                                                                                                                                                                                                                           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
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·, n\>.:s. ~\nd d'h'il \·l<Y!\1:\ >.-1:\X Tn f.F              ·'
r   n-'\:\'"· ~tnd   I~   i i"(.i/~1 J'Y TI~X:\S
I   i·~<!Jl!\'(J.I.P,



                            P!aintift\.




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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 <k,:im<: under

p;:n:dly uf !1t.~(jUr) Ibm the ron~go~ng. h l}'U~ and ~.-~on\.'\~ I. r::-;c;:U[\:'d in Ch~ltharn. Conllty. Sl:·u.: n!'

(JN'~i"f?l<L ll!l 'lht~ .J.5~~):·1_\ or Octnbcr. ~01-!.                          }            . ';;-..
                                                                                              ,/




                                                                                                                             0501
Tab Q
                                        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,                                      §
                                                  §
         Plaintiffs,                              §            OF HARRIS COUNTY, TEXAS
                                                  §
v.                                                §
                                                  §
TMX FINANCE HOLDINGS, INC.;                       §
TMX FINANCE, LLC;                                 §
TMX FINANCE OF TEXAS, INC.; and                   §
TITLEMAX OF TEXAS, INC.,                          §
                                                  §
         Defendants.                              §                152"d JUDICIAL DISTRICT

PLAINTIFFS' RESPONSE TO DEFENDANTS' MOTION FOR PROTECTIVE ORDER
             REGARDING THE DEPOSITION OF OTTO BIELSS

         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 response to Defendants TMX Finance LLC, TMX

Finance of Texas, Inc., and TitleMax of Texas, Inc.'s (collectively, "TitleMax") Motion for

Protective Order regarding the Deposition of Otto Bielss ("Motion"), and respectfully show the

Court as follows:

                                   I.     INTRODUCTION

         TitleMax is improperly asserting the apex deposition doctrine in an attempt to prevent

LoanStar from proceeding with the deposition of a TitleMax employee who possesses

knowledge of discoverable information-Otto Bielss.       Mr. Bielss served as the Senior Vice



25373482.1
                                                                                         0502
EXHIBIT D
            0503
                              ATTORNEYS EYES ONLY
                                                                    Page 1

                        ATTORNEYS' EYES ONLY
 1                           NO. 2 013-33584
 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                                      I
11
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:  8:57 a.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

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                                                               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

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 1

                                         I-N-D-E-X
 2
 3      WITNESS           DIRECT          CROSS           REDIRECT        RECROSS
 4      LINDA McDONALD
 5      By Ms. Powers             5                            129
 6      By Mr. LaBriola                      128
 7

 8                                     * * * * * * *
 9

10
11                                    E-X-H-I-B-I-T-S
12      DESCRIPTION                                                             PAGE
13
14      Exhibit 1     Letter dated 5-14-13 ............... 88
15
16      Exhibit 2     Packet of various documents ........ 92
17
18      Exhibit 3     E-mail chain . . . . . . . . . . . . . . . . . . . . . . 117
19
20      Exhibit 4     Notice of Deposition .............. 120
21
22                                     * * * * * * *
23

24
25

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 1             A    Yes.
 2             Q    Okay.   By whom?

 3             A    By TMX Finance of Texas.

 4             Q    Is that TMX Finance of Texas, Inc.?

 5             A    LLC.

 6             Q    And how long were you in that position?

 7             A    I was in that position from March of 2011

 8      until April -- until November 18th, 2013.

 9             Q    And what was your job title there?

10             A    Divisional vice president.

11             Q    And what were your duties and
12      responsibilities as divisional vice president?

13             A    To oversee operations.

14             Q    Okay.   And in that position, were you

15      overseeing the operations of TitleMax stores?

16             A    Yes.

17             Q    Okay.   How many stores?

18             A    It fluctuated throughout my tenure, but

19      when I left, when I resumed new responsibilities in

20      November; approximately 230 in Texas.

21             Q    And all of the stores were in Texas?

22             A    Yes.

23             Q    Were you responsible for all of the stores

24      in Texas?

25             A    Yes.

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 1             Q     And during the entire time that you were
 2      employed as a divisional vice president of TMX
 3      Finance of Texas, were you responsible for all of the
 4      stores in Texas?
 5             A     Yes.
 6             Q     And you said that the number of stores
 7     varied.      Approximately how many stores were there
 8      when you started in that position?
 9             A     Two.
10             Q     And during the tenure of your time as a
11      divisional vice president of TMX Finance of Texas,
12      you've stated your duties and responsibilities were
13      to oversee operations, but can you define that a
14      little bit further and give me an idea of what that
15      means?
16             A     To oversee operations is to oversee
17      staffing.     So staffing, hiring, training and profit
18      and loss duties.
19             Q     Okay.   And what did your profit and loss

20      duties entail?
21             A     Performance management.
22             Q     Were you responsible for marketing in any
23      way?
24             A     Yes, for training of marketing, yes.

25             Q     Before March of 2011, were you employed by

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 1      before, left and went to CheckSmart and then came
 2      back and were a regional manager again?
 3            A     Correct.
 4             Q    How long were you a regional manager in
 5      that time before CheckSmart?
 6            A     I was hired -- January of 2007 was my
 7      official hire date.
 8             Q    Okay.   And prior to January '07, did you
 9      work for any of the TitleMax entities?
10            A     No.
11             Q    As a regional manager from that time,
12      January '07 through April '09, was that in Georgia?
13            A     I started in Georgia and trained in Georgia
14      for approximately three months and then I moved to
15      Columbia, South Carolina and I was a regional manager
16      for CheckMax, which was our company's payday loan
17      division.
18             Q    Why did you leave TitleMax to go to
19      CheckSmart for that brief period of time?
20            A     Our company went through a bankruptcy and I
21      was laid off.
22             Q    Today I'm going to focus on the time in
23      which you were a divisional vice president for TMX
24      Finance of Texas, LLC, during that period of time
25      from March 2011 through November 2013, who did you

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                                                                Page 15

 1      report to during that time?
 2             A    Otto Biells.
 3             Q    Who is Mr. Biells?
 4             A    Senior vice president.
 5             Q    Of TMX Finance of Texas?
 6             A    Correct.
 7                  MR. LaBRIOLA:      You probably want a spelling
 8             for his last name.      It's unusual.
 9      BY MS . POWERS :
10             Q    Yes.   How do you Biells?
11             A    B-I-E-L-L-S.
12             Q    B-E-I-E --
13            A     B-I-E-L-L-S.
14             Q    B-I-E-L-L-S, okay.
15            A     I had to think of it for a second.
16             Q    Now we've been discussing TMX Finance of
17      Texas, LLC, is there also a TMX of Texas, Inc.?
18             A    Yes.
19             Q    How are the two different, if you know?
20             A    They're two different business entities.
21             Q    What is the difference between the two's
22      operations?
23             A    The difference, I'm not sure I understand.
24             Q    What do they do differently, if anything?
25             A    They do the same, it's just a different

                               Veritext Florida RepDiiing Co.
     800-726-7007                                                  305-376-8800
                                                                   0510
                                                              Page 1
                      CAUSE NO. 2013-33584

  WELLSHIRE FINANCIAL              * IN THE DISTRICT COURT
  SERVICES, LLC, d/b/a             *
  LONESTAR TITLE LOANS and         *
  INTEGRITY TEXAS FUNDING,         *
  LP,                              *
                                   *
             Plaintiffs            *
                                   *
  vs.                              * 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            * 152ND JUDICIAL DISTRICT

********************************************************
               ORAL AND VIDEOTAPED DEPOSITION OF

                          RICHARD TODD HALE

                            MAY 15, 2014

********************************************************

        ORAL AND VIDEOTAPED DEPOSITION OF RICHARD TODD HALE,
produced as a witness at the instance of the PLAINTIFFS,
and duly sworn, was taken in the above-styled and
numbered cause on the 15th of MAY, 2014 from 9:06a.m. to
2:50p.m., before MELISSA PARKHILL, CSR, in and for the
State of Texas, reported by computer-assisted machine
shorthand, at the law offices of Sutherland Asbill &
Brennan, 600 Congress Avenue, Suite 2000, Austin, Travis


                                                             0511
                                                             Page 2
 1   County, Texas, pursuant to the Texas Rules of Civil

 2   Procedure and the provisions stated on the record or

 3   attached hereto.

 4

 5

 6

 7

 8

 9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25



                                                            0512
                                                         Page 3
 1                     A P P E A R A N C E S
 2
 3   FOR THE PLAINTIFFS:
 4             Sarah F. Powers, Attorney at Law
                    -and-
 5             Christina Goebelsmann, Attorney at Law
               WARGO FRENCH
 6             1888 Century Park East, Suite 1520
               Los Angeles, California 90067
 7             (305) 913-8587
               spowers@wargofrench.com
 8

 9

10   FOR THE DEFENDANTS:
11             Geoff Gannaway, Esq.
               BECK REDDEN, LLP
12             1221 McKinney, Suite 4500
               Houston, Texas 77030
13             (713) 951-6263
               ggannaway@beckredden.com
14
15
16   ALSO PRESENT:
17             Cody Hall, Videographer
18
19
20
21
22
23
24
25



                                                        0513
                                                                Page 23
 1   two documents in there that are e-mails that were sent --

 2   well, i t was a conversation between myself and.
 3   Mr. Sudduth regarding marketing specifically with what
 4   this case I think is involved in, which has to do
 5   marketing using public databases.     Okay.    And in those

 6   e-mails, one of them -- And I'm paraphrasing.       I don't
 7   know i t off the top of my head.    But we have the e-mail,

 8   so we can demonstrate it.    Mr. Sudduth -- Mr. Sudduth

 9   well, let me go back -- let me       Can I go back?    Let me

10   go back to this because to answer to your question ties

11   in with      with the chronological stuff here.

12        Q.     Absolutely.   Please continue.

13                    MR. GANNAWAY:   Object to form.

14        A.     Do you remember -- Going back to where he says

15   let's explore different types of marketing, after this
16   audit when the store was not meeting goals and I just got
17   there is when Mr. Sudduth had a conversation with me and

18   said, Todd, you're going to have to start doing more
19   buyouts.    That's the way all of the successful stores are

20   -- are getting it done.     You're going to have to --

21   you're going to have to do more buyouts.
22                    And there was an extreme amount of

23   pressure.    And i t was very apparent that -- you know, it
24   was -- it was you're going to have to do this or else.          I

25   mean, i t was that type of conversation.      And it was



                                                            0514
                                                                    Page 24
 1   during that when I was like, okay.

 2                          Again, also keep in mind, I'd never worked
 3   in the title loan industry before.             I've never worked for

 4   another title loan company.            So I know really nothing

 5   about how i t worked, the laws, statutes that regulate it.

 6   Everything I did learn about it, I learned from the
 7   vantage point of TitleMax or what TitleMax believed was

 8   right and what should be done.

 9                          It was during that conversation that

10   Mr. Sudduth instructed me to -- about the Public Database
11   and to          to use the -- how to use the Public Database

12   and to be able to look up information on that to be able

13   to market specifically and target potential customers

14   clients that already had an existing title loan.

15           Q.     Okay.     Now, let me
16                          MR. GANNAWAY:   Okay.   I'm going to object
17   to the responsiveness before your next question.

18           Q.     Let me stop you there for just a second.        When
19   was i t that Mr. Sudduth first introduced to you the
20   concept of using a database to look up customers that had

21   title loans with TitleMax's competitors?
22                          MR. GANNAWAY:   Object to form.

23           A.      I don't remember the exact date.       I know it was

24   roughly around            it was -- after      right roughly after

25   this.        So Sept      late September, 2012.



                                                                  0515
                                                                 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.

                              Veritext Florida Reporting Co.
     800-726-7007                                                  305-376-8800
                                                                       0516
                                                               Page 2

 1                               APPEARANCES
 2
 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
                                                                 0517
                                                                                                    Page 3

 1                                                   INDEX
                                                                                                     PAGE
 2
        Appearances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            2
 3
 4      JAMES ARTHUR GRIFFIN
 5          Examination by Ms. Goebelsmann .............                                        .       6
            Examination by Mr. Gannaway ................                                        .     190
 6          Further Examination by Ms. Goebelsmann .....                                        .     214
            Further Examination by Mr. Gannaway ........                                        .     217
 7          Further Examination by Ms. Goebelsmann .....                                        .     217
 8      Changes and Corrections . . . . . . . . . . . . . . . . . . . . . . . .                 .     219
 9      Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   .     220
10      Reporter's Certificate . . . . . . . . . . . . . . . . . . . . . . . . .                .     221
11
12                                                 EXHIBITS
13
14      NO. DESCRIPTION                                                 PAGE/LINE REFERENCED
15
        Exhibit 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7/2
16               Notice of the Oral and Videotaped
                 Deposition of James A. Griffin and Subpoena
17               Duces Tecum
18      Exhibit 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56/9
                 Lists of names with loans
19
        Exhibit 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     99/9
20               E-mails dated September 15, 2012, with
                 attachment
21
        Exhibit 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133/22
22               E-mails dated November 27, 2012
23      Exhibit 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145/5
                 E-mails dated October 20, 2012, with
24               attachments
25

                                           Veritext Florida Reporting Co.
     800-726-7007                                                                                    305-376-8800
                                                                                                      0518
                                                                       131
                               n
 1 over the "so many extra,         but I don't remember the

 2 exact number.      As I remember it,    the account would

 3 actually shut down and you weren't allowed to do

 4 anything until the new month rolled around,           as I

 5 remember it.

 6        Q.    Did you record any of the buyouts that you

 7 performed of LoanStar loans?

 8        A.    There may have been notations on the marketing

 9 sheet just because there's a lot of pressure or

10 emphasis being put on that and I wanted to be able to

11 talk to whoever came in and asked me how it was going.

12 I've sent out X number of letters and I've got this

13 many responses back.      It may have been notated on the

14 marketing sheets, but it was nothing formal.

15        Q.    And those were the sheets contained in the

16 marketing binder?

17        A.•   Correct.

18        Q.    Would any of the general records maintained by

19 TitleMax reflect the buyouts made to LoanStar?

20                   MR. GANNAWAY:     Object to form.

21                   THE WITNESS:     Based upon the record

22 keeping that was in place when I was there I would say

23 yes.

24        Q.    (By Ms. Goebelsmann)     And why is that?

25        A.    Well, as you see in this e-mail, we



                                                                0519
                                                                140
 1     A.    No,   I don't think so.

 2     Q.    Do you know if any other stores in Texas had

 3 similar gentleman's agreements?

 4     A.    I don't know for sure.

 5     Q.    Did you make any other requests for lists

 6 based upon zip codes similar to the e-mail that's in

 7 Exhibit 4?

 8                 MR. GANNAWAY:     Object to form.

 9                 THE WITNESS:     Because I had heard that

10 Felix had a second list, which was more of a list from

11 the one that Patrick had dropped off to me, yes,        I did

12 go to Felix and ask him for -- for my zip codes.

13     Q.    (By Ms. Goebelsmann)      Did anyone come to you

14 asking you for a zip code list?

15     A.    HR and I may have talked about it.        Actually I

16 think I did give HR some zip codes from the first list

17 that Patrick gave me.

18     Q.    And why is that?

19     A.    Because HR and I were so close in proximity.

20 I think there was less than a mile between our two

21 stores.   There's an incredible amount of pressure to

22 get loans and an incredible amount of pressure to            to

23 market to get the loans.       As I said, the belief at

24 TitleMax is that if you're not getting loans it's not

25 because of anything other than poor marketing.



                                                             0520
                                                                   141
 1                   MR. GANNAWAY:     Object to the

 2 responsiveness.

 3        Q.   (By Ms. Goebelsmann)      Did you ever search the

 4 DMV databases using the names of lenders?
 5        A.   No.

 6        Q.   Did you come up with any other marketing

 7 practices in order to increase your loan volume?

 8        A.   Of course, we had banners that we would hang

 9 on the side of our trucks or on our windows that

10 advertised no-interest loans, and we would park at an

11 angle next to the street.         Just anything to visually

12 try to get a customer's -- a potential customer's

13 attention as they came through.

14        Q.   And why did you come up with those additional

15 marketing practices?

16        A.   As I mentioned earlier, there's an incredible

17 amount of pressure.      We were,    for the most part -- I

18 mentioned that Todd and I had a bit of a disagreement

19 over marketing boundaries, but for the most part we

20 were a pretty close-knit group.        And if one guy said,

21 man,    I'm kind of feeling some pressure here, you know,

22 we would kind of brainstorm and come up with different

23 ideas to try to get people's attention.         So these are

24 ideas that were shared amongst us.

25        Q.   Were those marketing ideas that you came up



                                                            0521
                                                           Page 1
                       NO. 2013-33584
WELLSHIRE FINANCIAL         )   IN THE DISTRICT COURT
SERVICES, LLC, d/b/a        )
LOANSTAR TITLE LOANS and    )
INTEGRITY TEXAS FUNDING,    )
LP,                         )
                            )
       Plaintiffs,          )
                            )
vs.                         )   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.           )   152ND JUDICIAL DISTRICT

**********************************************************

                 ORAL VIDEOTAPED DEPOSITION
                        JOSHUA HADDEN
                       June 18th, 2013

**********************************************************

      ORAL VIDEOTAPED DEPOSITION OF JOSHUA HADDEN,
produced as a witness at the instance of the Plaintiff
and duly sworn, was taken in the above-styled and
numbered cause on June 18th, 2013, from 10:03 a.m. to
1:07 p.m., before Margaret Raiford, Certified Shorthand
Reporter in and for the State of Texas, reported by
computerized stenotype machine at the offices of
Sutherland Asbill & Brennan; 600 Congress Ave., Suite



                                                          0522
                                                          Page 2
 1   2000; Austin, TX 78701, pursuant to the Texas Rules of

 2   Civil Procedure and the provisions stated on the record

 3   or attached hereto.

 4

 5

 6

 7

 8

 9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25



                                                         0523
                                                             Page 3
 1                            APPEARANCES
 2
     FOR PLAINTIFFS:
 3        Mr. Joseph D. Wargo
          Wargo French
 4        999 Peachtree St., NE
          26th Floor
 5        Atlanta, Georgia 30309
          Telephone: 404.853.1500
 6        Fax:  404.853.1506
          E-mail: jwargo@wargofrench.com
 7
     FOR CORPORATE DEFENDANTS:
 8        Mr. David J. Beck
          Beck Redden
 9        1221 McKinney St., Suite 4500
          Houston, TX 77010
10        Telephone: 713.951.6209
          Fax:  713.951.3720
11        E-mail: dbeck@beckredden.com
12   FOR CORPORATE DEFENDANTS:
          Mr. Bryon A. Rice
13        Beck Redden
          1221 McKinney St., Suite 4500
14        Houston, TX 77010
          Telephone: 713.951.6256
15        Fax:  713.951.3720
          E-mail: brice@beckredden.com
16
     FOR CORPORATE DEFENDANTS, TMX FINANCE OF TEXAS, INC.,
17   AND TITLEMAX OF TEXAS,  INC.:
          Mr. Stephen T. LaBriola
18        Fellows LaBriola
          Suite 2300, South Tower
19        225 Peachtree Street, NE
          Atlanta, Georgia 30303
20        Telephone: 404.586.9200
          Fax:  404.529.4028
21        E-mail: slabriola@fellab.com
22
23
24
25


                                                         0524
                                                                    Page 62
 1   to you whether that customer came through the process

 2   that you've .identified here today?

 3       A.   Yes.

 4       Q.   ~d     did it?

 5       A.   Yes.

 6       Q.   Did you ever express to anyone any discomfort

 7   you had with the    --    this process?

 8      A.    Are you talking about during the -- when --

 9   when we were doing them?

10       Q.   What -- yes, sir.

11      A.    No.

12       Q.   Okay.    What about upon your departure or close

13   to when you -- when you were deciding to leave, did you

14   ever tell anyone internally that you had some kind of

15   discomfort with this process?

16       A.   I did send out an e-mail when I resigned -- the

17   day that I resigned kind of explaining some of my

18   frustrations with TitleMax, and the buyout letter

19   process was -- was one of those.          How, you know, we were

20   instructed to do something that was, you know, unethical

21   and possibly illegal, and that i t was one of the few

22   things that was actually working and with all the

23   pressure, you know, of the new loans, we finally found

24   something that was working and then we were told to

25   stop; so, there was a lot of frustration there.          So,



                                                                    0525
                                                             Page 63
 1   yeah, I mean, I guess I kind of expressed my frustration

 2   on that to the Austin region and to Linda McDonald.

 3        Q.   Who is Linda McDonald?

 4        A.   She is the divisional president.    She's over,

 5   like, all of Texas and possibly some other areas.

 6        Q.   You used the words "unethical" and "illegal."

 7   Was i t your belief at that time that you just testified

 8   about that this process was unethical or illegal?

 9        A.   At that time, yes.

10        Q.   And -- and what -- what gave you that belief?

11        A.   Just the fact that there was a lawsuit, you

12   know, regarding it.

13        Q.   Okay.   Earlier you testified that -- and I'm --

14   I   just want to get you back to that testimony, something

15   about not telling people when they showed up in town or

16   something like that?

17        A.   Yes.

18        Q.   That's not exactly what you said, but do you

19   remember what you said?

20        A.   Yes.    There --

21        Q.   What were you referring to there?

22        A.   -- there      there was a time, I believe i t was

23   probably sometime in February, where we got a phone call

24   from the store manager on the Riverside store; they

25   called him Rad -- I think his name was Rademez or



                                                             0526
                                                                 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                               ERNEST PAGE
13                               MAY 23, 2014
14                                  VOLUME 1
15              *******************************************
16                       ORAL AND VIDEOTAPED DEPOSITION OF ERNEST
17      PAGE, produced as a witness at the instance of the
18      Plaintiffs and duly sworn, was taken in the
19      above-styled and numbered cause on the 23rd day of May,
20      2014, from 3:38p.m. to 6:17p.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.

                              Veritext Florida Repmiing Co.
     800-726-7007                                                  305-376-8800
                                                                       0527
                                                               Page 2

 1                               APPEARANCES
 2
 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
        ALSO PRESENT:
15
                    Mr. Manuel Martin, Videographer
16
17
18
19
20
21
22
23
24
25

                              Veritext Florida Repotiing Co.
     800-726-7007                                                305-376-8800
                                                                 0528
                                                                                                    Page 3

 1                                                    INDEX
                                                                                                     PAGE
 2
        Appearances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            2
 3
 4      ERNEST PAGE
 5          Examination by Ms. Powers .................. .                                              4
            Examination by Mr. Gannaway.................                                              102
 6          Further Examination by Ms. Powers .......... .                                            112
 7      Reporter's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . .                    119
 8                                                  EXHIBITS
 9      NO. DESCRIPTION                                              PAGE/LINE REFERENCED
10      Exhibit 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . 5/25
               First Amended Notice of the Oral and
11             Videotaped Deposition of Ernest Page and
               Subpoena Duces Tecum
12
        Exhibit 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     36/8
13         E-mails dated September 15, 2012
14      Exhibit 3........................................                                            56/12
           E-mails dated October 20, 2012, with
15         attachment
16      Exhibit 4........................................                                            66/20
           E-mails dated September 15, 2012, with
17         attachment
18
19
20
21
22
23
24
25

                                           Veritext Florida Repmiing Co.
     800-726-7007                                                                                    305-376-8800
                                                                                                      0529
                                                                    79


 1 had three different regionals that were all also

 2 basically in training.

 3     Q.      And who was there from corporate during your

 4 training in Dallas?

 5     A.      I couldn't tell you the names.      I mean,   I

 6 couldn't.

 7     Q.      Were there written materials involved in your

 8 training?

 9     A.      Yes.

10     Q.      And did you take those written materials with

11 you when you went to your store?

12     A.      Yes.

13     Q.      Where were those materials kept?

14     A.      Actually those were kept -- some of it was

15 kept at the store,      and a lot of it was training stuff,

16 just at my house.       I'd keep it in my home.

17     Q.      Do you still have any of those materials

18     A.      No.

19     Q.      -- at your home?

20     A.      Not at all.

21     Q.      And you said you spent a week training in

22 Savannah,    correct?

23     A.      Yes,   ma'am.

24     Q.      What occurred there?

25     A.      That's more of a -- that training -- you're



                VERITEXT REPORTING SERVICES (800) 567-8658   0530
                                                                               80


 1 basically done          with the rest of the training.            That's

 2 more o f - - i t ' s -- 99 percent is how to sell.                It's --

 3 they weed you out.              They're very aggressive about--

 4 you can go three months of training and get terminated

 5 in that one week if you're               not-- if you're not really

 6 gung ho,          if you're not real      fiery.    They don't want

 7 real mellow people.              They don't want subdued people.

 8                        If -- they put you in scenario after

 9 scenario after scenario day in and day out.                    It's like

10 your apt          in front of everybody else and they're grading

11 you.        It's eight hours every day of              of hanging from

12 chandeliers and standing and dancing.                  I mean,    that's

13 what we used to call i t because that's what they want

14 to see.

15                        I mean,    I   -- we started -- in my class

16 when I       was there from all over the United States there

17 was probably 27 of us.                Like 21,   22 made it.     We lost

18 about       five,    six maybe -- I      couldn't tell you exact

19 number       --    just because they weren't           they weren't

20 excited enough.           They weren't fired up enough.             And

21 that was basically -- that week was                    i t wasn't

22 training you on anything else other than just have a

23 lot of get-up-and-go.

24        Q.         Did that week include role-playing?

25        A.         There was a    lot of role-playing.




                      VERITEXT REPORTING SERVICES (800)    567-8658    0531
EXHIBIT G
            0532
                              ATTORNEYS EYES ONLY

                                                                    Page 1

                        ATTORNEYS' EYES ONLY
 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
               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                                      I
11
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:  8:57 a.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

                              Veritext Florida Reporting Co.
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                                                                       0533
                              ATTORNEYS EYES ONLY
                                                               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

                              Veritext Florida Reporting Co.
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                                                                    0534
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                                                                                 Page 3

 1

                                         I-N-D-E-X
 2

 3      WITNESS           DIRECT          CROSS           REDIRECT        RECROSS
 4      LINDA McDONALD
 5      By Ms. Powers             5                            129
 6      By Mr. LaBriola                      128
 7

 8                                     * * * * * * *
 9

10
11                                    E-X-H-I-B-I-T-S
12      DESCRIPTION                                                             PAGE
13
14      Exhibit 1     Letter dated 5-14-13 ............... 88
15
16      Exhibit 2     Packet of various documents ........ 92
17
18      Exhibit 3     E-mail chain . . . . . . . . . . . . . . . . . . . . . . 117
19
20      Exhibit 4     Notice of Deposition .............. 120
21
22                                     * * * * * * *
23

24

25

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                                                                     Page 30

 1      frequently, because I oversaw 250 stores, but if I
 2     was going to visit a region, a particular region, I
 3     might pick three of the underperforming stores to
 4     visit, versus, you know, out of five stores, and
 5     visit two top performing stores.                I always mixed it
 6     up, but in 250 stores, you can only see every store
 7     possibly once a year.
 8             Q       During this time period that we're
 9      discussing did either TMX Finance of Texas, Inc. or
10      TitleMax of Texas, Inc. have a central corporate
11      office?
12            A        Our company has two corporate offices.          One
13      in Dallas and one in Savannah.
14             Q       Are those offices also stores?

15            A        No.
16             Q       And if you know, who works out of the
17      Dallas office that you've just described?
18                     MR. LaBRIOLA:     Can you put a time frame on
19             that?
20      BY MS. POWERS:
21             Q       Yes.   During the time period from
22      March 2011 through November '13, and if it changed
23      during that time period, please let me know.
24             A       Otto Biells officed out of the Dallas
25      office, the corporate office, but he also officed out

                                 Veritext Florida Repmiing Co.
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 1      an ASM, an SM and     a GM?
 2            A     Yes.
 3             Q    Are those larger stores?
 4            A     Yes.
 5             Q    And then they have CSRs under them; is that
 6      correct?

 7            A     Yes.
 8             Q    What's the maximum number of CSRs that any
 9      of your stores had during that time period?

10                  MR. LaBRIOLA:       Objection as to form.

11                  THE WITNESS:       If you're speaking about the
12             highest volume store that we had, I'm guessing,

13             to be honest
14      BY MS. POWERS:
15             Q    Yeah, don't guess.

16            A     I can give you a range of five to seven.

17             Q    Okay.
18            A     But again, I'm not 100 percent sure.

19             Q    Okay.     Did you ever discuss your marketing

20      strategies with Otto Biells?

21             A    No.
22             Q    When did you speak with Otto Biells, and I

23      believe you've testified that was on a weekly basis,

24      correct?
25             A    Approximately.

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 1             Q    Okay.
 2             A    There were weeks that I didn't talk to him,
 3      but in general, I spoke to him once a week.
 4             Q    Okay.   When you did speak to him, what did
 5      you discuss?
 6             A    Our business, operations.
 7             Q    And was it just you reporting what you were
 8      doing?
 9             A    Not necessarily.       Just talking about the
10      business, discussing the regional managers, their
11      performance, their leadership opportunities.
12      Sometimes it would be about opening markets, that we
13      were opening stores and planning on staffing.
14             Q    And did Otto Biells ever give you any sort
15      of instruction?
16             A    Yes.
17             Q    And what did he instruct you on?
18             A    He would instruct me on hiring people, how
19      many people we needed to hire.
20             Q    Anything else?
21             A    I'm trying to think.          I can't think of
22      anything else really, what he would instruct me on.
23             Q    During the time period that we've been
24      discussing, the March 2011 to November 2013, did you
25      ever speak with Tracy Young?

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                                                                         Page 78

 1             it's not an ethical practice.            So our president
 2             has encouraged us to make sure that's not
 3            happening.    So I haven't heard of it happening.
 4             I've been coached not to allow it to happen.
 5      BY MS . POWERS :
 6             Q    Okay.   Did you ever hear of any TitleMax
 7      employee doing that practice prior to November 2011?
 8            A     No.
 9             Q    And do you know which employee or employees
10     were accused of doing that in November of 2011?
11            A     No, I don't.
12             Q    Do you know which region or store was
13      involved?
14            A     No.
15             Q    After November 2011, did you ever hear of
16      this practice occurring?
17            A     After 2011, the following year in November
18      I received a call from my supervisor saying that
19      allegations were made, that we were                    that an
20      employee was going to a parking lot of a competitor.

21             Q    Was your supervisor who called you Otto
22      Biells?
23             A    Yes.
24             Q    And do you know who the employee or
25      employees involved were?

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 1            A     No.
 2             Q    What did you do in response to that
 3      November 2012 call?
 4            A     In 2012 there was also another allegation
 5      that we were using or an employee was using a DMV
 6      database search and he asked me to call individually
 7      each regional manager and make sure, first, to find
 8      out if it was occurring, that it needed to be
 9      reported back.
10                  Second, to make sure our -- each employee
11      understood that we don't condone that.                  It's not
12      allowed.    It's against policy, and to make sure to
13      reiterate that.
14             Q    And did you call each regional manager
15      individually?
16            A     I did call each regional manager
17      individually.      I did discuss with them that it was
18      not allowed.      It was a violation of policy and that
19      they needed to check with their district managers and
20      make sure they understood the policy, also make sure
21      and ask them if they were aware of either of these
22      practices happening.       The district managers were then
23      instructed to call each general manager and
24      communicate the same thing and then it needed to be
25      communicated back to me if anybody was aware of it

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 1      happening and that everybody had been reminded of the
 2      policies and the proper practices.                 And that's what
 3      happened.
 4             Q    And when you made these calls to the
 5      regional managers, did that also occur in
 6      November 2012?
 7            A     Yes.
 8             Q    And when you made these calls, were you
 9      able to reach all of your regional managers?
10            A     I was.
11             Q    And did any of them say anything to you
12      about that practice occurring?
13            A     No.
14             Q    And did you ever receive a report back from
15      anyone about that practice occurring?
16             A    No.
17             Q    In the November 2011 incident, did you ever
18      hear about the     DMV   database being utilized?
19             A    I'm sorry, say that again.
20             Q    You mentioned that in November 2012 there
21      was an additional allegation that the                 DMV   database
22      had been searched, correct?
23             A    Correct.
24             Q    Was that also an issue in November 2011?
25             A    No.

                                 Veritext Florida Reporting Co.
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                                                                  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                                ERNEST PAGE
13                                MAY 23, 2014
14                                   VOLUME 1
15              *******************************************
16                       ORAL AND VIDEOTAPED DEPOSITION OF ERNEST
17      PAGE, produced as a witness at the instance of the
18      Plaintiffs and duly sworn, was taken in the
19      above-styled and numbered cause on the 23rd day of May,
20      2014, from 3:38p.m. to 6:17p.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 here.to.

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                                                               Page 2

 1                                APPEARANCES
 2
 3
        FOR THE PLAINTIFFS:
 4
                    MS. CHRISTINA GOEBELSMANN
 5                  MS. SARAR 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
        ALSO PRESENT:
15
                    Mr. Manuel Martin, Videographer
16
17
18
19
20
21
22
23
24
25

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                                                                                                    Page 3

 1                                                   INDEX
                                                                                                     PAGE
 2
        Appearances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             2
 3
 4      ERNEST PAGE
 5             Examination by Ms. Powers . . . . . . . . . . . . . . . . . . .                           4
               Examination by Mr. Gannaway.................                                           102
 6             Further Examination by Ms. Powers .......... .                                         112
 7      Reporter's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . .                    119
 8                                                 EXHIBITS
 9      NO. DESCRIPTION                                                 PAGE/LINE REFERENCED
10      Exhibit 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5/25
               First Amended Notice of the Oral and
11             Videotaped Deposition of Ernest Page and
               Subpoena Duces Tecum
12
        Exhibit 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      36/8
13             E-mails dated September 15, 2012
14      Exhibit 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    56/12
               E-mails dated October 20, 2012, with
15             attachment
16      Exhibit 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    66/20
               E-mails dated September 15, 2012, with
17             attachment
18
19
20
21
22
23
24
25

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                                                                                Page 90

 1           Q.     And did you ever speak with Mr. Bielss?

 2           A.     No.     He spoke to us.          He went up there and

 3      gave a little pep talk and how he started, gave us his

 4      history and all.

 5           Q.     Did you personally have any conversations with

 6      Mr. Bielss?

 7           A.     No, ma'am.

 8           Q.     Okay.     Did you meet Tracy Young?

 9           A.     The name sounds familiar.

10           Q.     Do you recall any conversations with Tracy

11      Young?

12           A.     Maybe during training, yeah.                     I mean,   just

13      again, there was a lot of them up there talking to us

14      and giving us information and this is what we're going

15      to do today, this is the role-play we're going to do.

16      Other than that

17           Q.     Do you recall any specifics conversations you

18      may have had with Tracy Young?

19           A.     No, ma 1 am.

20           Q.     Did anyone ever tell you about conversations

21      they had with Otto Bielss?

22                          MR. GANNAWAY:         Object to form.

23                          THE WITNESS:         Not that I'm aware of.

24           Q.     (By Ms. Powers)          Did anyone ever tell you

25      about any conversations they had with Tracy Young?

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                                                                                      0545
                                                               Page 1
                     CAUSE NO. 2013-33584

 WELLSHIRE FINANCIAL              *   IN THE DISTRICT COURT
 SERVICES, LLC, d/b/a             *
 LONESTAR TITLE LOANS and         *
 INTEGRITY TEXAS FUNDING,         *
 LP,                              *
                                  *
            Plaintiffs            *
                                  *
 VS.                              *   HARRIS COUNTY, TEXAS
                                  *
  TMX FINANCE HOLDINGS,           *
  INC.; TMX FINANCE 1 LLC;        *
  TMX FINANCE OF TEXAS,           *
  INC.; TITLEMAX OF TEXAS,        *
  INC.; FELIX DeLEON; and         *
  ISHMAEL HERNANDEZ,              *
                                  *
            Defendants            * 152ND JUDICIAL DISTRICT

********************************************************
              ORAL AND VIDEOTAPED DEPOSITION OF

                         ARTURO R. GUERRERO

                            JUNE 4, 2014

********************************************************

       ORAL AND VIDEOTAPED DEPOSITION OF ARTURO R.
GUERRERO, produced as a witness at the instance of the
PLAINTIFFS, and duly sworn, was taken in the above-styled
and numbered cause on the 4th of JUNE, 2014 from 2:37
p.m. to 5:47p.m., before MELISSA PARKHILL, CSR, in and
for the State of Texas, reported by computer-assisted
machine shorthand, at the law offices of Beck Redden, 515
Congress Avenue, Suite 1750, Austin, Travis County,


                                                              0546
                                                          Page 2
 1   Texas, pursuant to the Texas Rules of Civil Procedure and

 2   the provisions stated on the record or attached hereto.

 3

 4

 5

 6

 7

 8

 9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25



                                                         0547
                                                         Page 3
 1                     A P P E A R A N C E S
 2
 3   FOR THE PLAINTIFFS:
 4             Sarah F. Powers, Attorney at Law
                    -and-
 5             Christina Goebelsmann, Attorney at Law
               WARGO FRENCH
 6             1888 Century Park East, Suite 1520
               Los Angeles, California 90067
 7             (305) 913-8587
               spowers@wargofrench.com
 8             cgoebelsmann@wargofrench.com
 9                                                                .




10
     FOR THE DEFENDANTS:
11
               Bryon Rice, Esq.
12                  -and-
               Geoff Gannaway, Esq.
13             BECK REDDEN, LLP
               1221 McKinney, Suite 4500
14             Houston, Texas 77030
               (713) 951-6263
15             ggannaway@beckredden.com
16
17
     ALSO PRESENT :
18
               Jeremy Garrett, Videographer
19             Victoria Newman, Attorney at Law
               (Present Telephonically)
20
21
22
23
24
25


                                                        0548
                                                               Page 27
 1   name?

 2           A.   I don't, to be honest with you.     I really don't

 3   remember who they were.

 4           Q.   While you were training in Savannah, did you

 5   meet anyone from corporate?

 6           A.   I did.    I met Otto Bielss (pronouncing Bliss)

 7   and Tracy Young.

 8           Q.   And what context did you meet Otto I think, is

 9   it, Biells?

10           A.   No.     It's Otto-- It may be Otto Bielss.   Otto

11   -- I thought i t was Otto Bielss (pronouncing Bliss.)       I'm

12   not sure.

13           Q.   Okay.    We'll call him-- we'll call him Otto.

14           A.   Mr. Otto.     I mean, the first day of our

15   training, they get up, introduce themselves and, you

16   know, welcomed us, you know, to the -- to the training.

17           Q.   Okay.    And that was both Otto and Tracy Young?

18           A.   Yes, ma'am.

19           Q.   Did you have any conversations with Otto or

20   Tracy Young?

21           A.   Separately, no, ma'am.

22           Q.   So other than the occasion that you've

23   described where they got up and introduced themselves,

24   did you have any other contact with Otto or Tracy Young

25   during your training?



                                                               0549
                                                                     Page 28
 1        A.     During my training, no, ma'am.

 2        Q.     Did you have any contact with Otto or Tracy

 3   Young at any other point?

 4        A.     I haven't had any contact with Tracy Young.

 5   Otto has been to this area -- to the Austin area visiting

 6   stores.

 7        Q.     Okay.     And has Otto ever visited your store?

 8        A.     Yes, ma'am, he visited my store at 8505

 9   Springdale Road.

10        Q.     What number is that?

11        A.     23.

12        Q.     And when he visited, was anyone else with him?

13        A.     It was him, my D.M. at the time, Mike Ryan, our

14   R.M. at the time         Oh, what was his name.      I can't

15   remember his name.       I only met him, like, twice.         He was

16   out of Houston.       I don' t remember his name.    And Linda

17   McDonald was with him.

18        Q.     Was the regional manager who was there Darren

19   Lewis?

20                       MR. RICE:   Object to form.

21        A.     I'm not quite sure of his name.         I don't

22   remember.

23        Q.     It was a man?

24        A.     Yeah, i t was man.

25        Q.     Could you describe to me what he looks like?



                                                                     0550
                                                                Page 1
                      CAUSE NO. 2013-33584

  WELLSHIRE FINANCIAL              *   IN THE DISTRICT COURT
  SERVICES, LLC, d/b/a             *
  LONESTAR TITLE LOANS and         *
  INTEGRITY TEXAS FUNDING,         *
  LP,                              *
                                   *
             Plaintiffs            *
                                   *
  vs.                              * 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             *   152ND JUDICIAL DISTRICT

********************************************************
               ORAL AND VIDEOTAPED DEPOSITION OF

                          GILBERTO HERNANDEZ

                             JUNE 4, 2014

********************************************************

        ORAL AND VIDEOTAPED DEPOSITION OF GILBERTO
HERNANDEZ, produced as a witness at the instance of the
PLAINTIFFS, and duly sworn, was taken in the above-styled
and numbered cause on the 4th of JUNE, 2014 from 9:04
a.m. to 1:57 p.m., ·before MELISSA PARKHILL, CSR, in and
for the State of Texas, reported by computer-assisted
machine shorthand, at the law offices of Beck Redden, 515
Congress Avenue, Suite 1750, Austin, Travis County,


                                                               0551
                                                          Page 2
 1   Texas, pursuant to the Texas Rules of Civil Procedure and

 2   the provisions stated on the record or attached hereto.

 3

 4

 5

 6

 7

 8

 9

10

11

12

13

14

15
16

17
18

19

20

21

22

23

24

25



                                                         0552
                                                         Page 3
 1                     A P P E A R A N C E S
 2
 3   FOR THE PLAINTIFFS:
 4             Sarah F. Powers, Attorney at Law
                    -and-
 5             Christina Goebelsmann, Attorney at Law
               WARGO FRENCH
 6             1888 Century Park East, Suite 1520
               Los Angeles, California 90067
 7             (305) 913-8587
               spowers@wargofrench.com
 8             cgoebelsmann@wargofrench.com
 9
10
     FOR THE DEFENDANTS:
11
               Bryon Rice, Esq.
12                  -and-
               Geoff Gannaway, Esq.
13             BECK REDDEN, LLP
               1221 McKinney, Suite 4500
14             Houston, Texas 77030
               (713) 951-6263
15             ggannaway@beckredden.com
16
17
     ALSO PRESENT:
18
               Jeremy Garrett, Videographer
19             Victoria Newman, Attorney at Law
               (Present Telephonically)
20
21
22
23
24
25


                                                        0553
                                                                Page 26
 1   yes, a lady.
 2           Q.   Could one of the trainers been named Jill

 3   Johns?
 4           A.   I don't remember.
 5           Q.   Could one of the male trainers been named Kevin

 6   Hart?
 7           A.   Don't remember.

 a           Q.   Could one of the male trainers have been named
 9   Kevin Long?

10           A.   Don't remember.
11           Q.   Could one of the male trainers have been named
12   Otto Bielss?

13           A.   Otto Bielss wasn't a trainer.

14           Q.   Who was Otto Bielss?

15           A.   He is I   think the C.E.O. for part of the

16   company.

17           Q.   Was he present for your training while you were
18   there in Savannah in April of 2012?

19           A.   He just came in once.
20           Q.   And what did he do while he was there at

21   training?
22           A.   A short speech for 15 minutes.

23           Q.   Did you have the opportunity to speak with him?

24           A.   Not one on one.
25           Q.   Do you know if anyone had the opportunity to



                                                               0554
                                                                   Page 1

 1                            NO. 2013-33584
 2      WELLSHIRE FINANCIAL         ) IN THE DISTRICT COURT
        SERVICES, LLC,              )
 3      d/b/a LOANSTAR TITLE        )
        LOANS, d/b/a MONEYMAX       )
 4      TITLE LOANS, and d/b/a      )
        LOANMAX; MEADOWWOOD         )
 5      FINANCIAL SERVICES, LLC,    )
        d/b/a LOANSTAR TITLE        )
 6      LOANS, and d/b/a MONEYMAX )
        TITLE LOANS; and            ) HARRIS COUNTY, TEXAS
 7      INTEGRITY TEXAS FUNDING,    )
        LP,                         )
 8                                          )
                    Plaintiffs,             )
 9                                          )
        vs.                                 )
10                                          )
        TMX FINANCE HOLDINGS,               )
11      INC.; TMX FINANCE, LLC;             )   152ND JUDICIAL DISTRICT
        TMX FINANCE OF TEXAS,               )
12      INC ..; and TITLEMAX OF             )
        TEXAS, INC.,                        )
13                                          )
                    Defendants.             )
14
15
                      * * * *    ~   * * * * * * * * * * *
16                     VIDEOTAPED ORAL DEPOSITION OF
                               ANTONIO AMADO
17                              July 9, 2014
                      * * * * * * * * * * * * * * * *
18
19
20               THE VIDEOTAPED ORAL DEPOSITION of ANTONIO
21      AMADO, produced as a witness at the instance of the
22      Plaintiffs, and duly sworn, was taken in the
23      above-styled and numbered cause on the 9th day of July,
24      2014, from 8:23a.m. to 10:23 a.m., before RACHELLE K.
25      YOUNG, RPR, CRR, Certified Shorthand Reporter in and

                                Veritext Florida Reporting Co.
     800-726-7007                                                    305-376-8800
                                                                     0555
                                                              Page 2

 1      for the State of Texas, reported by stenographic and
 2      computer-aided transcription, in the offices of Kim
 3      Tindall & Associates, 645 Lockhill Selma, Suite 200'
 4      San Antonio, Texas 78216, pursuant to the Texas Rules
 5      of Civil Procedure and the provisions stated on the
 6      record or attached hereto.
 7
 8
 9                                APPEARANCES
10      FOR THE PLAINTIFF (S) :
11           Ms. Sarah F. Powers
             WARGO & FRENCH
12           1888 Century Park East
             Suite 1520
13           Los Angeles, California        90067
             (310) 913-8587
14           Spowers@wargofrench.com
15
        FOR THE DEFENDANT(S):
16
             Mr. Bryon A. Rice
17           BECK REDDEN, LLP
             1221 McKinney Street
18           Suite 4500
             Houston, Texas 77010
19           (713) 951-3700
             Brice@beckredden.com
20
21
22      ALSO PRESENT:
23          Louis Soucie, Videographer
24
25

                             Veritext Florida Reporting Co.
     800-726-7007                                              305-376-8800
                                                                0556
                                                                 Page 3

 1                                    INDEX
        WITNESS                                                PAGE
 2
        ANTONIO AMADO
 3
              Appearances                                        2
 4             Examination by Ms. Powers                         5
               Examination by Mr. Rice                          72
 5             Further Examination by Ms. Powers                91
               Reporter's Certification                         95
 6
 7
 8
 9                                   EXHIBITS
10      Deposition
        Exhibits                  Description                   Page
11
        Exhibit 1       Subpoena Duces Tecum                          6
12
13
14
15
16
17
18
19
20
21
22
23
24
25

                              Veritext Florida Reporting Co.
     800-726-7007                                                     305-376-8800
                                                                          0557
                                                                       Page 46

 1      remembered.
 2           Q.     Did you ever receive any communication from
 3      Tracy Young regarding marketing or how to market?

