligations of the Irving partnership. TEX.REV.CIV. Rule 200 of the Rules of Civil Procedure provides STAT. ANN .. mi. 6132a-l. § 4.03 (Vernon that "any party may take the testimony of any Supp.l997); Shaw v. Kennedy. I.td.. 879 S.W.2d 240, person, including a party, by deposition upon oral 247 (Tex.App.-Amarillo I994.no writ). The general examination." TEX.R. CIV. P. 200. Thus, because Relators are defendants in this lawsuit, Bacon may partners of that pattnership are likewise subject to deposition in legal actions involving the partnership. depose them. See, e.g., Kelly Assoc., Ltd. v. Aetna Casualty & Sur. Co .. 681 S.W.2d 593.595 (Tex.l984). *444 CONCLUSION Relators have cited no cases where the "apex" doctrine has been extended to general partners in a Relators have failed to show that the court abused its limited partnership. Although we do not preclude the discretion in denying their motion for protective order. possibility that the doctrine might be so extended under They have not demonstrated that "the trial court could appropriate facts, the facts presented in this case do not reasonably have reached only one decision." Easler, warrant such an extension. 903 S.W.2d at 890. Thus, we deny the petition. THE "APEX" DOCTRINE DOES NOT PROTECT NAMED PARTIES Footnotes Bacon had notified counsel for Relators by letter dated March 24, 1997, that she intended to depose them and sought mutually agreeable times to conduct the depositions. Relators apparently filed their motion in anticipation of Bacon's deposition notices. 2 Simon DeBartolo Group, Inc. is not a party to Bacon's suit. 3 In 1993, Relators were limited partners ofSPGLP. They exchanged their interests in SPGLP in August 1996 fOr similar interests in another limited partnership known as Simon DeBartolo Group, L.P. 4 Relators did not offer a copy of the certificate of cancellation in evidence at the hearing. 5 At the hearing on Relators' motion for protection, Bacon sought to introduce over twenty lease agreements signed by Herbert Simon as president ofirving Mall, Inc. and various tenants of the mall. These lease agreements were all apparently signed by the respective parties between 1990 and 1993. Relators stipulated that Herbert Simon signed all these leases in his capacity as president of Irving Mall, Inc. 6 The date of the filing of a certificate of cancellation does not necessarily equate to the date of dissolution of a limited partnership. According to section 2.03(b)(4) of the Texas Revfsed Limited Partnership Act, a limited partnership can designate a future effective date of dissolution in a certificate of cancellation. TEX.REV .CIV. STAT. ANN .. art. 6132a- l, § 2.03(b)(4) (Vernon Supp.\997). Because Relators have not provided a copy of the certificate of cancellation, we cannot say whether the certilicate of cancellation was effective on the date it was filed or on some future date. 7 Relators commonly objected to the propounded interrogatories on the basis that they were ·'overbroad, unduly burdensome, unnecessarily expensive and meant solely for the purpose of harassment.'' End of Document © 2015 Thomson Reuters. No claim to origlnal U.S. Government Works. l· Tab 10 Wilz v. Flournoy, 228 S.W.3d 674 (2007) 5o-tex.sup ct~J.-97s-··- 228 S.W.3d 674 West Headnotes (6) \ Supreme Court of Texas. Patricia WILZ, Guardian of Jon Patrick Ill Trusts Flournoy, an Incapacitated Person, Petitioner, -r· Presumptions and burden of proof v. A party seeking to impose a constructive Kenneth W. and June trust has the initial burden of tracing FLOURNOY, Respondents. funds to the specific propet1y sought to be recovered. No. 06-0913. June 29, 2007. 7 Cases t'hat cite this headnote Synopsis Background: Former wife, as guardian for Trusts incompetent son, brought action against fanner .- Trust Property or Funds Mingled husband and his new wife, asserting claims for with Properly or Funds of Trustee conversion, breach of fiduciary duty, constructive fraud, and imposition of constructive trust, relating to Once the party seeking to impose a former husband's handling, when he had been son's constructive trust has satisfied his or her guardian, of proceeds of settlement of son's personal initiCJ.I burden of tracing funds to the injury action. At close of evidence, former husband specific prope11y sought to be recovered, and new wife moved for an instructed verdict, which the entire property will be treated as motion was denied. The 77th District Court, Limestone subject to the trust, except in so far as County, Deborah Oakes Evans, J., entered judgment the trustee may be able to distinguish and on jury's verdict against former husband and new wife, separate that which is his own. denied their motion for judgment notwithstanding the 6 Cases that cite this headnote verdict (JNOV), and imposed a constructive trust on former husband's and new wife's entire farm. Fonner husband and new wife appealed. The Waco Court 131 Appeal and Error of Appeals, 20 I S. W.3d 833, affirmed in part and > Sufficiency of Presentation of reversed and rendered in part. Review was