 4           A.     No.    That type of correspondence would come
 5      from our vice president of operations, Otto Biells, and
 6      they were more generalized e-mails.                They weren't

 7      directives.       Those were more communicated through our
 8      district and regional managers.
 9           Q.     When you say "they were more generalized

10      e-mails," what do you mean?
11           A.     We needed to increase marketing, the company
12      exposure in certain cities, maximizing, you know,
13      your -- the resources that were made available to us,

14      but not specifics.

15           Q.     When you say maximizing resources available to

16      us, what do you mean?

17           A.     Using the fliers, we had -- we had a company

18      that would fax us leads, EZ -- EZ Money.                 EZ Money, I
19      think.      EZ Money would fax us a lead and/or -- because
20      we did no cold calling.         All of our leads were either
21      walk-ins from marketing tactics that we had utilized
22      and/or leads that we were provided by our headquarters,
23      who had called the BOO number or gone online, and/or
24      EZ Money, or EZ Loan would send us an e-mail followed
25      by a fax, where we would have to call an 888 number

                                Veritext Florida Reporting Co.
     800-726-7007                                                         305-376-8800
                                                                           0558
                                                                              Page 47

 1      with a reference number.              An9 once we provided that,

 2      they would give us the name,               telephone number, year,

 3      make, and model of the vehicle, and the loan that they

 4      were interested, amount, and we would,                       in turn, contact

 5      that customer and solicit them.

 6           Q.     And do you know where those leads came from?

 7           A.     I do not.       EZ Loan, EZ Money.

 8           Q.     Do you -- but do you know where EZ Loan or

 9      EZ Money got the leads?

10           A.     No, ma'am.

11           Q.     Okay.       Did you ever discuss marketing or

12      marketing practices with Otto Biells?

13           A.     N0 1   ma'am.

14           Q.     How many e-mails did you receive from

15      Otto Biells during your time as TitleMax regarding

16      at TitleMax regarding marketing?

17           A.     Two, maybe.

18           Q.     Do you recall what they said?

19           A.     As I      had just stated, utilize our marketing.

20      The company had invested a lot of money in our fliers,

21      window sticker decals, to -- you know, of that nature.

22           Q.     Do you know a Linda McDonald?

23           A.     I   do.

24           Q.     And who is that?

25           A.     She is our former vice president.                     Linda was

                                    Veritext Florida Reporting Co.
     800-726-7007                                                                305-376-8800
                                                                                  0559
                                                                 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.

                              Veritext Florida Repmiing Co.
     800-726-7007                                                  305-376-8800
                                                                       0560
                                                               Page 2

 1                               APPEARANCES
 2
 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
                                                                 0561
                                                                                                    Page 3

 1                                                   INDEX
                                                                                                     PAGE
 2
        Appearances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            2
 3
 4      JAMES ARTHUR GRIFFIN
 5          Examination by Ms. Goebelsmann . . . . . . . . . . . . .                            .       6
            Examination by Mr. Gannaway . . . . . . . . . . . . . . . .                         .     190
 6          Further Examination by Ms. Goebelsmann .....                                        .     214
            Further Examination by Mr. Gannaway ........                                        .     217
 7          Further Examination by Ms. Goebelsmann .....                                        .     217
 8      Changes and Corrections . . . . . . . . . . . . . . . . . . . . . . . .                 .     219
 9      Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   .     220
10      Reporter's Certificate . . . . . . . . . . . . . . . . . . . . . . . . .                .     221
11
12                                                 EXHIBITS
13
14      NO. DESCRIPTION                                                 PAGE/LINE REFERENCED
15
        Exhibit 1........................................                                          7/2
16               Notice of the Oral and Videotaped
                 Deposition of James A. Griffin and Subpoena
17               Duces Tecum
18      Exhibit 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56/9
                 Lists of names with loans
19
        Exhibit 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     99/9
20               E-mails dated September 15, 2012, with
                 attachment
21
        Exhibit 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133/22
22               E-mails dated November 27, 2012
23      Exhibit 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145/5
                 E-mails dated October 20, 2012, with
24               attachments
25

                                           Veritext Florida Repotting Co.
     800-726-7007                                                                                    305-376-8800
                                                                                                      0562
                                                                      Page 172

 1             A.    Correct.
 2             Q.    What about the regional manager?
 3             A.    The regional manager occasionally, but most of
 4      your conversations were had with your DM.
 5             Q.   Would corporate discuss your marketing
 6      practices with you?
 7                        MR. GANNAWAY:        Object to form.
 8                        THE WITNESS:       When you say "corporate,"
 9      I'm thinking corporate office, and in that case no.
10      Linda or your regional manager would occasionally have
11      a conversation with you, but again, most of it was
12      through your district manager.
13             Q.    (By Ms. Goebelsmann)         When you're thinking of
14      corporate office, who are you thinking of?
15             A.    Leadership team at the Savannah, Georgia,
16      office.
17             Q.    What are the names of the people on that team?
18             A.    Gosh, I can't believe I don't remember their
19      names.      Otto, 0-t-t-o, Bielss, I think, B-i-e-1-s.

20      That's the only one that stands out.                 And I'm going to
21      sound like I'm making fun of this.                The only reason it
22      stands out is because it's like automobile and we were
23      doing title loans.      That's the only reason it stands
24      out.
25             Q.    Do you remember how many other people were

                                Veritext Florida Reporting Co.
     800-726-7007                                                         305-376-8800
                                                                          0563
                                                                    Page 173

 1     part of the leadership team?

 2             A.   No.   Obviously -- Tracy Young I think is the
 3      owner of the company, and then he had his team that

 4      reported to him, but I don't remember how many people

 5     were on that team.
 6             Q.   Did they have any conversations with you

 7      regarding your marketing practices?

 8             A.   I met Otto once in the -- maybe twice.            I met

 9     him once for sure in the Arlington store, maybe once at

10      the Austin 5 store.      Both times the stores were doing
11      really well, so it was more of a,              "well, tell me how

12     you're doing it" type thing, not so much a "how can you

13     get better" type thing.

14             Q.   What do you mean "tell me how you're doing

15      it"?

16                        MR. GANNAWAY:       Object to form.

17                        THE WITNESS:       The sales were good, so he

18      just wanted to know what we were doing marketingwise to

19      get the sales to where they were.

20             Q.   (By Ms. Goebelsmann)          Do you know why he asked

21      you what you were doing?

22                        MR. GANNAWAY:       Same objection.

23                        THE WITNESS:       I don't know specifically.

24      I have my beliefs, but I don't know specifically.

25             Q.   (By Ms. Goebelsmann)          What's your belief?

                               Veri text Florida Reporting Co.
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                                                                            0564
                                                                       Page 174

 1                         MR. GANNAWAY:       Object to form.

 2                         THE WITNESS:      All stores were not
 3      performing well, so the belief was that if it's working

 4      at this store, then we should just transplant or

 5      transpose those practices to this store and this store

 6      will do the same thing.

 7           Q.     (By Ms. Goebelsmann)          Did you mention

 8      PublicData to him?

 9           A.     No.

10           Q.     Do you know if anyone else did?

11                         MR. GANNAWAY:       Object to form.

12                         THE WITNESS:      I don't know.

13                         MR. GANNAWAY:       I'm sorry.        Could you

14      repeat your answer?

15                         THE WITNESS:      I don't know.

16           Q.     (By Ms. Goebelsmann)          Who else were part of

17      those conversations with Otto?

18           A.     Gary Jackson would have been part of the

19      conversations in Arlington.            Annette would have been

20      part of the conversations in Austin.

21           Q.     So were there two separate times that you

22      spoke with Otto?

23           A.     Yes.

24           Q.     When were those times?

25           A.     The one in Arlington would have been November

                                Veritext Florida Reporting Co.
     800-726-7007                                                            305-376-8800
                                                                              0565
                                                                   Page 175

 1      or December of 2011.       The one in Austin 5 would have
 2      been, gosh, January, February of 2012.
 3           Q.     Did you explain to Otto what you were doing to
 4      attract new customers?
 5           A.     They were very generic answers, but yes.           We
 6      talked about how great we were at marketing, the B-to-B
 7      marketing, and how many fliers we put out.              Just really
 8      generic answers and --
 9           Q.     Can you describe to us what your generic
10      answer was?
11           A.     We concentrate on fliers, and we put out X
12      number of fliers per day, per week, per month.              We've
13      got several auto repair shops that we work with, and
14      A-1 Transmission sends me a couple customers a month.
15      Just real generic answers.          Just answers that fall in
16      line with what TitleMax has said is already the proven
17      method for marketing.
18           Q.     And what was the proven method?
19           A.     Just kind of that three-pronged attack that we
20      had talked about earlier.
21           Q.     Did you mention to him that you were sending
22      fliers or letters directly to prospective customers?
23           A.     No.   At the time in           in Arlington that was
24      not a practice at that store or that general manager
25      was using, so it didn't come up in our conversations.

                               Veritext Florida Reporting Co.
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                                                                       0566
                                                                       Page 176

 1           Q.     What about for Austin 5?
 2           A.     I don't know that that was brought up then.                    I
 3      don't believe it was because we didn't start using the
 4      PublicData immediately right off the bat in Austin 5.
 5           Q.     Why did Harold and Gary visit Austin 5 in the
 6      beginning of 2012?
 7                       MR. GANNAWAY:       Object to form.
 8                       THE WITNESS:      We were a new market, so
 9      there were only two stores in Austin.                  Austin was
10      projected to be a really high-performing market.                    Lack
11      of tenure, so when you have new managers, new market,
12      you're going to pay extra attention to it.
13           Q.     (By Ms. Goebelsmann)        Do you know how long
14      Harold worked with TitleMax?
15           A.     I don't know for sure.
16           Q.     What about Gary?
17           A.     Gary had worked for the company a year, year
18      and a half.
19           Q.     From early 2012?
20           A.     Early 2012, yes.
21           Q.     Did anyone ever tell you to stop sending out
22      the buyout letters or the fliers that you were sending
23      directly to customers?
24           A.     We were told to stop sending out our in-store
25      or in-house-created fliers, yes.

                              Veritext Florida Reporting Co.
     800-726-7007                                                            305-376-8800
                                                                             0567
                                                             Page 1
                      CAUSE NO. 2013-33584

  WELLSHIRE FINANCIAL            * IN THE DISTRICT COURT
  SERVICES, LLC, d/b/a           *
  LONESTAR TITLE LOANS and       *
  INTEGRITY TEXAS FUNDING,       *
  LP,                            *
                                 *
             Plaintiffs          *
                                 *
  vs.                            *   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          * 152ND JUDICIAL DISTRICT

********************************************************
               ORAL AND VIDEOTAPED DEPOSITION OF

                          THOMAS B. KIRK

                           JUNE 5, 2014

********************************************************

        ORAL AND VIDEOTAPED DEPOSITION OF THOMAS B. KIRK,
produced as a witness at the instance of the PLAINTIFFS,
and duly sworn, was taken in the above-styled and
numbered cause on the 5th of JUNE, 2014 from 9:10 a.m. to
12:29 p.m., before MELISSA PARKHILL, CSR, in and for the
State of Texas, reported by computer-assisted machine
shorthand, at the law offices of Beck Redden, 515
Congress Avenue, Suite 1750, Austin, Travis County,


                                                            0568
                                                          Page 2
 1   Texas, pursuant to the Texas Rules of Civil Procedure and

 2   the provisions stated on the record or attached hereto.

 3

 4

 5

 6

 7

 8

 9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25



                                                         0569
                                                         Page 3
 1                     A P P E A R A N C E S
 2
 3   FOR THE PLAINTIFFS:
 4             Sarah F. Powers, Attorney at Law
                    -and-
 5             Christina Goebelsmann, Attorney at Law
               WARGO FRENCH
 6             1888 Century Park East, Suite 1520
               Los Angeles, California 90067
 7             (305) 913-8587
               spowers@wargofrench.com
 8             cgoebelsmann@wargofrench.com
 9

10
     FOR THE DEFENDANTS:
11
               Bryon Rice, Esq.
12             (Not Present)
                    -and-
13             Geoff Gannaway, Esq.
               BECK REDDEN, LLP
14             1221 McKinney, Suite 4500
               Houston, Texas 77030
15             (713) 951-6263
               ggannaway@beckredden.com
16
17
18   ALSO PRESENT:
19             Jeremy Garrett, Videographer
               Victoria Newman, Attorney at Law
20             (Present Electronically)
21
22
23
24
25



                                                        0570
                                                         Page 137
 1   binder that was someone other than the general manager or

 2   the store managers who were in Austin 2?

 3        A.   Yes.

 4                    MR. GANNAWAY:   Object to form.

 5        A.   Well, yes.

 6        Q.   And who would review the binder?

 7        A.   Mike Ryan.

 8        Q.   And what was the purpose of Mike Ryan's review

 9   of the binder?

10                    MR. GANNAWAY:   Object to form.

11        A.   During monthly audits at our store, i t was part

12   of his job.

13        Q.   And what are the monthly audits?

14        A.   Just seeing how we were doing, making sure our

15   folders were correct, making sure that, you know, we were

16   doing our normal business properly.

17        Q.   Did anyone else at TitleMax perform audits of

18   the marketing binder?

19        A.   To my knowledge, no.

20        Q.   Did Jim Batterson ever review the marketing

21   binder?

22                    MR. GANNAWAY:   Object to form.

23        A.   To my knowledge, no.

24        Q.   Did you ever receive any visits from anyone in

25   corporate while you were at Austin 2?



                                                          0571
                                                             Page 138
 1           A.   Yes.

 2           Q.   Who did you receive visits from?

 3           A.   Linda and Otto.

 4           Q.   And who is Linda?

 5           A.   I don't know her title.

 6           Q.   Do you remember is i t Linda McDonald?

 7           A.   I believe so.

 8           Q.   And Otto, do you remember his last name?

 9           A.   I do not.

10           Q.   Does Otto Bielss sound correct to you?

11           A.   I don't remember his last name.

12           Q.   Do you remember his title?

13           A.   No.

14           Q.   And when did Linda and Otto visit you?

15           A.   I want to say early '13.

16           Q.   And they visited you in Austin 2 at the same

17   time?

18           A.   Yes.

19           Q.   And who was present for that visit?

20           A.   Myself, Lucia and Mike Ryan was with them when

21   they visited.

22           Q.   And what happened during that visit?

23           A.   They walked in and introduced themselves and

24   asked how we were doing as far as numbers, and then they

25   left.



                                                             0572
                                                          Page 139
 1        Q.   Did they review the marketing binder?

 2        A.   No.

 3        Q.   Did they review any sort of documents that you
 4   had in Austin 2?

 5        A.   No.

 6        Q.   Did they do anything else?

 7        A.   No.

 8        Q.   Was that the first time that you had met Linda?

 9        A.   Yes.
10        Q.   And what about Otto, had you met him

11   previously?

12        A.   No.

13        Q.   Did you have any other binders in Austin 2

14   where you maintained documents related to the operations

15   of the store?

16        A.   There's a deposit binder.    There was a binder

17   that showed monthly results.

18        Q.   Monthly results of what?
19       A.    How we did last month dollar wise, reviews,

20   such as that.

21        Q.   Would that be called a performance binder?

22        A.   Yes; yes.   Sorry.

23        Q.   Were there any other binders that you

24   maintained that documented the operations in Austin 2?

25        A.   No.



                                                            0573
From:                             Karen Prouty Conklin <kconklin@fellab.com>
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 <kconklin@fellab.com>
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
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                                                                                         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        Ho<Nells          Joshua
     10494788             11324669            TX          curtis.berry@lillemax.biz                       0      c           2          2013-09-01        Berry             Curtis
     10511025             11988406            TX          tm-fortwofth-tx4@tiUemax.biz                    1      c           9          2015-12-01        Lira .            Ricardo
     10509475             12522566            TX          ·felixd66@yahoo.com                             0      c           3                            DELEON            FELIX
     10505537             12605197            TX           james.griffin@tlt!emax.biz                     0      c           2          2015-02-01        Griffin           Jim
     10503873             14918914            TX           blaine.deleoo@tltlemax.biz                     0      c           2          2013-04-01        Deleon        Blaine
     10509978             16440562            TX          taylor.sullivan@lillemax.biz                    0     .c           2                            SulliVan_____ Tayl_or _.
     10503108             20994108            TX          pdobney01@aol.com                          -:   1      C.          2          2017'02-01 _-   ---oObrtey ·.:--__ --Pefi"rly: _- ·
     10507788             23012910            TX          skyler.wooten@tillemax.biz                      0      c           2          2014-02-01        Wooten            Sk0er
     10524421             23115630            TX          james.schafer@tittemax.biz                      1     -c           2          2017-05-01      :·Schafer- ·-:-James·
     10496806             23643523            TX          kevin.wi!lis@tit!emax.biz                       0      c           9                           Wi!fis     Kevin
     10527270             33163845            TX          mister1031@yahoo.com                            0      c           2          2016-07-01       Tucciarone Gerald
     10505301             33371030            TX          alysia.easton@litlemax.biz                      0      c           2          2014-02-01        Easton   Alysia
     10497454             35031270            TX          scott.damico@titlemax.biz                       0      c           2          2014-08-01        Damico   Scott
     10500881             237693958           TX          annette.martinez@Utlemax.biz                    0      c           2                            MARTINEZ ANNETTE
     10514374             0165-523-78-954-0   FL          !indsay.obrien@tillemax.biz                     0      c           2          2013-10-01        OBrien   Lindsay
     10507313             TITLEM001           CORP        dspillers73@gmail.com                           0      I           F                            Matthews William




0
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                                                                                                                   "P..!IJIUJ!U~13.,!i!!DI,
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              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 Nrtul<!                                         l'll'l>imts   Orvn~rCily                Ptt'l•ic>us Ouma Sin!<!
              75149-                                                           l@!rn1@                                                        CARROLLTON                              TX
                                                                                                                                                                                      Rc•nr;va/ Nfllfrc• ZIP Corlr


              R<'lh'Wal Nolirc· 7./P+:f                                                                                                       l'lt'l 1 illll~ Uwt~c·l'/alc· Nttmh•r   Ptrvk>us Expimli1111 Mont/1
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              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)
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                                                                              PASS-lRK                                                        0050                                    0000000000
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              00000000                                                         005400                                                         006400                                  Redacted
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                                                                                                                                              BRAND LAWS)
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              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
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                                                                                                                            APPLICATION
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                 RECORDS
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                       lkn Holdi!r Pa~li011                                                                                               lim 0.1/t
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                              lNTEGRITY TEXAS FUNDJNG                                                067491478                  3639 GUS THOMASSON RD
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                              MESQUITE                                                               TX                        75150-

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                                                  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!'!' Stm•l               R<'H<"WIII NMin• City                                    l!rJJI'Wil/ NutiC<' Slnlr             Rrnruml Nofiu ZIT' Out••

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         2012                                      2013                                                     04                                    Moy 12012
         TitlrOalc                                Oum<'l~hip lujom111/iom                                  M11rfi'IYI'IIr                        Make'
          FebS 2009                                01 • TEXAS TITLE                                         2001                                  FORD
         M~dd                                     Mad<'} Drsr:rip/iou                                      Vl'hid,• Bod!! T,!ip<'                \1   ,•hidr MajorColmfCclorGnJIIp]
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               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
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               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-


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                   AGGREEMENT IS NOT PART                                                                                        ISSUED             OF PAYMENT FOR 1HE HEAVY
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                    CRy,TX7S189-4670                               175189-4670


                         Lie11 Holders
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                                                                                                                                              20100SOI


                               Lieu Holder l11jormntiou
                               U.•n   Huld~rNnm.:                                                      Um HPidcr Numlt.:r    5/rw/                                                                      5/Jw/(rol/fJ
                                INTEGRITY TEXAS FUNDING                                                  072154393           5501 BROADWAY BLVD., STE. 105
                               Cily                                                                    5/11/1'               Zip Cod,•                                                                  Cr<rmlr;f
                                GARLAND                                                                  TX                  75043-

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        Record Details
        Owucr Ntw~·                                     OwuaSrn·eJ                                                     OwuaCil!f                             Onou.•rSIM~
         j;@tml@                                        1;@@1@                                                          DALLAS                               TX

                                                        .-. -.
        Owner ZIP Code                                  Pll'Vimls Owucr NrJlll.!                                        Pn:tri~u.<OnmcrCity
         75243-                                                ~                                                        MESQUITE                             TX
        RL'II('loa/ Nr>/ic.•Sin~·J                                                                                     Rmrwal No/ier.• 5/n/r                 Rrurwnl Nalia ZIP Codt•


        R•'llt'<Mf No tic.- ZIP+4                      Ucm!r' Plair Numb,·r                                            Pm•ious Uuuu {1/at,• Nul/llr<"r       Pn'l'illlls Ex)•imtilm Mo11th
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         2013                                           2014                                                           . 03                                  Apr52013
        TilfrDa/C'                                     Oumml1ip lufonmtiou                                                                                   Makr
         Jun 26 2013                                    12 • CERTIFIED COPY OF TEXAS '!1TLE                             2010                                 TOYOTA
        M11dd                                          Mrrf.•/ o,·soiptiau                                             Vrldck Body Typr                      \'rln'ck Major Colm{Cc/11r Gmllj'/
         CBA                                            TOYTCBA                                                         4D • 4-DOORSEDAN                     WHITE {Color Group WHITE)
        Vdr ich.o Mirrt~r Ct~lm/CI.!It~r GmiiJI}       Vel! felt Clnss Ct~~f~                                          VdrickTumm.~u                         I'drick Snl~$ PriCI!
                                                        PASS                                                            0000                                 0001669500
        Vcfridr Sold D1r/e                             Vtlddr Ewpl!f Wl'i"ght                                          Vrldclr Gro$.~ WrWrl                  VinNumlw
         00000000                                       003400                                                          003400                               I@Fifi@•
        f1rmdrd Tilk /nfnnmtion                        DIIC!IIlk'll/ TYJ~' /ufrmmliml                                  Vr•lrick OdomL'/r•r lnfom~llion       Oil•;,•/Jufrmunliou
         none found                                     01 • REGULAR TITLE                                              A= ACUTAL MILEAGE 0 • VErllCLE IS NOT DIESEL
                                                                                                                                          POWERED
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        0 • VEHICLE DOES NOT                            0 =VEHICLE IS NOT STOLEN                                       0 = VEHICLE IS NOT.                    O=VEHICLEDOES NOTHAVEOVER
        MEET STANDARDS                                                                                                 EXEMPT FROM                           2/3 OF BED Wffil PERMANENTI.Y
                                                                                                                       REGI51RATION FEES                     MOUNTED EQUIPMENT
        Flo~rl   Dnlll1j/l' Iufonmlfrm                 Gavrnm!o!ul Ouwrmlrip lrifrmmllilll                             Titlt• Hc-1 Clr~tk /rifllmllllil>u    Jnspt•cli!lu Wniv.·rllrifllmmion
        0 ·VEHICLE HAS NO                              0 =VEHICLE IS NOT U.S. GOVERNMEN O=NOHOTCHECK                                                         0 =TEXAS SAFETY INSPECJION IS
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                                                                                        APPLICATION
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        RECORDS
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        0 = SURVIORSHIP        0 =TEXAS TITLE IS NOT REVOKED                                                            0 =SUSPENSION NOT 0 =VEHICLE IS EXEMPT FROM PROOF
        AGGREEMENT IS NOT PART                                                                                         ISSUED             OF PAYMENTFORTHE HEAVY
        OF 1HE VEHICLE'S TITLE                                                                                                            VEHICLE USE TAX
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              Lien Holders
             Um Holda PoMiou                                                                                                           UmDafr
                 1                                                                                                                     20130603


                     Lien Holder Infonna lion
                     u,·n Holda Nmrli'                                                       li<'ll 1-io/du Numb~ I'           Stm•/                                                         5/n·cs (c<JuJ)
                      INTEGRITY TEXAS FUNDING                                                081001660                         4401 LEMMON AVENUE
                     City                                                                   S1111~                             z;,c..rt,·                                                    Cormln;
                      DALLAS                                                                 TX                                75219-
                                                                                                                                                                                          PUO't32> 8
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         75043-                                               1@@1@                                                         RICHARDSON                           TX
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        00000000                                              004000                                                        004000                               !dffittA@
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       AGGREEMENT IS NOT PART                                                                                               ISSUED             OF PAYMENT FOR TilE HEAVY
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                        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
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                                                                Indicator                                                              Wdgl!lllifcmuliou
                              DOES NOT
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               lim Hof.t,., p,Js/!ou                                                                          IimDa/1'
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                     Ucn HCJ/d.-rNrmt:                                               Uru Holder Number          Stn!ct
                     U'ITEGRDY TEXAS FUNDING                                          067727776                  3306 IRVING BLVD
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                                                     Yourncrouul OZ099410S-TX fill~   bun durrgcd 1 'I.Dok·rtp' on Fdmmry 20, 2014 n/15:23:23.
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    *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




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                  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-


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                                                                                                                                        PO 014015
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                       Redacted                                      GREENVILLE, lX 75402-9034


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                                                                                                                 Bed Wei&hl llifonllllliou
                                                                                                                 VEHICLE DOES NOTHAVEOVER




                                         0 = NO PERMIT REQUrRED


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                                                     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
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             Record Details
             Owm•r Nn!llt..'                                          OwucrStm:-1                                             OwucrCily                                01t•urr Slnlf
               • • I •     • t                                                                                                GREENVILLE                               TX
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              75402-903<t                                              Redacted                                               DALLAS                                   TX
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             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)
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                                                                       PASS                                                   0000                                      0002098668
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              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
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             !@f$@MGreenville;rx                                      !@$!$                      Greenville,TX 75402-9034    i@fflijffliM
             75402-9034                                                                                                                                                                                  PO 014018
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                 Lien Holders
                 UclllfulrfcrP<tSiiM                                                             Ui:n Dill~
                 1                                                                               20130724


                      Lien Holder biforma fion
                      lku Hold.•rN.111re                              Um HolrlcrNumbtr        Sin:~ I                              Stn·ct (ron/)
                       INTEGRITY TEXAS FUNDING                         071608359               6210 WESLEY STREET
                      Cit}!                                           Stalt'                  Zip Code                             Country
                       GREENVILLE                                      1X                      75402-



                                                                                         Feb 20 2014, 15:46:27
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                                                                                           Feb 26 2014, 12:07:14
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                                              0 = VEHJCLE IS NOT STOLEN




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                Lien Holders                                                                                                               PO 014085
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                   1                                                                             20120820


                       Lien Holder Information
                       Ueu HolrhNtmlt'                           lim HoldcrNmu/!er    Sired                                         Sh~cl (COli/}

                       lNTEGRI1Y TEXAS FUNDING                    071144553           15298 W BUCKINGHAM BLVD
                       City                                      Slrtle               ZipC(Ide                                      Cou11/ly
                       GARLAND                                    TX                   75042-


                   Certified Lien Hnlden:;

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                                                                               Yorrraccouul 01 Z988.J06-TX lm~ bml dun-ged 1 'l.bDk-up' on FtbnmnJ 28, 20Z4 n/ 1 I:I Z:56.
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        On•ncrNanl:!                                                                                                   OWI!UCily                                   OH•urr Sfa/(
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        Owner ZIP Cmf<!                                                                                                Pn1110u! Ou.olletCfl!l
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         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)
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                                                                                                                                         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
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        0 = VEHICLE HAS NO                                0 • VEHICLE IS NOT U.S. GOVERNMEN 0 = NO HOT CHECK                                                       0 =TEXAS SAFETY INSPECTION IS
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                                                                                            APPLICATION
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        0 =VEHICLE HAS NO JUNK 0 =NO PERMITREQUJRED                                                                    0 • NEVER SALVAGED 0 =NOT A RECONS1RUCTED VEHICLE
        RECORDS
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        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
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         0 =REGISTRATION IS VALID 0 =NO HOT CHECK ISSUED FOR                                                           0 = REGISTRATION                             0 =REGISTRATION STICKER NOT
                                  REGISTRATION OF VEI·llCLE                                                            PLATES NOT SEIZED                           SEIZED
        £kcfnllli( Tillr /nfonmlion                       l.rmmt Lmulnfummliou
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              Lien Holders
              Um 1-/o/dcr Po~fio11                                                                                                   Urn Dnk
                                                                                                                                      20130615


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                         Cily                                                        Stnl.:
                         HOUSTON                                                      TX


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                                                                                                                                                                     I
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                                                               IIDIEN"DFI:ED A5 BEJNG REAQUffiED 1D
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                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

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                                                                                                                  PIIII!·Numl>rr




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             none found                                                                                                               IS NOT DIESEL




                                                      0" NO PERMIT REQUIRED


                                                      O"TEXAS         IS NOT REVOKED




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                         JNTEGRITY TEXAS FUNDJNG                                                  082000419                 2819 S GARLAND AVE
                         City                                                                                               ZipCrdt                               Cormlry
                         GARLAND                                                                  TX                        75041-


                   Certified Lien Holder::;

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20140402083420083421 020994108 TX DETAIL
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    *   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<l/fcr ZIP C11dr


                                                                  lictt/S~   Pint•• Numb,•r                                     Pn-vio1<s Uwl~<' Pin{(• Nnm/oer   Pa-vh!/1~   fXJ'imtUm M1ml/!
                                                                   I@Mi@l                                                        "'.I                              04
                Pn.•r.lie>/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.<rl lnfanm/Wu
 none found                                 01 ·REGULAR TITLE                                       A • ACUTAL MILEAGE 0 • VEHICLE IS NOT DIESEL
                                                                                                                       POWERED
DOT Stmufarrls b!fimmli(IJJ                 DPS 5/flh•u lmficrrlfll'                               Rrgislmliau E;n•mp!iou             Fi.·ud Bed \.Wigftlltifcl/lm/ipn
0 • VEHICLE DOES NOT                          0 • VEHICLE IS NOT STOLEN                            0 • VEI·UCLE IS NOT                O•VEHICLE DOES NOTHAVEOVER
MEET STANDARDS                                                                                     EXEMPT FROM                        2/3 OF BED WITH PEfu\1ANENTLY
                                                                                                   REGISTRATION FEES                  MOUNTED EQUIPMENT
Flood D1111~1gr l!ifanmlioiJ               Gdr•tmm•uf Owtll!'l!1flip lufMu~ll'all                  Titlr Hot Cllr>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.<inu hifanHIIIiDu   H~nvy U~,,      Tax !Jifanunlion
0 = SURVIORSHIP            0 • TEXAS TITLE IS NOT REVOKED                                           0 =SUSPENSION NOT 0 =VEHICLE IS EXEMPT FROM PROOF
AGGREEMENT IS NOT PART                                                                             ISSUED             OFPAYMENTFORTHEHEAVY
OF TI-lE VEI·llCLE'S TITLE                                                                                            VEHICLE USE TAX
Rtxi$/Hlli!1n Vlllirlily luft>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




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                                                                                                                                                                    PD_014361
                                                                                                                                                                                        0639
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       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



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                                                                                                      PUBLICIIATA_&Jllll,
                                Home I My Account" I Account History I Autoseiltch I Refer Friends & Earn Lookups I Logout
-+Texas- Deparbnent of Motor Vehicles [Ov-mers]
                     Results for "75071628901" on 1 database{s) Searched by ZIP Code

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                        Redacled                                                     MCKINNEY, TX 75071-6289

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                        Redacled                                               MCKINNEY, 1X 75071-6289

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                       I@Jffl1$                                                       VICKINNEY, 1X 75071·6289

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                        Redncted                                               MCKINNEY, 1X 75071-6289



                                                                                 Yc>uraccotml 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
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                                                                                                      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
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        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·.<;
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                                                                                                                  May 19 2014,16:06:36
      20140519160636160637 023115630 TX DETAIL
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      rec=3913412516
      ip=216.207.175.4
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      refcr=http:lllbsearch.publicdata.comlpdsenrch. php?p 1=t3HGCM56373G706271 +&input=grp_ dmv_ vin&tacDI\ifV=DPP A-
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                                                                                                                                                                                                         PD_006478
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                                                                                                                                                                                                                         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).


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                                                               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

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                         F:X-10        ,        Material Contract
                                                l~aterial Contract
                                                                                                                                     HTML
                                                                                                                                     HT\4L
                                                                                                                                                   34K
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                     •1: ~X-lQ 22
                              £A-lQ ?1
                                                Material Contract
                                                11aterial Contract
                                                                                                                                     HT11L
                                                                                                                                     HTHL
                                                                                                                                                  107K
                                                                                                                                                  l75K
                              F:X-?1 1          Subsidiaries of the Registrant                                                       HTHL          47K
                     ,,'',,   ~
                              £:<-:'11 2
                                                Certification per Sarbanes-Oxley Act (Section 302)
                                                Certification per Sarbanes-Oxley Act {Section 302)
                                                                                                                                     HTHL
                                                                                                                                     HT!~L
                                                                                                                                                   31K
                                                                                                                                                   32K
                              F:X-:;? l         Certification per Sarbanes-Oxley Act {Section 906}                                   HTI~L         26K
                    10:       ~                 Certification per Sarbanes-Oxley Act (Section 9061                                   HTHL          26K
                    32:       F:Xr.F:r          XBRL IDEA ~Jorl:book -- fi'nancial Report (, xls)                                      XLS       2'    56~1
                    55: El                      Document and Entity Information                                                      HTML              51!(
                    4 4: E2.                    Consolidated Balance Sheet~                                                          HTl~L        12SK
                    53: l!l                     Consolidated Balance Sheets (Parenthetical)                                          HTML              29K
                    57: M.                      Consolidated Statements of Income                                                    HTML              B7K
                    72: R.2                     Consolidated Statements of Member's Equity and                                       HTML              44K
                                                            Noncontrolling Interests
                    4 6: !!f.                   Consolidated Statements of Cash rlows                                                HTML         163K
                    52: El                      Nature of Business, ?rinciples of Consolidation                                      HTML              91K
                                                            and Significant Accounting Policies
                    40: Ell                     Credit Quality Information, Allowance for Losses                                     HTML              81K
                                                            on Title Loans Receivable and Liability
                                                            Related to Unconsolidated CSO Lender
                                                            Loans
                    31: ~                       Concentration of Credit Risk                                                         HTML              32K
                    73: BlQ                     Property and Equipment                                                               HTHL              60K
                    59: Ell                     Other Assets                                                                         HTML              47K
                    58: R12                     Acquisitions                                                                         HTI~L             361<
                    63: E.l..l                  Senior Secured Notesr Revolving Credit facility                                      HTNL              92K
                                                            and Notes Payable
                    64: B.l..i                  Accounts Payable and Accrued Expenses                                                HTML              471<
                    62: E.l.2                   Other Operating and Administrative Expenses                                          HTML              58K
                    65: B.l..fi                 fair Value Measurement and Fair Value of Financial                                   HTI~L             S3K
                                                            Instruments
                    54: El.1                    Employee Benefit Plans                                                               HTt-lL            29K
                    56: E.1.B.                  Related Party Transactions                                                           HTNL              32K
                    61: E.1.]_                  Corrunitments                                                                        HTI1L             69K
                    78: .!UQ.                   Contingencies                                                                        HTNL              32K
                    68: R~l                     Phantom Stock ?!an                                                                   HTNL              28K
                    4 9: B22.                   Chapter 11 Bankruptcy Filing                                                         HTML              29K
                    60: ill.                    Guarantor Condensed Consolidating financial                                          HTML         781K
                                                            Statements
                    51: all                     Nature of Business, Principles of Consolidation                                      HT!•!L       129K
                                                            and Significant Accounting Policies
                                                            {Policies)
                    24: ~                       Nature of Business, Principles of Consolidation                                      HTML              53K
                                                            and Significant Accounting Policies
                                                            (Table&)
                    69: .8.21i                  Credit Quality Information, Allowance for Losses                                     HTI·!L            a3K
                                                            on Title Loans Receivable and Liability
                                                            Related to Unconsolidated CSO Lender
                                                            Loans (Tables)
                    75:       E..U              Property and equipment (Tables)                                                      HTHL              S<lK
                    35: B2J!                    Other Assets (Tables)                                                                HTML              46K
                    34: B.2..1                  Senior Secured Notes, Revolving Credit racility                                      llTML             70K
                                                            and Notes Payable (Tables)
                    38: E.1D.                   Accoun~s Payable and Accrued Expenses (Tables)                                       I!THL             46K
                    39: R31                     Other Operating and Administrative Expenses                                          I!TML             58K
                                                            (Tables)


                                                                                                                                                                  0644
                        41: E.lZ.                     fair Value Measurement and fair Value of Financial         HTML           41K
                                                                  Instruments (Tables)
                        22: E.J..1                    Commitments (Tables)                                       HTNL        671<
                        66: B.M.                      Guarantor Condensed Consolidating Financial                HTML       617K
                                                                  Statements (Tables)
                        48: BJ5.                      Nature of Business, Principles of Consolidation            HTML           <7K
                                                                  and Significant Accounting Policies
                                                                  {Details)
                        50: !U.2                      Nature of Business, Principles of Consolidation            HTML           37K
                                                                  and Significant Accounting Policies
                                                                  (Details 2)
                        28: Ell                       Nature of Business, Principles of Consolidation            HTl~L          46K
                                                                  and Significant Accounting Policien
                                                                  {Details 3)
                        77: !<3R                      Credit Quality Information, Allowance for Losses           HTML           50K
                                                                  on Title Loans Receivable and Liability
                                                                  Related to Unconsolidated CSO Lender
                                                                  Loans {Details}
                        17:    E..19.                 Credit Quality Information, Allowance for Losses           HTML           49K
                                                                  on Title Loans Receivable and Liability
                                                                  Related to Unconsolidated cso Lender
                                                                  Loans (Details 2)
                        42: B.:L!l                    Concentration of Credit Risk !Details)                     HTML           29K
                        71:    ~                      Property and ~quipment (Details)
                        21: gz
                        33: ru..J.
                                                      Other Assets (Details)
                                                      Acquisitions (Details)
                                                                                                                 HTML
                                                                                                                 HTHL
                                                                                                                 HTML
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                                                                    IO~K -   Annual Report
                                                                   Document Tnhlc of Contents

                                     (seque111 ial)                                                     (alphabetic)

~          - Filina Suhml<;sion
Table ofContents                                                                      Altemntive Fonnats <Word et nl.l
fru:ll                                                                                8tt<;iness
Item I
                                                                                      Certain Relationshins and Relmed TrnnsactioJt~ nnd Djrector
                                                                                      Independence
Business
                                                                                      Changes in and f)i_<;ngreements with Accoml!ants on Accounting m1d
illDLlA                                                                               Fjnancbl Disclosure
Rl~k Factors
                                                                                      Com:olidated Balance Sheers as ofDccemher 1 I ?OJ? and ?0 II
Item IB
                                                                                      Con<;oJid<"lted Stntemcnts of Cash Flows for the Years Ended December
llnrcsolved St!ilfCormrents                                                           "11 ?0!2 2011 and ?010
hem?                                                                                  Con.<;o!idmed Stmements oflncorne lOr the Yem1> 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<ll Condition nnd Results of     Item 13
        Opemtions                                                                           Item 14
        Item 7A                                                                             Item 15
        Oum1titmivc and Ounlitativc Disclosures Ahout Market Ri~k                           lli!n..!A
        Hem R                                                                               Item IR
        Fimmcinl Staten~nl<; and Sunp!emcnti)rv Data                                        lkln.2.
        Report oflndepcnderl!: Regi<;tercd Public Accmmting Firm                          • Item 3
        Consolidated Balance Sheel<Ul!wf'Decembcr 31. ?0 I? nnd ?011                        Item4
        Coi\S'olidated Statement~ oflnco!Th! for the Years Ended December 31                Item :)
        ?OJ? ?011 m"KI ?010                                                                 ltem6
        Consolidated St<1tements of Member's Em1itv nncl Noncontrolline.lntcrests           llillil.l
                                                                                             ltem7A
        for the Yctlrs F11dcd December 11 :w I 2 ?{)I I and 20 I0
        Con<;o!idatcd S!n!cmcnl"> ofCash Flm\'S Cor tim Yrm;s Ended Qccemher 31
                                                                                            lliml.R
                                                                                            Item 9
        ?012 ?0\1 and ?OJO
                                                                                             ltem9A
        Notes tn Cnmnlid<Jted Financial Stmem"nts
                                                                                             ltcm9B
        ltem9                                                                                l.egul Proceeding.-;
        Chmmes in ami Disnm-eciT"Cnts wjth Accowlt<Jnts on Accotolting and Financinl        Manugen~nt's Oi.~cJL~sinn and Analysis nfFinanci<JI Condition and Results
        Di~c!osJ[C
                                                                                            of Operation"
        lkm..2A                                                                             Market for Regi~tr<Jnt's Comnun Equ~v Rclntcd Stockholder Mailers nnd
        Controls nnd Procedures                                                             Issuer Pttrclmscs ofRcluity Sccl[itics
        J..!Qm.2.B                                                                          Mjne Snfcl\' Dl<>c!QSJlfC'>
        Olhcr lnfomrution                                                                   Note"> to Consolidated Fjmmcjal Smtcn-ents
        Pnrt Iii                                                                            Other lnfom)ation
        Item 10                                                                             P<lrt I
        Directors E:.:ecutivc Officers m1d Corporate Govemance                              Part lj
        l.!slliill                                                                          Pari Iii
        Executive Compensation                                                              fill:L!y
        .l!Jmill                                                                            Pri11cinnl Accotullflnt Pees and Services
        Securitv Owncrshin of Certain Renclici<JI Owners nml Mannnetrcnt ami                Pronertics
        Re!nted Stockholder Mnllers                                                         Opantitiltive <Jnd Oua!itmive Disclosures About Market Ri5k
        Item 13
                                                                                            Rcnort nflndercndent Registered Public Accounting finn
        CertoM1 Relationshb1s and Related TrnnS;)ctions and Director Independence
                                                                                            Ri"k Factors
                                                                                            Se:cnritv 0\\nC:rshin of Certain Bene ficin! Owners and Mmljlgcmcnt and
        Item 14
                                                                                            Relmcd Stockholder M<llters
        prjncinal Accotnltml( Fees and SeJYices
                                                                                            Selected Ein;mcii!l Q<11<1
        Part lv
                                                                                            Signnturei\
        Item 15                                                                             Table ofContc]l!s
        Exhjhits and Finnnci<ll Stntemcnt SchcdJ!fcS                                        ( lnrcsolved Sta ll'Comncnts
        SiPnlll\trCS



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                                                         UNITED STATES
                                             SECURITIES AND EXCHANGE COMMISSION
                                                                          WASHINGTON, D.C. 20549



                                                                                                                                                    0646
                                                                                        FORM 10-K

     ll<l ANNUAL REPORT PURSUANT TO SECTION 13 OR 1S(d) OF THE SECUR!TillS EXCHANGE ACT OF 1934
                                                                              For the fiscal year ended Qccemlrr 31 201 '2

     0    TRANSITION REPORT PURSUANT TO SECTION 13 OR IS(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                                                                             For the tr:msitioo period from          to

                                                                                 Commission File Number 333~1722-l.J



                                                                                  TMX Finance LLC
                                                                          (E.'Oict N~tne ofRegistnmt as Specified in its 01arter)


                                                Delaware                                                                                         20~1106313
                                       (State oflncocporotion)                                                                      (I.RS. Employer !dtmtilkation No.)

                                 15 Bull Street, S:mmnah, Georgia                                                                                   31401
                           (Address ofPrincipnl E.'>l!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 T<Wi~tmnt was required to submit and post such files).·
Yes IBl No 0

     Indicate b)' check mark if disclosure of delinquent filers pursuant to !tcm40S ofRcgttlation S·K (§229.405 ofthis chapter) is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or infom1:1tion statcmcms incomomtcd hv rqfercncc in Pan !II oft his Form 10-K or any omcndmcnt to this FomllO.K. IBl
    Indicate by check mark whether the rcgisrmm is a J~rgc acccler.ued filer, an accclerotcd filer, n non-ncccl~rated filer, or a smaller reponing company. See definitions of "large
acccleralcdjilc:r," "accclerarcdjiler"nnd ".\mallerrt:poning company" in Rule 12b·2 ofthe E.\l:ilongc Act.

                                      Large accelerated filer 0                                                                               Accelerated filer 0

                                  Non-accelerated filer !:ID                                                                          SmaUerrcponinl} compony 0
                        (Do not check ifn sm.1Ucr reportins compnny)
    Indicate by check mark whether the re1•istmn1 is a shell cornpnny (as defined in Rule 12b·2 ofthe E...change Act). Yils 0 No        IE]

     Indicate by check mark whetherth!i registrnnt has filed aU documems and reports required to be filed by Sections 12, 13 or !5(d) ofthe Securities E.'lt:hangc Act of J9J4subscqucnt to
the distnbution of securities under a plan con fumed by a court, Yes lEI No 0
    The Compijnv has    100 outstnnding       limited liability comp<my m::m!Jership units, aU of which are held by TMXFimnce Holdings Inc.




Tnhlq nfC'onlent~

                                                                                         TMXFINANCELLC
                                                                                      ANDAFFILL\TES
                                                                      FORM JO~I{FOR THE YEAR ENDED DF.CI\.\1Bffi31. 2012




                                                                                                                                                                                                   3

                 Ri~k Fn<:tnrs                                                                                                                                                                     9

                 \Jnr.•so!vN1    .StnffComl'l'l<!nt~                                                                                                                                               17

                                                                                                                                                                                                   18

                 I ~t:nl Proccedint:s                                                                                                                                                              18

                                                                                                                                                                            0647
                  Mine Snfetv      Pisclo~ures                                                                                                                                                        18



                  Mnrl:s::t   f<'~r Rcgi~lrnnt's   Cn111mon F.!luitv Rdn!d Stockholder ~·lapen; :1!\d     l~sn~r Pnrchn~e~    ofEnnity Securities                                                         19

                  Selected Finmtcinl Pntn                                                                                                                                                                 19

                  Mnnngement'~         Qiscnssinn 11nd ..\nalvsis nfFimmcial Comlitinu nm! Re$ulrs ofOnemtinm;                                                                                        21

                  On:~ntitntive    nnd Qnalitl!!ive Disclosures -\h0111 Mnrl:ct Risk                                                                                                                  30

                  Financial :':tntemcots nnd Stnm]rnwman•              Pam                                                                                                                            31

                  Changes in :tnd Di~al!reements with AccountmttS on Acconntin1• nnd Finandnl                    Di~clnsnre                                                                           61

                  f'nntrols nml Proceflnres                                                                                                                                                           61

                  Other lnfopmtion                                                                                                                                                                    61



                  Dirccton Executive Officers nne! Cnmnmte Goycmnnce                                                                                                                                  62

                  Execntjve Cnmnensmjon                                                                                                                                                               64

                  Sccmitv OwMrnltiQ nfCCilnin            Bcneficj.~l   Owner;; nml 1\!nnngcmctl! nnd Relntcd Stockholdcrl'llil!lcr.:                                                                  70

                  Cer1ain Relntinn3hins ond Rclntct! Tmnsactions nnd Director lnd!!ncndcnce                                                                                                           70

                  Principnl Accountant fees nnd Sco•ices                                                                                                                                              72



                  F.'<hihit.o; nml Finnncjnl   St~ttem.,ml   Schccln!es                                                                                                                               73

                                                                                                                                                                                                      76

                                                                                                           2


TnhlenfCnntents

                                                                                       FORWARD-WOKINGSTAT.El\'JENTS

         11tis report co/1/ams '1ont•ortf.lookmg stalctt/CIIfs"' 1/wt illl'olvc l"i.rks and :mccrlainlir:s. Fonvurd-looking :rtatemems provide currem cxpeclalion.r ojjilfurc ct'cll/s based on
certain e.rpectatlons, assumptions, e.fltmatcs ami projccllom: Font•ard-looklng .t·tatcnuml.f can he Jdentljlcd by lbefoctlhatthcy do not refale slricll)' lo hi.vtorfcal orc111"1"CIIf facts aud
frequently colllflill words.wc:l1 as "anticipate," "a,t:mmc," "hclfct•c," "budget," "comlnuc," "could," "csllmale," "c,rpccl, ·• ''jillurc, ·• "!mend, ·• "may," ''plan," ''polenflaf," "predict,"
 ''proji!CI," "will" tmd other .m111/ar terms. All :rlolements .thai address opl!ralmg performance, e\•en!.f ordcvdopmmls that we c.rpccl oranlic1palc will oCclfr 111 tllcjitturc- mcludrng
s/atcmi!IIIS relating to demand for our products and .~erv(cc.v, safes growth, comparable l"ION! safes, sf ore opcnlllgs, slate afrhc economy, capilaf alloca/ion and expenditures, liqutdil)'
amllhc effie/ ofadopting certain accouming sumdards- ore font•ard-louking stateme/lls. Font•ard-looJ:ing .~loteiiWI1fJ.' ilwnfwt risk aud ore not guorunlees njji1111re petfnrmonce. 711<'
( 'm11!>1m\' '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. RISI<FACTORS.

     Our busftwssfitt:l!s a variety ofrlsks and llllcl!rloinl/es, including those described hdau<, t}Jat could materially and adwr.~dy affict our busfness,jinaucial condition and results of
operations and could cause acwal rcsulls to diffir materially from our e.r:pectations and projections. You shallld read these risk factors ill conjunction with "}!em 7, Mauagemmt :\·
Discussion and Ana(vsts ofFinancial Coudfltou oud Results ofOpcralions" and our cousolidatedfinancial stalemellfs and related notes/// "/tem8. Financial Statenumls rmd
Supplemr:mwy Data."

Our imfuslrJ• is strictly regulutetl 111 tfse state,f~:de.rul and loctJifel•ds. Our failure tu comply witII upplicuble laws ami regulutions go1•eruing cotlSIIIIU!r protection, lrmdiug practices
am! fll/lcr aspects t~.frmr husiucs~~ aswell us changes in applicable laws and regula/ions, could /lave u j"iguificrmt mfl't!rSe impact 011 our busiiii!SS, resuffs ofopcrutfmu,jiuauciaf
condition uud ubi/fly to servlc~ our de lit ollllgatfous.

       Our business and products are subject to e:>lensive 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 <tdver.;e impact on our business, prospects, resu[ls of operations, financial condition and cash flows nnd could impoir our nbility to service our debt obligntions and to
continue current operations. For cmmple, ccnain consumer advocacy groups nnd fcdcrnl and state les:ishuors have as~crted that laws and regulations should be tightened to severe!>' 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<!ements).


      Any judicial decisions, legislntion or other rules orregulations that impair our ability to enterinto and enforce pre-dispute consumer arbitration ngreements could significnnt!y
increase ollr exposure to cl~ss ~ction litigation as well as litigation in plaintiff~fiiendly jurisdictions. Such litigation could have a material ndverse effect on our business, results of
operations, financial condition and ability to service our debt obligations.

Our insumur:e r:o)•crage limit:r may be inadequate ro co1•er ortr liabilities or one or more ofour iusura11ce carriers could tft:jault 011 their obligatious.

        As a result ofthe liability risks inherent in our line ofbusiness, we maintain liability insurance in1ended to cover vnrious types of property, casualty ~nd other risks. The types and
nmounts ofinsurnnce that we obtain vary from tbne to time, depending on availability, cost and our decisions v.ith respect to risk retention. The policies nre subject to deductfules and
C:..I:!usions that result in ourretention ofa level of risk on <1 self-insured basis. Ourinsur.mce policies are subject to annual renewal. Tile coverage limits of our insurance policies m:t}' not be
ndequate, and we may notlle able to obtain liability insurance in the future on acceptable temlS or at:~IJ. In addition. our insurance premiums may be subject to increases in the future which
may be nl3tcrial. furthermore, the losses that are insured through commercial insurance n.re subject to the credit risk ofthose insumnce companies. While we believe our eo/TliT\ercial
insurance providers are currendy credit worthy, we cannot assure you that sucl1 insurance co~nnies will remain so in the future. Inadequate insurance covernge limits, increases in our
irlsurance costs or losses suffered due to one or more of our insul"ilnce carriers defaulting on their obligations, could have a material adverse effect on our financial condition, resu!!s of
opemtions and ability to service our debt oblig:~tions.

A significant portion of our revetme is generated by our stores in Georgiu, Alubnma, Tt!tme.fsee ami Sullfll Curoli11n.

       Appro»mately 28%, 12%, 11%and 8% ofour stores are located in G!orgia, Alabama, Tennessee and South Cnrolina, respectively, which accounted forapprOllimately 36%, 16%, 13%
and 13% of our revenue, respectively, for the ycnr ended Decgrnhcr 31 2012. As n result, ifnny ofthe evenls noted in these risk factor.s were to occur in these states, including changes in
the regulatOI)' envitonment or worsening of economic conditions, it could significllntly reduce our revenue and cash flow and could hal'e a material adverse effect on our business, results
ofopemtions, financial condition and ability to service our debt obligations.

                                                                                                   II


                                                                                                                                                                                0653
Thhls ofContent~

!jwe lose key 1/I«Jlllgtllll!llt or are tmahfe lo attract a11d retain qua{itJ• management tale/It, we mny be unable to pmfllably operate nml grow our business.

       Our continued growth and future success will depend on our ability to retain the members of our senior managemc:nt team, who possess valuable knowledge of, and experience with,
the legal and regulatol)' environment of our industl)' and who have been instrumental in developins ourstmtesic plans and procuring capital to enable the pursuit ofthose plans. The lass
of the services of members ofsenioimaMgement, together with any inability to attrnct new skilled ffi!lnagement, could hnm1 our business and future development.

T!Jt./1/teres/s ofour Parent's sole benejidal owtter may be lliffaeut til au those ofrmr iuves/ors.

       Tmcv young is our founder, Olllinnan of the Board, 0JicfE.'IJ!cutive Officer, President and the sole bcnefidalownerofourparent holding company, TMX Finance Holdings Inc. As a
result, subject to the !imitations in the agreements govemi11g our indebtedness, including the inrlsntnre governing our senior secured notes, or the "lml!!lllllr>! "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<lnge for an unrelated third porty to JMke loans to our customers. There
arc a limited numberoflhird pnllies that make these types ofloans, and there is significant demand and competition for the services oftilesc third parties. Titese third pnrties rely on
boJTowed fonds in order to tnilke consumer loans. lfthese third panics Jose their abWty to make loans or become unwilling to mnke loans nnd we nre unable to find another lending pl1t1ner,
our cost of am:mging loans in these states tn3y increase significantly and we could be forced to change the way we operate in these states, wl1ich may l1ave a material adverse effect on our
finaneinl results, make it difficult to opcrnte profital:lly in these locations and negatively affect our ability to service our debt obligntions.

Tile lack ofavailability ojun adequate mrmher afltour/y employees to T/111 our business cn11flf negativcly impact our growth, mul any increases in Wtlges, benefits or rltltu cosu·
associrrtclf will/ llollrly employees could signljicautly increase our labor co.rls.

       Our workforce is comprised pnhmrily ofemployees wbo work on an hourly basis. In certain ure:~s where we opernte, there is significant competition for employees. The l:tckof
avnilability ofnn ndequate number ofhourly employees or an increase in wages nnd benefits to current employees could adversely affect our business, results of operations, cash flows,
financial condition and ability to service our debt obligntions. We ore subject to applicable rules and regulations relating to our relationship 'vith our employees, including minimum wage
nnd break requirements, health benefits, unemployment and sales tax::s, O\'enime und woricing conditions and inlJnigration status. Accordingly, legislated increases In t\1e federnl minimum
wage, as wei) ns increases in ndditiom1llabor cost components such as employee benefit costs, workers' compensation insurnnce rntes and compliance costs and fines, would increase our
labor costs, which could have a material ndverse effect on our business, prospects, results of operations :'lnd fin:mcial condition.

                                                                                                      IS


Tnhle ofConl¢0!«

Any disrup/iu/J ill t!Jc availability or security ofour iujormatiou .fJ'Stems co1tlri cuuse us to rose customers and revenue, subject liS to signljicuuf liability and cause us tu incur
slgu/jicam c:xpensc,

       We ruly heavily upon our infommtion systems to process customer loan tmnsnctious, account for our business activities tmd scnernte the reporting used by mwagemcnt for
analytical and decision-m"llcing purposes. Bleh of our stores is part of an integmted dota network designed to facilitnte underwriting decisions, reconcile cnsh bnlnnces and report revenue
and e:q~ense transaction data. Our back-up system> 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<mtially below wh:~.t we would nonnally C:.;JCCt during certain periods, our annual financial results would be adversely impacted and our
nbility to service our debt may also be adversely affected.

                                                                                                     16


                                                                                                                                                                                     0656
Tnh!e ofCnntents

 Our substantial lew!! ofindebtedness coulrf advcr.rdy a.ffict our jillaltcial COIIditiou and prevent rtsfromjiiljil/ing our obligatio/IS 1111dcr tlte senior Stcllri!rl notes.

        We have substantial indebtedness. As of December 1! "'0! '), TMX Finance LLChad appro>.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


Tah1<! ofC'ontent~

                                                                                                    PARTD

ITfhiS. MARKET FOR REGISTRA!\'T'S COi\1\tON EQUITY, REI.ATJID STOCKHOLDER MATIERS AND ISSUER PURCHASES OFEQUITYSECURITIES.

      Trncv Young, the founder, Cl!ainmn of the Board, OtiefE'>l!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<! rest   expense, 1w1, Including amorll::at/OI1 ofdeb/ issuance cus/.1'

         Interest e:q~ense, net, including an:ortilation of debt issuance costs, was S42.6 million for2011 compared to S26.3 million for 2010. 11tis represents an increase ofSl6.3 million, or
62.0%. During 2011, we incurred $15.6 mi!lion oflldditional interest compared to 2010 on the 5250.0 million aggregate principal amount of our 13.2$% senior secured notes issued on 1pne 21
lf!!!l. In addition, during 2011, we incurred interest of$3.5 million on S60.0 million nggrcgate principal amount ofour 13.25'lf. senior secured notes issued on lulv 22 ?OJ I. These increases
were partially offset by interest incurred in 2010 on ourtenn loan at the defauh rate during our bankruptcy proceedings

Reorganization item~

       There were no reorganization items in 2011 compared to S4.S million for 2010. On June 16 2011,the final 01apter II decree closing the bankruptcy case was signed and filed with the
court. See Note 16 of Notes to Consolidated Financial Statements in ''l/<!111 8. Financial Stalcmmls and Supp!cmcnfmy Data."

Net income

         As a result ofthe above factors, net income was S67.9 million for 2011 compnred to S81.7 million for2010.

                                                                                                  25


Tnhle of\nnt••nrs

UqultUty and Capital Rcsourc~s

        We nmnage our liquidity and capital positions to satisfy several objectiv~s. Near-tenn liquidity is managed to ensure adequate working cnpital is nvnilablc to fund seasonal gro\\1h in
l~Jans  and relnted interest receivable in nn nmount that c>.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)<lmination ofthe income tax return ofTitleMaxofG:orgia, Inc., or "TMG. "The e;.amination was e;-p~nded to coverall oftlte C'.onmmw's wholly-
owned suh~i!liMie.~ and TilleMa:<Aviation, or "Aviation," an entity owned by our Parent that we consolidate because we have detemtined it is a variable interest entity ofwhich weare the
primary beneficiary, See "Jtcm13. Ccrtafn Relationships and Rrlated Transacflons, a lid Director Jndeprmlence-Airplane Paymem~·. "The IRS completed its fieldwork and issued its
report in April2011. We paid o.ppro>.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<tble to Si,l million more cash used for deposits related to our unconsolidated
CSO Lender and an increase ofS<I.I million in prepaid e>.penses. The decrease in cush from changes in accounts pllyoble wns due to timing of payments.

Cusltflam<rftom i11vesti11g nctivltics

        Net cash used in investing activities WitS $2$4.$ million for 2012 compared to $246.5 million for 201 I. The increase ofS8.0 million, or 3.2%, was prinnrily attdbutable to an 58.7 million
increase in capitr~l e>.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<!mher J I 1011 and incurs interest at 4.4%. The three notes payable to the Sole Shareholder nrc in tl1e amounts ofS11.4 million, S5.4 million nod S2.8 million as ofDeccmher 31 2012. The
Sll.4 million note has a fixed interest mte of5.12% and is payable in monthly installments ofS104,000, including interest and prineip~l. '\ith n fmnl payment of$8.4 million due in
December 1016. The S5.4 million note has a ft'!<!d interest rote oflO% payable monthly, with the full principal amount due in December 2015. The S2.8 million note is coll~ternlized by an
aircrnft 01\1\cd by Aviation and guaranteed by the C'omnar\V. This note has a ft\l!d interest rate of6.35% and is payable in monthly installments ofS35,000, including interest and principal,
with a final payment ofS2.1 million due in October 2015.

      The three notes payable to other unrelated entities are in the amounts ofS6.0 million, S5.0 million and SLO million as ofDeccmher 31 101 1. Each ofthese notes bears interest at 13%
with interest payable monthly, The principal amount of each ofthese notes is due in July 2013, although !he $5.0 million note and the Sl.Omillion note nuy be elllended for up to one
additional year at our sole discretion.

       As ofDecemh<!r Jl 2012, our consolidated CSO Lenders had outstanding a total of$25.0 million of notes pay~hle 10 third panics, One consolidated CSO Lend~r had 41 notes due in
2013 that bear interest rnnging from 10% to 15% and are secured by the assets oft he consolidated CSO Lender. These notes allow the consolidated CSO Lender to take one or more dmws
up to a total m1,.j'mum principal of$17.1m.illion. As ofQecemhrr J I 2012, a total ofS14.1 million was dr.ll\11 underthese notes. As ofD~cgmher3! 10p the other consolidated CSO Lender
had 11 unsecured notes due in 2013 that bear interest mnging from 12% to 14~{, nnd allow draws up to a total rna:cimum principal ofSI1.9million. As ofD~c~mh~r:; 1 10]1, a tmal ofSl0.9
million was drnwn under these notes. Each of these notes h~s an automatic annual renewal provision.

       lvlanagement belie\'cs that our available shorNenn and long-tern\ capital resources will be sufficient to fimd our anticipated cash requirements, including working capital
requirements, capital e).}lenditures, scheduled principal and interest payments, payments pursuant to any excess cash flow offers and income tax obligations of our Sole Shareholder, for at
least the nell! 12 months.



                                                                                                                                                                              0663
c:~ptal   Ell:penditure.s

      Capital expenditures a~ ofDecemher :11 .,012 .fQ!l and 2010 were S40.3 nn1lion, $32.0 million and 18.6 million, respectively, which we used to open new .stores and develop our
software .systems. We do not have any material capital expenditure conunitment.s as ofDecemher:; 1 :!IH?. However, we will continue to open additional stores and further improve our
software systems, which will reqllire ongoing capital e:q:~enditures.

                                                                                                2S


Tnhlc of Contents

Contrnctual PaymcntONig:ltions

    The following table summariu:s our material contrnctual payroont obligations, including periodic interest payments, as ofDecemhcr :11 2012.. These contractual requirements in dude
payments required for our debt obligations, operating !eases and contractual purchase obligDtion~.

                                                                                                          P:~vmenls   due bv   De~ernber   l\,
                                                     Tol~t                 2013                 2014                    lOIS                     2016                 2017                There>!.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<lentme requires us to make e~css cash flow offers in the first quarterofeaclt year fort he le5scr of$30 million or7S% of our e>.r:css c<t.sh flow {as defmed in the !nrlenlllrel. The
contmctunl payments shov.n in the table do not include the elfects ofDny such e;>J: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.;c<!mher 31 "lOP in confmmity with U.S. genernlly accepted accounting
principles.

Is! McGfmlri!J' l.LP

Rnldgh, Nonh Carotlna
Mnrch '17. "lQIJ

                                                                                                 32


Thhle ofCnntem~

                                                                                      Ti\-LX FlNAI'>ICE 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 <md Florida, with operotions conducted within 77TitleMaxstorcs under the Equity Auto Lonn brood, 11nd through 53 standalone stores under the
      JnstaLoan br.md. The C:omnmw is in the process offully $cparnting the Equity Auto Lonn business into standalone stores undertlte TnstaLoan brnnd with separate management and
      the addition of other Joan products. Segment infotm:ltion is not presented since all oflhe ('omp:111v's revenue is attributed to a single reportable segment: specialty linanci~l services.

      TMX Finance LLC changed its name from Tit!cMaxHoldings, lLC to TMX Finance LLC effective hme 11 2010 Effective Santemher ;;o 2012, the fonnersole mcmbcrofTMX Finance
      LLC tmnsferred 100% of his membership interests to TMX Finnnce Holdings Inc, ("Parmi") in e~hilnge for shares of~;ommon sto~;k in the Parent. The former sole memberofTMX
      Finan~;e LLCis the sole beneficial ownerofthe common stock ofthe Parent (the "Sale Shm-elwlrlcr"}.


      The Comnmw is subject to laws, regulations and supervision in each of the smtcs in which it operates, Most states have laws that spccificaUy regulate the Cnnm;mv's products and
      services to establish aUowable fees, imerest and other economic tenru. The terms of products and services offered by the Conmmw vary between states to comply with each state's
      specific laws ond regulations. lu llddition to state laws and regul:Hions, the Comnnnv's business is subject to vario\)s local rules and regulations such as zoning regulation and penni!
      licensing.

      The interest rntes and fees for th1~ rnmnany's products and services arc not currently regulated directly at the fedcrnl level, but laws and regulations l!Oveming the business arc
      subject to change. On Ju\v 21 2010, the Dodd~Frank WaU Street Refonn and Consumer Protection Act was enacted into law. This net established the Consumer Financial Protection
      Bureau ("CFPB'')as a federal authority responsible foratlministc1ing and enforcing the laws and regulations for consumer linanciol products and services. TI1e legislation docs not
      specificoUy target title lending, traditional pnwn or instaUn1tnl lending for CFPB regulation. However, the CFPB is currently in the process of developing rules that could subject lilt
      ~to some fonn ofrcgul~tmy oversight. TI1e CFPB is specifically prcihibited from institutin~; federnl usmy interest rnte cnps.

      Princin!es ofCnn:;o!jdatjon

      TMX Finance LLC is ll single member Delaware limited liability company that, through its       suh~jdipries,   is engaged primarily in the origination t~nd servicing of automobile title loans.

      In Apri12006, the Sole Sharcholdcrfonncd EAl. On June '1 '010, the Sole Shnrcholdertransferrcd IOO%ofhis membership inter~ts in E.A.Lto TMXFimmca LLC. The Cnnmmw
      consolidated EAL effective lmpHlr.' ! 1010 in accordonce with accounting stnndards related to consolidation. This transfer between entities undcrconunon comro! has been
      accounted for at the historical cost of the n~sets llnd liabi!ith~$ transferred.

      TI1c Conmnn\' conducts bu$iness in Tc.'Qs nnd cc11nin other stntcs through whoUr-owned ~nhsirljnries each of which is registered in the applicable state ns a Credit Services
      Organization ("CSO'l111cse CSOs hnve enterad into credit sen• ices org~nization asrccmcnts ("CSO Agrt:cmcnts") with third-party lenders {the "CSO L<:ml~rs") that make the loans
      to our customers. The CSO Agreements govern the tenns by which the Conmnn\' performs servicing functions nnd refers customers to the CSO l.enders for a possible e>.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 ofconsolid<lted financial statements in confomlity with nceountins principles generally accepted in the United States of Am: rica requires management to m.1ke
      cstiln;~tcs and assumptions that affect the reported amounts of <Jssets and liabilities and disclosurll of contingent assets <Jnd liabWties at the date ofthe consolid<Jted financial
      statements <Jnd the reported lln>OUnts of income <Jnd e:-.:pcnses during the reporting period. Actunl results could differ from those estimates. Material estimates that are particularly
      susceptible to change relate to the detennination ofthe allowance for loan losses and the valuation ofrepossessed assets.

      Cash and Cash Equ/l•alents

      The Conmnnv n\a~tains amo\mts in bank accounts which, at times, may exceed fedemUy insured limits. The C'omnnnv h<Js not e:q:~erienced losses in such accounts Management
      believes the ('(lmnanv's exposure to credit risk is minimal for these accounts.

      Gooc/wi/1 ond lutangrblc AssC!ts

      Goodwill and indcfinitc-Hfc: intangible assets ~cquired in a busine~s combination are recorded using the acquisition method of accounting and are tested for impairment annu<JUy, or
      more frequently ifcircurnstnnces indicate potential impairment, on a reporting unit level. In testing forimpnirmcnt, the C'nnDJanv first assesses qu<llitntive factors as a basis for
      detennining whether it is necessary to perfonn the two-step goodwill impainnent test. The lir.it step of the i111painncnt test, if necessary, is to compare the estimated filirvalue oftlte
      reponing unit to its canying V<Jlue. lftlte fair value is less than the canying value, then a second step is perfonned to deten11lnc the fair value of goodwill and the amount of
      ilnpainnem loss, ifony. In <Jddition, intangible assets wi!l1 fmite lives me amort ired over tlu::ir estinl.'lted useful lives and reviewed for impainncnt whenever events or circumstances
      indicnte the c;mying value Jli..1Y not be fi.1Uy recovcmbl~.

                                                                                                 39


Tnhle ofConr•·nt~

                                                                                      TMX FINANCELLC
                                                                                       AND AFFILIATES

                                                                          Notes to ConsolitJatcd Financial Statements

(I)   Nature of Business, Principles ofConsolill:ltion nndSignifitllnf Accounting Policies (continued)

      Loan Lo.ucs

      Provisions for Joan losses are charged to income in amounts sufficient to m:lintnin an adequate allowance for lonnlosses and an adequate accrunl for losses related to guaranteed
      Jonns processed for our unconsolidated CSO Lender. Factors used in assessing the ovcrnlladequacy of the allowance for loan losses, the accrual for losses related to gu11ranteed
      loans processed for ouruneonsolidated CSO Lender and the resulting proYision for Joan losses include lonn loss e;..perience, contrnctual delinquency oflitlc loans receivable,
      economic and other quali1:ltive considerations nnd management's judgment. While management uses the best information available to make its evaluation, future odjustments to the
      allowance m.1y be necessary ifthere <Jre significant changes in economic conditions. Thi! C't'ul1flnnv charges-offan account when the cnstotneris 61 days contrnclmllly past due.

      Loan OrigillatfOII Costs

      Direct costs incum::d for the originntion of loans, which consistm1lnly of employee-related costs, :~re deferred and recognizx:d as a reduction ofthe rek1ted imerest :md fee income
      over the overoge life oft he loon using a method that approximates the interest method.



      The lompnnv lllliY initiate repossession proceedings according to the respective stote low if an account becomes past due. Repossessed collateral is valued at the lowerofthe
      receivable bal~nce oft he Joan prior to repossession or estinmted net renlizable value. Manogement esti/1\'ltes net realizable value as the projected cash value 1rpon liquidation less
      costs to sell the related collater.tl.

      Property oml Equipment

      Propeny and equipment, including capitalized interest, ure cunied <Jt cost. The cost ofpropeny retired or sold and the related accumulated tlcpreciation are rt:moved from the
      accounts, and any resulting gain or loss is recognized in the consolidated st:~tements ofincome. Depreciation of property and equipment is provided by the straight-line method over
      the estil\\'lted useful lives of the assets once they nre placed in service, as shown in the chart below. Leasehold in1provements :~re <Jmortized using the stmlght-line. method ovcrthe
      lesser oft he useful lives ofthe inlprovements ortlle life of the lease. Repairs and mainten11nce are e.~,pcnsed as incurred.

                                                                                                                                              U•cful U\l:S
                                                                                                                                                fyear:sl
                     Computers and software                                                                                                      3 to 5
                     F'umilUreand fi:11ures                                                                                                        7
                     Leasehold improvements {:1)
                                                                                                                                                   '
                     Signs
                     Vehicles                                                                                                                      '
                                                                                                                                                                             0669
                        Aircrnft                                                                                                                  15
                        Capi!tlllease assets-buildings {b)                                                                                        15
                        Building                                                                                                                  30


       (a) Leasehold improvements are depreciated over the tenns oftl1e lease acreements with a maximum or five years.
       (b) T11e depreciation C.'l:jlcnse on assets acquired under capital leases is included with depreciation el<.pense on owned assets.

      lmpairmml ofLollg·Livr:d A.vsals

      The Cnnmnnv annually or more frequendy, irappropriate, evaluates whether events or circumstances have occurred that indicate tl1e currying amount orlong-lived assets may
      warrant revision or may not be recoverable, When fuctors indicate that these long-lived assets should be evaluated for possible impairment, !h¢: Conmpnv i'!Ssesscs the rc:coverability
      by detemtining whether the canying value or such lontHived assets will be recovered through the future undiscounted cash flows e).pected from uses orthe liS sets nnd their
      eventu:d disposition.

                                                                                                40


Tnh!e nfC'onh:nls

                                                                                      TM.:.X.FINANCELLC
                                                                                        M'D AFFILL\TES

                                                                           Notes to Consolill:ited Fimmdal Stltements

(1)   Nature of Business, Princlplcs ofConso!hlation and SigniOcnnt Accounting Polidcs (continued)

      Dehtlssuunce      Cos/.~


      Costs incurred to obt;,in debt financing are amortized over the lire oft he related debt using a method that appro:-jmates the interest method. Amorti2ation is included as a component
      ofinterest e1.pense in the consolidated statements of income.

      Income Recognition

      Interest and fee income is recogniZI:d using the interest method. Accrual or interest and fee income on title loans receivable is discontinued when no payment has been received for
      35 dnys or more. The accrual of income is not resumed until the account is Jess than five days past due on a contractual basis, at which time manag.ement considers collectability to be
      probable.

      A(/vr:rllsing Costs

      TI!c; Comnonv incurs advertising costs principally related to advertising on television, the internet, billboards tmd yellow pages. These costs <~re expensed as incurred.

      Income   Ta~cs and Distribmion.r

      The Cnrmnuv, with the consent ofthc Sole Sharel1older, elected in prior years to be ta)ll;d under sections of the federal and state income tax laws, which provide that, in lieu or
      co~porate income ta)ll;s, the Parent separately accounts for the C'nnma1w's items orincome, deduction, losses nnd credits. The consolidated financi~! statements generally do not
      include a provision for income taxes as long as these elections remnin in effect. Certain snh~illinrie~ operate il1 stntes that impose nn entity-level tax that is n percentage ofincome.

      Given she Comno1nv's income tax elections, the assets and liabilities with significant estimated net differences between the tnx bases and the reponed amounts are presented below as
      ofnecemher 11 2012 and 1illJ.. The cstim<11cd net differences disregnrd the assets and !i<Jbilities orthe consolidated CSO Landers.

      The tax bases were less than the canying amounts as follows:

                     in !hcmsands                                                                                     2012                        201t
                     Title loans receivable, net                                                            s                {25,763)    s               (27,812)
                     Property and equipment, net                                                                             {71,023)                    (47,1<12)
                     Goodwill                                                                                                 (5,975)                      (5,975)

                     Total estinmted nilt differences                                                       s                (102,761)   s               (80,929)

      While !he Cnmnmw's tax status and income tax elections ro:m.ain in effect, !he Conm.1nv may occasionally 111Jke distribulions to the Parent in mnounts sufficient to pay some or aU of
      the t:n.:cs dnr! on the f'nmnnnv's items ofincome, deductions, losses and credils. The lmlJ!Hmy anticipates nnking distributians of$23.0 to 526.0 million to the Parent to pay 2012
      federal and state income ta;o..:es. The Cnrnpnny ~my make future dislributions to the Parent in ;~ddition to those required for income taxes. To the enent distributions are pennitted
      under the !enn.'i orlhe indenture governing the f'ompnnv's senior secured notes, distributions from the rmnprmy to the Parent will provide the prirnmy menns for the Parent to make
      interest payments on its $100.0 million or 11.0% senior notes issued in October 2012 and due in October 2015. The maximum potential amotmt of distributions for purposes ofruudiug
      the Parent's interest payments is $11.0 million for each orthe years ending Dccemher:: 1 201:: lQl:! and .Nli At Dccemher :.1 2012 the availability ofpenni1ted distributions for
      purposes other than estimated ineome 111xpaymcnts was approxim.'l.tcly S5.0 million (calculated net ofan estimate for income !ax distributions).

       Plralllom S!ock /'I an

      The C'nnmarw accounts for share-based employee compensation by measuring aU share-based payments to employees using the intrinsic value method and recording the resulting
      e;o;pcnse in the consolidated statements of income. Ih¢ Cnnmanv measures the liability ror grants ofphatttomstock by using an agreed-upon calculation defmed by the terms ofthe
      phantom stock plan.

                                                                                                41


Tahle nfC'onte!lts

                                                                                      Ti\IX FINANCELLC
                                                                                        M'D AFFJLIATES




                                                                                                                                                                             0670
                                                                              Notes to Consolid:Jtcd Fin:mcial Statements

(1)      Nalure of Business, Principles of Consolidation and Significant Account!ng Policies (continuetl)

         Recent Accounting Standards

         In October 2012, the FASB issued ASU 2012-{)4 to provide technical corrections and improvements to a wide runge ofTopics in the Accounting Standards Codification, including
         conformin; amend menu related to fuir value measurements. The amendments in this guidance will be effective for fiscal periods beginning after Dcccmhcr I5 "OJ"· The adoption of
         this guidance is not Cllpccted to have a material impact on thg Commmy's financial position, results ofoperntions orcc.sh flows.

(2)      CreditQu~lity     Information,AllOl\mlcc for Losses on Tille Loans Rccdw.Ne and Liability Related to UnconsolidntcdCSO Lender Loans

         The Commmv loans cosh to customers in c~h:mge fora fee and an agreement to repay the amount loaned. The Comnnnv's loan portfolio includes ba!~nces outstnnding from all title
         loans, including shorHcnnsingle payment loans and m11lti-payment installmcnt loans. The Commmv utilizc;s n WJ.ricly ofundcrwriting criterinto specificnlly monitor the perfonnancc
         of its portfolio oftitle loans and m1intniru an aUowance at a level estimated to be adequate to absorb loan losses inherent in the portfolio.l11e ~Uowance forlosses on title lo~ns
         rccciv:~ble is presented in the consolidated balance sheets. In addition, tht! Compnnv maintains a liability for estimated losses rein ted to lo~ns processed forth!! Comnnnv's
         unconsolidated CSO Lender that are guaranteed under CSO Agreements. The li~bility for estimated losses related to th~se guaranteed loans is included in accounts payable and
         accrued e;q1enses in the consolidated balance sheets.

         The rnnm~nv does not stratify the title Joan portfolio wlum evaluating pcrfomumce ofthe loans. Rmher,the total portfolio is assessed for losses based on contrn.ctunl delinquency,
         the value of underlying coUateral, economic and other qualitative considerations and management's judgment. The Comnmw uses historical collection perfo!m'lnce adjusted for
         recent portfolio performance trends to develop the e:q~ected loss rntes used to establish the allowance and liability for loan losses. Increases in the allowance and liability for loan
         losses are recorded as provision for loan losses in the consolidnted statements ofincome. TI1e Cgmnnnv charges-offan account when the customer is 61 days contrnctually past due.
         01arge-offs on title loans receivable are equal to the loan balance (including interest and fees). Recoveries on losse~ previously charged to the ollowance nrc credited to the
         aUowance when collected.

         Delinquency e~erience oftitle loans receivable at   D~ccmher:; I   2012 and lQ!! was as follows:

                    in lhous:utds                                                                                         1.012                             21HI
                   lv30 days past du~:                                                                         s                     91,699      s                      57,494
                   31-60days past due                                                                                                 16,471                            11,291

                   Total past due                                                                                                    108,110                            68,785
                   C\nretlt                                                                                                          469,002                           421,308

                   Total                                                                                       s                     ~77.112     s                     400,093

         Title loans receivable on the consolidated balance sheets is net ofuneamed interest and fees ofS3.9 million and 52.9 million as ofQecemher::t 1 :!OP and l!1l.L respectively.

         Accrual ofintercst and fee income on title loans rcceiv~ble is discontinued when no payment has been received for35 days or more. The accrual of income is not resumed until the
         account is less than five days past due on a contrnctual basis, at which time management considers collectability to be probnble. Title loans receivable in non-accrual st3tus at
         Oect>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<ltion                                                                   {70,843)                         {54,214)

                       Net property and equipment                                                              s                    95,239       s                   72,571

      Capitalized interest at Deecmher:; l ?OJ, and 20!! was S0.9 million and SO.S million, respectively.

      During the second quarter of20}2, the lonmnnv tempornrily decided to stop development ofn new proprietary store software system and e>.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 Secuf<!_cl   Note~


      On hme 21 2010, TMXFinance LLCand TitleMaxFinance Corporation, as co-issuers (the "Issuers''), issued S250.0 million ofSenior Secured Notes {the "2010 Notes") nt99.078%of
      par. ihe 2010 Notes mature Julv 15 20Js and bear interest 111 13.25% per year, payable semi-annuaUy, in arrears, on July IS and Januacy 15 of each year. The discount ofappro>funtely
      $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 L<l million and SSA million. The $2.8 million no!e bears inlcrest at 6.33% and is
      payable in mmuhly installments of$35,000 with a final payment ofS2.1 million due in October 2015. The SIJA million nole bears interest at 5.12% and is payable itt monthly
      installments of$104,000 with a final paynren! of$8.4 million due in December 2016. The $5.4 million note bears interest at 10% pay<1b!e monthly, wiJh the full principal amount doe in
      December201S.

      Debt maturities during each of the ne1J five years ending December 31 nre as follows:

       in thollnnds                                                      %013                   1014             lOIS               2016            1017                Tat~!
      Senior secured notes payable                                  s                    s                   s     310,000      s               s                s              310,000
      Revolving credit facility                                                                                     25,000                                                       25,000
      Notes p:1y:1ble                                                       12,031                     32                 33               35              24S                   12,376
      Not~s paynble to Sole Shareholder                                        937                     988              8,508          9,195                                     19,628
      Notes payable issued by consolidated CSO Lenders                      24,%0                                                                                                24,960

      Total                                                         s       37,928       s         1.020     s     343,541      s      9,230    s          24S   s           391,961

      =rum
      Senior Secured Notes

      TI1c: Notes are fully and unconditionally guaranteed, jointly und severally, on a senior secured basis by the Issuers and each oftheire},j'sting and future domestic resuicttd
      suh~jdinrics, otherthi'ln immaterial ~uhsjdjmJc.~. This: l.!uar.mtec: arose from the issuance of the Notes for the purpose of additional fimmcb1g. The Notes 11re secured by firs.t•priority
      liens on substantially all oft he Issuers' nsscts 11nd require pcrfornwucc under the gunrnntcc if there is 11 def11ult on the Notes. Underthis gnnrnntce, the !Tl.1>imum 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 <H Decemher 31 ?OJ' and 2!W. consisted ofthe following:

              in thousands                                                                                                                        1012                                    20ll
             Interest                                                                                                                s                   19,749          s                           19,085
             Salaries and benefits                                                                                                                       13,444                                      15,839
             Phantom stock award                                                                                                                                                                      9,776
             Trade pnyables                                                                                                                              11,513                                       6,567
             Rent                                                                                                                                         5,6S6                                       4,247
             Accrual for losses on loans processed for unconsolidated CSO Lender                                                                          4,610                                       1,006
             Taxes payable                                                                                                                                2,781                                       3,595
             Other                                                                                                                                        3,558                                       2,241

             Total accounts payable and accrued     cxp~nses                                                                         s                   61,341          s                           62,356

(9)     Other Orcrnting :mdAdministrathe E':l:rcnse~

       Other operating and administrative e~enses forthe years ended Qrcen~ler31            ?OJ?,   ;!.Qlland NJ.2consisted of the following:

              inthouunds                                                                                         !012                             2011                                    2010
             Collateral collection expenses                                                          s                   16,952.     s                   10,533          s                            7,881
             Technology services, software licensing and hosting expenses                                                11,039                           5,505                                       4,062
             Office supplies and postage e;.:penses                                                                       8,217                           6,535                                       4,639
             Recruiting, reloc.1tion and training c)ll)enses                                                              7,079                           6,537                                       1,479
             Travel and related expenses                                                                                  7,033                           6,682                                       4,264
             Bank processing fees                                                                                         2,762                           3,325                                       2,838
             Legal fees                                                                                                   2,722                           2,385                                       1,710
             Accounting, audit and tax fees                                                                               2,056                           2,630                                       1,128
             Business licensing e~enses                                                                                   1,656                           1,191                                       1,021
             Other                                                                                                       17,953                          13,373                                      12,385

             Total other operating and administrative e>.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<!ms

                                                                                      TMX FINAN'CELLC
                                                                                       AND AFFILIATES

                                                                          Notes to ConsolitL1tcd Financial Statement~

(17) Guarantor Condensed Consolitlaling Financi:ll Statements (continued)

                                                                                  Consnlitbting B:ll:tnce Sheet
                                                                                       Drcrml~r 31      2012
                                                                                            (in tilnusunds}


                                                                                  lssuer1                 Gu~r~ntors                                    Eliminntigns            Consalidnlcl.l


                                                                                                                                                                            0677
Assets
Cash and cash cqttivalcnts                                            s                              s           S8,80J    s            1,993      s                       s            90,794

Title loans receivnble                                                                                          542,771                34,401                                          577,172
Allowance for loan losses                                                                                       (88,986)                                        {5,575)                (94,561)
Unumonized Joan origination costs                                                                                 3,716                                                                  3,716

Title loans receivable, net                                                                                     457,50]                34,401                    {5,575)               486,327

Interest receivable                                                                                              37,893                     162                                         38,055
Properly and cquipllX!nt, net                                                                                    75,474                \9,765                                           95,239
Debt issuance costs, net ofaccumubted arnonization                                     10,570                                                                                           10,570
Goodwill                                                                                                          5,975                                                                  5,975
Note receivable from Sole Shareholder                                                   1,017                                                                                            \,077
Other assets                                                                              29                     48,841                 !,9%                   (11,120)                 39,746
lnvesurent in affiliates                                                           729,325                                                                    t729,325)

Total Assets                                                          s            741,001           s          714,485    s          58,317       s          t746,020)    s           767,783

linbilities and Equity
Senior secu~d notes, net                                              s            311,5\9           s                     s                       s                       s           311,519
Revolving credit facility                                                           25,000                                                                                              25,000
Notes payable                                                                       12,000                                             25,336                                           37,336
Notes payable to related panics                                                                                                        19,628                                           19,628
Obligations under capital leases                                                                                  1,971                                                                  1,971
Accounts payable and accrued e:q:~enses                                                19,5-H                    46,540                11,970                   (16,716)                61,341

Total Liabilities                                                                  368,066                       48,51 I               56,934                   (16.716)               456,795

Total member's equity and non controlling interests                                372,935                      665,974                 1,383                 {129,304)                310.988

Total Uabilities and Equity                                           $            741,001           s          714,485    s           58,317      s          (746,020)    s           767,783

                                                                                                53


T:~hle   of('oulents

                                                                                 ThJX FIJ'IIANCE LLC
                                                                                   AND AFFJLJATES

                                                                     Notes to Consoli!l:tled Financial St:llements

(17) Guarantor Condensctl Consolitl:lting Financi:Jl Statements {continued)

                                                                              Consolida.ting Balance Sheet
                                                                                  Decenl\)('r 31,2011
                                                                                       (in thous:md.'>)

                                                                                                                                 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! <Ire
designed to ensure that inform1tion required to be disclosed in ourreports underthe E.~hange Act is recorded, processed, summariud and reported within the time periods specified in the
SEC'5 rules and fonns nnd th;~t such informEition is accumu/3ted and comnunicntcd to our management, including our ChiefE'l:culive Officer and Chief Accounting Officer, as appropriate,
to allow timely decisions regarding required disclosure, The C'pmpnny's m.1nasement carried out an evaluation, under the supervision and with the participation of our 01iefE~eutivc
Officer and 01ief Accounting Officer. ofthc effectiveness ofourdisclosurc controls and procedures as ofDccenlher 31 2012. Based on the evaluation, ourOJiefEv.ecutive Officer and Chief
Accounting Officer have concluded that 1he Cmnpmw's disclosure controls and procedures were effective as ofDecemher 31 2012.

Management's Report on          Inlcrn~l   Control O\er Financial    Rcp::~rting


      The Cornnmw's management is responsible for establishing and maintaining adequate intemal control over financial reponing as defined in Rule 13a·l5(f} under the E..:.change Act.
Mnnagcmcnt conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in /llll'rlla{ Control-Integrated Framework
issued by the Comrni11ee of Sponsoring Organi;>;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<um, Mr. Bielss was made eligible to panicipate in a profit bonus which is based on 0.15% of an internal monthly profitmellic:ls detennined by J.l.!.s.
~-The internal monthly profit mel ric me:~surcs the interest and fcc income from !he applicable stores for which Mr. Bie\ss is responsible for nmnaging, Jess dirctt costs ofthosc
stores and less an allocated amoul\1 for corporate overhead e;qJenses. In Febnmy 2013, Mr. Bielss agreed ton discontinuance of his profit bonus in cn:hange for 11 food annual bonus
amount ofS400,000 to be paid on a monthly basis.