granted. Questions Affirmative claim of former husband and his new wife, as defendants in former wife's action, as guardian for !Holding:! The Supreme Court held that fmmer husband and new wife, by failing to obtain a incompetent son, asserting claims for jury finding on their affirmative claim, regarding conversion, breach of fiduciary duty, imposition of constructive trust, that funds for down constructive fraud, and imposition of constructive trust, relating to former payment for farm purchased by former husband and new wife came from former husband's personal funds husband's handling, when he had been rather than from settlement proceeds, waived the claim son's guardian, of proceeds of settlement of son's personal injury action, that funds on appeal. for down payment for fann purchased by former husband and new wife came from Court of Appeals reversed; judgment rendered. former husband's personal funds rather than fi·om settlement proceeds, so that entire farm was not subject to constructive trust, was waived on appeal unless former husband and new wife conclusively established the claim under the evidence, Wilz v. Flournoy, 228 S.W.3d 674 (2007) 5ofex:s·uP"tCT975······ ......... '" ......... where former husband and new wife .--- Testimony of interested persons failed to obtain a jury finding on that The factfinder may treat an interested affinnative claim. Vernon's Ann.Texas witness's testimony as conclusive if it is Rules Civ.Proe .. Rule 279. clear, direct, and positive and there are no circumstances tending to discredit or 3 Cases that cite this headnote impeach the same. [4[ Appeal and Error Cases that cite this headnote _co;, Sufficiency of Presentation of Questions [6] \Vitnc-sses Affirmative claim of former husband .= Effect of refusal to ansvver and his new wife, as defendants in In action brought by former wife, as former wife's action, as guardian for guardian for incompetent son, against incompetent son, asserting claims for former husband and his new wife, conversion, breach of fiduciary duty, asserting claims for conversion, breach constructive fraud, and imposition of of fiduciary duty, constructive fraud, and constructive trust, relating to former imposition of constructive trust, relating husband's handling, when he had been to former husband's handling, when he son's guardian, of proceeds of settlement had been son's guardian, of proceeds of son's personal injuty action, that funds of settlement of son's personal injury for down payment for farm purchased action, jury was entitled to draw negative by former husband and new wife came inferences from former husband's and from fOrmer husband's personal funds new wife's repeated invocations of rather than from settlement proceeds, Fifth Amendment privilege against self- so that entire fam1 was not subject to incrimination when questioned at trial constructive trust, was not conclusively about truth of former husband's deposition established under the evidence, and testimony that funds for down payment thus, former husband and new wife, by for farm purchased by former husband failing to obtain a jury finding on that and new wife came from former husband's affirmative claim, waived the claim on personal funds rather than from settlement appeal; the only evidence supporting the proceeds. U.S.C.A. Const.Amend. 5; claim was former husband's deposition Rules ofEvid .. Rule 513(c). testimony, former husband was interested witness, former wife attempted to 9 Cases that cite this headnote contradict his testimony, and jury was entitled to draw negative inferences from former husband's and new wife's repeated invocations of Fifth Amendment Attorneys and Law Finns privilege against self-incrimination when questioned at trial about truth of former *675 Percy L. lsgill, C. Zan Turcotle, lsgitt & husband's deposition testimony. U.S.C.A. Associates, P.C., Houston, Edward T. i'vlcFmland, Const.Amend. 5; Vernon's Ann.Texas Lutkin, for petitioner. Rules Civ.Proc., Rule 279; Rules ofEvid .. John Porter Mabry, Vance Dunnam, Dunnam & Rule 513(c). Dunnam, Waco, for respondents. 1 Cases that cite this headnote Opinion [5[ Evidence PER CURIAM. Wilz v. Flournoy, 228 S.W.3d 674 (2007) 5o Tex~sup. ct.'J~97s·-·~--·--------------------··---- On behalf of her son, Jon Flournoy, Patricia Wilz Flournoys converted Jon's property with malice. The sought to impose a constructive trust on property trial court therefore imposed a constructive trust on the purchased by her ex-husband and his new wife. The entire farm. trial court imposed a constructive trust on the entire property, but a divided court of appeals limited the trust The com1 of appeals agreed that Wilz had met her to a 35 percent undivided interest. Given the evidence burden to impose a constructive trust on the entire presented at trial and the jury's findings, the court of fam1, and the burden shifted to the Flournoys to appeals erred in limiting the constructive trust, and we show which funds came from their own accounts. reverse. 