      Douglas W Marohn: Mr, Marohn joined us as a Senior Vice President ofOpemtions in August 201/. We executed an offer letter with Mr. M~rohn !hat specifies the terms ofhis base
salary at an annual rate ofS262,500. Mr. Marohn's offer letter specifies a guaranteed bonus ofSJ25,000 paid upon completion of his training period and a profit bonus equal to a fu.:cd
percentage of profit forthe area ofthe f'omnanv fur which he is responsible. The profit bonus hus not yet been implememed. Mr. Mr~rohn's offer letter ::~!so provides for severance upon
involuntal)' tennination without cause in the amount ofsixtr.Onths of base salary, which would be conlingent upon e>: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'<lnt~n!~

Potcntinl Payments Upon Terminntion or Change of Control

     The infonnation below desco"bes the estimMed value of the potential payments that would have become payable to each named executive officer assuming a tenninalion of
employment aml!or change of control had occurred on Pt•cen~>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, r<!slgnotfonjorGood Reason):

                                                                                   Sever:tnt~
      N:1m~                                                                            I                                                    Total
      Trnc\' Young                                                          s                          s                           s
      Elirnhe1h C'.   Nel~on
      OnoW.Bie!ss,lll
      Douglas W. Marohn                                                                     131,250                                                 131,250
      ArthurTretyak                                                                         25D,OOO                                                 250,000


      (I)     B~sed   on six months ofthen-cmrenc base salaty, as specified in the respective individual's offer latter or employment agreamant.

      (2)     lvfr. Tretyak would be ilntitled to a pro-r.nad bonus upon termination widtout c~usc or for good reason. For2012, the amount of such pro-rated bonus would be SO.

      In tl1e event of a tennination for cause or a cltange in control without any tennination ofemployment, no executives would be entitled to any severance amounts or special payments.

Risk AssessmentofComJX!nsatian Policies and Prnctices

      The design :md operation of our incentive compensation ummgements for our employees, including the named eXI.!cutive officers, were reviewed for the purpose of determining
whether such programs might encourage inappropri~te risk-taking that would be n::;~;sonably likely to have a material adverse effect on rhe C'mmmnv ln conducting its review, management
considered the perfonnance objectives and tnrget !evc!s used in connection with these incentive arrangements and also the feMures oft he C'omn:ul\''S compensation progrnmtltat are
designed to mitigate compensation-related risk Manugement concluded that !he C(!mmmv's compensation plans, progrnrru and policies, considered ns a whole, including applicable risk-
mitigMion feature~. are not reasonably likely to have a material adverse effect on rhc Company.

                                                                                                69


T;thle nf('nntcng

ITEM 12. SF.CURTrY()WNERSHJP OF CERTAIN B~EFJCIALOWNERS AI~D l\'IANAGE\1ENT AND RELATED STOCKHOLDER MA'ITERS.

     Trncv Y(lunr•, the founder, 01ainnan of the Board, ChiefE.'Il!cutive Officer and President ofTMX Finance LLC, is the sole beneficial ovmer ofthe common stock ofTMX Finance
Holdings !nc., which owns :~ll \OOofthe outstanding limited liability company interests in TMXFinance LLC. Mr. Young's address is IS Bull Street, Suite 200. ~:wann;th, n:omia ;1401

      No director, officer or employee ofthe C'onmnnv or any other person, hilS any option, warrant or other right to ucquire any ownership intere$1 in TMX Finance LLC and there are uo
compen~ation  plans that provide for the is~uance of equity compensation to ;my person.

ITEM 13.    CEnTAL~     REL\ TIONSIHPS AND RELATED 'ffiANSACfiONS, AND DmECTOR INDEPFJ\'DENCE.

Transactions "ith TMX Fimmcc Holdings Inc.

        Effective Sentcmhcr 30 2012 Mr. Young trnnsfcrrcd 100% ofhis membership interests b1 TMX Finance LLC to newly-fanned TMX Finnnce Holdings Inc., or the "Panmr," in
exchnnge for shares ofconunon stackofthe Pnrent. On Octnhcr 17 "01", the CC'Impnnv distributed S350,000to the Parent. On Oet(lher31 :!OP, the Parent issued S\00.0 million ofseniorPIK
notes, orthe "P/K Notes, ''that beilrinterest 111 II% per year and nre due October 1'i "015, Under the tenns oft he inrlemur.:: governing the PIK Notes, interest on the PJK Notes is payable
in cnsh to the c:>lent 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<!c.~:   Consists of fees and expenses forprofessimml services provided rclnting to tax planning ilnd compliance scr.·iccs, and assistance with lax audits and appeals.

        All Other Fvr:s: Consists of fees other thlm the professional services reponed above. Tite services provided in 2011 were related to unclaimed property research.

       All audit and non·audit services provided by lvleCilndrcv l.l.P and RSM McG!adrey, Inc. (through November 30 20\ I) are pre·approved by the Omimun oft he Board ofManagers
tllld Olief~cutive Officer, who considers whether the pro,•ision oft he non-audit 5crvices is compatible with the maintenance of that finn's independence in the conduct of its auditing
functions. The non·audit services pro\'ided by McC"'~ndrev U.P and RS~f McG!adrey, Inc. (through No\'cmhel' ~0 ?Q)l) in 2012 and 2011 were pre·approved in aecordancewith this policy
and communicated to the remainder ofthe Board ofMan11gers.

                                                                                                   72


T.nhh! ofC'ontcnts

                                                                                                PARTlY

ITEM 15. EXHIBITS AND FINA.i...,CIALSTA'fEMENT SCHEDULES.

        (a}(l) Fimmci:tJ Statements

               The information required by this Item is included in "Item 8. Financial Srotcmcnfs and Suppl<!mCJIWry Dalll."

        (a){2) Fin:md:tl Stntement Sclmlules


                                                                                                                                                                             0688
             AU schedules, for which provision is made in the applicable accountin£ regulations oft he SEC, have been omitled because they are not required under the related instructions,
are not applicable or the information has been provided in the consolidated financi~l statements or the notes thereto, included in "Item 8. Financial Statements and Supplemelllary Data.

         (a){3) E."dlil:ilS

              E•;hibits marl<ed with an asterisk(~) are incomomted bv reference to e:U1ibits or appendices previonslv fj!ed with the SEC, as indicated by the references in paremlieses. AU
other eiliibits are filed or furnished herewith. Oureurrent, quarterly and annual Repons are filed with the SEC under File No. 33:i-172244. Our ReJ;istration Statements have the file numbern
noted wherever such statements are identified in the fo!lowin£ list of exhibits.

Thhiblt No.                                                                                           D•••rl linn nf Exhlb\1

                              Certificate ofFonmtion ofTMX Finance LLC, date"d Sente111ber 15 1003 (E,:hibit 3.1 to TMX"Finance LLC's Registration StotemcnJ on Fonn S-4, dnted
                              Fchnwrv J.l ?OJJ, is incorpornted herein by this reference)

                              First Amendment to the Certificate ofFormation ofTMX Finance LLC, dated tune 18 1010(E"41ibit3.2 to TMX Finnnce LLC's Registration Statement on FormS-4,
                              dated Fchnwry !4 JQJ 1 is incorporated herein by this reference)

3.3~                          Amended and Restated Operating Agreement ofTMX Finoncc LLC, dated Jun~ 21 2010 (Exhibit 3.3\o TMXFinonce LLC's Registration Statement on FormS-4,
                              dated FchnHI!'\' 14 20! I is incorpomted herein by this reference)

4.!~                          ~dated           J\Lnc 11 1010, ~lOOn£ TMX Finance LLC and TilleMa>: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'l<!ndment
                              No. Ito TMX Finance LLC's Registration Statement on FomtS-4, dated Mnrch ::;u 101 I, is incorporated herein by this reference)

10.4*                         Servicing Agreement dated April19 1009by and between Equity Auto Loan, LLCand TitleMaxofGeorgia, Inc. (E\hibit !O.Sto Amendment No.2 to TMX Finance
                              LLC's Registrntion Statemem on Form S-4, dated A mil !lJ 101 1, is incorpornted herein by this reference)

10.5""                        Renl Estate Lease Agreement dated Janmuv 1 1009by and between TMX Investments, LLCand TitleMaxofMissouri,lnc. (E-d!ibit 10.6to Amendment No. lto
                              TMXFinance LLC's Registration Statement on FonnS-4, dated March :;o 1011, is incorporated herein by this reference)

                              Real Estate Lense Agreement dated Sentemhcr 1 ?flO& by and between TV Investments, LLCand Ti!feMaxofGcorgia, Inc. (E\hibit 10.7 to Amendment No. lto
                              TMX Finance LLC's Registration Statemen! on FonnS-4, dated Mnrch ::iO. 201 I, is incorporated herein by this reference)

                              Real Estate Lease Agreement dated Septemhcr I 100s by and between TY!nvestments, LLCand TitleMaxofGeorgia, Inc. (E~1ibit 10.8 to Am;:mdment No. I to
                              TMX Finance LLC's Registration Statement on Fonn S-4, dated Mnrch ::;o 2011, is incorporuted herein by this reference)

10.8•                         Sublease Agreement dated An<>ust 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<F..,·hihit I0.22to Amendment No. I to TMX Finance LLC's Registrntion Statement on FomiS-4,
                              dated !...larch 1{1 '011, is inco~porated herein by this reference)

                              Oml Compensntion Agreement with       FJirnh~th C. Ncl~on,     entered into on Angnst 21 201' (TMX Finance LLC's Current Report on Fonn &-K, dated illUll!&21.
                             2Ql2, is incorpor.~ted lu:rein by this reference)

l0.21t                        Employment Offer LenerofDougl~s Marohn dated June'> 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 afTitleM<P.H"~l'itleMa·x-l"inanee-'r-X,-e~<i-llle
              D~4"   DataBases, eR the etheF AaAEI .


.9.:---¥ewr eff:'eJ:ts te iHYestigate tAe eet'l~Efleee:i iR tHe !' 1 sveH'!Ber 13, 2912\etter frem
      JeRH ~1 eCleskey ef Selee+-tvtaAaget'AeRt Rese1:1rees, LLC, te ''iR Then'las efT~ lX
      FinaRee, LLC (tRe "Cease aRB Desist Letter''), aA8 attaeheellierete as Exhil:lff...A..,
      ineh.teling 9Ht net Iil=niteEl te:
        a. The Elates eftRe eaeh       iR«estigatie~r,

        8. IEientifie:atiaA-£tf.¥.el:lr Jireeters, el¥ieers, tF!aAageFS, regienal rnal'lagers, Elistriet
           ~Refill t'AaRagers, stare maAagers, assi:itaAt stare maAagers, el::lstemer
           ser-'.4€-e-Fef!reseAtati··e, er emf~leyees iRvelvea e~i]3atiAg iR BA)' s~;~eh
           ~
        e. IA8ivicluals witH whem.Yet~r elireeters, effieers, maaagei'S;-regH;ma~-rnana-geFS,
           Elistriet l'AaRagers, geAeralmaRagers, slere maAagers, assistaRt stare maRager::,
           el:lstemeF servie:e represeRtative, er eFl'lpleyees eeffimHRieate8 in the seurse efaAy
           StiER iAYCStigetieA;

        &.--.ffiterfml e:lise1:1ssieRs fay aRB Bet"'rJeR aAy sf Yet:W-4it:eeters, effieers, ITJaRag~
            ~ea! tF.aRagers, 8isr:riet manageFS, general FRaAagers, stare tTJaAagers, assistaHt
            stare IHanagers, Gl:lstamer service refJFCsentati· ·e, er en1plsyees;:clating te any
            sl::leh itwestigat+eRt
        e. faet-s t:!isc~8-6t!·ring any sr~eA investigatieA that Stlj:)~ert er unEiermine in any
           way the elaims made l:Jy !ahA HeC!esl:ey in tl\e Cease ane:l Qesist beuer; aAEI
        J:.   All esmH'I!:IAieatiens ·rith Yertr Srtl:Js-i€iaries er Affiliates, anEI.'er et'AfJieyees
              relatiAg te eras a res='ilt efany s~:~eA il'l\~estigatien, inel~;:~ding "reminEI(ing] all
              Te::as tHaRagers" ef Y e1::1r f!est#eA-en tAe pFaetiees Elesefi8e8 iR tHe Cease aRd


                                                   12




                                                                                                           0706
              Desist Letter, as set ferth iR tRe DeeemBer 8, 2Gl2 letter fren'l "iR Then'las ef
              T~ 4X FiAaAee, bbG-.te-J-ehn ~4eClesl::e;· ef £elest ~4aAagemrffit-R.e.s.eHrees, bbC.


IQ. All fiAaAeial iAfenHatieR esAeemiAg eash sf Yel-:lr !eaRs eA the 0"erla)3 bist frem the
    date-each !oaR vas erigiAateEI te tHe J3FeSeRt, iAei~:~Eiing lmt net limiteEI to:
a-:-¥-el-:lr re··eA~;~e (iR 9ellars) fer each efYel:H'ieans     SA   the O"erlaJ3 List;                    ---J Formatted
!:r.-¥e~eRses           (iA ElellaFS) fer eaeb efYel-:lr IeaRs eR the OverlaJ3 bist;
e:-¥e1:1r   ~eta!   grass reveAHe aRt! Ret j3refit (iA ele!lars) fer all efYeHr !eaRs SA tHe Overlaj3
      List freA'l the earliest Elate tAat a lean SA the Qyerlap list ·11as erigiAate8 te the )3rese:H+
~eAtifieaFieA ef all Bee1:1meRts er rep arts iR "sur pessessieA, e~:~ste8y, er eeHtrel---j                       rormatted:Justified, Tab stops:   oH, Left
      e<'iE:IefH:iHg er refle:tiHg that Ye1:1 8isb1:1rseE:I f~;~R8s er issueS cAeel:s te 13ay eff aRy ef
      PlaiAtiffs' leaR v·heA-¥el:I-GrigiFJateel cael:! efYeur !eaRs SR tRe OverlaJ3 bist;
e. The 6isi:'JwrsemeRt sf fHABs er issHaAee ef eheehs te pay eff PlaiRtiffs' leans fer eaeA ef
   the IeaRs entRe Overla~
f.----M.eRthly er ether reJ3erts Bise!esiAg the 10 8h:lme (i.e., the total number) ef Re"' leatrS-aA-4
      I·ef.iAaflees fer eaeh efYe~
~7.            THe RHmBer aREI/er Bellar aiHSHttt-ef-menthty-safe.s...:fur-eaefl-ef Yeur stares eR tRe
      O··erlaJ3 bist;
         h. Ref3erts raRhiRg emf3leyees By "Aer         lee~A   "elume" er "sales" fer    e~ll   eftfle
             ~~immc-e-T-X-steres-appeariAg eR tHe O··erlap List;*
         h---¥eur meFJthly · ·ehnne (i.e., the tetal RHmi:ler) ef nev,r leans anS refiFJaFJ€-eS-f.er-ea;;l.}
             ef the TitleMa:: TX er TMX 'fiAaRee TX stares SA the QuerlatJ List.


++._s._ _ Your involvement in l~itigation in the state ofTexas, including but not limited to:
         a. Identification of 1Jitigation currently pending in the state or federal courts located
            in Texas in which You are a named party;
         b. T.he causes of action in the ~litigation currently pending in the state or federal
            courts located in Texas in which You are a named party;
         c. The current status of the 1Jitigation currently pending in the state or federal courts
            located in Texas in which You are a named party;
         d. Identification of 1Jitigation filed or pending in the state or federal courts located
            in Texas in the last five (5) years in which You were a named party;
         e. The causes of action in the .!iitigation filed or pending in the state or federal
            courts located in Texas in the last five (5) years in which You were a named
             party; and




                                                   13




                                                                                                                                   0707
        f.   The status of the 1Jitigation filed or pending in the state or federal courts located
             in Texas in the last five (5) years in which You were a named party.


12. The iEieRtifieatiel1 ef~Re eRtity 1~ayi11g legal Bills asseeii:'.teEI...-itA the al:reve eaptie&e4
    tiH.ga#eR, aREI the se1:1ree eftRe RmEis 1:1see te pay S!:ldt legal Sills.




                                                  14




                                                                                                         0708
EXHIBITD




           0709
                                                                               1
  1                                NO. 2013-33584
  2 i1ELLSHIRE FINANCIAL SERVICES,            *     IN THE DISTRIC'l' COURT
      f.1LC,   d/b/a LOANS TAR TIT.LE         *
  3 LOANS and INTEGRITY TEXAS                 *
      FUNDING, LP                             *
  4                                           *
      vs.                                     '     HARRIS COUN'rY, 'fEXAS
 5
      'J.'l,JX FINANCE HOLDINGS,   INC.;
 6 'l'MX FINANCE,      LLC;   TMX FINANCE *
      OF TEXAS,     INC.; TITLEMAX OF
                                              •k
 7 'fEXAS,       INC.; FELIX DELEON;
      AND ISHMAEL HERNANDEZ                   '' 152ND JUDICIAL DISTRICT
 8
 9
10             *******************************************
11                   ORAJ" AND VIDEOTAPED DEPOSITION OF
12                            JANES AR'l'HUR GRI F'F'IN
13                                 HAY 23,    2014
14                                   VOI.lJl'1E 1
15             ************************t**************ktw*
16                      ORAL AND VIDEOTAPED DEPOSITION OF JAMES
·1 7 i\RTHUR GRIFFIN, produced as a witness at 'che instance
18 of the Plaintiffs and duly sv1orn, was taken in the
19 above-styled and numbered cause on the 23rd day of Hay,
20 2014,       from 9:08a.m. to 2:09p.m., before Marsha Evans,
21 Certified Shorthand Reporter in and for the State of
22 •rex as,     reported by machine shorthand,            at 600 Congress
23 Avenue,       20th Floor, Austin, Texas, pursuant to the
24 '!'exas Rules of C.i.v:L.l. ProcedUJ:e and the provisions
25 stated on the record or attached hereto.




                                                                        0710
                                                                       Page 10

 1             Q.    What did you discuss?
 2             A.    What I thought this was all about.
 3             Q.    And what did you think this was about?
 4             A.    Aggressive marketing tactics.

 5             Q.    What other discussions did you have with your
 6       family?
 7             A.    That's it.      Just the fact that I had to come
 8       down and talk about aggressive marketing tactics.

 9             Q.    Who in your family was present for that

10       conversation?
11            A.     My wife and my middle daughter.
12            Q.     And what are their names?

13            A.     Cathy, with a C, Griffin.

14            Q.     And your daughter's name?

15            A.     Devin Montiel, M-o-n-t-i-e-1.
16            Q.     You had mentioned that you spoke with your
17.      family about aggressive marketing tactics.                What did

18       you mean by that?
19            A.     Because I sa1v the name LoanS tar on the -- on

20       the paperwork,    I assumed that we were going to talk
21       about PublicData.com and targeting their specific

22       customers.

23            Q.     And why did you make that assumption?

24            A.     We had been using PublicData.com for I'm going
25       to guess a year or so, and then we had been asked to

                                  Veritext Florida Reporting Co.
      800-726-7007                                                        305-376-8800


                                                                              0711
                                                                       Page 11

 1      not do that anymore, and rumor had it it was because

 2      LoanStar was upset with us for doing that ..

 3            Q.    When you say ''we,• who are you referring to?

 4            A.    TitleMax stores in general.
 5            Q.    All the stores in Texas?

 6           A.     I don't know about all the stores in Texas.
 7                       MR. GANNAWAY:       Object to form.         I'm

 8      sorry.

 9                       THE WITNESS:      I'm not sure that all the
10      stores in Texas were using it, but it was a -- it was a

11      directive that was given to stores and a tool that was

12      out there.
13           Q.     (By Ms. Goebelsmann)        Which stores was that

14      directive given to?
15                       MR. GANNAWAY:       Object to form.
16                       THE WITNESS:      For sure the stores in

17      Austin.     It 1vas a -- it was used some when I was in
18      training in the Dallas/Fort Worth area, as well.
19           Q.     (By Ms. Goebelsmann)        You had indicated that
20      PublicData had been used for one year.                 When did it

21      start to be used?
22                       MR. GANNAWAY:       Object to form.

23                       THE WITNESS:      I don't know when it
24      started.     I interviewed Hi th the company in late

25      September, early October of 2011, and I asked

                              Veritext Florida Reporting Co.
     800-726-7007                                                            305-376-8800


                                                                               0712
                                                                   Page 12

 1      specifically about marketing plans, and I was told then

 2      during the interview process that we had access to a
 3      program that would tell us if a customer had a loan

 4      somewhere else and we could then target that customer,

 5      so I know it was at least in use or known of at that
 6      time.
 7           Q.     (By Ms. Goebelsmann)          Who did you speak with

 8      that told you this?
 9           A.     Harold Landers.

10           Q.     Who is Harold Landers?
11           A.     He was a regional manager at the time.
12           Q.     Regional manager where?

13           A.     For TitleMax.
14           Q.     Was he in a particular district or region?
15           A.     Texas.   I don't -- I don't remember how the

16      entire Texas market broke out, but he was DFW and

17      Austin for sure.

18           Q.     Was there anyone else present for this

19      conversation?

20           A.     There was not.

21           Q.     When did you start using PublicData?

22           A.     I'm going to guess March or April of 2012.

23           Q.     When did you stop using Pub1icData?

24           A.     February,   late February, early March of 2013.

25           Q.     Why did you stop using PublicData?

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     800-726-7007                                                     305-376-8800


                                                                        0713
                                                                         Page 13

 1            A.    I left the company.           Can I elaborate on that?

 2            Q.    Yes.

 3                         MR. GANNAWAY:         Object to form.

 4                         THE WITNESS:        The last two months or so,

 5      two or three months, it was not used for targeting

 6      specifically LoanStar customers.                 PublicData.com, if

 7      you're not familiar with it, allows you to key in a

 8      license plate number, and it will tell you if anyone

 9      has a lien on their vehicle.              So I would ride through

10      parking lots and jot down license plate numbers in

11      places that those types of customers might frequent,

12      just to have some type of database to work off of.

13                         MR. GANNAWAY:         I ' l l object to

14      responsiveness.

15           Q.     (By Ms.   Goebelsmann)          Did anyone tell you to

16      stop using PublicData?

17           A.     For targeting LoanStar customers, yes.

18           Q.     Who told you that?

19           A.     That I believe came out in an e-mail from our

20      district manager,       Patrick Sudduth.

21           Q.     When did he tell you that?

22           A.     I'm going to guess November,               December 2012.

23           Q.     Do you have a copy of that e-mail with you?

24           A.     I do not.

25           Q.     Do you have a copy of that e-mail in your

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     800-726-7007                                                           305-376-8800


                                                                                0714
                                                                         Page 48

 1            A.    Mayumi, who I'm still friends with, shared

 2      with me that she had an attractive assistant manager

 3      that worked for her and she felt like Gary was flirting

 4      and hitting on not only her, but the other ladies that

 5      worked for -- that worked for him.

 6           Q.     Who was the assistant manager who worked with

 7      Mayumi?

 8           A.     I don't remember her name.

 9           Q.     When you were working with TitleMax, how often

10      did you communicate loJi th your supervisors?

11           A.     Daily for the most part.

12           Q.     And how would you communicate?

13           A.     It's probably 50/50 split between e-mail and

14      telephone.

15           Q.     Did you send e-mails to Andy H?

16           A.     When I was in training in Arlington I would

17      have sent e-mails to him, yes.

18           Q.     Would you have asked questions about marketing

19      practices?

20           A.     We would have reviewed marketing practices.

21      At the time I was so new that I don't know that I would

22      have been in a position to ask good,               intelligent

23      questions about marketing.

24           Q.     Did you send e-mails to Gary Jackson?

25           A.     Absolutely.

                              Veri text Florida Reporting Co.
     800-726-7007                                                           305-376-8800


                                                                              0715
                                                                   Page 49

 1            Q.    Did you send him e-mails regarding marketing
 2      practices?

 3            A.    Sure.
 4            Q.    Did you send any e-mails to him regarding
 5      PublicData?

 6            A.    I'm sure that information would have been in
 7      my marketing practices.        I don't recall sending an
 8      e-mail to him just about PublicData. ·

 9            Q.    What do you mean that information would have
10      been in your marketing practices?
11           A.     We had to break down by day Nhat our marketing

12      plan was and PublicData Nas a              Nas a big part of our

13      marketing plan.

14           Q.     When you say you have a breakdown by day, what

15      is that?

16           A.     Monday through Saturday.          We were expected to

17      market 'six days a week, and Ne had to explain on what

18      day and approximately Nhat time and for how long we
19      were going to do what activities.

20           Q.     Was this a written schedule?

21           A.     It was a written plan.         Business oftentimes

22      dictated how closely you stuck to that, but it was a

23      it was an estimate on what your next week's marketing

24      practices would be.

25           Q.     Did you share this with your district manager?

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                                                                         0716
                                                                      Page 88

 1      kind of a novelty to be able to get into PublicData and

 2      use it for the first time.

 3            Q.    Why was it a novelty?

 4            A.    At the time it seemed like an easy way to

 5      start generating a lot of business.

 6            Q.    What did Harold Landers tell you about

 7      PublicData during your interview in November 2011?

 8            A.    He did not call it PublicData.             I asked about

 9      marketing plans and how stores would market their

10      business,    and he said that we now have the capability

11      of going into a program, typing in a license plate

12      number, and it will tell us if a person has a loan and

13      at what competitor and we can go -- in his words, 11e

14      can actually go knock on the customer's door and talk

15      to them about our services.          I didn't feel comfortable

16      doing that,    so I did the mailers.

17                       MR. GANNAWAY:       Object to responsiveness.

18           Q.     (By Ms. Goebelsmann)        I may have misstated

19      earlier.     When did you have your conversation with

20      Harold Landers?

21           A.     Late September, early October.

22           Q.     So this conversation you just conveyed was in

23      late September 2011?

24           A.     Or early October, correct.

25           Q.     Did you speak with Harold again about

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                                                                           0717
                                                                 Page 89

 1      PublicData or using the license plate information in

 2      the manner that he had described?
 3            A.    Not directly, no.
 4            Q.    Did you ask anyone about it during your
 5      training period?
 6            A.    I did.
 7            Q.    Who did you ask?

 8            A.    Gary Jackson at the time was my training GM,
 9      and again,    I did not know the name of the other
10      website, but I just -- I mentioned to him that Harold
11      had brought this up, and he said, yes, that's something
12      that some guys are using.

13            Q.    Did he indicate to you lvho was using it?

14            A.    He did not.

15            Q.    Do you know what areas the PublicData database
16      was being used in?
17                       MR. GANNAWAY:       Object to form.

18                       THE WITNESS:      Not for sure.

19            Q.    (By Ms. Goebelsmann)        Where did you believe it

20      was being used?

21                       MR. GANNAWAY:       Object to form.

22                       THE WITNESS:      The Dallas/Fort Worth area.

23           Q.     (By Ms. Goebelsmann)        And why did you believe

24      that?
25           A.     Because in asking Gary about it he had

                              Veritext Florida Reporting Co.
     800-726-7007                                                   305-376-8800


                                                                     0718
No. 2013-33584

District Court of Harris County, Texas

152"d District

Wellshire Financial Services, LLC dba Loanstar Title Loans and Integrity Texas
Funding, LP

Vs.
TMX Finance Holdings, Inc.,
TMX Finance LLC; TMX Finance ofTexas Inc.; Titlemax ofTexas, Inc.



Excerpts from the

ROUGH TRANSCRIPT OF THE DEPOSITION OF RANDY RAINEY

July 8, 2014 at 9am

Christina Goebelsmann, Wargo French LLP for Plaintiffs

Bryon Rice, Beck Redden for Defendants




                                                                                 0719
RAINEY- DRAFT ONLY                      Page 36
NOT FOR OFFICIAL USE




     2    A. Yes.

     3    Q. Okay. And did you ever hear of a technique of

     4 writing down license plate numbers in parking lots?

     5    A. Yes.

     6    Q. And who did you hear that from?

     7    A. Tom Griffin.

     8    Q, And when did you hear that?

     9    A. Within a week or so after being hired.

     10    Q. So did Tom tell you about the writing down of

    11 license plate numbers as part of your training?

     12          MR. RICE: Objection, form.

    13     A. He stated that this was something he was

    14 doing, and I actually went with him several times to do

    15 it at a couple of different locations. So I actually-

    16 he actually showed me how to do that.

    17     Q. And where did you go on those several times

    18 that you accompanied him?

    19    A. There was-- We went probably two times--

    20 maybe three, but I think at least two times to a

    21 competitor that's on Forest Lane and Central Expressway,

    22 and that's the-- that's Texas Title, like red and

    23 yellow. It's really close to where I live. I live on

    24 the other side of the freeway.

    25          And another place, I believe it's on


                                                                  0720
 RAINEY- DRAFT ONLY                          Page 37
 NOT FOR OFFICIAL USE


 1 Buckingham and Belt line, same company.

 2          And another place on Central Expressway

3 somewhere between-- it's on the west side of Central

4 Expressway, somewhere between, like, Spring Valley and

5 Alpha, somewhere in-- somewhere around there, within a

6 mile or half mile. And it was, like, a little odd--

7 very odd little mom-and-pop kind of place. It was,

8 like, in a weird little office at the end of, like, a

9 motel. I don't know the name of that place.

10    Q, Was that an auto title loan company?

11    A. I don't know everything-- They did auto

12 loans, the title loans, but I-- they may have had other

13 loan services as well. I'm not sure.

14    Q. Were there any other places that you

15 accompanied Tom where you would be writing down license

16 plate numbers?

17    A. If there is, I don't recall. Just those the

18 three that I recall.

19    Q. Okay. And those three times you accompanied

20 him, during what month and year did that occur?

21    A. It would have been within the couple weeks

22 after I was- within a week to two weeks after I was

23 hired; and I would say somewhere between the second and

24 fourth, fifth week --

25    Q. Okay. You--

                                                             0721
No. 2013-33584

District Court of Harris County, Texas

152"d District

Wellshire Financial Services, LLC dba Loanstar Title Loans and Integrity Texas
Funding, LP

Vs.
TMX Finance Holdings, Inc.,
TMX Finance LLC; TMX Finance of Texas Inc.; Titlemax of Texas, Inc.



Excerpts from the

ROUGH TRANSCRIPT OF THE DEPOSITION OF MIGUEL MARTINEZ

July 8, 2014 at 2pm

Christina Goebelsmann, Wargo French LLP for Plaintiffs

Bryon Rice, Beck Redden for Defendants




                                                                                 0722
MARTINEZ- DRAFT ONLY                   Page 33
NOT FOR OFFICIAL USE

     1 searches?

     2    A. No.

     3    Q. Do you remember who first told you about the

     4 PublicData searches?

     5    A. There was a guy named Ray. He told Wendy and

     6 Wendy told me. And then it was discussed at-- on one

     7 of our conferences-- on one of our conference calls,

     8 and I know-- I know at least Andy was aware of it.

     9    Q. So you discussed the PubllcData searches with

    10 Wendy and the other--

    11    A. Yeah. She's the one that told me that that's

    12 what she was going to start doing, and that I should

    13 start doing it over at-- at the other North Richland

    14 Hills location.

    15    Q. So to make sure that I have this clear: You

    16 first learned about the PublicData searches from

    17 Wendy?

    18    A. Um-hmm.

    19          MR. RICE: Objection, form.

    20    A. Yes.

    21    Q. (BY MS. GOEBELSMANN) And when did you have

    22 that conversation with Wendy?

    23    A. When I was there training.

    24    Q. And Wendy was your trainer?

    25    A. Well, yeah, for the Texas-- I guess kind of



                                                              0723
 MARTINEZ- DRAFT ONLY                      Page 34
 NOT FOR OFFICIAL USE


1 just getting me introduced to how to do loans in Texas,

2 so for those couple weeks. So basically I got there and

3 the first thing they did was make me go out and market

4 for Wendy. So I was outthere marketing.

5          And then we were discussing my move to

6 the new store when-- you know, when I was going to be

7 taking over that, and she was telling me that, "Hey,

8 this is what Ray in Euless is doing."

9     Q. Okay. So you first learned about PublicData

10 when you were working with Wendy in or about August or

11 September 2011--

12    A. Yes.

13    Q. --is that right?

14          MR. RICE: Objection, form.

15    Q. [BY MS. GOEBELSMANN) And had Wendy been using

16 the PublicData searches prior to that point In time?

17          MR. RICE: Objection, form.

18    A. No. She wasn't using it through her computer.

19 She was actually getting-- She would call Ray and Ray

20 would pull up the information for her, because Ray's the

21 one that had, I guess, the access to that PublicData.

22    Q. [BY MS. GOEBELSMANN) Okay. How long had Wendy

23 been receiving search results from Ray, to your

24 knowledge?

25          MR. RICE: Objection, form.


                                                              0724
No, 2013-33584

District Court of Harris County, Texas

152"d District

We !Ish ire Financial Services, LLC dba Loan star Title Loans and Integrity Texas
Funding, LP

Vs.
TMX Finance Holdings, Inc.,
TMX Finance LLC; TMX Finance of Texas Inc.; Titlemax of Texas, Inc.



Excerpts from the

ROUGH TRANSCRIPT OF THE DEPOSITION OF ANTONIO AMADO

July 9, 2014 at 8am

Sarah Powers, Wargo French LLP for Plaintiffs

Bryon Rice, Beck Redden for Defendants




                                                                                    0725
                                                                 19

        A. Before I had started, there is a general manager,

     Denny, I think his first name was. I don't recall his

     last name. I was told that he had done that.

5       Q. Okay. What store was Denny at, if you recall?

       A. He was on the store on North -- Northwest

     Military, just up the road from here.

       Q. Do you know what number that is?

       A. Not off the top of my head, I'm sorry. I want to

10 say 5, maybe SA-5, SA--- SA-5- perhaps SA-5. I know

     SA-l is on San Pedro. SA-7 was on Blanco, and that was

     not in our district under Bill Kretschmer. That was under

     Eric Bullis. He was our district manager, different

     district.

15       Q. From-- from whom did you hear that Denny was

     using the practice of locating lie--- or using license

     plate numbers to locate customers?

       A. CSRs, CSRs that had worked in different stores

     that had known him, that had been through my store. I'm

20 trying to remember their names. And the reason that came

     up is the company had sent out-- I was no longer at

     SA-18. I was then promoted to Castle Hills 1, which is in

     a different district, here on Blanco. And the company had

     sent out an e-mail, a company-wide e-mail, advising of

25 litigation between Integrity and Title Max. So there was




                                                                      0726
                                                                   21

     employees collecting license plate numbers to locate

     prospective customers by employees at the Wind crest store?

               MR. RICE; Objection. Form.

5               THE WITNESS; Wind crest store, no, ma'am.

     BY MS. POWERS:

       Q. Okay. And what about the Stone Oak store?

               MR. RICE; Objection. Form.

               THE WITNESS; Stone Oak, I'm trying·· no,

10 ma'am.

     BY MS. POWERS;

       Q. And what-- what store is San Antonio 3, if you

     recall?

               MR. RICE: Objection. Form.

15              THE WITNESS; I believe SA-3 is Stone Oak,

     if I'm not mistaken.

     BY MS. POWERS:

       Q. Other than Denny, did you ever hear of any

     TitleMax employee using license plate numbers to locate

20 prospective customers?

               MR. RICE; Objection. Form.

               THE WITNESS; Yes. Brigitte. Brigitte, but

     I don't know-· I don't remember her last name either, and

     she was at the store on 281 and Blanco. And we had heard

25 that from her store manager, Nick, but I don't know Nick's




                                                                        0727
                                                                   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                 * l52ND 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.

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                                                                       0728
                                                                       Page 100

 1        which has a Bates number at the bottom of TMX 001338,
 2        the bottom two-thirds of that page appears to be an
 3        e-mail from Patrick Sudduth, correct?
 4                          MR. GANNAWAY:       Object to form.
 5                          THE WITNESS:       No.     I'm on the second
 6       page.       The bottom two-thirds appears to be an e-mail
 7       sent from Todd to Patrick.
 8.            Q.      (By Ms. Goebelsmann)          I'm sorry.   You appear
 9       to be correct.       So the bottom two-thirds of this page
10       is dated September 15, 2012, at 1:33 p.m. from
11       TMX-Austin-TX20, correct?
12             A.     Correct.
13             Q.     And who is TMX-Austin-TX20?
14             A.     The store on South Lamar.
15             Q.     And you mentioned Todd.           Who is Todd?
16             A.     Todd is another general manager that I bounced
17       ideas off of, marketing ideas.
18             Q.     Can you please read the text of Todd's e-mail
19       into the record?
20            A.      "I created a database using the data that we
21       got from PublicData. com" --
22                         THE REPORTER:        Could you read a little
23       slower, please?
24                         THE WITNESS:        "I created a database using
25       the data that we got from PublicData.com using the

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      800-726-7007                                                         305-376-8800


                                                                             0729
                                                                      Page 101

 1      license plates from cars parked at our competition,

 2      Texas Title next door.        I have about 20 names and

 3      addresses in that database, and all have liens on their

 4      titles according to PublicData.              I then created this

 5      form letter and used mail merge to merge in the names
 6      and addresses information from the Excel database to
 7      personalize the letter.         I'm mailing them out today.
 8      Todd."

 9            Q.    (By Ms. Goebelsmann)         The e-mail directly

10      above that towards the middle of the page is from

11      Patrick Sudduth, correct?
12           A.     Correct.
13           Q.     And it appears to be a response to

14      TMX-Austin-TX20, correct?

15           A.     It is.
16           Q.     Can you please read what that e-mail states?

17           A.     "Good idea.    Do you mind sharing this with
18      everybody?"

19           Q.     If you turn back to the first page of

20      Exhibit 3, all the way at the bottom there's a date

21      line of September 15, 2012, at 1:40 p.m.                 Can you

22      please read what that e-mail states?

23           A.     "Patrick asked me to share this idea with

24      everyone."     Smiley face.      "Feel free to call me if you

25      have questions on how to set it up.                Todd.''

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     800-726-7007                                                          305-376-8800


                                                                             0730
                                                                     Page 102

 1            Q.    And immediately above that there is an e-mail
 2      from Patrick Sudduth dated September 15, 2012, at
 3      1:42 p.m.     Can you please read into the record what·
 4      that response states?
 5           A.     "Call Todd.    There is no reason not to do
 6      this."
 7           Q.     And then finally at the top of the page is an

 8      e-mail from TMX-Austin-TX13.           Was that you?

 9           A.     It was.
10           Q.     What did your e-mail say?
11           A.     "Same thing here.       We had our first buyout
12      from this last month.       We continue to work our
13      competitors' parking lots, and on single coverage days
14      we check license plates of cars that come into our
15      parking lot."
16           Q.     What did you mean when you said,            "Same thing

l7      here"?
18           A.     That we are using PublicData.com to generate a
19      mailing list based upon license plate numbers that we
20      get from our competition.
21           Q.     So you were doing the same thing that Todd
22      indicated that he was doing at the bottom of page 2 of
23      Exhibit 3?
24           A.     Correct.
25           Q.     And that involved the use of PublicData,

                               Veritext Florida Reporting Co.
     800-726-7007                                                        305-376-8800


                                                                           0731
                                                                 Page 103

 1      correct?
 2            A.    Correct.
 3            Q.    Collecting license plate information from cars
 4      parked in the lots of competitors?
 5            A.    Correct.
 6            Q.    Creating a database of information based upon
 7      those license plates?
 8            A.    Correct.
 9            Q.    Sending letters to customers?
10            A.    Correct.
11            Q.    Using mail merge to send those letters?
12           A.     I   did not use mail merge.
13           Q.     How did you send letters?
14           A.     On the last page is an example of a -- an
15      insert that I created, and as I put in the data I would
16      put checkmarks, yes for instant approval; yes for no
17      credit check; yes, you get your money in 30 minutes or
18      less; yes, you can get money for car repairs, rent,
19      vacation, or cash for peace of mind.
20           Q.     So page 4 of this exhibit is a mailer that you
21      had created?
22           A.     Yes.
23           Q.     And that mailer was attached to your e-mail
24      dated September 15, 2012?
25           A.     Yes.

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     800-726-7007                                                   305-376-8800


                                                                      0732
                                                                     Page 105

 1            A.    Well,   I would print out a screen shot from
 2      PublicData anytime I got one that had a competitor's
 3      lien information on it.         So I would -- if it was Jim
 4      Griffin, it would be Jim Griffin.               It was addressed
 5      specifically to that person at that address.
 6            Q.    When did you start collecting license plate
 7      information from cars parked in competitors' parking
 8      lots?
 9           A.     As early as February of 2012 when I was
10      working at Austin 5 through Annette Martinez's account.
11            Q.    How did you get the idea to obtain information
12      using the license plates in competitors' parking lots?
13           A.     This was, again, an idea that was brought up
14      in an interview that I had with Harold Landers as early
15      as September, October 2011.
16           Q.     Why did you wait until February 2012 to start
17      using that practice?
18           A.     That was the first time that the actual nuts
19      and bolts of the practice had been explained to us.                  As
20      I mentioned earlier, Harold didn't even give me the
21      name of the website that they were using.                He just
22      walked me through how they were kind of using this
23      website to get competitors' information.                When I asked
24      Gary about it he said yes, he was aware of it, but he
25      wasn't using it, but he knew of other guys in the

                               Veritext Florida Reporting Co.
     800-726-7007                                                          305-376-8800



                                                                             0733
                                                                          Page 106

 1      district that were.

 2                       So finally in roughly February --

 3      January,    February of 2012 the information was shared

 4      with Annette who then shared it with us and that --

 5            Q.    How did you know the information was shared

 6      with Annette?

 7           A.     There was a visit that day.               As I remember it,

 8      it was Gary Jackson and Harold Landers, and they had

 9      encouraged her to sign up for a PublicData.com account.

10           Q.     Were you present for that visit?

11           A.     I was in the store, but I was not part of the

12      conversation.

13           Q.     Did you hear the conversation?

14           A.     I did not.

15           Q.     How did you know what happened during the

16      conversation?

17           A.     Annette recapped it once the -- once everyone

18      left.

19           Q.     When did you first hear the name PublicData?

20           A.     I'm thinking it was that same conversation.

21           Q.     And why do you think that?

22           A.     Again,   Harold couldn't even articulate the

23      name of the 1-1ebsite, and when I brought it up to Gary

24      because I had not yet heard the name of the website,                    I

25      couldn't tell him what it was either.                     I just explained

                                 Veritcxt Florida Reporting Co.
     800-726-7007                                                             305-376-8800


                                                                                0734
                                                                Page 107

 1      to him what I had been told by Harold, and he said yes,

 2      some people are using it, but it was not being used
 3      there by him.

 4            Q.    When Annette recapped the conversation that
 5      she had with Harold and Gary, what did she tell you?
 6            A.    There's a lot of excitement in her voice.
 7      Again, we felt like it was a -- it was going to be an
 8      easy way to start driving a lot of business, and she
 9      said, hey, this is what everyone's been talking about.

10      It's Pub1icData.com.      You sign up for an account, and
11      you can key in license plate numbers and you'll get
12      lien information.     And she signed up for the account

13      right there.     I mean, we did it in the store looking
14      over her shoulder just to see how it was going to work.

15           Q.     When you said "we did" --

16                       MR. GANNAWAY:       Object to responsiveness.
17      I'm sorry.
18           Q.     (By Ms. Goebelsmann)        When you said "we did it
19      in the store looking over her shoulder,'' who is the
20      "we"?

21           A.     I believe Paul Walton was part of that

22      conversation, as well, or part of that group.

23           Q.     Were Harold or Gary present?

24           A.     Not at the time I don't believe they were, no.

25           Q.     Did Annette report back to Harold and Gary

                              Veritext Florida Reporting Co.
     800-726-7007                                                   305-376-8800


                                                                     0735
                                                                Page 1
                      CAUSE NO. 2013-33584

  WELLSHIRE FINANCIAL              *    IN THE DISTRICT COURT
  SERVICES, LLC, d/b/a
  LONESTAR TITLE LOANS and
                                   *
  INTEGRITY TEXAS FUNDING,
                                    *
  LP,
                                   *
                                   *
             Plaintiffs
                                   *
                                   *
                                   *
  vs.                              *    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            *    152ND .:JUDICIAL DISTRICT

********************************************************
               ORAL AND VIDEOTAPED DEPOSITION OF

                          RICHARD TODD HALE

                            MAY 15, 2014

********************************************************

        ORAL AND VIDEOTAPED DEPOSITION OF RICHARD TODD BALE,
produced as a witness at the instance of the PLAINTIFFS,
and duly sworn, was taken in the above-styled and
numbered cause on the 15th of MAY, 2014 from 9:06 a.m. to
2:50p.m., before MELISSA PARKHILL, CSR, in and for the
State of Texas, reported by computer-assisted machine
shorthand, at the law offices of Sutherland Asbill &
Brennan, 600 Congress Avenue, Suite 2000, Austin, Travis



                                                               0736
                                                                Page 121
 l         A.     No, ma'am.     I took that form of letter and
 2   customized i t as I was instructed to do with my store's
 3   contact information.        But I did not create the original
 4   letter.

 5         Q.     Do you know who did create it?
 6         A.     No, rna' am.
 7         Q.     When you say you took i t and customized it as
 a   you were instructed to do, who gave i t to you and
 9   instructed you to customize it?

10         A.     I -- I don't remember exactly.      I really don't.
11   I mean, i t came from-- I don't even remember if it came
12   from one of the general managers or if Patrick gave it to
13   me.   But somehow I got a copy of one of the letters that

14   one of the other stores was using, and Patrick instructed

15   me to customize i t with my store's information.

16         Q.     Okay.     You don't know who gave the letter to
17   you, but Patrick was the one who instructed you to
18   customize it; is that correct?
19         A.     Well, yes.     And not only that -- I'm just --
20   again, to clarify it, Patrick was the one that instructed

21   me to do all this stuff as is evident by all of the other
22   documents.
23                        MR. GANNAWAY:   Object as nonresponsive.

24                        (Brief interruption.)
25                        MR. GANNAWAY:   Oh, I'm sorry.   Thank you.




                                                                0737
                                                                Page 122
 1           Q.   And so Patrick approved of the use of this
 2   letter, correct?
 3           A.   Oh, absolutely.
 4                        MR. GANNAWAY:   Object to the form;
 5   leading.
 6                        Please repeat your answer.
 7           A.   Yes, he did.
 8           Q.   Okay.     And turning back to the very first page
 9   of this exhibit marked 1337 at the bottom, in fact,
10   Patrick Sudduth forwarded this plan to all of the Austin
11   stores; correct?
12           A.   Yes, ma'am.     And I would clarify again reading
13   through the e-mail, he specifically says, "Call Todd.
14   There is no reason not to do this."
15                        MR. GANNAWAY:   Object as nonresponsive.
16           Q.   And when he says there is no reason not to do
17   this, the this was canvassing parking lots to obtain
18   license plate numbers of competitors' customers and then
19   looking up their D.M.V. information in order to market it
20   them?
21                        MR. GANNAWAY:   Object to form and leading.
22           A.   Yes.
23           Q.   And as we discussed earlier, there's a strict
24   chain of command at TitleMax; correct?
25           A.   Yes, ma'am.



                                                                0738
                                                                Page 123
 1           Q.   So if your district manager tells you that it's

 2   okay, you understand that this is consistent with company
 3   policy; correct?
 4           A.   Yes, ma'am.

 5           Q.   Okay.     And, in fact, you weren't just receiving
 6   approval from your manager; he was telling everybody he

 7   supervised right in front of you to do the same thing;
 8   correct?

 9           A.   Exactly, which is --
10                        MR. GANNAWAY:   Object to form and leading
11   before you respond.

12           A.   Okay.     That's fair enough.   But and that's why
13   I feel confident in being able to say as I'd said earlier
14   when I would say we were because there's a lot of
15   documentation that demonstrates that i t wasn't just me
16   that was being asked and required to do this.          It was
17   this was clearly going out to everybody was being asked
18   and required to do this.

19                        MR. GANNAWAY:   I' 11 object as
20   nonresponsive.

21           Q.   And when he says, "Call Todd; there's no reason

22   not to do this," did anyone ever call you in response to
23   this?

24           A.   Yes, ma'am.
25           Q.   Okay.    Who did?



                                                                 0739
                                                               Page 124
 l          A.   I don't remember specifically.       I think Jim
 2   did.    And, again, just to clarify on what he was
 3   referring to call Todd about, that was calling Todd about
 4   how to be able to use the information that we were
 5   already instructed to be using from the database and just
 6   mail i t out easier by using the EXCEL spreadsheet and the
 7   mail merge.    That's the part that I played in terms of
 8   just making it easier to -- to mail it out.
 9          Q.   So then was i t your understanding that all of
10   these stores that Patrick was a-mailing here were already
11   using Public Data to get personal information of
12   customers of competitors?
13                       MR. GANNAWAY:    Object to form and leading.
14          A.   Yes, ma'am.
15          Q.   Okay.     And how did you develop that
16   understanding?
17          A.   Well, several different ways.       I mean, clearly
18   through all of the e-mail chains that everybody already
19   has copies of, that's pretty evident.         And then just from
20   talking to them.       As a matter of fact, there is one of
21   the other -- and that's documented in one of the other
22   a-mails.    I'm paraphrasing.       But one of the other-- and
23   in response to this e-mail, one of the other managers
24   says -- And I'm paraphrasing -- we're already doing that.
25   I got that idea from somebody else a long time ago.



                                                                0740
Tab T
                                         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,                                      §
                                                  §
       Plaintiffs,                                §             OF HARRIS COUNTY, TEXAS
                                                  §
v.                                                §
                                                  §
TMX FINANCE HOLDINGS, INC.;                       §
TMX FINANCE, LLC;                                 §
TMX FINANCE OF TEXAS, INC.; and                   §
TITLEMAX OF TEXAS, INC.,                          §
                                                  §
       Defendants.                                §                 152"d JUDICIAL DISTRICT

     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

       COME NOW Plaintiffs Wellshire 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,

(collectively, "LoanS tar") and hereby move this Comt for an order compelling Defendants TMX

Finance LLC, TMX Finance of Texas, Inc., and TitleMax of Texas, Inc. (collectively,

"TitleMax") to respond to requests for production of documents, and show the Court as follows:

                                    I.      INTRODUCTION

       By now, it is patently clear that TitleMax has no compunction about wasting this Court's

resources, and instead seeks only to obstruct LoanStar's discovery effmts at every turn, in

furtherance of its mission to halt the progress of this case. Indeed, once again TitleMax refuses




                                                                                            0741
to produce information directly relevant to LoanStar's claims, raising meritless relevancy and

breadth objections as to requests narrowly tailored to lead to the discovery of admissible

evidence. Specifically, TitleMax refuses to provide any substantive response to requests seeking

documents and communications directly reflecting TitleMax's illegal conduct as alleged in

LoanStar's Petition, and the knowledge of and reaction to that conduct by TitleMax

management. Similarly, TitleMax refuses to produce the hard drives for computers used by three

employees who engaged in the marketing practices at issue, even though counsel for TitleMax

has admitted in open court that at least one of the hard drives at issue appears to contain

responsive information not produced in the litigation.

         Given that the discovery requests seek information going to the core of LoanStar's

claims, TitleMax's objections must be seen for what they are--the latest step in its campaign to

delay the litigation and prejudice LoanS tar's efforts to establish its case. LoanStar should not be

forced to tum to the Court and consume valuable Court resources each and every time TitleMax

defaults on its obligations under the Rules of Civil Procedure. Because TitleMax's latest refusal

to participate in the discovery process is just one in the line of many, and because TitleMax

defies even express Court Orders, 1 the Court should award LoanStar its fees and costs in being

forced to bring yet another discovery motion. As TitleMax has proven time and time again,

anything less is insufficient to compel it to act.

          II.    BACKGROUND OF CASE AND EFFORTS TO MEET AND CONFER

         Through the discovery process, LoanStar has successfully established that, just as it

alleged (see Second Amended Petition ~,! 30-57), numerous TitleMax employees engaged in

criminal conduct designed to steal LoanStar's customers.        Specifically, TitleMax employees


1
    See LoanStar's Motion to Enforce Court Orders and For Sanctions filed on October 31,2014,
to be heard concurrently herewith.

                                                     2

                                                                                               0742
would lurk in LoanStar and other parking lots to record vehicles' license plate and vehicle

identification numbers, then use that information to search databases containing motor vehicle

records ("DMV Databases") to illegally obtain contact information for the purpose of marketing

their services to the owners of the vehicles, including numerous LoanStar customers. TitleMax

employees also would search DMV Databases by lienholder name to specifically target the

customers of competitors, including LoanStar.        TitleMax employees openly engaged in and

discussed this conduct, which was in some cases directed by TitleMax management. (Ex. A

[Deposition of Randy Rainey at 38-41; Deposition of Michael Ryan at 28-31; Deposition of

Patrick Sudduth at 17-22; Deposition of James Griffin at 41-43; Deposition of Richard Todd

Hale at 99-l 00].)

         Thus, as part of its continuing discovery effm1s, LoanStar served requests for production

seeking documents and communications sent, received, or created by four higher-level TitleMax

employees (the "Corporate Employees") 2 relating to the DMV Databases and LoanStar

customers.     In its responses, TitleMax asserts .rote, boilerplate objections that are wholly

inapplicable to the requests at issue, and i'Lu1her endeavors to rewrite the requests to seek

narrower categories of documents than those requested.             Moreover, despite counsel's

representation that production would be made in the first week of November, TitleMax has not

produced any documents to date. 3

         Likewise, TitleMax continues to refuse to produce the hard drives of the computers used

by three employees who engaged in the illegal marketing practices at issue in this litigation-

Felix DeLeon, Lucia Grajeda, and Todd Hale-even though TitleMax has defaulted on its


2
    The Corporate Employees are Tracy Young, Linda McDonald, Otto Biells, and John Robinson.
3
  Rather, the day before LoanStar filed this motion, TitleMax produced a privilege log respecting
searches for the email account of only one of the Corporate Employees, Tracy Young.

                                                 3

                                                                                             0743
obligations to search the hard drives for relevant information.       Indeed, notwithstanding the

testimony of multiple TitleMax employees (including Hale himself) that the employees at issue

possess relevant information, TitleMax has neither produced any records from these employees'

computers nor even bothered to conduct a search of two of the hard drives. The one hard drive

that was searched, Hale's, has apparently revealed responsive information. Indeed, TitleMax has

now represented twice in open court that a search of Hale's computer by counsel located a

spreadsheet containing a list of names that may be responsive to an outstanding discovery

request, and that it would produce the same. (Ex. B [September 22, 2014 Hearing Transcript at

81-82; October 10, 2014 Hearing Transcript at 59].)       But when LoanS tar later requested the

promised production, TitleMax backtracked on its representations to the Court and refused to

produce the spreadsheet unless LoanStar agreed beforehand, sight unseen, to completely

abandon its request for the hard drives of all tluee employees.. LoanStar refused to prejudice

itself and accordingly, TitleMax has yet to produce any responsive documents or the hard drives.

In the same way, TitleMax has refused to produce the DeLeon and Grajeda hard drives, even

though multiple TitleMax employees have testified that DeLeon and Grajeda possessed and

distributed lists of LoanStar customers, and LoanStar expressly requested same. Yet, on meet

and confer, TitleMax admitted that the DeLeon and Grajeda hard drives have never been

searched.

       TitleMax should not be permitted to continue to flout the Court and the Rules of Civil

Procedure.   Rather, it should be compelled to conduct a reasonable inquiry and produce all

responsive information, including the hard drives, within ten days of the hearing on this motion.




                                                4

                                                                                             0744
                            III.   ARGUMENT AND AUTHORITIES

        As TitleMax's conduct throughout this case has made clear, TitleMax is intent on

delaying the progress of this litigation through obstruction of LoanStar's discovery efforts.

TitleMax effectuates this goal by serving baseless objections, inappropriately withholding

responsive documents, and then simply refusing to comply with Comt orders requiring

production of same. In so doing, TitleMax purposely delays the progress of the litigation and

increases costs for both LoanStar and the Comt. This gamesmanship runs counter to the entire

purpose of the discovery process, which is to ensure a just and fair adjudication of claims on

their merits. Cf TEX. R. CIV. P. I; In re Dynamic Health, Inc., 32 S.W.3d 876, 886 (Tex.

App.-Texarkana 2000, pet. denied); cf Coleman v. Winn-Coleman, Inc., 110 S.W.3d !04, Ill

(Tex. App.-Houston [I" Dist.] 2003, no pet.) ("Discovery is favored, and the rules that govern

it are to be liberally construed."). In light ofTitleMax's continued improper conduct, the Comt

should enter an order compelling TitleMax to produce responsive documents within ten days of

the hearing on this motion and award monetary sanctions to cover LoanStar's fees and costs in

bringing this motion. TEX. R. Civ. P. 215.1 (e), 215.2(b)(2), and 215.3.

       A. TitleMax Must Produce the Corporate Employees' Documents                            And
          Communications Reflecting TitleMax's Illegal Marketing Practices

       Throughout this litigation, TitleMax has assetted inappropriate, rote objections with little

or no applicability to the information actually being sought; this time is no different. Here,

TitleMax asserts relevance and burden objections to requests seeking documents and

communications 4 regarding the very subject matter of the case: (I) marketing to LoanStar's


4
  LoanStar specifically requested this infcmnation due to deposition testimony indicating that the
Corporate Employees used text messages to communicate with one another. (Ex. C [Deposition
of Linda McDonald at 76-77].) TitleMax indicated during the meet and confer with LoanStar
that it had not asked any of the four Corporate Employees for text messages responsive to the
Requests.

                                                 5

                                                                                             0745
customers (Ex. D [RFP Nos. II]); (2) communications with the DMV Databases, (id. [RFP Nos.

9, 1OJ); (3) use by TitleMax employees of the DMV Databases to market to customers of

competitors (id. [RFP No. 12]), the possession by TitleMax employees of search results from the

DMV Databases or other compilations of names and/or addresses including LoanStar customers

(id. [RFP Nos. 13, 14]), the recording of license plate or V!Ns during visits to non-TitleMax

parking lots (id. [RFP 15, 16]), and non-compliance by TitleMax employees with TitleMax's

policies related to the solicitation of competitors' customers (id. [RFP 17]).

       TitleMax's responses are crafted in an improper attempt to unilaterally restrict the scope

of its production. Indeed, TitleMax reframed the scope of no less than eight of LoanStar's

requests in order to substantially limit-or wholly eliminate-the production of any documents.

(See Ex. D [Responses to RFP Nos. 10, 12, 13, 14, 15, 16, 17, 18].)

       TitleMax's responses to LoanStar's Request Nos. 16 and 18 are emblematic of this tactic:

       REQUEST NO. 16: Any and all Documents or Communications, inch.1ding 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 employees of TMX Finance,
       TMX Finance TX, and/or TitleMax TX recording, copying, or acquiring vehicle
       identification numbers (or VlN) or license plate numbers of vehicles located in
       Non-TitleMax Parking Lots.
       RESPONSE: Defendants object to this Request . . . . 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 NO. 18: 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 any noncompliance of employees of TMX
       Finance, TMX Finance TX, and/or TitleMax TX with TitleMax' policies. rules.
       and/or codes of conduct related to the solicitation of Customers of Competitors in
       the state of Texas.
       RESPONSE: Defendants object to this Request . . . . Subject to, and without
       waiving, the foregoing objections, Defendants will produce responsive. non-


                                                 6

                                                                                            0746
        privileged policies. rules. and/or codes of conduct related to the solicitation of
        Customers of Competitors in the state of Texas.

TitleMax's attempted retraming is designed to prevent LoanStar fi·om obtaining critical evidence

necessary to its case. For example, TitleMax employees hal'e testified that they improperly

searched and identified LoanStar customers by recording license plate numbers not only from

LoanStar parking lots, but also apartment parking lots and other shopping centers. (See Ex. E

[Deposition of Randy Rainey 39-42 (searching license plates obtained from cars parked in

general parking lots); Deposition of James Griffin 115-117 (license plates recorded in other

parking lots)].) Accordingly, TitleMax's unilateral limitation of its response to Request No. 16

improperly prevents LoanStar from obtaining the fnll scope of the infmmation to which it is

entitled.   Similarly, TitleMax's refusal to produce documents reflecting the use of DMV

Databases other than DataTrax or PublicData ignores testimony from its own employees that

other databases may have been used. (See, e.g., Ex. E [Deposition of Randy Rainey 39-42 (using

an unidentified databases for marketing purposes); Deposition of James Griffin 95-96

(unidentified database other than PublicData used to conduct searches); Deposition of Thomas

Kirk 124-125 (unspecified database used to create lists of customers for mailers)].) Attempts in

this regard to prevent LoanStar from obtaining evidence regarding its claims and TitleMax's

purpmted defenses violate the spirit and purpose of the discovery process. Chapa v. Garcia, 848

S.W.2d 667, 668 (Tex. 1992) ("Discovery is designed 'to allow the litigants to obtain the fullest

knowledge of the facts and issnes prior to trial."'); Gutierrez v. Dallas Indep. Sch. Dist., 729

S. W.2d 691, 693 (Tex. 1987) ("The rules of discovery were changed to prevent trials by ambnsh

and to ensure that fairness would prevail."). Accordingly, this Comt should compel TitleMax to

respond to the requests as written.




                                                7

                                                                                             0747
       Further, despite the fact that TitleMax's written responses promise some production, to

date no production has been made. During meet and confer, TitleMax promised ·production

during the week of November 3, but TitleMax has yet to produce even a single document.

Accordingly, the Court should compel TitleMax to produce responsive documents within ten

days of the hearing.

       B. TitleMax Must Produce the Hale, DeLeon, and Grajeda Hard Drives

       As described above, due to the significant discrepancies in TitleMax's responses to

requests seeking lists of LoanStar customers in TitleMax's possession, LoanStar requested the

hard drives of certain employees known to have maintained such lists. LoanStar first informally

requested these hard drives, but TitleMax unequivocally refused to produce the same. (Ex. F

[June 18, 2014 E-Mail from Sarah Powers to Geoff Gannaway; June 25, 2014 E-Mail from

Geoff Gannaway to Sarah Powers).) LoanStar later served formal requests for production of the

hard drives, but notwithstanding TitleMax's clear failure to conduct an adequate search under its

own volition, TitleMax once again unequivocally refused to produce. Because the information

sought is directly relevant to LoanStar's claims and cannot be recovered by alternate means, the

Court should compel TitleMax to produce the hard driv.es. See In re Weekley Homes, L.P., 295

S.W.3d 309,317 (Tex. 2009) (compelling production of hard drives in similar circumstances).

       All of the elements the Supreme Court set forth in Weekley to support the production of

hard drives are present here. First, TitleMax has unquestionably defaulted on its obligation to

search for and provide the requested information. !d. As set forth above, Hale testified that he

maintained a spreadsheet on his computer of customers to whom he had sent marketing materials

after obtaining their contact inf01mation from PublicData ("Hale Spreadsheet"). (See Ex. G

[Deposition of Richard Todd Hale at I 02-1 06] (testifying he saved the spreadsheet on a



                                                8

                                                                                            0748
computer at "store office number 20")). LoanStar requested production of the Hale Spreadsheet,

but TitleMax claimed that no such document could be found. (Ex. H [TitleMax's Response to

the Third Request for Production, No. 6].) Only after LoanS tar moved to compel production of

the hard drive from Hale's computer did TitleMax even attempt a search, then conveniently

representing that the spreadsheet may have been located and would be produced. Yet, TitleMax

has not produced the spreadsheet to date, and still refuses to provide the hard drives for expert

analysis. In the same way, only upon meet and confer did TitleMax finally admit that it had

never searched the Grajeda and DeLeon hard drives, even though those employees pled the Fifth

when asked about their searches (see Ex. I [Depositions of Felix DeLeon at 12-16; Lucia Grajeda

at 16-18; Ismael Hernandez at 11-21]) and former and current TitleMax employees have

consistently testified that Grajeda and DeLeon conducted searches and disseminated search

results to other employees. (See e.g., Ex. J [Deposition of Thomas Kirk at II 0-111; Deposition

of Michael Ryan at 45-48; Deposition of Patrick Sudduth 43-44].) Accordingly, TitleMax has

not engaged in the reasonable search required by Texas law and production of the hard drives is

appropriate.

       Second, LoanStar seeks production of the hard drives not to itself, but to a qualified

expert selected by both parties, with Loan Star to bear the expense of the expert. 5 It is not only

feasible but likely that a mutually-selected computer expert will be able to recover the requested

information-LoanStar does not seek complex computerized data but merely seeks lists of its

own customers, likely to be saved as Excel spreadsheets, Word documents, or text files. An

expert analysis of the Grajeda and DeLeon hard drives would locate search results and customer



5
  LoanStar proposes that each party offer three expert candidates and meet and confer regarding
selection, with selection to be completed by no later than December I, 2014.


                                                 9

                                                                                             0749
lists saved on the computers, as well as any attempts to delete the infmmation from the
             6
computers.       The expert's search would be limited to identifying and retrieving the lists and

spreadsheet LoanStar has previously expressly requested TitleMax produce.

       Finally, there is no question that there is a "direct relationship between the electronic

storage device and the claim itself." In re Weekley Homes, L.P., 295 S.W.3d at 319. Here,

LoanStar's entire case is founded on TitleMax's improper and illegal use of computerized online

databases to identify and market to LoanStar customers.            Thus, the parties previously

contemplated the production of this information as early as June 2013, when the parties entered

into a stipulated injunction under which TitleMax agreed to image all computer hard drives

believed to have been involved in the illegal marketing. The agreement contemplated that the

images and the information contained thereon would ultimately be produced.

       Because LoanStar requested production of the hard drives due to TitleMax's failure to

properly search for responsive documents from Hale, Grajeda, and DeLeon and intends to submit

the hard drives directly to an expert who will search for, locate, and extract the information

sought, TitleMax is facing no burden in production and has no basis for its continued objection

to this discovery. Thus, the Cotni should compel TitleMax to produce the requested hard drives

within ten days of the hearing on this motion, and award LoanStar its costs and fees in

accordance with the Rules.

                                           IV.    PRAYER

       Due to TitleMax's continued, unjustified refusal to abide by its discovery obligations and

produce documents responsive to LoanStar's requests for production, this litigation has been



6
 The deletion or destruction of information at the employee level is a pa1iicular concern in this
case because, as TitleMax has alleged in its prior pleadings, TitleMax's employees fear criminal
prosecution for their actions.

                                                 10

                                                                                           0750
needlessly prolonged and this Collli's resources unnecessarily wasted. Accordingly, this Court

should enter an order compelling TitleMax to produce responsive documents within ten days of

the hearing and award LoanStar its costs and fees in bringing this motion.

                                             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.johnson@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)
                                                       (Admitted Pro Hac Vice)
                                                     999 Peachtree Street, N. E., 26' 11 Floor
                                                     Atlanta, Georgia 30309
                                                     Telephone: (404) 853-1500
                                                     Facsimile: (404) 853-150 I
                                                     E-Mail: jwargo@wargofrench.com
                                                     E-Mail: aromero@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: (31 0) 853-6333
                                                     E-Mail: spowers@wargofrench.com
                                                     E-Mail: cgoebelsmann@wargofrench.com


                                                11

                                                                                                 0751
     Attorneys for Wells hire 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 Money Max
     Title Loans; and Integrity Texas Funding, LP




12

                                             0752
                             CERTIFICATE OF CONFERENCE

       Counsel have conferred and otherwise communicated extensively for weeks about the

issues raised in this motion and were unable to reach agreement.

DATED: November 12,2014

                                                     Is/ Daniel Johnson
                                                        Daniel Johnson




                                                13

                                                                                   0753
                                CERTIFICATE OF SERVICE

       This is to certify that I have this day served all parties with a copy of the within and

foregoing 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

has been forwarded to all counsel of record in accordance with TEX. R. Civ. P. 21 and 21a on this

12th day of November 2014.

BECK REDDEN LLP
Geoff Gannaway
Bryon Rice
1221 McKinney St., Suite 4500
Houston, Texas 77010.

FELLOWS LABRIOLA LLP
Stephen LaBriola
Christina Baugh
Peachtree Center
Suite 2300, South Tower
225 Peachtree Street, N .E.
Atlanta, Georgia 30303-1731

Attorneysfor TitleMax
TMX Finance of Texas, Inc. and
TitleMax of Texas, Inc.



                                                     Is/ Daniel Johnson
                                                        Daniel Jolmson




                                                14

                                                                                            0754
Exhibit A




            0755
     I


 1
 2
     I
                                NO. 2013-33584
           WELLSHIRE FINANCIAL SERVICES,     IN THE DISTRICT COURT
                                                                                    Page 1

                                                                                                 l
           LLC, d/b/a LOANSTAR TITLE
 3         LOANS and INTEGRITY TEXAS
           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 i       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          ******************************************************
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 9:03 AM 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.
     -'  --·--------~-------------------------------------------------------------------------------
                                        Veritext Florida Reporting Co.
     800-726-7007                                                                      305-376-8800

                                                                                          0756
 1
     I                       A P P E A R A N C E S
                                                                   Page 2


 2 i '.I

           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
     L______. ___·--·---------····. ·---·--------..--.                _ _ _ _..i

                                  Veritext Florida Reporting Co.
     800-726-7007                                                    305-376-8800

                                                                       0757
     ,---------
                                                                                        l
                                                                          Page 38
                                                                                            I
 1             A.    Yes.
 2             Q.    Okay.     And did you ever hear of a technique of

 3      writing down license plate numbers in parking lots?

 4             A.    Yes.

 5             Q.    And who did you hear that from?

 6             A.    Tom Griffin.

 7             Q.    And when did you hear that?

 8             A.    Within a week or so after being hired.

 9             Q.    So did Tom tell you about the writing down of

10      license plate numbers as part of your training?

11                           MR. RICE:     Objection, form.

12             A.   He stated that this was something he was
13      doing, and I actually went with him several times to do

14      it at a couple of different locations.                    So I actually --

15      he actually showed me how to do that.

16             Q.    (BY MS. GOEBELSMANN) And where did you go on

17      those several times that you accompanied him?

18             A.    There was -- We went probably two times

19      maybe three, but I think at least two times to a

20      competitor that's on Forest Lane and Central Expressway,

21      and that's the -- that's Texas Title, like red and

22      yellow.     It's really close to where I live.                 I live on

23      the other side of the freeway.

24                           And another place, I believe it's on

25   ~--~u~-~~n~~~-~-an-~~el t    Line,   _sam:_~omp~ny.                     ______ j
                                                                                            i

                                 Veritext Florida Reporting Co.
     800-726-7007                                                            305-376-8800

                                                                               0758
                                                                          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 know 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             Q.    Were there any other places that you
14      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 Reporting Co.
     800-726-7007                                                               305-376-8800

                                                                                  0759
     ~------



     I'                                                             Page 40
     '
 1
     I         Q.     Would that be November 2011?
     I
 2             A.     Yeah.
 3             Q.     Okay.
 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 these 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, like, a website and log in, and he would
23        find out general information.        He told me that that was
24        a website that -- that he paid for.          It was information
25        like -- sometimes there were a phone number, address.
     ---------------------                       -------·-·--------·----·----j
                                  Veritext Florida Reporting Co.
     800-726-7007                                                     305-376-8800

                                                                         0760
     ~------------------------




                                                                Page 41

 1   I   It definitely told if the car that he was looking at in
 2       the parking lot just in front of us had a lien against
 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       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             A.    Um-hmm.     Yeah.   He showed me I know at least
     ~·-·-------------------------------·---------------------------__]
                            Veritext Florida Reporting Co.
     800-726-7007                                             305-376-8800

                                                                      0761
                             CAUSE NO. 2013-33584


  WELLSHIRE FINANCIAL                              IN THE DISTRICT COURT
  SERVICES, LLC d/b/a
  I.OtiESTJI.R TITLE LOIINS and                •
  INTEGRITY TEXAS Ft.JNDING 1                  •
  "·            P~i3.int.if:f:::


  vs.                                              152ND JUDICIAL DISTRICT

  TMX FIUI\NCE HOLDINGS 1
  INC,; 'l'HX FINJ\NCE 1 LLC;
  TMX  FINAUCE OF TEXJ>r.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 wh<l:thC.z;         tlu~:z;:~   we:z::e any --




                                                                                          0765
                                                                                                 P119'C 30

 1           A.     tio.

 2           Q.     --     c.s.R.~   in Austin 8?

 3           A.     no.
                    At tho time that you              ~hared   thi~   info~tion
 '           Q.

 5   with Austin 10 on Lamar, do you                  roc~ll   who the G.M.     wa~?


                    Yo~.       His name        i~   Gabriel-- I'm     ~orry.    I
 '
 7   can't
          A.

              rem~er hi~           lA~t   nnme.

 8        Q.        That't: fine,

 9           A.     You understand I've been cut of the                 ~rket       for

10   several      ~~nth5    now.

11           Q.    A.~d ju~t       to the be.!lt of your        ~ility,   I'm just

12   at:kinq for what you know.

13

14
          "· Q.
                    Riqht.

                    Do you recall who the S,M,             we~   in Auutin lO 11t

15   the time you t:harcd thi$ infonn.a.tion?

16        A.       Yeah, A::lelia Figueroa.

17        Q.       Anci do you recall any other empl.oyo:es in Austin

18   10

19        A.       ~lo.


20        Q.        -- .,    r;hat   tiz:~e?


21        A.       Nuh-uh.

22        Q.       For TitJ.eBucks 2 on Lilmar, do you recall                  -- do
23   they have
                    • G.M.    at TitleBucl:s?

24        A.       Uh-huh.

25        Q.       Who wat: the G.M. at that store at that time?




                                                                                          0766
                                                                                                  Paqe 31
 1           A.     Her    n~e     ~as   Diana Brown.

 2           Q.     And do you recall if that                   ~tore   had an S.M. or

 3   C.C.R.       [sic] --

 4           A.     ~es,     they had an S.M.

 5           Q.        C.S.R.        I'm   ~orry   .

 •           A.           S.M.,    ~tore   manager.        I don't recall.          That

 7       that stor• had z;:avaral S.M. II in i t as w•ll.                    So I

     don't    rem~cr         exactly which one           w;a~   there at that time.

 9           Q,     Ho>t 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 th<! web           ~::itc   DntaTrllX?

12        A.      I have.

13        Q.      When did you fir1.1t learn or hear that te:r:n.?

14        A.      X would say probably I              think late December or

15   early January.

16        Q.      Tell   ~c    qonorally what        OataTr~ i~::.


17        A.      The way I understand it, it's juot a pro9'ram

lS   that can essentially sort tho lienholder information.


"         Q.

20   December· just not referred to a=               Dat~Trax?


21        A.      Po.G:oibly.     I   think thu.t'lli the only              Wel:!., I

22   think OataTrax is the only             n~~e   that I heard it referred

23   to by,

24        Q.      And    ~o   late December wall: the first ti=e that

25   you ever heard of thi:; typo of databaBe being used?




                                                                                             0770
                                                                                                Page 18
             A.      Yenh, a'    fa~   as I know.

 2           Q.      Tell me 2n what context you           lea~ned        about

 3   Dat;:~.'lrax.



 •           A.      Well, Jim gave me a call, whichever i t was,

 5   late December or oarly January.                 And i t   W>O   -- 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 <ggannaway@beckredden.com>
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.'<UII.

 7


 •
 9   this
            •.
            Q•




            e-m~il
                    Okay.

                    Yeah.

                       trail.
                                Did you ever e-mail it to anycn•?

                                l   me;m, l      think thie -- that. wa.!l

                                     Let me 1.1ee.       Or maybe there wasn't an
                                                                                 p;~rt   of



10   attacluucl'lt.     l*!.ybe he jui.IC said --            Ok;:~.y,   No.   Then I

11   que!lla I didn't       attil~h      it.

12                          With regards -- Going bacl<: to this e-mail,

13   P;m.triok   rcu::pond.~:   and ha says, "Good idu11..               Do you mind

14   sharing that with everybody,"

15                          So then I did ae he instructed, and I

16   .~:hilred   the -- I forwarded that e-mail then to everybody

17   to qive everybody else the idea of using Microsoft Word's

18   cerqe proqram with the Public Data.                        But I guess I did

19   not actually include tha                  a~tachment     or what I created on

20   therll!.

21          Q.     Wall, and I'm just --And                   l'~ as~inq      about the

22   spreadsheet becauec we have requested it, and we're told

23   that it couldn't be found.                   So   I'~   wonderinq i£ you have

24   any concept as to where we miqht be able to find thnt

2S   spread~hect?




                                                                                              0831
                                                                                                     Paqe 106
 1           >.        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<ork with Michael Ryan?

 5                         MR.. RICB:    Object to :fOJ:lll,

 6          A      r plead tho Fifth.

 7          Q      Do you know who Michael Ryan is?

                   :tas.
 '          A

 9          Q     'lol'llat is Hichaol Ryan•:: po::;ition at 'l'itlo.."iax?

10          A      I plead tho Fifth,

11          Q     Was he your 3uperviGor?

12          A      I plead the Fifth.

13          Q     What stores did Michael Ryan oversee?

14          A      I plead the Fifth.

15          Q     Did he oversee your store?

16          A      I plead the Fifth.

17          Q     Axe you     f~~liar     with a   co~pany     called

19   tlata'I'rack:~?


19         A      I plead the Fifth.

20          Q     Oid you ever obtain an account with

21   oata'I'racks?

22         A      I plead the Fifth.

23         Q      Have you nvar aecessod a database maintainod

     by Data'I'racks?
"
25         A      I plead the Fifth.




                                                                              0856
 1                      Hav~    you avex   ~ccossud    a    d~t~a~o   maintained

 2   by DataTxacks on a cODputer that is ownud or                      ~intainad

 3   by TitlcHax?

                        I plead the Fifth.
 '           '
 5           Q          Have you ever accessed a database maintained

 6   by   Data~rncXs           for a   co~put~r   -- on a personal coDputer?

 7           A          I plead the Fifth.

                        Rave you over maintained -- have you ever
 '
 ~   performed a search on a database maintained by

10   DataTracks on any other computers?

11           A          I plead the Fifth.

12           Q          Rave you ever      perfo~cd        any searches from the

13   Texas       Depar~ent        of Motor Vehicle         recor~?


14                      I plead the Fifth.
             '
15           Q          okay.     Have you ever searched any datnbasu

16   ~intaining             DMV records for the      pu~osas      of -- of

17   locatinq customers of competitors?

18           A          I plead the Fifth,

19           Q          Have you ever searched any           dat~asc,


20   including, but not limited to,                 DataTrack~.


2~   PublicData com, or the              Taxa~    o .. partment of   Moto~ Vehic~e


22   record~          fo~   the purpoGe of Locating or identifyinq the

23   name~       of    cu~tomer~   of the plaintiffs in this case,

24   Wellshire Financial, doinq business as                     Loanst~r   TitLo

25   Lo~s        or    rntegrit~   Texas Funding?




                                                                                     0857
                                                                                   Pago 18
 1                          MR. CLEVELP.ND:     Obj<l'ction --

 2          A          I plead. the Fifth,

 3                          MR.   CLEVE~tO:     Ol:d~cti•;m;    fo~.


                       (By Mr. Stroud) Axe you fAmdliar with who
 '          Q

 S   LoanStar Title         Loan~   i~?


 6                          MR.   CLEVE~m:      Hang on a      ~oeond.


 7                          I inctruct you not to anGwor on Fifth

 a   Amendment      qround~.


 9          A          I plead tho Fifth.

10          Q          (By Mr. Stroud} Are you     £~liar        with who

1~   Integrity Texa5 Funding iG?

12          A       I plead the Fifth.

13          Q       Havo you ever acce,scd a database containing
14   DMV records and then used the %carch results that wero

15   obtained to mail solicitations to tho people idontifiod

16   on the search?
17          A       I plead the Fifth.

18          Q       Have you ever searched OataTracks for the

19   n~es       of customers o£ Loans tar Title Loans or Integrity

20   Texas Fundinq?

21          A       I plead tho Fifth,

22          Q      Have you ever searched OntnTraoku by a

23   lienholder,        spc~i~i~~lly      limited to Integrity      Tcx~o

24   Funding?

25          A      I    pload the Fifth.




                                                                            0858
                                                                        Page 1
                         CAUSE NO.   20~3-33594


WELLSHIRE FINANCIAL                  IU THE DISTRICT   COUR~
SERVICES, LLC, d/b/a
L01illS'l'AR 'l'I~LE LOXUS
and INTEGlU't~ TEXAS
FUNDING, LP,
             P1a:intiff~,


                                     OF HARRIS COUNTY, TEXJI.S

'lMX FIUANC£ HOLDINGS,
INC,,· 'l'MX FINliNCE, LLC;
'niX FltiANCE OF TEAAS,
INC.; TI'l'LEHAX OF TEXAS,
ltiC; FELIX DELEON; and
ISMAEL   HERt~A."lDEZ,
             Defcmdants.             152ND JUDICIAL DISTRICT


                  ORAL VIDEOTAPED DEPOSITION

                          !SHM:L HEIUlANO:E:Z

                           June 24, 2013



      ORAL VIDEOTAPED DEPOSITION OF ISM7>.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<CES   {Cont.)

 2

 3   ALSO PRE SEN 'I':

 4         Mr. Nichola~;: D'Angelo (Vidnographar)
           Mr. Felix DeLeon
 5

 5


 '
 '
10

11

l2

13

l4

15

l6

l?

18


"
20

21

22

23

24

25




                                                    0861
                                                                                                    Page 11
 1                                MR, RONDON:         "ie:;,    I   am,

 2                                HR. 1.;}1.RG0:    And, Chz:-is, I'm sorry.

 3   You uro as         ~ell?


 4                                MS. BRYAN:        I have no objection to

 S   that.       Yes.     I'm comfortable with that.

 6                                Mit. G,l\lrnAWAY:      And -- and, I que10s,

 7   Mr. Wargo, I'd ask are you comfortable with that a:

 8   sufficiently invoking his Fi,th                           Amen~ent         rights?

                                  MR. WXRGO:        I -- I          ~-     I£   av~ryona's
 '
10   in    agrce~ent,         I    ~.        Thank you.

11         Q.       Mr. Hernando:, could you tell me whether

12   you pz:-ovided any docu=ents to any attorneys other

13   than your counuel, Reece, in this case?

14                                MR. RONDON:         Give me one second real

lS   quick, Joe.

16                                MR, WARGO:        Yas.

17                                HR. RONDON:         Joe, we can talk nbout
18   that later, if you like.                      Jl.nd I -- I cAn -- I'll qivc

19   you frank and open answers to that.                                 But,

20   v~.   Hernandez, I'Q qoing to ask you to plead the

21   Fifth?

22         A.       I plead the Fifth.

23         Q.       Sir,          h~s   unyone at any          ti~o       -- at any timo

24   a~ked      you to    ~hred         or   d~sposQ    of any information that

25   you bQlieve         i~       somehow reLated to tho litigation?




                                                                                             0862
                                                                                      Page 12

    '       A,          J: plc;:~od.   the Fifth.

                    Do you have            ~ny ~nform~tion    or
    '       Q.

    3   documentation in your             pos~cGsion     that you believe is

 4      relevant to        thi~    litigation?

 5          A,             plead tho Fifth.

                    Sir, at any tiree, did you enter' into a
 '          Q.

 7      contract with Oatatrax on your behalf or on behalf of

 8      TitleMax?

                    I plead the           Fi~th.
 '          A.

lO          o.      Sir, if you entered into a contract, when

11      did you do so?

l2                              MR. RONDON:         I'm going to object to

13      form.

l4          A.      I plead the Fifth.
l5          Q.      Sir, have you ever falsely identified

16      your$elf to Datatrax?

l7          A.      I pl1111d thu Fifth.

                    Have you over fal$elY identified your$elf
"           Q.

19      to 'l'itloMax?

20          A.      I     ploud the Fifth.

21          Q.      Did you ever obtain any info=tion fro!Il

22      Datatrax?

23          A.      I     plead the Fifth.

24          Q.      Did       you ever obtain any info.!:ltation from

25      DatatraK that ua::: subsequently used by anyone              .,




                                                                               0863
                                                                                page 13

 1   Ti tleM.ax?

 2                        MR. RONDON:       Objection, fol:lll,

 3                        MS. BRYAN:      Objection, form,

 •          A.     I   plead the Fifth .

 5          Q.     D~d   you   eva~   obtain any infor.mation     fro~


 6   Datntrax that, to         you~ kno~ledge,     was subsequently

 7   ~sed    by other people at TitleMax?

 B                        MR. GlillNAWhY;     objcet to fo:nn.

         A.        I plead the Fifth.

10          Q.     Sir, did you ever provide any certification

11   to Datatrax that information you were obtaining from

12   Datatrax would be         u~ed   for a proper purpo=o?

13       A.        I plead the Fifth.

         Q.        Could you tell me what proper purpose you
"
15   stated to Datatrax in pulling the information?

16                        MR. RONDON:       Object to for.m.

17       A.        I plead the Fifth.

1B       Q.        Ara you aware of the fact that you cannot

19   obtain information        fro~   Datatrax without certifying

20   that the information is beinq obtained for a propar

21   purpose?

22                       MR, GANNl\WhY:       obj oct to form.

23                       }m, RONDON:        Object to form.

2<       A.        I plead the Fifth.

25       Q.        Did you ever certify to Datatrax that you




                                                                         0864
    1   ~ere    pulling   informat~on      from   it~   database for any

    2

    3       ..
        purpot:e at all?

                     I plead the Fifth .

 •             Q.    Sir, are you aware of tho fact that

 5      obtaining information from Datatrax for -- for

    6   pu~oses     o£ soliciting customers was an improper

 7      purpo10e?

 a                         MS.    BR~AN:      Objection,    fo~.


 a                         MR. GJ\NNJ\HAY:        object to form.

10          A.      I pleaa the Fifth.

H           Q.      When you obtained information from

12      Datatra~,   did you      u~e   that   info~ation    a~   an employee

lJ      of TitleMax?

14                         MR. RONDON:         Objection,   fo~.


15                         MS. BRYAN:         Objnction, form,

16          A.         plead the Fifth.

17          Q.      Did you uso any Datatrax information to

19      solicit customers that were Integrity customers?

18

20

21
            •.
            Q.
                           MR. RONDON:

                    I plead the Fifth .
                                               Objection,   fon~.




                    Did you ever search the Datatrax databases

22      for information that was related in any way to either

23      Loanstar or rnte9rity?

20          A.      r plead the Fifth,

25          Q.      When did you       per£o~     your fir:t so•rch




                                                                               0865
                                                                                          Page 15
 1   se~king inforw~tion           rulated to         Loun~~a~     or Integrity?

 2                        MS.     BR~AN:       Objection, form.

 3                        MR. RONDON:              Objeetio:.n,   f<=lrt:'l,


 4       A,        x plead the Fifth.
 5       Q.        When did you         pu~fo~        your   fi:~t      search

 G   u~ing Datatr~        databa~cs        for informntion related to

 7   Loansta~     or Integrity?

                                                     Objection, !"ore.
 '                        MR,     GJI..NN11.WAY:

                          MS. BRYAN:          Objection,          fo~.
 '
10                        HR..    RONDON:          Objection, form.

ll       A.            plond tho Fifth.

12       Q.        Row many       cu~tomers         did you identify -- I'm

13   sorry.     Let me start thut over again.

14                        Row many Integrity or               Loan~tar


15   cu:~tomers    did you identify through Oat.:ltrax searcheto?

16                       MR.      GANNA~Y:           Objection, form.

17                       MS.      BRY~r:      Objection, form.

l8                       MR. RONDON:               Objection, form.

10       A.        I plead the Fifth.

20       Q.        How often did you perform a search of the

21   Datatra~     database       fo~ Lo~nstar         or   Int~qrity


22   cuGtomers?

23                       MR. RONDON:               Objection, form.

24       A,        I   plead the Fifth.

25                       MR. WARGO:           What is the         fo~




                                                                                   0866
                                                                                               Paqe 16
 1   objection?

 2                        MR. RONDON:           C~n   you    ~npnat   thn

 3   question, please?

 •                        MR.   ~GO:        Would you         re~d   baok the

 5   qu~rstion?


                          MR. RONDON:           Yeah.        I'm askinq     he~   to.
 '
 7                         (Xhe record was            ~ead   as   ~oquc~ted.)



 •                        MR. RONDON:           It    assume~     fact~   not in

 9   evidence.

10       Q.        On average, how         ~any      differunt      eusto~a~&


11   informntion did you obtain in any search that you

12   perfo::med?

13                        MR. GANNA'WAY:         Object to fo:t:m,

1<       A.            plead the       Fi~th.


15       Q.        Did you      eve~    run searche& where the results

16   cominq buck were greater than 100?

17                        MR. GANNAWAY:          Object to form.

19       A.            pl~rad   the Fifth.

19       Q.        Did you perform all of these searehea

20   within the scope of your             ~ployment          at TitleMax?

21                        MR. GAHNAWJI.'l:       Object to fo:t:m.

22       A.        I   plead the Fifth.

23       Q.       Did you perfo:t:m the:e             sea~ches     at the

24   direction of anyone else at                Titl~x?


25                        MR. G)UINM1l\Y:        Object to form.




                                                                                        0867
                                                                                      Page 17
 1       A.       I plead the Fifth.

 2       Q.       Sir, did you evar perform              an~ ~oaxch     of a

 3   Datatra~ databa~a        specifically seeking customar

 4   information of vehicles encumbered by liens made by

 5   Integrity?

 6       A.       I plead     ~~e   Fifth.

 7       Q.       Sir, have you aver            ~eurehad    the Datatrux

 8   databa~e   by licen=e plate number?

 9                        MR. GA."m1'.H1\Y:      Object to fo:t:'lll.

10       A.       I    plead the Fifth,

11       Q.       For any searches you performed on

12   Datatrax's database for either Loanstar or Integrity

13   customers, what geographic areas did you search for?

14                        Hl\. ROUDON:         Objeet to   fort~~.


15                        MS. BRYA.'l:        Form,

16       A.       I plead the Fifth.

l7       Q.       Did you    ~vcr      seek information concerning

18   Integrity customers in the Austin, Texas area?

l9       A.       I plead the Fifth.

20       Q,       Did you ever seek information concerning

2l   In£eqrity cuato=er# for the Dallas, Texa~ a~ea?

22                       HR. GJ>.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<A"t:         object to :form.

         A.           plead the Fifth.
 '                I

 5       Q.       And for purposes of thoso last two

 6   que~tions,       I'm   r~ferrinQ     to cu=tom4rn that you

 7   switched over usin9           in~ormation       obtained from

 a   searches of the Datafax -- Datatrax database.

 9                          HR. RONDON:          I'= sorry, Joe.      Was that

10   a question?