20 I S.W.3d 833, 836-37. Nonetheless, it held that the trial court abused its discretion because Kenneth's Patricia Wilz and Kenneth Flournoy divorced in 1973, deposition testimony proved he paid the down and Kenneth was awarded custody of their son, Jon. payment from personal settlement funds and that In 1987, Jon suffered incapacitating injuries in an $50,000 was outstanding on the note. The court of automobile accident. Kenneth, individually and on appeals estimated Jon's interest in the farm as the Jon's behalf, sued Ford Motor *676 Company. In a initial purchase price minus the down payment minus 1991 settlement, Kenneth received $379,300 on Jon's the amount outstanding. Thus the court of appeals behalf and $95,000 personally. As guardian of Jon's concluded that Jon was entitled to a constructive trust person and estate, Kenneth purchased stocks and bonds on an undivided 35 percent of the farm. for Jon's benefit. Subsequently, Kenneth and his new wife, June, purchased a 110-acre farm for $I53,049, Ill 121 A party seeking to impose a constructive paying $49,365.50 in cash and executing a note for trust has the initial burden of tracing funds to the the balance. The note called for monthly payments specific property sought to be recovered. Meyers v. of $96!. Between 1991 and 1999, the Flournoys Buy/or Univ., 6 S.W.2d 393. 394-95 (Tex.Civ.App.- withdrew several thousand dollars from Jon's account, Dallas 1928, vvrit ret\1); see r:aton v. ! lusted. 141 Tex. many installments of which were roughly $960. By the 349, 172 S.W.2d 493. 498 (1943) ( "[T]he beneficiary end of200 I, the Flolll·noys had depleted Jon's account, may follow the trust property, and claim every part of and they institutionalized him in a state mental health the blended property ·which the trustee cannot identifY facility. as his own.") (emphasis in original). Once that burden is met, "the entire ... property will be treated as subject In 2005, Jon's biological mother, Patricia Wilz, became to the trust, except in so far as the trustee may be able to his guardian, and she sued the Flom·noys on Jon's distinguish and separate that which is his OlV/1." [:;a ton, behalf for conversion, breach of fiduciary duty, and 172 S.W.2d at 498-99 (emphasis in original). The trial constructive fraud. court and court of appeals agreed that Patricia traced Jon's funds to the farm; thus, the burden shifted to the Patricia traced several checks drawn on Jon's account Flournoys to demonstrate what portion of the farm's to the Flournoys' personal account. When questioned purchase price came from their own funds. See 20 1 about these checks, the handling of Jon's funds, and S.W.3d at 839. the source of the funds used to purchase the farm, the Flournoys each invoked the Fifth Amendment 131 141 [51 161 The Flournoys bet the farm (as it privilege against self-incrimination. The Flournoys' were) when they failed to obtain a jury finding on their sole evidence regarding the funds consisted of affirmative claim that pmt of the purchase money came Kenneth's pretrial deposition, where he said he used from personal funds. Therefore, this claim is waived his settlement money for the farm's down payment and on appeal unless they "conclusively established" it. that $50,000 remained outstanding on the note. When See *677 7:0. Sfonley Boor Co. v. Bank qf' 1:1 questioned about the truth of this testimony, Kenneth Paso. 847 S.W.2d 218. 222-23 (Tex.l992) (citing again invoked the Fifth Amendment. TEX.R. CIV. P. 279). The Flournoys' only evidence on this point was Kenneth's deposition testimony. The jury found that Kenneth breached his fiduciary Kenneth, however, was an "interested witness," so duty and committed constructive fraud and that the his testimony, even if uncontradicted, "presents an Wilz v. Flournoy, 228 S.W.3d 674 (2007) to disregard Kenneth's deposition testimony as not issue to be determined by the trier of fact." Gl!vinson credible. Therefore, the trial court did not abuse its 1'. Manhattan Conslr. Co., 449 S.W.2d 458, 467 discretion in imposing a constructive trust on the entire (Tex.l969). The factfinder may treat an interested witness's testimony as conclusive if it is "clear, direct , farm. and positive and there are no circumstances tending Accordingly, we grant Patricia Wilz's petition to discredit or impeach the same." !d. But here, Wilz for review, and without hearing oral argument, attempted to contradict Kenneth's testimony, and the TEX.R.APP. P. 59.1, reverse the court of appeals' jmy in this civil case was free to draw negative judgment and render judgment that the entire farm inferences from the Flournoys' repeated invocations is subject to a constructive trust, see TEX.R.APP. P. of the Fifth Amendment. See TEX.R. EYID. 513(c); 60.2(c). Tex. Dep'l (!(Pub. _c;qj'ety Ojjicer.v .r'lss'n v. Denton, 897 S.W.2d 757. 760 (Tex.l995) (citing lJLLYler v. Pal111igiano. 425 U.S. 308, 318. 96 S.Ct. 1551. 47 Parallel Citations L.Ed.2d 810 ( 1976)). The Flournoys failed to secure a jwy finding on their claim, and the jmy was free 50 Tex. Sup. Ct. J. 975 End of Document ',£:! 2015 Thomson Reuters. No claim to original U.S. Government Works