11                          MR. WARGO:       Yms.

12       Q.       Do you       undorst~d         my queGtion?

13                          HR. GJ>.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<C.: '!'MX FIN.l\NCE, LLC;
  TMX FINANCE OF TEXAS,
                                      •
  INC, ; TITLEHAX OF TEXAS 1          •
  INC. ; FELIX Do LEON; and
  ISHH1'1EL HERNAliDEZ,
                                      •
                                          152liD JUDICIAL DISTRICT




               ORAL AND VIDEOTAPED DEPOSITION OF

                              THOYJI.S S. KIRK

                                JUNE S,   2014

························································
        ORAL AND VIDEOTAPED DEPOSITION OF THOMAS B. KIRK,

p~oduced a~    a witness at the instance of the PLAINTIFFS,

and duly ll'worn,   wa~      taken in the above-styled and

numbered eau::e on thm 5th of JUlre, 2014 from 9:10 a.m. to

12:29 p.m., Oefore MELISSA PARKHILL, CSR, in and for the

State of Texas, reported by computor-assintod machine

shorthand, at the law o£ficcs af Beck Redden, 515

Congrcs~    Avanua, Suite 1750, Austin, Travis County,




                                                                     0874
                                                                               P~ge   2
    l   Texn$, pursuant to the   Texa~ Rule~   of Civil Procedure and

    2   tho provisions :tatad on the rocord or     att~ehod   hereto.

    3

    4

    5


    '
    '
 •
lO

ll

12

13

14

15

16
,
19

19

20

21

22

23

24

25




                                                                        0875
                                                                           Pag111 3
    1                          APPEARANCES

    2

    3   FOR THE PLAINTIFFS:

    4               Sarah F. Power~, Attorney at Luw
                           -and.-
 5                  Ch:t:ist.ina Goebelsmann, J>.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<ANCE OF TEXAS ,
  INC. ; TIT~ OF TEXAS,
                                  •
  INC.; FELIX DELEON; and
  ISHM11EL J!Etui'ANDEZ,          •
                                  •   HARRIS COUNTY, TEXAS
             Defendants



               ORAL AND VIDEOTAPED DEPOSITION OF

                            MICHAEL RYAN

                          JUNE 25. 2013




        ORAL AND VIDEOTAPED DEPOSITION OF MICHAEL RYAN,

p:odueod as a witness at tho instance o£ the PLAINTIFFS,



numbered cause on the 25th of JUNE, 2013, from 11:41 a.m.

to 1:51 p.m., before MELISSA PARKHILL, CSR, in nnd for

the State of Texas, reported by computer-assisted machine

sho:thand, at the law offices of sutherland Asbill           &
Brennan, 600 Congress Avenue, Suite 2000, Austin, Trnvis

County,   Texa~,,pursuant    to Texas Rules cf Civil Procedure




                                                                 0879
                                                                               Pnqc 2
 1   and the   p~oviaions    stated on the   ~ecord.


 2

 3

 4

 5                       APPEARANCES

 6

 7   FOR TilE PLAIN'riFFS:

 B               JeGsica c, Casey, Attorney at Luw
                WARGO FRENCH
                999 Peachtree Street, NE, 26th rloor
 '              Atlanta, Georqiu 30309
10               (404) 853-1500
                 jcusey~varqofrencb.ecm
11

12

13   FOR TilE DEFENDANTS, 'n:OC FillANCE OF TEXl\S and 'l'ITLE.MAX o£
     TEXAS:
14
                Stephen T. LaBriola, Esq.
15              FELLOWS LABRIOLA
                S~ite 2300, South Tower
16              225 Peachtree Street, NE
                Atlanta, Georqia 30303
17               (404) 589-9200
                alabriola~fellab.com
19
                      -AND-

                Geoff Gannaway, EGq.
20              BECK REDDEN 1 LLP
                1221 McKinney Street, Suite 4500
21              Houston, Texa~ 77010
                (713) 951-6263
22              gqannawayGCeckredden.com

23

24

25




                                                                        0880
 1               APi>&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<Ul@skv. com
 7

 a
 9   FOR. THE "OEF'EN'OJI.N'l', Mft. IIERNANDEZ:

10                Rooeo Rondon, Esq.
                  KALL MAINES LUNGRIN 1 P, C.
ll                Willi~s  Towor, 64th Floor
                  2800 Post Oak Boulevard
12                Hou:;ton,   Tcx-a:~:   77056
                   (713)   971-9000
lJ                rrondonQhallmainoslugrin.com



15
     FOR THE WITNESS:
16
                  Edward J. Uennessy, Esq.
17                THE HENNESSY Ll\W FIR."!
                  2900 Wesl~yan, Suite SSO
                  Houston, TQxas 77027
"
19
                   (713)   224-5066
                  ejhQhgbatty.oom

20

21
     ]I.L$0 PP..ESENT:
22

23

24

25




                                                                 0881
                                                                                   Page 45

 l         A.   Not that I recall, no,

 2         Q.   Do you recall whether -- Strike that.

 3              Tell me how the      proce~s   worked with requesting

     these searches from Lucia.        Did other people, to your

 5   knowledge, go directly to her or did         ~st     of the requests

 6   filter through you to get this          info~ticn?


 7         A.   I don't know the answer to that question.

 •         Q.   !tow many of the Austin -- Hell, how many atore:ll
 9   are there in Austin?

10         A.   I believe there's 21 or 22 now.

ll         Q.   O! the 21 or 22 stores in the Austin market,

12   how ronny of them do you recall making roquosts for this

13   information on their behalf?

14         A.   Maybe ten.

lS         Q.   And at one point in time you were in charge of

16   half of the .Auctin mArket; i:s th11t right?

l7         A.   Uh-huh.

                How many stores were in your district when you
"          Q.

     were the north di#triet managor?
"
20         A.   Nine.

2l         Q.   Did all nine of      tho~e   stores   rcquo~t


22   informAtion from     DataTra~   through you?

23         A.   None of    the~   actually requested anything from

24   me.

2S         Q.   Did you request      info~ation       from ontaTrax on




                                                                            0882
 1   behalf of all nine of          tho~e      storeG?

 2        A.      ~   raquo~tod     information from Lucia.

 3        Q.      For all nine of those stores?

 4        A.      Not all of them, no.

 5        Q.      How many of       tho~e      nine   store~?


 6        A.      Probably five.

 7        Q.      Why didn't you request              info~tion    on behalf of

 8   tha oth11r four     stor~u;?


 9        A.      tic particul.ar rl!ason.               don't know why.      Some

10                                      were   u~inq     the -- the mailer$ to
11   do their marketing,           Some of them weren't using it.              Some

12   of them were getting their information directly from

13   Lucia.    Some of them were not.

14        Q.      !low do you know that so:>: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       t<!llinq me?




                                                                             0884
                                                                                              Page   ~B

    l           Q.     No,    Why 4o you think that        sto~os   were gatting

    2

    3

    4
                •.
        their information directly from Lucia?

                       Well, they were either qettinq --either

        getting i t from me       ~~   the informAtion from me or from

 5      Luci~ bocau~e        everyone -- they all talked to Lucia.

    6   Evo~one       talked to Lucia.      But      don't know.        To ba

 I      honest with you, I do not know.

 •              Q.     Did you ever obtain        tho~o   customers lists from
    9   anyone, other than Lucia?

lO              •      Not -- No .

11              Q.    And you always picked these lists up at Lucia's

12      store?

13              A.     (Node.)

14              Q.     Did Lucia, to your knowledge, over -- Strike

15      that.

16

n
10
                •.
                Q.
                       Did Lucia ever

                       Nuh-uh .
                                           c-~il   you any of these lists?



                       Did you ever e-mail any of thero lists to

19      anyone else?

20              A.     Nuh-uh; no.

21              Q,    And I    apoloqi~o   if you already answered this.

22      Did any of the stores in your          di~t~ict ~ko         a   ~equo~t   to

23

24

25
        you

                •.
              fo~




                Q.
                     those

                      No.
                             custo~er li~ts?


                              As far as a formal request, no .

                      or an informal request?




                                                                                       0885
                                                                               Paqo   ~

                          CAUSE NO. 2013-33584


  WELLSRIRE FINANCIAL                       IN THE   DIS~RICT   COURT
  SERVICES, LLC d/b/a
  LONESTAR TITLE LON-IS and
                                       •
  INTEGRITY TEXAS FUNDING,
  LP,

                Plaintiff.!l

  vs.                                       152ND JUDICIAL DISTRICT

  TMX  FINANCE HOLDINGS 1
  INC. ; 'l'MX FINANCE, LLC:
  TMX FINAUCE OF TEX1\S 1
  INC. ; TITLEW\X OF TEXAS 1
  INC. 1 FELl: X DELEON; and
  l:SitW\!:L HE!UIANDEZ,

                Defendant::            *    ll.AAAIS COUNTY, TEXAS



                  ORAL AND     VIDEOTAPED   DEPOSITIOl~   OF

                               PATRICK SUDDUTH

                                JVUE 25, 2013



        ORAL    ~      VIDEOTAPED DEPOSITION OF PATRICK SODDUTH,

produced ax a witnesx at the instance of the PLAINTIFFS,



numbured       enu~o    on the 25th of JUNE, 2013, from 2:38p.m.

to 4:54 p.m., before 1-tt:Liss;,. PAR1\RILL 1 CSR 1 in and for

the state of TcKas, reported by computor-asGiGtcd machine

shorthand, nt tho law officeG of Sutherland Asbill '

Brennan, 600 Congress Avenue, Suite 2000, Auntin, Trnvis

County, ToKaG, pursuant: to Texas Rules of Civil Procedure




                                                                        0886
                                                                                   Paqc 2

 l   and tho   provision~     ~tatcd   on tho record.

 2

 '
 4

 s                           APPEARI.llCES

 6

 7   FOR. THE PLAINTIFFS:

 9               Jc~~io~     C. Ca$ey, Attorney at Law
                ~-lARGO    FRENCH
                 999 Peachtree Street, NE, 26th Floor
 '              Atlanta, Georgia 30309
lO               (404) 853-1500
                jcasey@warqofronch.com
ll

l2

13   FOR TilE DEFENDANTS, 'l'MX FINANCE OF TEXAS ;'l.nd   Tl:TLE~!AX   of
     TEXAS:
l4
                Stephen T. LaBriola, Esq.
15              FELLOWS LABRIOLA
                Suite 2300, South To~er
16              225 Peuchtree street, NE
                Atlanta, Gaorqia 30303
l7              (404} 589-9200
                 Gl~riola@follab.com
18
                          -AnD-

"               Geoff G~naway, Esq.
20              BECK REOPEN, LLP
                1221 McKinney Street, Suite 4500
21              HOU$ton, Texau 77010
                (713) 951-6263
22              gqannaway@beckreddon.com


"
24

25




                                                                            0887
                                                                          Page 3
 1               A P P E A R A N c E S         C 0 N T I N U E 0

 2

 3    FOR THE DEFeNDANT, HR. DELEON:

 4                Chri~tinn A, Bryan, Attorney at Law
                  SMYSER RAP~~ & VESELKA, LLP
 5                700 Loui~iunn, Suite 2300
                  Houston, Texas 77002
 6                (713) 221-2345
                  cbrynnQ ckv. com
 7



 Sl   FOR THE DEFEND1\..'t'l', MR, HE!Uill.NPEZ:

10                Reece Rondon,        E~q.
                  HALL loiAINES LUNGRIN, P.C.
11                Williams     Tow~r,    64th Floor
                  2900 Post Oak Boulevard
12                HoUGton, Texa~ 77056
                  (713) 871-9000
13                rrondon@hallmninnslugrin.com

l4

15
      FOR THE WITnESS:
16
                  Richard D. Milvenan, E&q.
17                l~CGINNIS,   LOCHRIDGE & X!LGORE:, L.L.P.
                  600 Conqross Avenue, Suite 2100
                  Austin, Texas 79701
"                  (512)   45l5-6005
                  rmilvenan@mcqinnislaw.com
"
20

21
      AI.SO PRESEliT:
22
                  Cody Hall, Videoqraphcr
23

24

25




                                                                   0888
                                                                                    Pa.ge 43
 1   pu.-poses?

 2                          HR, HILVENAN:       Objection, form.


 '          Q.

 4   pu.-posc~     for which       som~one   can zccess the information in

 5   the   D~taTrax      database?

 •                 I'= not 100 percent sure what --

 7                          MR. MILVENAN:       Objection, form.

 a         A.      Lik~     I   ~aid,   I don't know a whole lot about the

 ~   progr~      or anything like that.

           Q.      That'~       fine.

           A.      Yeah.

            Q.     t~e're       just hera to find out --

           A.      Yeilh.

           Q.      -- what you know          tod~y.


           A.      Right.

           Q.      Did Mr. DeLeon ever tell you that he had to

17   certify a purpose for accessing              in!o~ation   from

18   DataT..:nx?

           A.      No.
"
20         Q.      Othc..: than Jim, did any of your superiors over



22         A.      No.

23         Q.      To your knowlcdqo, how =any of the TitleHax

24   stores in your district received informntion that was

25   obtained from DataTrax?




                                                                             0889
 1           A.      'I'hat   ~oulel b~   ~-   I don't know 100 percent £or

 2   GUro.        I would say -- I know thoro                wa~   probably a couple

 3   who I don't believe ovar 90t --who ever                         u~ad    any of

     tho~o.        If I were to        quos~   honestly, i t would bo a little

 5   speculative, but I think IMybe six or seven pos:-.ibly.


 '           Q.      oo you      po~~onally     know     th~t ~nyona        at   tno~o


 7   atorea waG --         h~d    obtained this information from

 S   O;~.ta'l'rax?


                     My understanding was that any of the
 '           A.

10   info~tion         came from reports that Felix had pulled.

11           Q.      You mentioned Austin 3 and Austin 13 were two

12   store:!! --


"           A.       Riqht.

14           Q.      -- that you personally Obtained information

15   for.

"                    What other stores in your district do you

17   believe had       info~tion          that was obtained           fro~    Data'l'rax?

19                            HR. HILVENAN:          Objection, foX'lll.

                           moan, the specific                      numbers?
"           A,       ~ou                                sto~c


20          Q.       Right.

21          A.       I'll sa.y I'm fairl.y confidant that J\u:a:in 1.8

22   diQ not,        And, you know, tho others I think i t would be

23   an   a~~umption       if     were to      ~ay    th~t   all of the rest did.

24   Oh, I uould also           ~cal   pratty comfortable suyinq that

25   Austin 15 probably never roooivod any,




                                                                                            0890
Tab U
                                                                            1

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 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                       ORAL HEARING ON PARTIES' MOTIONS
15
16
17         On the 21ST day of November, 2014, the following proceedings came
18   on to be held in the above-titled and numbered cause before the
19   Honorable ROBERT K. SCHAFFER, Judge Presiding, held in Houston, Harris
20   County, 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




                                                                     0891
                                                                            2

                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014
                                                           .




 1                                 AI?I?EARANCES

 2
 3   MR. JOHN DANIEL JOHNSON
     SBOT NO. 24046165
 4   SUTHERLAND ASBILL & BRENNAN, LLP
     1001 Fannin
 5   Suite 3700
     Houston, Texas 77002
 6   Telephone:  713-470-6100
     Fax:  713-654-1301
 7   E-mail:  Daniel.johnson@sutherland.com
     Counsel for PLAINTIFFS
 8

 9

10   MR. JOSEPH D. WARGO
     GA 738764
11   MS. ABIGAIL STECKER ROMERO
     CA 284534
12   WARGO FRENCH
     999 Peachtree Street NE
13   26th Floor
     Atlanta, Georgia 30309
14   Telephone:   404-853-1500
     Fax:  404-853-1506
15   E-mail:   Jwargo@wargofrench.com
     Counsel for PLAINTIFFS
16
17
18
     MS. CHRISTINA GOEBELSMANN
19   SBOT NO. CA. 273379
     WARGO FRENCH LLP
20   1888 Century Park F
     Suite 1520
21   Los Angeles, California 90067
     Telephone:  310-853-6300
22   Fax:  310-853-6333
     E-mail:  Cgoebelsmann@wargofrench.com; jozmer@wargofrench.com
23   Counsel for PLAINTIFFS
24
25

                         CYNTHIA MARTINEZ MONTALVO, CSR
                              152ND DISTRICT COURT
                                  713-368-6037
                               cynthiam@justex.net




                                                                     0892
                                                                  3

                        ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1                              A P P E A R A N C E S
 2
 3   MR. GEOFF GANNAWAY
     SBOT NO. 24036617
 4   BECK REDDEN
     1221 McKinney
 5   Suite 4500
     Houston, Texas 77010
 6   Telephone:  713-951-6263
     Fax:  713-951-3720
 7   E-mail:  Ggannaway@beckredden.com
     Counsel for DEFENDANTS
 8
 9
     MARY-OLGA LOVETT
10   SBOT NO. 00789289
     GREENBERG TRAURIG, LLP
11   1000 Louisiana
     Suite 1700
12   Houston, Texas '77002
     Telephone:  713-374-3541
13   Fax:  713-754-7541
     E-mail: mol@gtlaw.com
14   Counsel for DEFENDANTS
15
16
17
18
19
20
21
22
23
24
25

                         CYNTHIA MARTINEZ MONTALVO, CSR
                              152ND DISTRICT COURT
                                  713-368-6037
                               cynthiam@justex.net




                                                           0893
                                                                                 4

                         ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1                           (Judge enters)
 2              THE COURT:     All right.     Wellshire Fiance Services v. TMX
 3   Finance.
 4              I was just going to say for the benefit of my court reporter
 5   I want the Plaintiffs to identify who's speaking first and then we
 6   will get to the Defendants.
 7              Start with Mr. Johnson.
 8              MR. JOHNSON:     Daniel Johnson.
 9              MS. GOEBELSMANN:     Christina Goebelsmann on behalf of the
10   Plaintiffs.
11              MS. ROMERO:     Abigail Romero on behalf of Plaintiffs.
12              MR. WARGO:     You Honor, Joe Wargo also appearing for the
13   Plaintiff.
14              THE COURT:     Say again?
15              MR. WARGO:     Joe Wargo.
16              THE COURT:     Mr. Gannaway,   you start.
17              MR. GANNAWAY:     Your Honor, Geoff Gannaway on behalf of the
18   Defendants.
19              MS. LOVETT:     Mary-Olga Lovett here for the Defendants along
20   with Chris Johnson our Co-Counsel.
21              And I am to extend the apologies of my colleague Mr. Garcia
22   who got dragged away with the Mayor but he does appear as well.
23              THE COURT:     Oh, you just had to drop that.
24              MS. LOVETT:     He told me to.     I had a fiduciary duty to,
25   your.

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                          0894
                                                                                   5

                         ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1             THE COURT:     Shameless, shameless promotion --
 2   self-promotion --
 3             MS. LOVETT:     From Mr. Garcia --
 4             THE COURT:     -- from Mr. Garcia.
 5             MS. LOVETT:     Not from me,    your Honor.
 6             THE COURT:     Okay.     I understand.
 7             All right.     Ms. Lovett, you're new to this game, aren't you?
 8             MS. LOVETT:     I am,   your Honor.
 9             THE COURT:     Okay.    We have 11 filed Motions, correct?
10             MR. JOHNSON:     I think that's right, your Honor.
11             THE COURT:     Since these Motions have been filed have any
12   been resolved by agreement?
13             MR. GANNAWAY:     I don't think so.
14             MR. JOHNSON:     Some issues in some of the Motions have been
15   narrowed, but none of them have been resolved completely.
16             THE COURT:     Okay.     I have -- Defendant has filed Motions to
17   Compel.   The Plaintiff has filed a Motion to Compel -- two Motions to
18   Compel.
19             Defendants have filed two Motions for Protection.           The
20   Defendants filed a Motion to Designate a Responsible Third Party.
21             The Plaintiffs have filed Letters Rogatory and Motions -- I
22   guess Motions to Compel relating to that -- those Letters Rogatory.
23             MR. JOHNSON:     Not necessarily.        But I think except for that
24   last part of the sentence,        I think that's right.     And I certainly
25   would accept the Court's direction in however you might want to

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                            0895
                                                                                  6

                             ORAL HEARING ON PARTIES' MOTIONS
                                    NOVEMBER 21, 2014

 1   proceed.
 2              I might suggest of the 11, the three Motions for Letters
 3   Rogatory and then Defendants' Motion for Protection as to the DMV
 4   database really I think bundle into one issue or one argument.
 5              And,   so,   I think if the Court will entertain those first,         we
 6   might be able to dispose of four at one time.
 7              MR. GANNAWAY:     Actually I think, your Honor, some of the
 8   quickest matters that are raised in our Motion to Compel, which is a
 9   very straight-forward, quick matter and it, also, happens to be the
10   first -- first of the Motions that was set for a hearing in front of
11   your Honor.
12              MR. JOHNSON:     We are looking to get more bang for the buck.
13              THE COURT:     I'll tell you what we're going to do:
14              We're just going to go in order as it is in the Docket Sheet
15   here and that way we can flip back and forth between parties.
16              First thing I have is a Motion to-- Defendants' Motion to
17   Compel the Plaintiffs to Respond to Written Discovery.
18              MS. LOVETT:     Correct, your Honor.
19              I believe the Court had ordered prior to my entree to the
20   case -- and I don't want to retread old ground,          but the Court had
21   expressed concern about the full sameness of the damage model.           And
22   we obviously had sought Discovery on that issue.           And the Court had
23   ordered the Plaintiffs to disclose the mean by which the damage model
24   would be calculated since it was represented I believe at the initial
25   TRO that there would be -- that they knew they lost customers, there

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                           0896
                                                                               7

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1   were lost customers.       Essentially what they have called a
 2   "per-customer calculation model" is what they gave us in response to
 3   your Order ..
 4              THE COURT:     Okay.   Now, does this request that you're making
 5   morph into somehow the list that Judge People is preparing          the
 6   Overlap List that Judge People is supposed to be preparing as the
 7   Master in Chancery?
 8              MS. LOVETT:     Your Honor, the Plaintiffs might contend that
 9   it does.    We think it's a simpler issue.      We know and I know from my
10   review of the case and getting up to speed that your Honor has I
11   think provided the parties with an opportunity to conduct Discovery
12   over the last 17 months including with what would be assistance of
13   the Special Master.
14              What we don't have is evidence thus far of even one customer
15   lost which would be and which was represented to the Court at the TRO
16   as the basis for the damage model.
17              So, what Plaintiffs are now calling a per-customer
18   calculation model, according to their Order by your Honor, is
19   Plaintiffs' lost profit damages will be based upon an analysis of the
20   revenue that Plaintiff lost as a direct and proximate result of our
21   conduct and the associated incremental costs -- I can go on.        But the
22   point of fact, your Honor, the list has yet to yield either the
23   overlap fashion or its initial fashion one customer lost as a result
24   of this alleged tortious conduct.
25              THE COURT:    All right.   But in this Motion -- unless I have

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                        0897
                                                                                8

                          ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014

 1   the wrong Motion to Compel, and I don't think I do -- you're asking
 2   for Plaintiffs' profit information, Plaintiffs' per-customer
 3   calculation, Plaintiffs' attorneys' fees evidence, contracts that
 4   have been breached and/or tortiously interfered with and a couple of
 5   other things that are more general than these more specific items.
 6               MS. LOVETT:     Understood, your Honor.   All of which we would
 7   have been satisfied or at least we wouldn't feel the need to file
 8   this Motion to Compel had the Plaintiffs complied with the Court's
 9   Order to provide the basis for their damage calculation, which would
10   necessarily include all of those elements.
11               THE COURT:     Has a basis for your damage calculation been
12   provided to the Defendant in general terms?
13               MR. JOHNSON:     Your Honor, it was interesting that Ms. Lovett
14   stopped reading where she did because we went on and had she
15   continued to read our explanation indicated what we did is we broke
16   down different parts indicating that it would be calculated from lost
17   CSO fees,    lost interest, lost loaner-related fees and charges, lost
18   refinances and repeat customer business.
19               On the repeat customer business we previously produced
20   information supporting our allegations about the number of times
21   people refinanced.
22               So, the -- if your Honor recalls from the hearing that we
23   had, it's the Overlap List that was very much the jumping-off point I
24   will say and you will hear much about this I am sure as we go on.              We
25   are very frustrated because we still do not have that.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                         0898
                                                                                 9

                          ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014

 1             THE COURT:     Okay.     But you have an initial Overlap List.
 2             MR. JOHNSON:     We do.
 3             THE COURT:     And have you conducted any Discovery to find one
 4   person that has not resigned or renewed their loan with your
 5   company
 6             MR. JOHNSON:     No.
 7             THE COURT:           because of our even marginally because of any
 8   agent of the Defendant?
 9             MR. JOHNSON:     Your Honor, I think the Overlap List -- the
10   initial Overlap List revealed over 10,000 of those people.
11             THE COURT:     No.     The Overlap List reveals common customers,
12   doesn't it?
13             MR. JOHNSON:     That's right.     And common customers where you
14   can see on a date where the loan ended with us and then began with
15   them.   And, so --
16             THE COURT:     But don't you still have to show -- to prove to
17   them that the loan that ended with you and began with them was
18   somehow related to their actions?
19             MR. JOHNSON:     There is no question but -- that when we come
20   to trial in this case we're going to have to put on that evidence and
21   they are entitled to ask for that evidence.         But what I think we
22   started with was Ms. Lovett is saying that the Court ordered us to
23   provide a narrative of how we're going to calculate our fees.         And
24   what I've just read to you was a broken-down narrative of the pieces
25   as to how we're going to come up with per-customer loss model.

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                         0899
                                                                                 10

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1             Now,   I didn't read anything in their Motion that is to do --
 2   if what she's describing, well, hey, we need evidence of causation,
 3   there is not a word in this Motion about causation.          And that's just
 4   not before the Court.
 5             What she -- the point that she started with was that your
 6   Honor ordered us to describe in narrative in general terms because
 7   we're waiting on the Overlap List give them the description of what
 8   our per-customer damage model would be and we told them.
 9             We said it's going to comprise interest.         It's going to
10   comprise CSO fees.      It's going to comprise refinance fees.      We told
11   them that.   They didn't complain about that for -- I don't know --
12   two or three weeks.      Maybe even longer.     A month.   And then, finally,
13   we see it in the Motion.         But there is nothing in that -- their
14   Motion about the issue of causation.         That's just not in there.
15             THE COURT:     Okay.     So, what specifically are you asking for
16   that they have not produced as of yet?
17             MS. LOVETT:     Your Honor, what I'm specifically asking for is
18   evidence of one -- what -- I didn't stop reading to be disingenuous.
19   I stopped reading because of anything that they say there is
20   irrelevant if we don't have a customer upon which to base these
21   losses.
22             So, in other words, we have to get or mind around, as your
23   Honor knows, what's out there in the universe of damages.          How much
24   is it going to be.      We are entitled to know that.      We're entitled to
25   calculate.

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                          0900
                                                                                11

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1            Thus far from the original list and now the Overlap List the
 2   Court has correctly stated we don't know one individual.         So, we
 3   don't even know that there's something out there to whom all of these
 4   factors could be applied.
 5            These are the factors.       That's fine.   That's like saying it
 6   is going to be X times Y, but we have to know that it's based on the
 7   loss of at least one customer.       We don't have that.
 8            MR. JOHNSON:     I don't disagree with that.      That's just not
 9   what they have asked for in their Motion.       What they asked for in
10   their Motion was I guess a further description --
11            THE COURT:     Okay.
12            MR. JOHNSON:     -- of the components.
13            THE COURT:     All right.   When will this per-customer -- this
14   evidence of a customer leaving one and going to another be available?
15            MR. JOHNSON:     Well, your Honor, I think that the Court has
16   ruled -- and obviously I don't want to jump ahead of the Motion for
17   Continuance because that is part of this, but there is a date certain
18   by which the Court has said, okay, Plaintiffs, you have to disclose
19   your damage model.
20            THE COURT:     Hold that thought just one second because I know
21   where you're going.
22            Is it related to the Overlap List?
23            MR. JOHNSON:     Yes.
24            THE COURT:     So, your evidence of per-customer damages is
25   related to the overlap List?

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                         0901
                                                                                      12

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1               MR. JOHNSON:     And expert work in relation to that, your
 2   Honor.
 3               THE COURT:     Okay.     What else in this Motion besides the
 4   per-customer?     You want profit information?
 5               MS. LOVETT:     We do, your Honor.
 6               THE COURT:     Okay.     I don't -- I can't recall as I'm sitting
 7   here whether I ordered them to produce specific profit information as
 8   I have the Defendants.
 9               MS. LOVETT:     You did.
10               THE COURT:     Have I?
11               MS. LOVETT:     You did, your Honor.
12               THE COURT:     Okay.
13               MS. LOVETT:     Exhibit B to our Motion -- I am sorry.         I'm
14   skipping.     I'm contemplating the two.        I don't think you have ordered
15   specific financial profit-and-loss information.
16               MR. GANNAWAY:     Your Honor, if I may, may I approach?
17               THE COURT:     Not sure.     Go ahead, Mr.   Gannaway~

18               MR. GANNAWAY:     I don't bite.     I've got a summary I think of
19   the issues that will --
20               THE COURT:     Well,   I'm looking at your Motion.       Isn't this
21   contained in the Motion?
22               MR. GANNAWAY:     This summarizes so that you can see all the
23   RFP's that are at issue, your Honor.           And if you turn here to the
24   second page of what I've handed your Honor, these are all the
25   Requests for Production that ·we are moving to compel in this Motion.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                               0902
                                                                                13

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1             The ones that are at issue relating to profits and losses
 2   and loan volume go from 4 through 11, your Honor.        Those are the ones
 3   that are issue with respect to this.
 4             Now,   I need to point out,   your Honor,   in the landscape of
 5   this case, and as you know, my client has been ordered to produce a
 6   great many things.      As you said -- as you said your strike zone is
 7   broad when we are talking about Discovery.       This is right down the
 8   middle.   They have a lost profits claim against the Defendants in
 9   this case.   They're claiming lost profits.
10             They've got sworn affidavits in this case that they
11   specifically saw lost volume in stores in Texas, and they have
12   refused to give us their profits and losses and region where they
13   claim to be affected.
14             Those are the same -- you have entered an Order about
15   producing that kind of information.       You ordered me to produce that
16   kind of information because they had a discouragement theory.
17             THE COURT:     Okay.   You can hold that thought for just a
18   second.
19             MR. JOHNSON:     He is right in the sense that we have said
20   before there has been a decline in revenue, and we have produced
21   and I have Bates numbers where we have produced information like that
22   that they have requested.
23             What they're asking for here -- and just going by the
24   numbers here 1-A the profit-and-loss information -- and,        your Honor,
25   what they're asking for is monthly financial reports showing profit

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                         0903
                                                                             14

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1   and loss for the State of Texas in Dallas and Austin markets.         Our
 2   whole point is, as I mentioned earlier, the jumping off point for
 3   this our lost profit is not going to be a general number.      It's not
 4   going to be, hey, how did you do state wide.
 5            It's going to be based upon, as your Honor indicated, this
 6   customer, this customer, this customer.      And once we have that,
 7   candidly, our expert will be able to take that and will be able to
 8   provide all of that information for them.
 9            The problem is when you ordered the supplementation of the
10   Overlap List in July, now we're almost in December, and because of
11   their foot dragging we don't have that information.
12            THE COURT:     Okay.   But you're going to produce information
13   just like they're compelled to produce information to you.      If you're
14   going after their profits, you've got to show them you lost profits.
15   And I am going to go right down the middle on that.      And you are
16   going to provide profit-and-loss reports for your operations here in
17   Texas that are consistent with showing in a general sense what you
18   contend your profits -- your losses to be in profits.
19            We're not just going by customer, customer and that is going
20   to be your evidence.     You're going to have to provide them the same
21   type of profit-and-loss information that you are demanding they
22   provide to you.
23            MR. JOHNSON:     Your Honor, our only point would be that's
24   what we intend to do.     We want to show that information, and we want
25   to produce it.    Otherwise, we're not going to be able to award us

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                      0904
                                                                               15

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   damages.     But what we want to do is provide information that is
 2   relevant that is based upon the the actual customers that we are
 3   going to be telling the jury were stolen.
 4              THE COURT:     We're going beyond that.   Just like you're
 5   asking them to provide profit-and-loss statements for a specific time
 6   period for Texas and this region, you're going to have to avoid
 7   those same types of information -- that same type of information.
 8              It's not fair for you to demand it of them and you not
 9   produce it yourself.
10              MR. JOHNSON:     Your Honor, I would respectfully disagree with
11   that only in the sense that this entire lawsuit we are here because
12   of their conduct.
13              THE COURT:     I understand that.   Believe me I know that, Mr.
14   Johnson.
15              MR. JOHNSON:     Your Honor, and our lost profits claim based
16   on the model we just read to you all of those components, the CSO
17   fees, the refinancing, the interest rates, that's what our lost
18   profits information is going to be.       And that's information we do
19   want to provide them.       We just want to provide it once we get the
20   Overlap List and we know who the customers are.
21              THE COURT:     Item No. 1 on the Request for Production is Loan
22   Contracts.
23              MR. JOHNSON:     I think we are -- are we in -- is that 1-C?
24   No.   I am sorry.
25              THE COURT:     No.   I'm looking at the cheat sheet Mr. Gannaway

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                        0905
                                                                                 16

                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014


 1   handed me just a moment ago that cut through some -- did you provide
 2   them with a copy of that?
 3            MR. JOHNSON:     I got it now.
 4            MR. GANNAWAY:     I did, sir.
 5            THE COURT:     I'm on page 2.
 6            MR. JOHNSON:     The loan contracts I think this is an issue.
 7   Candidly, when we got this, we were a little bit confused because we
 8   have provided them with the loan contracts at issue.
 9            Now, if their request is -- and if their request is, look,
10   if you're going to claim that we stole 20,000 customers, then you
11   need to go to 20,000 files and pull up 20,0000 contracts and give
12   them to them.   That's not how we read the Request.       But they do have
13   the contracts and they've had them for some time.
14            MR. GANNAWAY:     That is false,   your Honor.
15            THE COURT:     Now, wait.   Now, Mr. Gannaway, when you say
16   that, I'm going to look at you and say is Mr. Johnson lying to the
17   Court.
18            MR. GANNAWAY:     I think I need to clarify what Mr. Johnson
19   said.
20            They gave me a few exemplar contracts.        The kind of
21   contracts that these people sign.        I want the pen and ink that the
22   people they are going to claim we interfered with and what they
23   signed so that we can evaluate it.
24            They've got a tortious interference with contract claim.
25   And they're suggesting we can't see the actual contracts that are the

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                          0906
                                                                                   17

                          ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014

 1   basis --
 2               THE COURT:     Right.      And I can't wait to see how you provide
 3   this information to them.           Are you going to be -- because you have
 4   said at least on one occasion -- and I may be paraphrasing this
 5   incorrectly -- that you may not be able to identify each person whose
 6   contract was interfered with.
 7               MR. JOHNSON:     Your Honor,     I will say this without revealing
 8   our work product or strategy in the case that we believe that our
 9   damage model may be presented to the jury in a way that complies with
10   the evidence in a way that we don't have to show customer by customer
11   causation.     That's the point that we're making.
12               I will say this:
13               Mr. Gannaway -- and I think what he just said is confirming
14   what we think is an absurdity at this point in the case is he
15   literally       and we will be guessing because what he wants us to do I
16   assume is go through files of 15-, 20,000 people and pull up what is
17   going to be the same accounts that he already has in his possession.
18   He's --
19               THE COURT:     I'm sure --
20               MR. JOHNSON:         already has those contracts.
21               THE COURT:     No.   No.     Wait a minute --
22               MR. JOHNSON:     What he has is he's got the same contracts.
23               THE COURT:     No.   He's got the template for the contract, but
24   he doesn't have the contract from Geoff Gannaway who you claim was
25   interfered with.     The rhetorical Geoff Gannaway, not really you.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                            0907
                                                                                18

                        ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1            MR. GANNAWAY:     Thank goodness.
 2            THE COURT:     Yeah.    I just picked the name.
 3            But if you're claiming that the contract that you have with
 4   Customer X you haven't produced that contract.       You've produced the
 5   template for that transaction.
 6            MR. JOHNSON:     And the information that goes into it would be
 7   derived from the Overlap List.       In other words, the form is going to
 8   have dates.   It's going to have somebody's name on it.      It's going to
 9   have the information from the loan.       All of that information we are
10   going to be able to derive once we get a finalized Overlap List.
11            And, your Honor, I am certainly not suggesting that once we
12   get the Overlap List we identify, okay, here, now, we have our set of
13   people for whom we're going to go to trial and present evidence on.
14            We may be able to scrape up these 10- to 15,000 contracts
15   but at this point without the Overlap List there is no way we can do
16   that.
17            MS. GOEBELSMANN:       Additionally, your Honor, during our last
18   hearing on October lOth it would be to produce loan contracts for all
19   the loans at issue.     And Mr. Gannaway represented that all that they
20   were seeking were the narrative of those contracts, as we already
21   provided the terms of those loans in response to prior
22   Interrogatories based upon a prior Overlap List.       And we are
23   committed to otherwise aiming our response to that Interrogatory
24   based upon our anticipated amended and correct Overlap List.
25            So, to the extent that they're seeking the terms of those

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                         0908
                                                                                  19

                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014


 1   particular loans, they will be getting those.        Now, whether those
 2   loan terms appear in individual blanks, that will be extremely
 3   difficult for our client to get together.
 4            THE COURT:     Okay.     Mr. Gannaway, I know what you want.        You
 5   want each contract of each customer that's been -- that they allege
 6   was interfered with.
 7            MR. GANNAWAY:     The first step to that they need to allege
 8   was interfered.
 9            THE COURT:     Right.     And we can't do that -- we can't do that
10   until the Overlap List is done.
11            MR. GANNAWAY:     Your Honor, they have had a list of 8500
12   people on it for 11 months.        And we don't have a lick of evidence
13   that any one of those fits within the cause          within the chain of
14   causation that is required for them to make their case.        Not one.
15            As Ms. Lovett pointed at the beginning, they have 8500
16   they've been living with for 11 months.        Why don't we have a single
17   contract signed by one of those people if they are going to claim
18   that it fits their allegation model and it's going to result in them
19   being awarded damages in this court?
20            MS. GOEBELSMANN:        The Overlap List still needs to be
21   amended --
22            THE COURT:     Wait a minute.     You've had 8500 names.     He's
23   right there.   You've had that Overlap List of -- the first Overlap
24   List for almost a year now?
25            MS. GOEBELSMANN:        But it's not reliable.

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                           0909
                                                                                 20

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1              THE COURT:     Why not?
 2              MR. JOHNSON:     I don't think that --
 3              THE COURT:     Why is it not reliable?
 4              MR. JOHNSON:     I don't think that we've had it --
 5              THE COURT:     For whatever period of time you've had it,
 6   you've had it and you've had --
 7              MS. GOEBELSMANN:     Right.
 8              THE COURT:     -- an Overlap List that contains 8500 names,
 9   correct?
10              MS. GOEBELSMANN:     Correct.   Except that it misses all the
11   information that would have been -- that is supposed to have been
12   provided by both of the parties for the years proceeding.          So at this
13   point --
14              THE COURT:     Like what information?
15              MS. GOEBELSMANN:     The July 11 expanded Overlap List was
16   supposed to include an entire year of information that had originally
17   been missing.    And that would include information as to who were
18   customers of TitleMax and who were customers of LoanStar.
19              Once those -- when -- once those lists were produced,         the
20   Special Master was supposed to provide a new Overlap List.          Without
21   that additional information we don't know really whether the 8500
22   people are the correct 8500 or if it's even 8500.          It may very well
23   be double that now.
24              MR. WARGO:     If I can be heard, your Honor?    Joe Wargo.
25              We have a list that's incomplete as to the 8500, your Honor.

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                          0910
                                                                                 21

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   Your Honor ordered that they provide information that goes back
 2   further.
 3              One of the key issues here is who was whose customers.           Who
 4   was whose customers first.       Okay.   When someone flips from one to the
 5   other or one to the other, that's evidence here as to whether their
 6   misconduct caused our damage.
 7              We can't run anything with the 8500, your Honor.        Because
 8   when we get that list that goes back even earlier, we're going to get
 9   new information potentially we expect that reason would tell us from
10   earlier in time of where -- whether those customers were our
11   customers first,    their customers first.
12              It is an entire do over of the entire list.      And they know
13   that, your Honor.       Maybe new counsel doesn't, respectfully.     But they
14   know that 8500 serves us no purpose because, if we give you a number
15   today, it may be an entirely and will be for a certainty some of
16   those people would have been other customers of other parties
17   prior      at least one of them.     Maybe a certain percentage but we
18   know for sure that that list will be faulty.
19              So, the 8500, your Honor,     is of no value.
20              THE COURT:    Okay.   Ms. Lovett?
21              MS. LOVETT:     Your Honor, new counsel does know one thing
22   that Mr. Wargo-- whom I've just had that pleasure of meeting-- did
23   stand up in front of Judge Bennett at the June 2013 TRO hearing and
24   said this:
25              We have seen a lost customer base.      We know we have lost

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                          0911
                                                                                    22

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   business.
 2               That was the representation he made to the Court.          He was
 3   able to make that recitation based on the fact supposedly that at
 4   least one customer was filched by misconduct.             Our question is and it
 5   is the Court's question:
 6               Why in the 8500 customers that they have whether they can at
 7   least make the allegation that there's been a jumping of ship that's
 8   attributable to this conduct?
 9               THE COURT:     Does the list of 8500 contain the identity of
10   whether the customer was initially a LoanStar customer or a TitleMax
11   customer?
12               MS. LOVETT:     Your Honor,   I think the answer to that would
13   have to be were they anybody's customer.          Who it is -- the list of
14   8500 is a snapshot in time that they based their TRO in good faith
15   on.    They had to have some basis from that list.
16               THE COURT:     Okay.   But that list is the identity of
17   individuals who were customers of both the Plaintiffs and the
18   Defendants.
19               MS. LOVETT:     I understand,   your Honor.
20               THE COURT:     Does it show who they contracted with first?
21               MS. LOVETT:     That is a -- go ahead.
22               THE COURT:     If Bob Schaffer's name appeared on the Overlap
23   List -- I'm not going to pick on you anymore.
24               If Bob Schaffer's name appears on the Overlap List, does it
25   say:

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                             0912
                                                                                   23

                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014


 1            Bob Schaffer contracted with LoanStar first or TitleMax
 2   first?
                                           '
 3            MR. JOHNSON:     It does not,       your Honor.   And that is the
 4   entire reason --
 5            THE COURT:     I got it, Mr. Johnson.
 6            MR. JOHNSON:     That's the reason why we had to expand.
 7            THE COURT:     That's why I'm asking this question.         Identify
 8   whose customer they were first.           It is hard to identify whether Bob
 9   Schaffer was filched -- I think you used that?
10            MS. LOVETT:     That is mine,       Judge.
11            THE COURT:     That is your term.
12            Filched by one entity or the other.           When will we know whose
13   customer was first?
14            MR. GANNAWAY:     Your Honor --
15            MR. WARGO:     When we have an Overlap List pursuant to the
16   terms of your Honor's Order.        And,    remember, we tried to go as far
17   back in time.   Your Honor cut it off.          And that is going to be a
18   snapshot in time that --
19            THE COURT:     Okay.    Mr. Wargo, hold on a minute.       I don't
20   mean to be disrespectful by interrupting because these guys here all
21   know what interruptions do to the Court, but I'm going to short
22   circuit this to a certain extent so that we are not here till 6:00
23   o'clock because you have probably have a plane to catch.
24            MR. WARGO:     Yes,    your Honor.
25            THE COURT:     All right.        So, we need a list which identifies

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                            0913
                                                                                24

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014

 1   this information.     We don't have that list now, do we?
 2            MR. WARGO:     No, your Honor.
 3            MR. GANNAWAY:     Your Honor, what we have list -- the list is
 4   not going forward in time.        June 2013 --
 5            THE COURT:     I know.
 6            MR. GANNAWAY:     -- we had a cut off before.      It is still is.
 7   So, they're going to know regardless of whether additional new loans
 8   end up on the new Overlap List, we know who's the last person in that
 9   time period to have a loan.
10            And under their theory, if the last person was a TitleMax
11   loan, I guess that's what they're going to seek damages on.         That is
12   not going to change when they get a new list.
13            THE COURT:    But that person whose last loan was TitleMax
14   their first loan could have been TitleMax and their running a
15   wild-goose chase after that person.
16            MR. GANNAWAY:     Your Honor --
17            THE COURT:     So, my question is:
18            Is Judge Peoples preparing the Overlap List so that we know
19   who the first lender was for that individual?
20            MR. GANNAWAY:     The answer is "yes'' Judge Peoples has the
21   information from the two parties at this point.
22            THE COURT:     So, he's going to be preparing his Overlap List
23   to identify Schaffer comma Robert first loan TitleMax, second loan
24   LoanStar and so forth and so on?
25            MR. WARGO:    Almost, your Honor.       And that will be done by

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                         0914
                                                                               25

                        ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1   the expert.   But certainly data will be presented by the Special
 2   Master where then the expert can run that information.
 3             THE COURT:     Okay.
 4             MR. WARGO:     Yes, your Honor.
 5             THE COURT:     All right.
 6             MR. GANNAWAY:     Your Honor, they have taken the position in
 7   previous hearings before your Honor that even if a customer went back
 8   and forth if they ended up landing with TitleMax and they can prove
 9   all the other things they need to prove like this person was the
10   subject of illegal search or even if months and months or even a year
11   passes between the two loans, they're saying that's last touch.
12             TitleMax got a loan and they did those things, it is in our
13   damages model.   If they are going to stipulate here that if TitleMax
14   had a loan before their loan that they are not going to include that
15   in their damages model, maybe what they're suggesting is right.           But
16   I have a feeling they will not stipulate to that.
17             They would still include that customer in their damages
18   model.   And they should let us know that that information as part of
19   their calculation and they should certainly let us see the contracts
20   that they are going to allege fall into that category.
21            MR. JOHNSON:      If I can clarify that a little bit?    I think
22   there may be some confusion.
23            What we said in the past is your Honor was asking some
24   questions at the previous hearing about, well, aren't you just
25   looking for loans that ends here and start here.        And we said "yes"

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                        0915
                                                                                    26

                           ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014


 1   we're looking for those.          But just because a loan ended here with us
 2   and then started with them six months later, that doesn't mean it
 3   couldn't have been the result of an illegal search.
 4              So, that may very well be within our damage model.           But that
 5   doesn't change the fact that the Court made which is that we do not
 6   have that list to show within the time we have from where the loan
 7   starts.
 8              THE COURT:     I think they have know where the loan started.
 9   Where the loan ends         where the loan -- see, y'all have got me where
10   I can't even talk.
11              Where the loan ends doesn't matter if we don't know where it
12   started.    And we have to know where it started and it ends.           Needs to
13   have started with LoanStar, correct.
14              MS. GOEBELSMANN:        Yes.
15              THE COURT:     You agree?        I'm looking to LoanStar to tell me
16   ''yay'' or ''nay.''
17              MR. JOHNSON:     I believe that is correct.
18              MR. WARGO:     Yes,    your Honor.
19              THE COURT:     Okay.     Okay.
20              MS. LOVETT:     Judge,    just to clarify so that -- as we stand
21   here today, your Honor, then the position is that all of a sudden now
22   it is impossible to determine whether or not there has been a
23   customer lost because we don't know the result of the Overlap List.
24              THE COURT:     I think that's exactly what we are hearing.
25              MS. LOVETT:     So as of today's date, there is no evidence in

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                             0916
                                                                                    27

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   the record that there has been a customer taken.
 2               MR. WARGO:     That is incorrect,     your Honor.   If I may?     We
 3   are talking about our damages model and what we're going to present
 4   as damages.
 5               That's an entirely different matter as to whether there's
 6   already been deposition testimony where people have raised their
 7   right hand and said:
 8               I used to work at TitleMax.         And those people came in with
 9   my buy-out sheets that I got using PublicData.com and they came in
10   and I flipped them from LoanStar to TitleMax.
11               That evidence is in the record.
12               THE COURT:     But the evidence of who they flipped --
13               MR. WARGO:     Their names is not known.
14               THE COURT:     No.     No.   Wait a minute, Mr. Wargo.
15               MR. WARGO:     I apologize.
16               THE COURT:     You want a clean record?
17               MR. WARGO:     Yes, your Honor.
18               THE COURT:     Okay.
19               The evidence of who was flipped from LoanStar to TitleMax is
20   not in this record.        The evidence is that someone has testified that
21   that I got the information and I flipped them from LoanStar to
22   TitleMax.
23               MR. WARGO:     Numerous people have testified to that.          Yes,
24   your Honor.     And that they did not keep the names of those people.
25   That is correct.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                             0917
                                                                               28

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014

 1            THE COURT:     I can't wait to see how it's presented at trial.
 2            MR. GANNAWAY:     Your Honor, there is another thing that Mr.
 3   Johnson said but I want to make sure --
 4            MR. JOHNSON:     Okay.
 5            MR. GANNAWAY:          they are taking-- they're not going to
 6   take the position at trial that, if a loan originated with TitleMax
 7   and then later on went through LoanStar then TitleMax again, they are
 8   not going to take the position they can recover damages if it
 9   originated with TitleMax?
10            I think that's what I heard him say, but I want to clarify
11   because that's a matter for how Discovery proceeds.
12            THE COURT:     I think I heard them say something akin to that.
13            MR. WARGO:     We have to show your Honor that their misconduct
14   caused us damage.     We agree to that.
15            THE COURT:     What if it's a TitleMax customer that went to
16   LoanStar and then subsequently went back to TitleMax?
17            MR. WARGO:     Based on the misconduct?    We would have to prove
18   it.
19            THE COURT:     How are you going to prove it?
20            MR. WARGO:     Your Honor, we would have to prove that.
21            THE COURT:     Okay.     Okay.
22            MS. LOVETT:     Your Honor --
23            THE COURT:     Can I tell you something?
24            MR. GANNAWAY:     Yes, your Honor.
25            THE COURT:     When we get to trial, you're going to have to

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        0918
                                                                                   29

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1   prove that.
 2              MR. WARGO:     Yes,    your Honor.
 3              THE COURT:     I mean, you're going to have to prove that
 4   customer   --
 5              MR. WARGO:     Yes,    your Honor.
 6              THE COURT:     -- was highjacked in some scenario.
 7              MR. WARGO:     Yes,    your Honor.   We understand that.   We are on
 8   the same page.
 9              THE COURT:     Okay.
10              MS. LOVETT:     Your Honor, if I might because the concern
11   arrises now in the context of this Discovery.           And I am making a
12   supposition having heard what Mr. Johnson said, which is how we would
13   present.
14              We know that Rule 1006 references voluminous summary, that
15   experts can do those.       However, we also know that we are entitled to
16   every single document that under pen that summary and that includes
17   proof that each of these individuals was at LoanStar at one point and
18   then at TitleMax.
19              So, we would not yield on an objection at the time of trial
20   but here is our 1006 Summary and you're just going to have to take
21   our word for it.
22              THE COURT:     I don't disagree with you completely.
23              MR. JOHNSON:     Well,    that may be the case but I will say that
24   in terms of taking evidence, okay,         from the Overlap List that is not
25   a Rule -- that's not what we are talking about a summary that we

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                            0919
                                                                                  30

                          ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014

 1   prepared.
 2               We've asked for a Special Master to take evidence that you
 3   don't want to give us and to take evidence that we don't want to give
 4   you and to put it in a form where we think it will be admissible in
 5   trial.
 6               MR. GANNAWAY:     Your Honor --
 7               MR. JOHNSON:     But I will say that's beyond the scope.     Now,
 8   if you want to give us your Customer List, then we will be glad to
 9   compare them ourselves and then we won't have all that underlying
10   stuff.
11               But the whole point of having the Special Master was to
12   avoid having to exchange each other's Customer Lists and then come up
13   with an Overlap List that would be admissible.
14               MS. LOVETT:     Your Honor, I won't point at counsel if he
15   won't point at me nor will I call him "hey.''       I will call him "Mr.
16   Johnson."
17               But my simple point is this and what your Honor's question
18   cut to it:
19               How are you going to present this as evidence?
20               The only way to present this type of evidence of which I am
21   aware of after 20 years, which I know isn't much,          I know your Honor
22   is Federal -- is Texas Rule of Evidence 1006, that is the summary of
23   voluminous documents.
24               THE COURT:     Okay.   Okay.
25               MS. LOVETT:     That's where I am with that.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                           0920
                                                                                  31

                          ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014

 1               THE COURT:     Okay.   I got it, and that's not really related
 2   to what we're doing here today.        That's a future thing and I
 3   appreciate what you're looking for and I can tell you I generally
 4   agree with what you're saying and I look -- wait with baited breath
 5   on how the Plaintiffs are going to present their evidence.
 6               And, so, we're going to move on.      The next item is
 7   attorneys' fee evidence.
 8               MR. JOHNSON:     I think this one should be resolved.     We have
 9   amended our Discovery Responses in writing to state that we would
10   produce the attorneys' fees invoices now.
11               We have made the same request of them.        They have not
12   produced theirs.     As the Court is aware, that requires a lot of
13   redaction.     And, so, I think that if we work with them and just come
14   up with a mutual time that both parties can exchange redacted
15   documents, we can do that.
16               THE COURT:     Now, the attorneys' fee information is always
17   interesting when we approach it at trial because then inevitably one
18   party or the other seeking fees neglects to bring themselves up to
19   date.
20               Can we reach some kind of an agreement on the production of
21   attorneys' fee information and the timing of it?
22               MS. LOVETT:     Yes, your Honor.
23               THE COURT:     So that we don't have to keep asking this
24   question.
25               MR. JOHNSON:     I think so.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                           0921
                                                                                   32

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1            THE COURT:     Both sides are compelled to provide attorneys'
 2   fee information, correct?
 3            MS. LOVETT:     Yes, your Honor.
 4            MR. GANNAWAY:     We agree to it,       your Honor.
 5            THE COURT:     So, let's do this:
 6            How many different times do y'all want the attorneys' fee
 7   evidence produced?
 8            MR. GANNAWAY:     I think we should start out produce what the
 9   parties have incurred to date.          And then we can agree to a time
10   reasonably to update again,      of course, at trial.
11            THE COURT:     At trial.       Okay.   You agree to that?
12            MR. JOHNSON:     That is fine with us.
13            THE COURT:     Okay.    So, we are going to produce attorneys'
14   fee documentation as of today.           And then we're going to produce
15   attorneys' fee information as of the date of mediation.
16            Go ahead.
17            MR. JOHNSON:     Yes,   sir.
18            THE COURT:     I mean, are you in agreement with that?
19            MR. JOHNSON:     I was just going to clarify all the invoices
20   issued through the end of October 31st, which would be to date I
21   think.
22            THE COURT:     That's fine.       This time frame --
23            MR. JOHNSON:     Got you.
24            THE COURT:     -- is what we're talking about here.         Can you
25   produce it to October 31st?       I doubt seriously if either one of

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                            0922
                                                                                     33

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   Defense counsel are going to make an issue out of that.
 2               MR. JOHNSON:     Understood.
 3               THE COURT:     The date of mediation.        Is that reasonable for
 4   the next time?
 5               MR. GANNAWAY:     That's fair.
 6               MS. LOVETT:     That would be good, your Honor.
 7               THE COURT:     Then mediation is probably going to be fairly
 8   close to the trial setting.          Within 90 days of the trial setting.
 9               MS. LOVETT:     Yes, sir.     It must be completed by February
10   18th I believe.
11               THE COURT:     Well,    today but we have a Motion for Continuance
12   on the floor as well.
13               MS. LOVETT:     Understood,    your Honor.
14               THE COURT:     Have y'all talked to Dave Matthiesen.
15               MR. GANNAWAY:     No,   your Honor.
16               MR. JOHNSON:     I don't think we have spoken with him about
17   that yet,    your Honor.
18               MR. GANNAWAY:     We had produced some alternatives.        The
19   Plaintiffs weren't agreeable.           So --
20               MR. JOHNSON:     I think we are fine with Matthiesen.
21               THE COURT:     You don't want Dave Matthiesen?
22               MR. GANNAWAY:     Dave Matthiesen,    your Honor, is a very good
23   mediator.     We had proposed after conferring with our client.
24               THE COURT:     Okay.    Unless there is an agreement, we are
25   going to stay with Mr. Matthiesen.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                              0923
                                                                                34

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014

 1            MS. LOVETT:     We will find somebody, your Honor.
 2            THE COURT:     You want to weigh in on something?
 3            MR. WARGO:     No, your Honor.      I just thought everybody was
 4   standing, so I might as well.
 5            MR. GANNAWAY:     Your Honor   --

 6            THE COURT:     Hold on a second.     Let's finish this attorneys'
 7   fees thing.
 8            So, October 31st -- up to October 31st or today, whichever
 9   you chose.    Date of mediation is the next one and then the trial.
10            MS. LOVETT:     Yes, sir.
11            THE COURT:     Is that enough?
12            MS. LOVETT:     I would suggest produce a week prior to trial
13   and then maintain through trial.
14            THE COURT:     And then whatever happens for that week on is
15   presented at trial.
16            MS. LOVETT:     Yes.
17            THE COURT:     And we know it will be substantial i f we go to
18   trial.
19            MS. LOVETT:     Yes, sir.
20            THE COURT:     Okay.   So, now, mediation seven days before
21   trial and then trial.
22            MS. LOVETT:     Yes, sir.
23            THE COURT:     Okay.   Whoever is preparing the Order I hope you
24   got it right.
25            Why don't you prepare the Order, Mr. Gannaway.

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                         0924
                                                                                   35

                          ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014


 1             MR. GANNAWAY:      Got it, your Honor.
 2             THE COURT:      Okay.     Contracts at Issue really goes to the
 3   Overlap List.    And,    so, we're going to hold off on compelling
 4   unless -- well, no,      you've got the
 5             MR. GANNAWAY:      Exemplars.
 6             THE COURT:         exemplars.     So,   you know what the contract
 7   looks like?     You're just waiting for the individuals?
 8             MR. GANNAWAY:      There is different kinds of contract but I
 9   don't know which one.       Just so I understand your Honor,      once they do
10   have the Overlap List and then they will eventually have to provide
11   the pen-and-ink contracts; is that your ruling?
12             THE COURT:      We're going to face that issue once they produce
13   the pen -- once they produce the Overlap List.
14             And, by the way,        is Judge Peoples still speaking to me?
15             MR. GANNAWAY:      Honestly, he doesn't bear the brunt of the
16   work.   The technical advisor he has hired.
17             THE COURT:      Okay.    Because when I see him at the Judicial
18   Conference I may not go up to him.
19             MS. LOVETT:      It's coming up, Judge.
20             THE COURT:      Once the Overlap List is prepared and the damage
21   model is prepared from that Overlap List,           then we're going to talk
22   about production of specific contracts.
23             I think until that -- until we get to that point,          I don't
24   think it's fruitful to discuss production of specific contracts.
25            MR. GANNAWAY:       Your Honor,    returning to last point just to

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                            0925
                                                                               36

                       ORAL HEARING ON PARTIES' MOTIONS
                              NOVEMBER 21, 2014


 1   make sure I got your ruling because there has been disputes after
 2   your hearing before:
 3            Their objections to our Requests 4, 6, 7, 8, 9, 11 relating
 4   to contracts are all overruled?
 5            MR. JOHNSON:     What were those, again?
 6            THE COURT:     4, 6, 7 and 8?
 7            MR. GANNAWAY:     8, 9 and 11, your Honor.
 8            THE COURT:     Okay.     The rest of that page?
 9            MR. GANNAWAY:     Yes.
10            MR. JOHNSON:     Your Honor, we'd likewise would like that to
11   wait until such time we are able to provide our damages model so that
12   you can make the determination if we cannot agree with Mr. Gannaway
13   as to relevancy of that.
14            MR. GANNAWAY:     Your Honor, that's completely unacceptable.
15   This needs to be provided to our expert witness as well.
16            THE COURT:     Hold on.     Hold on.   Let me read this
17   specifically.
18            Are these six Requests similar to the Requests for the same
19   information that the Plaintiffs sent to the Defendants?
20            MR. GANNAWAY:     They are nearly identical to what you have
21   compelled us to produce.        That's why I limited them to the Dallas and
22   Austin markets because that's what you ordered us to do.
23            So, I essentially mirror imaged your Request on that is what
24   at issue here.
25            THE COURT:     Mr. Wargo?

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        0926
                                                                                  37

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1               MR. WARGO:    Thank you, your Honor.
 2               And our point is similar to what you were picking up on the
 3   last Order as far as waiting right now based on, as Mr. Johnson said,
 4   work product, which we're not in position to reveal right now.
 5               That information is irrelevant to our damages claim.        And
 6   merely because it may be relevant to what we're seeking from them,
 7   doesn't make it relevant to what we're seeking as damages from this
 8   case.
 9               So, we asked your Honor that their     dilato~y   conduct in not
10   providing information to the Special Master so that we have an
11   accurate Overlap List, which has prevented us from providing our
12   damage model to them which right now I represent to you will not be
13   based in any way on that information, we ask that that not be
14   produced.
15               THE COURT:    But isn't this information not only reasonably
16   calculated to lead to the discovery of admissible evidence but it's
17   relevant information.       And I don't know what's on it, but if it shows
18   that your profits and losses in Texas for September 11th through
19   June 13th went up every month, isn't that evidence that you haven't
20   been harmed?
21               MR. WARGO:    No, it's not, your Honor.
22               THE COURT:    Okay.    Why?
23               MR. WARGO:     Why that's the case is our case is not based on
24   how well we did in Texas.         Our case is based on their theft of our
25   customers.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                           0927
                                                                                   38

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1               THE COURT:     Okay.   I appreciate that, but I'm going to order
 2   you to produce this information and I overrule your objections to
 3   Requests 4,    6, 7, 8, 9 and 11.
 4               I am going to play this down the middle, and they're going
 5   to get the same type of information from LoanStar and your other --
 6   there are two or three other companies involved, right, besides just
 7   LoanStar?     We're speaking LoanStar parenthetically?
 8               MR. WARGO:     Understood, your Honor.
 9               THE COURT:     Okay.   And then the last two are 17 and 18?
10               MR. GANNAWAY:     Yes, your Honor.
11               THE COURT:     Documents containing notations --
12               MR. GANNAWAY:     And I can --
13               THE COURT:        communications or trafficking of alleged buy
14   outs of Plaintiffs' loans by Defendants.
15               MR. GANNAWAY:     And this Request sprung from deposition of
16   two of Plaintiffs' employees.        And I asked them is there a way in
17   your computer system that you keep track of when there has been a buy
18   out of a TitleMax loan by LoanStar by other -- of TitleMax -- or the
19   reverse -- when either of the parties buy out each other's loans.
20               Two of those employees testified, yes,     I notate that
21   frequently -- usually and put it in the notes field in our computer
22   system.
23               What I'm asking for here, your Honor, is that they provide
24   notations that suggest there has been a buy out one way or the other
25   because that is stuff that is on the Overlap List.         It shows

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                            0928
                                                                               39

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   evidence of whether,    in fact,   there was a buy out going one way or
 2   the other, which goes directly to the damages.
 3            THE COURT:     What specifically are you asking for?    The
 4   actual notes, or that someone noted that a LoanStar loan was bought
 5   out by TitleMax or a TitleMax loan was bought out by LoanStar?
 6            MR. GANNAWAY:     Whatever notation they have, your Honor.        And
 7   in whatever form they have it in.       In its native format is what we
 8   would like to see.
 9            MR. JOHNSON:     Your Honor,   I think key phrase as reflected on
10   the Overlap List and that's the point here is that the Overlap List
11   is going to have this information on it.
12            What he's asking us to do I presume is for the -- and keep
13   in mind, your Honor, on the first Overlap List there was 8500
14   identifiable people that were on both.       But if you just take ours and
15   you take theirs, we're talking about on the first one, tens of
16   thousands of names.
17            Presumably what Mr. Gannaway is asking is that we go through
18   tens of thousands of files and look for some notation about a buy out
19   even though this case isn't about us buying out their loans and there
20   has been no evidence of any wrong doing on our part.
21            The case is about their buying out our loans.       And we think
22   that that is overly burdensome.       We think it's harassing.   There's no
23   reason for the because that same information is going to be on the
24   Overlap List once it's completed.
25            And I will say as to the testimony -- I think the testimony

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        0929
                                                                                40

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   has indicated that's not a usual practice.        That while those people
 2   did it some, that they're not aware of that being a usual practice in
 3   our company.
 4               THE COURT:     Can you note on the Overlap List the identity
 5   of -- no.     Let me restate that.
 6               Who were the people that testified to that?
 7               MR. GANNAWAY:     Alex Steven Haegen and Nancy Lopez.
 8               THE COURT:     Can you note on the Overlap Lists where these
 9   two individuals participated in a transaction and then go look at
10   those transactions to determine whether either one of them made a
11   note on that particular file?
12               MR. JOHNSON:     I don't believe, your Honor, that there is a
13   way to identify the person who was responsible for the transaction.
14   I think the Overlap List will reveal the store, will reveal a lot of
15   information.     And I think that candidly will reveal when there is a
16   buy out because we have end dates and new dates for loans.
17               But what he's asking us to do in a case where really the
18   complaint is -- there is no counter-claim.        The complaint is they're
19   buying out our loans based on their wrongful, illegal conduct.         And
20   what he wants us from us, hey, we want you to go through tens of
21   thousands of files and look to see whether y'all bought out a loan
22   from us and we just don't think that gets us anywhere in this case.
23               MR. WARGO:     And, your Honor, if I can --
24               THE COURT:     Hold on just a second, Mr. Wargo.
25               You're asking them to produce documents that your employees

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                         0930
                                                                                41

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014

 1   made notes on?
 2              MR. GANNAWAY:    That their employees made notes on.     That
 3   they had made -- and it is not documents.      It's in their electronic
 4   files they have a database that I assume can be run very quickly.               If

 5   there is a reference to "TMX" or "TitleMax," both their employees
 6   said they would put in a notation.
 7             And why it is relevant, your Honor, you don't assume that --
 8   you should not assume that every loan on the Overlap List was a buy
 9   out.    And sometimes there are -- there is a long time span between
10   them.
11              In some issues it might be a close time span but it might
12   still not be a buy out.      That person might have found funds from
13   whatever source, paid off their LoanStar loan and a few weeks later
14   decides they have a wild hair and go to TitleMax and get a loan from
15   them.
16             That's not a buy out.     That's finishing one loan and
17   starting another.      And the Overlap List doesn't tell us that.     And we
18   know now that they've got relevant information that shows whether
19   there were buy outs going both ways.      Under any view of the evidence,
20   that's going to be relevant, your Honor.      And they haven't submitted
21   an affidavit to you saying that's tough to run that search in the
22   data.    It's relevant and it's not overly burdensome.
23             THE COURT:    Okay.   Before I make a ruling one way or
24   another, you need to give me an idea of what it would take and what
25   the extent to which that would be a burden on LoanStar to look into

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                         0931
                                                                                42

                           ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014


 1   these files and find out if notations were made about buy outs, who
 2   bought out who.
 3             I'm going       before I make a ruling on this, I want to know
 4   what the burden is.
 5             MR. JOHNSON:     Understood, your Honor.    We will submit an
 6   affidavit to that effect.
 7             THE COURT:     Okay.
 8             MR. GANNAWAY:     Your Honor,   I think that there's only a
 9   couple of issues left with respect to this Motion.
10             One is they have a boilerplate objection to trade secret.             I

11   think in their Response said they're really not withholding anything
12   based on that.    But I want to make clear that they need to amend
13   their Responses to say that.      If they're going to say that, they will
14   withhold trade secrets or produce pursuant to our Protective Order,
15   that's fine.     But I need to know they're not withholding anything by
16   the substance of that.
17             MR. JOHNSON:     We will amend our Responses to make clear we
18   are not withholding anything on the basis of trade secret, Judge.
19             THE COURT:     Thank you.
20             MR. GANNAWAY:     The last issue has to do with language of the
21   Order.   And as your Honor knows, we went back and forth many times
22   regarding the last Order that your Honor issued.         And I'd asked you
23   to reconsider it and your Honor let it stand.
24             Some of the items in there we're asking for reciprocal
25   treatment, which you had ordered us to provide and to do.         And the

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                         0932
                                                                                43

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   limitations you placed on it we would like the same Order to that.
 2             THE COURT:     I haven't a clue what you're talking about.
 3             MR. GANNAWAY:     And I'm going to be specific, your Honor.
 4   One is you told us not just to produce profit-and-loss information
 5   but to produce revenue -- certain revenue and expense information.
 6   We'd just ask that they do the same thing so that we can analyze the
 7   profit-and-loss numbers.
 8             The other is that you said if we didn't produce information
 9   pursuant to the Requests for profit-and-loss information, that we
10   could not use it at trial to impeach their expert.         And I would
11   like -- your Honor, honestly I think that's an inappropriate ruling.
12   But if it is going to stand, then it needs to go both ways.         And if
13   they don't produce
14             THE COURT:     What is inappropriate about it?
15             MR. GANNAWAY:     Because it wasn't relief they sought in the
16   Motion that was before your Honor when your Honor ruled.
17             THE COURT:    But that is almost reciting what the Rule says
18   that if evidence is requested and not produced, it doesn't come in at
19   trial.   And that's the whole intent of my ruling.
20             I am frustrated with having evidence come up at trial that
21   was not produced in Discovery.      And, now, I have to conduct an
22   independent review of whether or not one party or the other is going
23   to be prejudiced by that.
24             MR. GANNAWAY:     I'm not here to challenge your ruling that
25   you made already, your Honor.

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                         0933
                                                                               44

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1            THE COURT:     Well, except that you said that you didn't think
 2   it was appropriate.
 3            MR. GANNAWAY:     I apologize.
 4            THE COURT:     Mr. Gannaway, that tells me that you think the
 5   Court has made of some kind of error in its ruling.
 6            MR. GANNAWAY:     Your Honor,    I apologize for suggesting that.
 7   My point, now, is, given that position of your Honor,       I would like
 8   reciprocal treatment.
 9            MR. JOHNSON:     Well, that wasn't in that Motion that they
10   filed.
11            THE COURT:     It is not in your Motion.     But I will make it
12   really, really clear that:
13            If Discovery is requested and not produced in this case --
14   because of the volume of information that we're talking about, if
15   it's requested and it's not produced,      it's not coming in at trial.
16            This Court is not going to conduct a review to determine
17   whether it's prejudicial or not.       If you ask for it and you don't
18   produce it,   it's not coming into trial.
19            Okay.    So I'm sure if we have to trial this case, one of you
20   are going to remind me of this and you probably won't have to.        It's
21   very frustrating.     You know,   I speak at seminars about what to do the
22   last 60 days out before trial and one of them is to clean up your
23   Discovery to make sure that everything is produced so that we don't
24   have those issues.
25            I don't think I have to put this in any Order we have

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        0934
                                                                                45

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   relating to what we're doing today.        I just wanted everyone to
 2   understand,   if the other side doesn't have it, it's not coming in.
 3            Okay.     Can we move on to the next Motion?
 4            MR. GANNAWAY:     Yes,    your Honor.   That is all.
 5            THE COURT:      The next thing I have is a Motion for
 6   Protective Order regarding the Apex Deposition of Tracy Young
 7            MR. GANNAWAY:     Yes, your Honor.
 8            THE COURT:     -- who I understand is the CEO of TMX Finance.
 9            MS. LOVETT:     Your Honor,    the LLC which is the parent --
10            THE COURT:     Parent.
11            MS. LOVETT:     -- entity that owns the holding company.        That
12   owns the affiliates.
13            THE COURT:     Okay.     What specific evidence do you believe
14   that Tracy Young has that's relevant to this lawsuit and cannot be
15   obtained from other -- some other resources?
16            MS. LOVETT:     That is a question for them,     your Honor.
17            THE COURT:     You're right.     Thank you very much.
18            MR. WARGO:     I like the question, but she didn't have an
19   answer for that.
20            MS. LOVETT:     I do.
21            THE COURT:    Can I tell you something?
22            She has an answer for you.
23            MR. WARGO:    Well, your Honor, we may disagree because the
24   starting point here when you're talking about Apex Doctrine is
25   whether it applies.    And that's what we filed in our Response,        your

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                         0935
                                                                                    46

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   Honor.
 2               Mr. Gannaway has represented to this Court that the LLC --
 3   and that is TMX Finance, LLC -- has one employee.            And that is --
 4   your Honor remembers this.
 5               THE COURT:     I've read all these Motions.
 6               MR. WARGO:     Okay.   So, your Honor, from our point of view
 7   and I think the law is crystal on this -- there is no Apex Doctrine.
 8   He is the guy and their Defendant in this case.
 9               Your Honor has already ordered that his documents be
10   produced.     That his Email be reviewed.      We're going to explore this
11   when we get further in Discovery, but everything that came out of
12   that Production was privileged.         We will explore that in Discovery.
13   That's their current position.
14               But, your Honor, for the same reason that you ordered that
15   his Emails are relevant based on Mr. Gannaway's representation that
16   Tracy Young-- forget about him being a CEO.             Okay, he is.   He's also
17   the CEO of the Texas entities at issue.         He is.
18               Your Honor, he's the only guy.      He's the only employee.         So,
19   .we are entitled respectfully, your Honor, to take evidence from the
20   single employee of a Defendant in this case.
21               That's our-- that's why the whole Apex Doctrine, your
22   Honor, doesn't even apply.         It's a nonstarter.
23               THE COURT:    Okay.    Well, let's say for the sake of
24   discussion that it does apply.
25               MR. WARGO:    Okay. Your Honor, what we have here is -- and we

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                             0936
                                                                              47

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014

 1   put this in our paper.       Going back to December 6th, 2012 we have
 2   alleged from their General Counsel TMX Finance, LLC, saying as
 3   follows -- and this is in the record:
 4              First TMX denies the allegations in your letter.
 5              This is a letter from our general counsel to TMX Finance
 6   saying we've heard that you guys are doing some illegal stuff in
 7   Texas -- your Honor, that is the basis of this lawsuit -- and we
 8   would like you to stop.
 9              And they wrote back through their Deputy General Counsel:
10              TMX denies the allegations in your letter.     Specifically TMX
11   employees are neither monitoring Select Texas stores, marketing
12   parking lots for the purpose of obtaining license plate numbers from
13   Select customers nor are they obtaining names and contact numbers of
14   Select customers through improper searching of lien information in
15   Texas state maintained motor vehicle records.
16              Now, your Honor, we know, though, that is just false.        And
17   that was from their Deputy General Counsel of TMX Financial.
18              They further state:
19              Second, TMX does not consider the above allegations to be a
20   proper business purpose and has reminded all Texas managers of its
21   position of its of this practice.
22              The only person who could have done that, your Honor, is
23   Mr. Young.    Tracy Young.     He was the only employee of TMX Finance.
24   May I --
25              THE COURT:    Who was that letter from?

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                       0937
                                                                                48

                          ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014


 1             MR. WARGO:     This is from Vin Thomas, their Deputy General
 2   Counsel dated December 6, 2012.
 3             THE COURT:     Deputy General Counsel of what?
 4             MR. WARGO:     The rate clause -- there's reference at the
 5   bottom.   Their rate clause in their letter with their letterhead
 6   says:
 7             Cease and desist letter dated November 15th, 2012 from
 8   Select Management Resources, LLC -- that's us, your Honor -- to TMX
 9   Finance, LLC.     Parens, quote, TMX, close quote, close parens.        They
10   are responding on behalf of TMX Finance.        Tracy Young.   He's the only
11   employee there.
12             And this representation -- the only one who could have
13   authorized this individual -- this attorney to the make this
14   representation is Tracy Young.
15             This representation, your Honor, purports to make a
16   representation about what's happening in Texas concerning the facts
17   and circumstances of this very litigation.
18             THE COURT:     Why does it have to be ordered by Tracy Young?
19             MR. WARGO:     He's the only guy.    He's the only employee.
20   This is of record.      There's no dispute here.    He's the only employee.
21   He's the only manager, and he's the only member of the LLC.
22             THE COURT:     Okay.   Ms. Lovett?
23             MS. LOVETT:     Thank you, your Honor.
24             First of all, what counsel says is "Re:       The cease and
25   desist letter" that they directed to -- they chose Texas TMX Finance,

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                         0938
                                                                               49

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   LLC,   this says "TitleMax'' on the letterhead ahd it's signed by -- if
 2   Mr. Thomas is the Deputy General Counsel and Mr. Young is the only
 3   guy,   then obviously we're talking about a different entity if he is
 4   the only employee.
 5              But here is the question that your Honor asked me and I will
 6   answer:
 7              They've done nothing.
 8              Your Honor had a hearing on October lOth where the parties I
 9   think quite vehemently debated the issue on what would be the proper
10   topic for a corporate representative deposition.        I know your Honor
11   recalls that.     Chapter and verse, your Honor.
12             THE COURT:      And this record is going to look quite
13   interesting,    I know.
14             MS. LOVETT:      Your Honor, we've seen more interesting.
15             But at that hearing, which is on October lOth,      the parties
16   were arguing and the Court found that the proper categories because
17   there was not an agreement over those categories for what -- and I am
18   calling it a 30(b(6) witness,      a corporate representative witness
19   under Texas Law.
20             Those categories were determined.      The depo was set for
21   November 13th, and we've got a ball game.       Somebody is going to
22   testify on all of those issues, which this Court ordered were proper.
23             Then something very interesting happens:
24             On October 23rd the Corporate Rep Notice is pulled.         They
25   say we don't have new information to depose a corporate

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                        0939
                                                                              50

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   representative.     The next day they notice Mr. Young because
 2   apparently they have enough information to depose him.
 3              Now, that, your Honor, smacks harassment because Mr. Young
 4   is Apex.    He is the crystal definition of an Apex.     The reason he is
 5   the only employee of that one entity is because it sits atop all the
 6   other entities.
 7              He is -- as you just heard -- the CEO of the Texas entity,
 8   which makes him an Apex Deponent.     They have to carry the burden.
 9   What have they done?     That cancelled the deposition that we came in
10   here and wasted your Honor's time with apparently and fought over and
11   the next day they turn around and noticed him.
12              As they have told you, the only Emails produced that were
13   relevant every single person who's testified has said I've never
14   talked to this person about that.     I've never talked to Mr. Young.
15   Not unusual because he's the CEO.     But when his own Emails were
16   produced       and we provided a Privilege Log.    That Privilege log
17   contains only privileged communications.
18              I won't go into the details of those,    your Honor, but simply
19   put the representation was that there is nothing that he knows that
20   is relevant.     Your Honor had a hearing about what was relevant.       And
21   why that corporate rep deposition was cancelled and the next day he
22   was noticed when they don't have enough information to depose the
23   individual that would be able to meet all categories they came in and
24   argued about 13 days before but suddenly they can depose Mr.       Young
25   who has nothing and from whom they have seen nothing, is the paradox.

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                       0940
                                                                                   51

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1             He's the Apex.        That's a heavy burden.   They haven't met it.
 2             THE COURT:     Mr. Wargo
 3             MR. WARGO:     Yes, your Honor?
 4             THE COURT:     -- TMX Finance is the company that's at the top
 5   of this pyramid, correct?
 6             MR. WARGO:     So to speak, yes,    your Honor.
 7             THE COURT:     Well --
 8             MR. WARGO:     Here's why I answered it that way:
 9             What we made a matter of record in this court, if you look
10   at their lOK, their filings,        they themselves -- themselves treat all
11   of these entities as one.
12             In fact,   one person who reported to him, Linda McDonald,
13   when we took her deposition, she didn't even know who her employer
14   was.   And, in fact,    when she was stated who her employer was,       she
15   made -- she was -- a nonentity.         Doesn't even exist.
16             So, your Honor, we can say it that way; but it's not how it
17   works in reality.      I understand that there's a company here and there
18   are Texas companies, but they are all one company.
19             THE COURT:     If they're all one company --
20             MR. WARGO:     Yes.
21             THE COURT:     -- doesn't that mitigate against your assertion
22   that because TMX Finance only has one employee then I should be able
23   to take TMX Finance's employee's deposition since we are alleging
24   that TMX Finance is a bad guy here?
25             MR. WARGO:     Your Honor,    I think you just said what my

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                          0941
                                                                                      52

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   argument is.     And, so,    I misheard you.         TMX --
 2               THE COURT:     No.     If they are only-- if they're just one
 3   entity
 4               MR. WARGO:     Yes.
 5               THE COURT:           acting as one entity and he's the CEO, is
 6   there anybody above him in this structure?
 7               MR. WARGO:     No,    your Honor.    There is no one above him in
 8   this structure, but that has nothing to do with whether he has
 9   relevant information.        And with regard to a Defendant in this case,
10   is -- and they haven't disputed this,            your Honor, I want to make two
11   things very clear:
12               She argued and I get to distraction talking about no
13   corporate representative deposition.             That is nothing to what we are
14   arguing about here.       What we're arguing about here is whether Tracy
15   Young has relevant information.
16               Your Honor asked us to assume the Apex Doctrine applies.                  It
17   doesn't, but we were going with that.             She didn't even try to say
18   that it applies.     And I know your Honor asked us to assume that --
19               THE COURT:    Wait.      Wait.   Wait.     Ms. Lovett did say the
20   Apex --
21               MR. WARGO:     Yes, your Honor.       She didn't argue that, in
22   fact,    it applied based on your            you asked us to assume that it
23   does.     When you look at the facts of the Apex Doctrine and you look
24   at the law, there is no dispute.             There are three or four cases.       The
25   Apex Doctrine requires a whole bunch of people reporting to someone

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                               0942
                                                                                53

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1   who is really too busy taking care of business.
 2            Your Honor, we have the flattest of flat organizations here.
 3   TMX Finance is a Defendant in this case.      That's undisputed.     TMX
 4   Finance has one employee:
 5            Tracy Young.    That's undisputed.
 6            TMX has one member.      That's undisputed.    TMX Finance has
 7   one --what's the last one-- manager.        That's undisputed.
 8             It's all Tracy Young.     And what I am pointing to you is
 9   their own letterhead coming from TMX Finance says we are looking at
10   overseeing everything in Texas and we are making a representation to
11   you, SMR, LoanStar, that we got the ball.      We're not doing anything
12   wrong.
13            That shows knowledge.      That shows personal information.        And
14   that all tracks back to literally -- and they haven't disputed
15   this     one person they can call on the CEO and he is -- and he
16   happens to be the CEO of other entities.      But that doesn't negate the
17   legal significance of this document, your Honor.
18             I'm entitled to argue to a jury that TMX Finance, their only
19   guy, is a bad dude because he has knowledge going back to 2012
20   purported to do something about it and didn't.         I'm going to argue
21   that in front of a jury.    How can I make that argument if I don't
22   depose him and find out what he's going to say?        He's the only guy.
23             So, your Honor, I would like to make one other point, if I
24   could take a sip.    They submitted an affidavit from him in this case,
25   and it's interesting what it says and what it doesn't say.         And

                          CYNTHIA MARTINEZ MONTALVO, CSR
                               152ND DISTRICT COURT
                                   713-368-6037
                                cynthiam@justex.net




                                                                         0943
                                                                                        54

                           ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014

 1   that's found on their Motion for Protection and on page 2 -- it's a
 2   very short affidavit.        At the top.
 3               THE COURT:     What exhibit?
 4               MR. WARGO:     I believe it's the only one,       your Honor.
 5               THE COURT:     No.     I see A through K.
 6               MR. WARGO:     It's B.     I apologize.
 7               THE COURT:     Thank you.
 8               MR. WARGO:     It's the only one in mind because you don't need
 9   to look at the others --
10               THE COURT:     You're right.     Okay.
11               MR. WARGO:           in my opinion.
12               Your Honor, on the second page of B -- now,          remember
13   Mr. Gannaway made representations to your Honor, which I have not
14   been contradicted here at all in oral argument nor in affidavit,                   and
15   that is what I told you that this is the flattest of flat
16   organizations.
17               Okay.   So, what this would have been the affidavit to say,
i8   oh, wait,    there are other people whom have information in TMX
19   Finance.     Its own legitimate,       separately legal entity that will be a
20   Defendant in this case that I'm going to have to argue to a jury
21   needs to be tagged.
22               And what is my evidence?        It's this letter to start with.
23   This letter is TMX Finance and TMX Finance making a representation
24   that nothing is wrong.           I'm entitled to depose the guy-- the only
25   guy.   That's your record here your Honor,            the only guy made this

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                                 0944
                                                                                 55

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   statement.
 2             And I'm entitled to depose him.     It's that simple
 3   respectfully.
 4             THE COURT:    But that statement is not made by a TMX Finance
 5   person.
 6             MR. WARGO:     It's made by a lawyer on behalf of TMX Finance.
 7   That's what it says.     That's just what it says.      ''Agent,'' your Honor.

 8   And it's on behalf of TMX.     We've sent the letter to TMX Finance, and
 9   TMX Finance wrote back.
10             There's only one person, your Honor.       And I get to tell the
11   a jury that is the guy.     And getting to my affidavit -- their
12   affidavit, your Honor, I do not have -- here's -- here's the sum
13   total of, hey,   I don't know anything.    I do not have any first-hand
14   personal knowledge of relevant facts concerning the subject matter,
15   blah, blah, blah.      Gosh darn it, your Honor, I am pretty sure Tracy
16   wasn't stuffing envelopes, wasn't in the back room getting on the
17   computer stealing our customers.
18             That's not the theory of our case.     But people who worked in
19   his organization did, and we've deposed them and what this is the
20   wiggliest of wiggle words:
21             I do not have firsthand personal knowledge.
22             Your Honor, respectfully, he doesn't need to for him to have
23   relevant evidence.      It's what the company's knowledge is that I get
24   to argue to a jury they knew at the time they said they didn't know.
25   They knew this is a lie.      He had relevant firsthand -- maybe not

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                          0945
                                                                                  56

                           ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014


 1   firsthand.     We're all lawyers.       We know what firsthand is.   But Tracy
 2   Young I'm going to argue to a jury knew what was going on,
 3   orchestrated what was going on and it goes to the very top of this
 4   one entity and there's only one guy.          He's in charge.
 5               THE COURT:     What evidence do you have that he orchestrated
 6   what was going on?
 7               MR. WARGO:     Your Honor, we have evidence that Tracy Young is
 8   the guy responsible for everything that happens in this company.
 9   That -- this is a small industry, your Honor.          This letter was sent
10   to TMX Finance because that's Tracy Young.          Tracy is someone who has
11   his hands in the business.
12               Okay.   This is my client, LoanStar.      They know who my guy
13   is.   Okay.    This is a small industry.       Tracy Young knows what's going
14   on in his business.       That's what we know.
15               THE COURT:     How do you know that?
16               MR. WARGO:     Your Honor   --

17               THE COURT:    Because it's a small industry?
18               MR. WARGO:    That's part of it.     How do we also know is I
19   have a letter from them.
20               THE COURT:    Besides the letter, Mr. Wargo --
21               MR. WARGO:     Yes, your Honor?
22               THE COURT:    Besides the letter, Mr. Wargo, what evidence do
23   you have?     And that goes to my very first question:
24               What evidence do you have that Mr. Young has relevant
25   information in this lawsuit?

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                           0946
                                                                                   57

                          ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014


 1               MR. WARGO:     Their 10K, your Honor.    Their 10K says that this
 2   guy, Tracy Young, every one serves at his pleasure, at his
 3   discretion.     That he is the person who is in charge of all of the
 4   Texas -- of the Texas entities.
 5               He has his hands in everything.       Your Honor, their was
 6   recently a message that went back and forth between Tracy Young and
 7   the person who's in charge of our company where Tracy Young said I
 8   got it.     I'm taking care of this.       I'm going to make sure it doesn't
 9   happen.
10               He's making those representations within the last month.
11   That's the same representation that Vin Thomas is making that Tracy
12   Young is going to put a stop to this.
13               So, your Honor, it doesn't even matter what I'm telling you
14   on this point, respectfully.        As a matter of law -- we are lawyers
15   here.     As a matter of law, there is only one guy.       So,   I can be
16   entirely wrong about what I just said.          I have one person in this one
17   company to depose.       And you're not going to let me?     I respectfully
18   think that's not fair,       your Honor.
19               You're talking about what's fair?       This isn't Ford Motor
20   Company.     They have less than a thousand employees.       This guy can
21   make some time to sit down and answer some questions about the
22   veracity and what he knew about       th~se   kind of statements.
23               So, when you're telling me I have to go somewhere else,
24   there is no where else to go.        And they've never disputed that to
25   this moment.     I have no where else to go to get evidence about this

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                            0947
                                                                                      58

                             ORAL HEARING ON PARTIES' MOTIONS
                                    NOVEMBER 21, 2014

 1   company, your Honor.
 2               THE COURT:     Okay.
 3               MR. WARGO:     Thank you.
 4               THE COURT:     Ms. Lovett?
 5               MS. LOVETT:     Would your Honor like to see a copy of the
 6   letter up close?
 7               THE COURT:     No.     I got it.
 8               MS. LOVETT:     I understand.      You know, it's sent from
 9   TitleMax.     It's signed by the Deputy General Counsel of that entity.
10   It doesn't mention an organization.            It says employees have been
11   reminded.     It doesn't say anything about Mr. Young.
12               And,    I'm sorry,   I am asserting that Apex Deposition applies.
13   We asserted that it applies in our Pleading that we filed with the
14   Court.     The Apex Deposition under Crawley Industrial absolutely
15   applies.
16               He is the guy over those one thousand employees.         I don't
17   file 10K's for a living.           I've never seen one that says he's the guy.
18   But if that's what the 10K says, your Honor, and if they came into
19   this Court and arguing that a corporate representative had personal
20   knowledge and important knowledge that he needed to be behind and
21   your Honor ordered -- entered an Order on that and they pull it down
22   and the next day it's all going to be Tracy Young,           then it doesn't
23   matter what Tracy Young said which might be a privilege settlement
24   may or not be a communication.
25               So,    the burden that they bear -- counsel's bear assertion of

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                               0948
                                                                                  59

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   ignore the Exhibits C through L, which, your Honor, are the
 2   deposition excerpts in which individuals repeatedly deny having any
 3   discussion about that with Mr. Young.        The letters they are showing
 4   you is written by a company lawyer, which means that even if he did
 5   discuss this with Mr. Young there is a privilege.
 6               So before we get to knocking down the door to the CEO's
 7   office -- even a thousand employees is a lot to me.         Before we get to
 8   the CEO's office, there has to be some showing that he has relevant
 9   knowledge.     And he may know that there is a lawsuit.      That's
10   relevant.     Does that mean that you get to go and depose Bill Gates
11   because he knows there's a patent infringement lawsuit?
12               Every single court that's looked at has said that's not
13   prudent and it may turn out not to be such a good idea.         But in this
14   instance it's their burden and all they're bringing the Court is this
15   letter which doesn't say it's on behalf of, by the way, the LLC.
16               It says we're responding to your letter directed to TMX.
17   It's on TitleMax letterhead.
18               THE COURT:     Directed to TMX Finance?
19               MS. LOVETT:    Well, yes.   They show to whom to direct it.
20   TMX -- the one guy at TMX Finance, didn't respond to this.
21               THE COURT:     But it is a letter in response TMX Finance, not
22   TitleMax Texas or any of the other entities that are in this lawsuit.
23               MS. LOVETT:     Fair enough, your Honor.   But, again, if they
24   want to take this letter and stick it front of the nose of every
25   single person that testified and say were you warned, were you told

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                           0949
                                                                                   60

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   about this, were you -- did you discuss this and they had wished to
 2   actually if they came before this Court in good faith saying we need
 3   information from a corporate representative.          The reason that's not a
 4   diversion or distraction is because the law requires that they show
 5   you that they have sought other means of obtaining the relevant
 6   information.
 7              They told you that there was other relevant information.
 8   They filed a Motion.      They forced us into a hearing on it.       You
 9   ordered it.     They pull down the deposition,       and then they noticed
10   Mr. Young.     There's no showing except for this one letter from a
11   lawyer.   The communications surrounding which would probably be
12   privileged.
13             THE COURT:    Okay.      I am not ruling right now on this, but I
14   will give you a ruling next week.
15             MR. WARGO:    Thank you,     your Honor.
16             MS. LOVETT:     Thank you,    Judge.
17             THE COURT:    The next thing I have is a Motion for
18   Continuance.     I don't want to do that just yet.
19             MS. LOVETT:     Can I correct a misstatement?       I want to
20   correct this on the record.         It's not a thousand employees.     It's
21   6,000.    I am good at correcting.
22             THE COURT:    Okay.      Defendant's Motion to Designate a
23   Responsible Third Party.
24             MR. GANNAWAY:     Yes,    your Honor.   May I approach?
25             THE COURT:     You may.

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                            0950
                                                                           61

                         ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1            MR. GANNAWAY:    This -- to give to visual aid, direct the
 2   Court to page 15.
 3            In a nut shell, your Honor, we have designated the
 4   PublicData and DataTrax entities, the companies that run those web
 5   sites, as people who are responsible third parties in this case.
 6            As your Honor knows, Chapter 33 says what we have to do is
 7   designate any person who is alleged to have caused or contributed to
 8   causing in any way the harm for which recovery of damages is sought
 9   whether by negligent acts or omission by other conduct or activity
10   that violates applicable legal standards.
11            And all we have to do at this phase, your Honor, is meet the
12   bear Pleading Standards required by Texas Rules of Civil Procedure.
13            We've done that.    We have listed a number of statutes and
14   other applicable legal standards that we believe that these folks
15   have run afoul on just on the basis of the testimony that we've heard
16   from folks who ran searches and what they believe they were
17   committing to when they saw the interfaces, for instance, on
18   PublicData.com.
19            Now, they argue that we need to show that these folks would
20   actually be found negligent.    They talk about contributory negligence
21   and all this sort, superceding negligence that would wipe out these
22   acts.
23            Your Honor, they're talking about ultimate liability.     And
24   it may be under the old Chapter 33 regime that would have worked.
25   The Rule used to say you can designate one who could have been but

                         CYNTHIA MARTINEZ MONTALVO, CSR
                              152ND DISTRICT COURT
                                  713-368-6037
                               cynthiam@justex.net




                                                                    0951
                                                                                 62

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   was not sued by the claimant and the person is or may be liable to
 2   the claimant.     That's not the case anymore.
 3            In 2003 it was changed to say:
 4            If someone committed -- contributed to the harm in any way
 5   by conduct or activity that violates applicable legal standard.
 6            And if you turn to page 17, I've cited the Unitech case out
 7   of the 1st District.     That says:
 8            An RTP can include people who aren't even subject to the
 9   Court's jurisdiction who might be immune from liability of the claim,
10   your Honor.
11            We don't need to show that these folks are ultimately going
12   to be liable or that they ultimately have breached a legal standard.
13   They don't even need to be liable.
14            THE COURT:     Don't you have to prove that they did something
15   wrong?
16            MR. GANNAWAY:     I need to show they breached an applicable
17   legal standard.    That's what the Rule says.
18            THE COURT:     Okay.     They did something wrong.
19            MR. GANNAWAY:     Yes,    your Honor.
20            THE COURT:     What did DataTrax
21            MR. WARGO:     DataTrax.
22            THE COURT:     What did DataTrax and PublicData do wrong?
23            MR. GANNAWAY:     If your Honor will turn to page 20,      I've
24   given an of the applicable legal standard that hasn't been met here.
25   And this is from Diverse Policy Driver.          I am not sure -- you know,

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                          0952
                                                                             63

                       ORAL HEARING ON PARTIES' MOTIONS
                              NOVEMBER 21, 2014

 1   it's the centerpiece of their allegations.     That says in Part C of
 2   USC 2721 in Chapter 18:
                                                      ~

 3            An authorized recipient of personal information may resell
 4   or may disclose the information only for use per Subsection B.
 5            That's the laundry list of permissible uses of what you can
 6   use these searches for.
 7            And then I cited your Honor to 2nd Circuit case that
 8   evaluated that language.   When a reseller like DataTrax, like
 9   PublicData, was excused of not having the right safeguards on their
10   website -- and that led to someone getting personal information that
11   resulted in an altercation where someone was physically hurt.        So,
12   the database provider was sued.   And the 2nd Circuit said:
13            In light of the Texas legislative history, we hold that
14   resellers are subject to a duty of reasonable care but before DTPP
15   protected personal information.
16            And if you turn to the next page, page 21, you will see that
17   allegations that the 2nd Circuit there thought were relevant were the
18   same kind of allegations that we're making here:
19            We conclude that a reasonable jury can find they failed to
20   exercise reasonable care when it disclosed the personal information.
21            One of the issue -- and I going to go over with your Honor,
22   if you will turn to the next page.   I've shown this to you before in
23   giving you some background about how those databases.     Page 22,
24   says -- and there has been lot of testimony on this from lots of
25   TitleMax former employers and employees.     When they were running

                        CYNTHIA MARTINEZ MONTALVO, CSR
                             152ND DISTRICT COURT
                                 713-368-6037
                              cynthiam@justex.net




                                                                      0953
                                                                               64

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014

 1   searches, they all agreed with this and it says, quote, for any use
 2   in the normal course of business.      And I will tell you it sounds like
 3   that's      whatever anyone does at work might not apply to running a
 4   search.
 5              If they're trying to locate -- even if you assume that
 6   everything they are saying as true, if they were trying to locate one
 7   of their folks so they can send out a mailer to them and trying to
 8   get them to convert and drum up some business, that's what those
 9   folks thought would fit into the normal course of business.       Take
10   that and ran the search and there was no suggesting that there was
11   anything that they were doing was wrong.
12              There has been lots of testimony on that.
13              THE COURT:    Except if you click on that link -- not filling
14   in the space, if you click on the link, it describes what that means,
15   doesn't it?
16              MR. GANNAWAY:    That is true, your Honor.    I'm sure they are
17   going to argue that to the jury but that's factual.       We just have a
18   Pleading Standard here right now.       And I did ask some of those folks
19   did you click on this, did you know if clicked on it you could see a
20   more full explanation.      And the testimony to that was "no."
21              And then if you turn back to page 21, look at what the 2nd
22   Circuit said about this sort of thing.       There was a purpose there
23   called "insurance other" that at least arguably is not a permitted
24   purpose.    And there is some statutory language that suggests that
25   certain insurers can look up information related to insurance.        But

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                        0954
                                                                               65

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   "insurance other'' Court said that might not cut it but we don't need
 2   to decide that today, your Honor.      That is a factual issue.
 3            We made the Pleading that they have breached a legal
 4   standard that is certainly applicable to resellers like DataTrax and
 5   PublicData.     And we don't need to show exactly what those interfaces
 6   do that but we've done that, your Honor.       We've shown you where the
 7   confusion has been.     We've already had testimony that there was
 8   confusion about and those folks thought there was nothing wrong with
 9   running these searches.
10            So, at this stage where we just have to make a bear bones
11   pleading required by Texas Rules of Civil Procedure with, we have
12   certainly shown where an applicable legal standard that arguably has
13   been breached.
14            THE COURT:     Yes, ma'am?
15            MS. ROMERO:     Your Honor, Abigail Romero.
16            This is just another one of TitleMax's attempts to shift --
17            THE COURT:    Okay.   You know something?     Hold on a second.
18   Let's stop with the jury arguments.       I don't mean to pick on you.         I

19   really wanted to pick on him.     I really wanted to pick on him because
20   the Pleading is loaded with it.       It does absolutely nothing for me.
21            So, let's not hurl invectives.       Just tell me why you think
22   you're right.
23            MS. ROMERO:     PublicData and DataTrax did not cause our harm.
24   The statute requires that the responsible third party have to cause
25   or contribute to the harm.     Our harm was 100 percent caused by

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        0955
                                                                             66

                          ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014

 1   TitleMax, caused by their employees.      And they misrepresented their
 2   purpose to PublicData and DataTrax.      They're conclusively presumed to
 3   know the law.
 4            So, even though we can get to all this other negligence and
 5   they violated an applicable legal standard if you want, but at the
 6   end of the day they didn't cause our harm.
 7            TitleMax could have had their employees sitting at a
 8   computer running searches on our customers all day, that's not what
 9   damaged us.     What damaged us is they have of our customers.   It was
10   the marketing.     It was the theft.
11            In fact, once of their employees who did, in fact, sit down
12   and run searches all day DataTrax sent that employee a letter saying
13   you have overloaded our severers.      We think you're not doing this for
14   an inappropriate purpose; but, that aside, running searches, that
15   doesn't harm us.
16            There is no way that they have satisfied the applicable
17   pleading standards because there is no -- just no harm on the face of
18   their papers.    And we can get into the rest of if you want.    We have
19   a Statute of Limitations argument that also bars in large majority of
20   their claims but there is no causation on the face of theirs.
21            MR. GANNAWAY:     Your Honor, I appreciate the stipulation that
22   running searches does not cause harm.      It still doesn't mean that we
23   can't designate RTP.     She is jumping to a jury argument, as your
24   Honor noted.
25            And even when she didn't start using the invective against

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                      0956
                                                                               67

                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014


 1   my client, she's still arguing that the facts don't support the RTP
 2   designation.   We have pled facts.       We have shown evidence already,
 3   your Honor, that support the RTP designation.        We have gone far
 4   beyond the mere bare bones pleading standard required by the Rules.
 5            And the only analysis --
 6            THE COURT:    Wait.   Hold on a minute.     Hold on a minute.     You
 7   said you don't have to prove that they caused harm?
 8            MR. GANNAWAY:    Well,   I   don't have to prove it at this stage.
 9   Eventually we would have to show those contributed to the Plaintiffs'
10   harm.
11            THE COURT:     Is there anywhere in these -- what do you call
12   them data information?
13            MR. GANNAWAY:     Databases.
14            THE COURT:     Databases have been brought in a lawsuit in the
15   manner in which you're alleging that it should be?
16            MR. GANNAWAY:    Well,   I think one example out of the 2nd
17   Circuit, yes, they have been sued in other areas for how they treated
18   the resell of data and whether they were careful enough and followed
19   the statutory requirement.
20            MS. ROMERO:     Your Honor, if I may?
21            THE COURT:     Just a moment?     You are talking about Gordon v.
22   Softech International?
23            MR. GANNAWAY:     That's correct, your Honor.
24            THE COURT:    And what is --what's the fact situation in that
25   case?

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        0957
                                                                              68

                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014

 1             MR. GANNAWAY:     Try to recite as best as I can recall it,
 2   your Honor.
 3             I believe that someone got in an altercation on the streets.
 4   Got in an argument and one of the individuals involved in the
 5   altercation went home --
 6             THE COURT:     Okay.   Go ahead.
 7             MR. GANNAWAY:     Went home and ran a search to try to find --
 8   they had I guess the license plate of the other person who they got
 9   in a fight with.   They looked up that information and tracked him
10   down and I guess beat him up.       Something to that affect is what I
11   recall.
12             The person who got beat up then sued the person who beat him
13   up and the database provider for having made available the
14   information and not taking enough steps to protect someone being able
15   to access.
16             I think that's parallel to what we have here.      Particularly
17   here all we have to do is meet the pleading standards.       We just have
18   to show that they contributed to the harm.       Folks have testified if I
19   had known this was illegal, if there was something on that PublicData
20   screen that said you can't run this unless and gave the full
21   statutory language and explained what's wrong with it, then I would
22   not have run the searches.
23             So, it directly impacts the damages that they're claiming.
24   It might have been zero damages if there had been something in here
25   that would have let people that want to abide by the law know that it

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                       0958
                                                                               69

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   might not be permissible to run the searches.
 2            THE COURT:     Yes, ma'am?
 3            MS. ROMERO:     This case that that Geoff's talking about right
 4   now not at all the same as this one.
 5             In this case the Plaintiff was the person whose information
 6   was searched.     They're the ones that were harmed.     PublicData and
 7   DataTrax did not harm us at all.
 8            They gave away Gordon's information in this case.        That is
 9   not this case.    Not at all.
10            MR. WARGO:     Your Honor -- if may interject, your Honor?
11            THE COURT:     You may.
12            MR. WARGO:     Your Honor makes decisions like this all the
13   time.   Pleading standards where someone has improperly alleged
14   causation, as your Honor has pointed out.     Your Honor, here this is a
15   bridge too far.     That case is entirely inapplicable to our case.
16   There is direct linkage between the search and the harm.
17            Here, we have a bunch of people for purposes of this
18   argument who we think we've already proven this those your Honor we
19   will prove it to a jury where they are in a room taking our
20   information and soliciting our customers and stealing.
21            These folks are in the middle of all of this and the only --
22   and they are the ones, as Ms. Romero pointed out, they are the ones
23   who have caused our harm.
24            Your Honor makes these decisions all the time on Pleading
25   Standards.   I'm sorry, this is a bridge too far.       You haven't caused

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        0959
                                                                                  70

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   the harm here.     This is a like saying there a vendor.     These people,
 2   your Honor -- DataTrax -- these are vendors.        So, is a copy service.
 3   So, is a currier service that couriers these documents in between
 4   their various offices in order to distribute these materials.
 5               THE COURT:     But if they hadn't had access to the database,
 6   I'm sure Mr. Gannaway would point out, they would have never found
 7   out that that customer was a TitleMax customer.
 8               MR. WARGO:     And your Honor can recognize as a judge that the
 9   State of Texas has said this is a legal enterprise and making that
10   information available is legal.
11               And if I can bring this horne?    Geoff just gave away exactly
12   why he loses this argument.        He said -- and I wrote it down as best I
13   could -- that he's taLked to          he's taken people's depositions where
14   they said if I had known that was illegal, I wouldn't have done it.
15               That is the core of our response to them.     As a matter of
16   law, your Honor, you cannot state a cause of action based on his
17   argument.     If I'd just known this was illegal, I wouldn't have done
18   it.   As a matter of law, that is not a cause of action.          That cannot
19   be a claim, and that's what they're basing this claim on.
20               THE COURT:     As a matter of law according to who?     You throw
21   that phrase around a lot, Mr. Wargo.
22               According to who as a matter of --
23               MR. WARGO:     Ignorance of the law is no excuse to saying,
24   please, I shouldn't do this.        That's all I am referring to when I say
25   that, your Honor.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiarn@justex.net




                                                                           0960
                                                                               71

                        ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014

 1             He's making his argument, gee whiz, if I had only known this
 2   conduct was illegal I wouldn't have clicked on here.      Your Honor,
 3   the -- our Justice System would cease to exist if we don't have the
 4   rule that says you, everyone, is presumed to know the law and you
 5   cannot claim ignorance of the law.
 6             THE COURT:     So, you're saying that someone signs on
 7   PublicData or DataTrax they're supposed to have knowledge of a
 8   complicated federal statute which precludes them from using that
 9   database for a certain specific purpose?
10             MR. WARGO:     I don't have to say that here, your Honor.       All
11   I'm saying in response his Motion, he cannot base his Motion on what
12   at the bottom is something that is not a legal principal.      That is, I
13   should-- if I had only known the law, that's what he has to go do in
14   order to meet many Pleading Standard, your Honor.
15             If he came in on an entirely unrelated case and said in a
16   Pleading if I had only known this was illegal I wouldn't have done
17   it, you'd throw that out of court.
18             You can't say someone --you can't maintain a cause of
19   action because, oh, gosh, if I would only known about the law.
20   That's his claim right here.      You'd throw that out of court and
21   that's what he's basing this on, your Honor.      And that's why it
22   doesn't even meet the minimal standard.
23             In addition to, he has not made any showing and we have
24   already come forward with evidence in this case that they're not the
25   cause.   That these people, PublicData.com, they're not the cause.

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                        0961
                                                                                72

                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014


 1   They're the cause of the damage -- of the harm as the statute points
 2   out.
 3            Thank you, your Honor.
 4            MS. LOVETT:     Your Honor --
 5            THE COURT:     Yes, ma'am?
 6            MS. LOVETT:     What Mr. Wargo said that you would -- you would
 7   evaluate on pleading standards all the time.        Of course, you and I
 8   know is incorrect because don't have a 12(b(6) here in Texas.         That's
 9   the difficulty many of us have struggled with.
10            While I'm a proud Los Angeles Lakers fan at the annoyance of
11   all my friends in Houston, the bottom line is in Texas there is no
12   Pleading Standards that Mr. Wargo is describing.
13            The standards under Rule 33 as now amended is caused or
14   contributed to.   And that's what would give you, for example, a Dram
15   Shop case.   The drunk driver is the person that killed the person.
16   That doesn't mean you can't name as a responsible third party the
17   bar.
18            Cause or contributed to.        The standard is brought.   There is
19   no -- we are not here on a Motion to Dismiss posture because there
20   isn't one in this case.    We are here on the simple posture of whether
21   or not you can identify a responsible third party.        And the pleading
22   standards for that simply is that they caused or contributed.
23            Here's the contribution because it's the searches and, now,
24   we have the stipulation on the record that these searches didn't
25   harm-- didn't harm LoanStar.

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                         0962
                                                                                 73

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1            We will deal with that, I'll assure you.       But if the
 2   searches hadn't been done, then the question becomes is there a
 3   causal connection.     Is there some nexus there that destroys our
 4   responsibility and creates or adds them into the picture.       And that
 5   is exactly what our Third-Party Responsibility Statute is designed to
 6   do.
 7            So, the pleading standards there is not what someone would
 8   have to do in a federal case on 12(b) (6).      The standard is simply
 9   what Mr. Gannaway articulated:
10            Could they?     Have we pled facts?    We may not be able to
11   prove them.   They may not be able to prove theirs.      But have we pled
12   facts that these third parties contributed?       Your Honor, .that's
13   undisputed those searches were done.     That's where the information
14   came from.
15            THE COURT:    Anything else?
16            MR. GANNAWAY:     Your Honor, I would just point out     knowledge
17   of the law means that we can't plead this, if you look at the Garcia
18   v. El Paso Limited Partnership case, it says:
19            Criminal actions that are a foreseeable result of a prior
20   tort do not excuse the previous tortfeasor liability.
21            That's dead on kills Mr. Wargo's argument.
22            THE COURT:    Okay.   I'm going to grant the Motion.     That
23   doesn't mean that it's going on the Charge.       It only means that today
24   we will consider it if there's evidence to support it.
25            MR. WARGO:    Thank you, your Honor.

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                          0963
                                                                               74

                       ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014

 1            MR. GANNAWAY:     Understood, your Honor.
 2            THE COURT:     Plaintiffs' Motion to Enforce Orders and for
 3   Sanctions.
 4            Mr. Johnson-- let's go off the record for a second.         I

 5   don't want this on the record.
 6                         (Brief discussion off the record)
 7            THE COURT:     With that said, Plaintiffs' Motion to Enforce
 8   Orders and for Sanctions.
 9            I guess the Plaintiffs' argument here is there are two
10   Orders here I've signed.        One of which specifically relates to the
11   Overlap List that the Defendants are not complying with and they
12   should be punished for it.
13            Have I characterized your argument, Mr. Wargo?
14            MR. WARGO:     Your Honor, the last word I wouldn't use
15   "punish" given what you just indicated on off the record.        But, your
16   Honor, I wiil tell you I've maybe in my career filed about five of
17   these.
18            THE COURT:     Okay.
19            MR. WARGO:     So, I want you to know this isn't something that
20   we routinely do and, you know, Mr. Johnson and it's not something
21   that he's going to routinely do.
22            But we have a few Motions here -- are happy to start with
23   the Overlap List -- that simply have not been complied with over a
24   period of time.
25            And I know Mr. Johnson has -- he's been on the front line

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        0964
                                                                               75

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   with Mr. Gannaway.       They have had, you know, those discussions.      And,
 2   so, he will weigh in as he deems fit.       But, your Honor, we have
 3   demonstrated I believe -- perhaps using too many adjectives and I
 4   will take responsibility for that, your Honor.
 5              We will make sure to curb our conduct going forward,     your
 6   Honor.     Your Honor, we have documented -- putting aside those words
 7   that gave you pause         systemic refusal to engage in the Discovery
 8   process that truly slows this case down dramatically.        And we put in
 9   our papers no overstatement has brought it to a stand still.
10              Your Honor, this is the only -- the Overlap List of the
11   Motion is where I would like to go back a little bit in time.          The
12   other ones I will not do this, your Honor, but I think it's
13   instructive and I will do this as briefly as possible.
14              Your Honor, the Overlap List was created out of a Consent
15   Rule 11.    And that goes back to the very infancy of this case.        And
16   that goes back, your Honor, to around September -- July/September of
17   2013.
18              Now, your Honor, you may not remember this and I doubt that
19   you do but we sure do:
20              A couple of weeks after we got their data, our client looked
21   at this -- this being a small industry -- and saying, gosh darn it,
22   that's too small of a list.       There's no way that that's accurate
23   except
24              THE COURT:     Hold on just a second.   It's now 4:00 o'clock.
25              MR. WARGO:     Your Honor --

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                        0965
                                                                                     76

                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014


 1            THE COURT:     So,    let's short circuit this just a little bit.
 2            MR. WARGO:     Yes, sir.
 3            THE COURT:     I signed an Order requiring that the Overlap
 4   List be updated.
 5            MR. WARGO:     Yes,    sir.
 6            THE COURT:     Requiring that certain information be provided
 7   within a certain period of time.           It's your allegations, am I
 8   correct, the information has not been provided to Judge Peoples so
 9   that he can prepare the Second Amended Overlap List?
10            MR. WARGO:     My understanding is on November the 6th or 7
11   that data was finally produced by Mr. Gannaway.
12            THE COURT:     Okay.
13            MR. WARGO:     Yes, your Honor.
14            THE COURT:    Okay.         So, Judge Peoples is now working on this
15   second Overlap List.
16            MR. WARGO:     Yes, your Honor.
17            THE COURT:    And your complaint is that the Court ordered him
18   to do that a while back?
19            MR. WARGO:     Yes,    your Honor.
20            THE COURT:    And he's been quite tardy at doing that?
21            MR. WARGO:     Yes,    your Honor.     And a bit more than that.
22            THE COURT:    A bit more than that?
23            MR. WARGO:     Yes,    your Honor.     A bit more than quite tardy.
24            THE COURT:    Okay.         Mr. Gannaway?
25            MR. GANNAWAY:        Yes,    your Honor?

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                              0966
                                                                                 77

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014

 1              THE COURT:     They're complaining about three specific Orders
 2   not being complied with.
 3              MR. GANNAWAY:     Yes, your Honor.
 4              THE COURT:     Have you complied with each of these three
 5   Orders?
 6              MR. GANNAWAY:     Every single one of the issues raised in the
 7   Motion to Enforce has now been completed, your Honor.
 8              THE COURT:     Okay.    When were they completed?
 9              MR. GANNAWAY:     Some of them were completed last week with
10   respect to the Amended Discovery Responses.         The Special Master List
11   was completed on August the 11th when your Honor ordered us to
12   provide.    You gave us 28 days from the day you gave the Order.        We
13   submitted those.
14              In October the Plaintiffs said we believe there is some
15   records that are missing.         We saw them on the first Overlap List.         We
16   don't see them on the second.
17              We investigated internally, and we found that the problem
18   was -- I will try to get into as few details as possible but to
19   explain to you the problem:
20              One of the fields that we have to provide to the Special
21   Master is the secondary Social Security number.          There's always a
22   primary Social Security number associated with an account.          That's
23   the borrower.    Sometimes there's a co-signer or a co-borrower.
24              We discovered that in many instances the secondary Social
25   Security number was missing in the list that we provided pursuant to

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                          0967
                                                                                 78

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   your Honor's Order on August the 11th.         And we worked to fix that as
 2   quickly as we can.
 3              We're talking about a list that generated 485,000 entries
 4   not reflected, your Honor, to cull from the Defendant's databases and
 5   we have been hampered, as I've explained in the Motion by the fact
 6   that every time we have been ordered to produce a new database that
 7   we had to produce a new list for the database instruction by the
 8   Special Master.
 9              We have had a new IT person that has to do it because there
10   has been a lot of turnover at TitleMax.          So, it's a new person that
11   has to cull the database properly.          So, we have corrected that issue.
12   Your Honor gave us 28 days to do the first instance from the time
13   that we identified the issue or they identified the issue.          We
14   completed our investigation and provided them a new list.          It was 24
15   days.    We are doing our level best to comply.
16              We understand that that was a mistake.        We told them it was
17   a mistake, and we provided the list as quickly as we could and we
18   told them we would pay for the Special Master process, for the
19   corrected process.
20             We've done all we can, your Honor.         There is no bad faith
21   here whatsoever.
22              THE COURT:     Has the Defendant provided you with Responses to
23   Discovery that are contained in these Orders that you're complaining
24   about?
25             MR. WARGO:      No, your Honor.

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                          0968
                                                                                 79

                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014

 1            THE COURT:     Which one?
 2            MR. WARGO:     In part.
 3            THE COURT:     Which ones have they not complied with?
 4            MR. WARGO:     Your Honor, the marketing portion.
 5            THE COURT:     Which Order are you referring to?
 6            MR. WARGO:     Your Honor, I'm referring to your Order dated
 7   August 19th.   They have entirely failed to comply with one aspect of
 8   this in that with elucidation and I will show they have also failed
 9   to comply with the other.     In particular talking about Paragraph 5.
10            THE COURT:    Tell me the date again.
11            MR. WARGO:     Your Honor, August 19th of this year.       It's
12   about the July 18th hearing.        Paragraph 5, your Honor.
13            THE COURT:     I got it.
14            MR. WARGO:    Thank you, your Honor.      May I?
15            THE COURT:     You may.
16            MR. WARGO:     Your Honor, your Honor specifically ordered --
17   and I'm going to the center of that Paragraph 5 well.          I will just
18   go:
19            Defendant shall identify the employees of TitleMax Finance
20   of Texas, Inc., and TitleMax of Texas, Inc., by full name, address
21   and job title who were involved in the approval of buy-out letters
22   and fliers used to solicit customers of Plaintiffs.
23            That's Bucket No. 1.
24            Bucket No. 2:
25            And the marketing strategy of using databases to identify

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                          0969
                                                                                    80

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   customers of competitors.
 2            Well, your Honor, on Bucket No. 2 they have never identified
 3   any one at all at any time who on using your Honor's Order provided
 4   or were instrumental in providing information regarding the marketing
 5   strategy of using databases to identify customers or competitors.
 6   Never ever ever.     Even after they supplemented to address the first
 7   portion of that, your Honor.        And I would like to address that
 8   because that's supplementation is false.
 9             So,   I will break them down.       Whatever is easier for your
10   Honor.   But your Honor asked me to respond specifically.         They've
11   never given us any person who was involved in the marketing strategy.
12            THE COURT:     I got that.
13            MR. WARGO:     Yes,    your Honor.
14            THE COURT:     What else?
15            MR. WARGO:     And that on the first part they were instructed
16   and ordered to provide persons -- your Honor,         I won't read it
17   again -- who were involved in fliers in the creation of them and the
18   approval -- where is that -- approval of buy-out letter to solicit
19   the customer.
20            THE COURT:     So, you're saying they haven't complied with
21   Paragraph 5 at all?
22            MR. WARGO:     Well,    your Honor, with regard to Paragraph 5,
23   they name people who were low-level people in Texas and they -- and
24   they did that based on deposition testimony.
25            Your Honor, they named no one within -- who was in the

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                             0970
                                                                              81

                          ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014

 1   marketing department in corporate in Savanna who was responsible for
 2   this, your Honor.
 3            If I may
 4            THE COURT:     What if no one from the corporate office in
 5   Savanna was responsible these two items?
 6            MR. WARGO:     From the deposition, your Honor, of an Austin
 7   District Manager taken in this case named Michael Bryant, I quote:
 8            "The fliers that were created in your district were
 9   typically created at the store level?
10            "Yes.     But we also used a standard flier -- a company
11   "standard flyer.
12            "And that's something that's created by the marketing
13   "department?
14            ''Yeah.
15            ''In the corporate office.
16            ''Uh-huh.
17            "Was that standard flier to your knowledge -"
18            This is the key:
19            "Was that standard flier to your knowledge ever sent to any
20   "of the individuals listed on these customer lists from DataTrax?
21            "Answer:     I'm sure they were.   It was a corporate flier.''
22            Beyond that, your Honor -- may I approach?
23            THE COURT:     You may.
24            MR. WARGO:     I've given you three documents.   I am handing
25   copies to Mr. Gannaway.     One of them I had from my reference was

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                       0971
                                                                                 82

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014

 1   entitled "Georgia."     I put a yellow sticky named ''Georgia.''     That's
 2   this one, Geoff.    One "Virginia'' and the other "Georgia."       That is
 3   this one here.
 4            THE COURT:     Mr. Gannaway?
 5            MR. GANNAWAY:     Your Honor, you are not going to see any
 6   difference between these copies of fliers.       The first one is evidence
 7   of this case.    It's the Texas case.     And the evidence in this case,
 8   your Honor,   is that the first one named "Texas" was one of the fliers
 9   that was used to go after our clients through the
10   DataTrax/PublicData.com method.      That is the first one I gave you,
11   your Honor.
12            The second one we got in Virginia last month from TitleMax.
13   The third one we got in Georgia from TitleMax last month.
14            Your Honor, these are -- certainly the first and second are
15   exactly the same.     The third,   if you will look at the dollar bill and
16   verbiage on there, it's virtually identical.       The serial number is
17   the same 50-dollar bill.
18            Your Honor, we have direct evidence from a former district
19   manager that these fliers were approved by corporate.       I just read
20   you that testimony.
21            THE COURT:     Okay.   Mr. Gannaway?
22            MR. GANNAWAY:     Your Honor, this is death of a thousand cuts.
23   We have been through this before.       When you signed that Order, we
24   asked your Honor to reconsider it.       While it was being reconsidered,
25   we had a hearing on September 22nd when this precise issue was

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                          0972
                                                                                 83

                          ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014

 1   discussed again with your Honor.          And this is what Daniel Johnson
 2   says with respect to what they were looking for because I said I need
 3   them to narrow the universe of what they he said.
 4            So, what he said:
 5            So, what we agreed to on the record, while we are
 6   specifically looking for these targeted -- these fliers and the
 7   fliers that were sent out to directed specifically towards buyers of
 8   competitors loan, that is all we are looking for.          So, you know,
 9   company-wide marketing strategies we are not interested in that.
10            And I explained here to your Honor that I was going to go
11   through deposition testimony and try to identify those specific types
12   of non-company wide things that they are complaining.          Specific
13   things that were generated at store level against our company policy
14   to send out mailers and fliers.
15            You directed me to review the depositions to see if the
16   exhibits dealt with that and if there was testimony that showed that.
17   I did that, your Honor.         You also asked me have I inquired -- have
18   you, Mr. Gannaway, inquired to the areas of managers -- regional
19   manager of the Dallas area.
20            I said:     I have not, your Honor.
21            You said:     Okay.     Do so.
22            I said:     Will do.
23            You said:     And then carry on with what you're doing right
24   now identifying these items.
25            I reviewed all those depositions, your Honor.          I have

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                          0973
                                                                               84

                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014


 1   updated my Responses accordingly, and we've inquired with the Dallas
 2   Regional Manager exactly as you said.
 3            We have updated our Discovery.     And this stuff about
 4   company-wide strategy stuff that Mr. Johnson told you he wasn't
 5   interested in, is beyond anything that could possibly be relevant to
 6   this case.
 7            Why does it matter who approved a 50-dollar bill?      That's
 8   why Mr. Johnson agreed that we didn't have to look if the -- with
 9   respect to responding to this Interrogatory.
10            MR. WARGO:    Your Honor, you before Mr. Johnson respond s, I
11   would like to add one more thing.     It certainly matters who approved
12   the bill because their Georgia entity we have to show to a jury is
13   culpable here, too.     I have a jury argument to make that people in
14   Georgia were involved in this as well.
15            Your Honor, the problem with Mr. Gannaway's argument that I
16   would like to say before Mr. Johnson jumps in is that he is arguing
17   something that happened at a hearing.
18            Unfortunately-- or fortunately for us there's an Order from
19   the Court that I just read to you that you have on your screen.           Your
20   Honor, he moved to modify this.     Your Honor denied.   So, here is his
21   Response and I would like to quote:
22            In the face of your Honor's Order, here is his Response:
23            Based upon a review of the deposition transcripts and
24   communications by Dallas Regional Managers, pursuant to this Court's
25   direction,   Defendants respond that the following people apparently

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        0974
                                                                                85

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   played a role in designing, preparing and/or approving letters and
 2   fliers offering to buy out competitors' loan.
 3              And then he lists people who have been deposed.       Your Honor,
 4   we fought this.     It is death by a thousand cuts.      That's why we are
 5   asking for our fees because we're here a third time.         We moved to
 6   compel.    We've had a couple of hearings on this.       It resulted in an
 7   Order.
 8              And the information that we are seeking is critical to our
 9   case.     It goes to the letters that were stuffed in the envelopes that
10   came to us to say -- from our customers saying what's going on here.
11   There are the very letters that they brought customers to TitleMax.
12              There couldn't be anything more relevant to this case and
13   whether Georgia-- I'm sorry          Savanna approved those letters shows
14   the corporate knowledge that we are going to need to show in this
15   case.
16              And Mr. Gannaway's response is quite telling,      your Honor.
17   He doesn't abide by your Honor's Orders.       He's calling it direction,
18   and I am quoting from him.       And he's also saying that these people
19   apparently played a role.
20              Your Honor, we're entitled to know who created this and
21   whether this was part of the company and whether it was part of a
22   company's sponsored event.
23              MR. JOHNSON:     All I want to the say is I don't think that is
24   an accurate characterization of what was discussed.
25              THE COURT:     He's reading the transcript.

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                         0975
                                                                               86

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1            MR. JOHNSON:     I understand that; but the broader discussion,
 2   your Honor.   And I have read it.      I read right before we came down to
 3   the courthouse.    What we were talking about is I don't care what the
 4   corporate strategy is for marketing in Georgia.        I don't care what it
 5   is in Virginia.    I don't care about that stuff.      But as to the
 6   buy-out letters that were sent to our customers in Texas, we want to
 7   know who created those.     And what you have in front of your Honor is
 8   evidence that somebody -- somebody in Texas didn't create that and
 9   send it to Virginia.
10            This is some decision was that was made by the corporate
11   office, and that is exactly what we are looking for because those
12   were sent to people in Texas.      It's in the middle of our case, your
13   Honor.
14            THE COURT:     Mr. Gannaway
15            MR. GANNAWAY:     Yes, your Honor?
16            THE COURT:        how difficult would it be to identify the
17   person in Savanna or wherever it was who created this marketing?
18            MR. GANNAWAY:     May I consult with my client, your Honor?
19            THE COURT:     You may.
20            MR. GANNAWAY:     We could tell them who created this flier.
21            THE COURT:     Why don't you?
22            MR. GANNAWAY:     We will, your Honor.
23            THE COURT:     Because all you're doing-- yeah, it's death by
24   a thousand cuts.   But you're bringing us such a lit bitty --a little
25   bitty problem to the Court and it's causing all of this commotion

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        0976
                                                                                        87

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   here.
 2               It's a simple thing to do it.           Just do it.     Identify the
 3   person that created this marketing strategy.              Period.    Just do it.
 4               MR. GANNAWAY:        Will do, your Honor.
 5               MR. WARGO:     Thank you, your Honor.
 6               THE COURT:     What else do you not have?
 7               MR. WARGO:     What I don't have is the second part of your
 8   Order, Paragraph 5, your Honor.           They've never given us anything at
 9   all, zero, with regard to the marketing strategy of using databases.
10               THE COURT:     Okay.     Is there a marketing strategy of at TMX
11   involving the use of databases?
12               MR. GANNAWAY:        Absolutely not.
13               THE COURT:     Why don't you admit -- why don't you acknowledge
14   that, and just say there is no such marketing strategy?
15               MR. GANNAWAY:        I've said that it was not approved by
16   corporate.     That's in the Interrogatory Response that we served even
17   before the later version that we amended.
18               MR. WARGO:     Your Honor, they have not answered this
19   question.     And if they want --
20               THE COURT:     If there is no one who has approved or
21   participated in the marketing strategy, what else do you want them to
22   say?
23               MS. GOEBELSMANN:        Your Honor --
24               THE COURT:     No.     I am asking Mr. Wargo.
25               MR. WARGO:     I want to lock them down and he is not telling

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                                 0977
                                                                                88

                        ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1   you the answer.   They did not answer this question, your Honor.
 2            THE COURT:     Within 14 days of the hearing Defendant shall
 3   identify employees by name, address,      job title who were involved in
 4   the approval of buy-out letters and fliers used to solicit customers
 5   of the Plaintiffs' and the marketing strategy of using databases to
 6   identify customers of competitors.
 7            If they say there are no individuals involved in the
 8   marketing strategy of using databases to identify customers, which is
 9   what I hear Mr. Gannaway is saying and I'm presuming that he said
10   that in response to Discovery --
11            MR. WARGO:     He did not.
12            THE COURT:     Well,   if he didn't,   then you need to.
13            MR. GANNAWAY:     I will read it to, your Honor,     if you would
14   like.
15            THE COURT:     Where did you answer that question,     though?
16            MR. GANNAWAY:     Supplemental Answer to Interrogatory No. 4.
17            THE COURT:     And when was that sent out?
18            MR. GANNAWAY:     I don't have the date, but it was months ago.
19            THE COURT:     What does it say?
20            MR. GANNAWAY:     It says:
21            As limited by agreement with counsel -- because we had a
22   meet-and-confer session -- Defendant states that no one had authority
23   or was responsible for the designing, preparing and/or approving
24   marketing approaches certain employees that were targeted customer
25   known to have a third-party title loans.        The marketing materials

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                         0978
                                                                                        89

                       ORAL HEARING ON PARTIES' MOTIONS
                              NOVEMBER 21, 2014

 1   used were not approved by the marketing department.              And, therefore,
 2   were against policy.
 3            MR. WARGO:     That is correct, your Honor.
 4            He has not responded to this.              If that were accurate, your
 5   Honor, what were talking about at the hearing?
 6            THE COURT:     I don't know because that happened months ago.
 7            MR. WARGO:     Yes,   your Honor.
 8            THE COURT:    And I've had a couple of thousand hearings since
 9   that date.
10            MR. WARGO:     Understood,       your Honor.    And we are happy to
11   take this representation where he can supplement -- we are happy to
12   put in the supplement answering.          That is all.     We just want to lock
13   them down.
14            MS. GOEBELSMANN:      Your Honor,      just by way of context since
15   it was a July 18th hearing where this was discussed occur before I
16   think that response that Mr. Gannaway is referring to was on behalf
17   TMX Finance, LLC, only and we did move to compel a further response
18   to that Request they had responded to it.             However, we did move to
19   compel with respect to the Texas entities that are --
20            THE COURT:    Okay.      Okay.     Fine.     Provide them with a
21   Supplemental Response and answering it specifically in response to
22   this Order.
23            MR. GANNAWAY:     Yes,    your Honor.
24            THE COURT:     Is there anything else that has not been
25   produced pursuant to an Order of this Court?

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                                 0979
                                                                            90

                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014

 1            MR. WARGO:     Your Honor, the answer to that is -- as far as
 2   we can tell right now the answer is they have supplemented as of this
 3   past week and we think that they have complied.
 4            And I do want to keep my Motion for Sanctions, though, as
 5   something for your Honor to consider.     Because we're only going to be
 6   back here again if your Honor doesn't take some action, as your Honor
 7   just said and you got exercised about it and I don't blame you, we
 8   are here on the little tiniest of things.
 9            And if we aren't going get some corporation in response to
10   the little, tiniest things we are going to be filing more Motions to
11   Compel and then Motion to Enforce.     That's why respectfully, your
12   Honor, and I know it's late and I know it's Friday but our Motion is
13   substantial with regard to their numerous failures to respond,
14   failure to -- and Mr. Gannaway -- Mr. Johnson asked hi.m can you give
15   me a date about when you're going to comply.     And he said that's a
16   reasonable request and he never does.
17            Your Honor, respectfully, if you don't take some action
18   about their failure to respond to these things in the ordinary
19   coarse, we are going to be back here again because we are dealing
20   with things that are basic.     These are things counsel always agrees
21   to your Honor.   Always.
22            THE COURT:    Well, that is not necessarily correct,
23   Mr. Wargo.   I can assure that these items in this Order were not
24   agreed to by counsel for TMX.
25            MR. WARGO:     Your Honor, Privilege Log, responding to --

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                     0980
                                                                                    91

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1              THE COURT:     If it was agreed to I wouldn't have ordered it.
 2              MR. WARGO:     No.     I'm saying it's something counsel typically
 3   agrees to and everything is a fight.          Everything is a Motion.     It's
 4   because we are not getting anything coming back requiring us to file
 5   Motions and take your Honor's time.
 6              THE COURT:     I'm not awarding sanctions at this time.        But if
 7   we come back in here again on tardiness in responding to things,               then
 8   I will take it under advisement --consideration.           But I'm not going
 9   to at this point in time.
10              He did respond last week.        I know it was -- probably your
11   argument is, well, it was done pursuant to or in response to these
12   Motions.    I appreciate that.        We're just going to let it go at this
13   point and deal with it.
14              But if it happens again, Mr. Gannaway, I can appreciate
15   their concern because you're responding to things and I don't know
16   the whole story and I will acknowledge that, which is one of the
17   reasons why I'm not asserting anything.          But getting information from
18   TMX seems to be a bit burdensome.          And you didn't respond to some of
19   these things until last week, which could be interpreted as being a
20   response because of Motion for Sanctions was pending.
21              MR. GANNAWAY:        Your Honor, I told them that I would get all
22   of -- they said they needed this information before the corporate
23   representative deposition.          I told them I would have it in advance.
24   There was no date set with respect to anything that's in front of
25   your Honor other than that Special Master list.

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                             0981
                                                                                92

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1            But I understand your Honor's frustration.
 2            THE COURT:     I'm frustrated because I have a handful of cases
 3   that require Friday afternoon.      11 Motions all in one?     This is not
 4   the normal way cases run in Houston.      Probably not in --
 5            MR. WARGO:     Georgia.
 6            THE COURT:     Georgia.
 7            MR. WARGO:     Atlanta.
 8            THE COURT:     That's what I thought it was.   I didn't know if
 9   it was Atlanta or LA.
10            Okay.   Come on, people, let's bring some rationality to
11   this -- is that a word -- and move things along because y'all are one
12   of two or three cases that require this kind of attention.         And I
13   appreciate the fact that neither one of you really want to go to the
14   extent that I'm ordering you to produce certain Discovery.
15            That said -- that's all I am going to say.
16            MR. WARGO:     Thank you, your Honor.
17            MR. GANNAWAY:     May I interject something at this point as
18   far as scheduling?
19            THE COURT:     Sure.   If you don't mind me continuing to look
20   for the proper Order to sign in this.      Go ahead.
21            MR. GANNAWAY:     I know that it's getting late in the day.
22   It's 4:20.
23            One of the issues that I think is more pressing from our
24   perspective and needing a ruling we had set it for submission last
25   week and the Plaintiffs requested that it be moved to this hearing

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                         0982
                                                                               93

                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014


 1   was a few Motions at issue regarding Third-Party Discovery.
 2             Some of them have already been received with subpoenas.
 3             THE COURT:     You're talking about the Letters Rogatory?
 4             MR. GANNAWAY:     Yes, your Honor.    The Letters Rogatory and
 5   there's also our Motion for Protection from Subpoenas already served
 6   and because apparently those folks might be thinking, your Honor,
 7   they are already under subpoena and starting to generate material
 8   that we would suggest are irrelevant and beyond the scope of
 9   Discovery that we address that issue if the -- we can.
10             MR. JOHNSON:     I think this was the four-for-one,   your Honor.
11   We can hopefully knock out four
12             THE COURT:     I'm trying to figure out what -- you're talking
13   about the Letter Rogatory to Online Guru, Acanum Investigations,
14   Burbridge Detective Agency --
15             MR. JOHNSON:     Yes, your Honor.    There were three Motions for
16   Letters Rogatory and then we issued subpoenas and then they filed a
17   Motion for Protection as to those and are all the same issues.
18             THE COURT:     I'm trying to find the Motion.
19             MR. GANNAWAY:     It was filed on Halloween, your Honor.
20             THE COURT:     Is that an editorial comment on the Motion
21   itself?
22             MR. GANNAWAY:     Not at all.
23             MR. JOHNSON:     May I approach,    your Honor?
24             THE COURT:     Just one second.
25             MR. JOHNSON:     Sure.

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                        0983
                                                                                  94

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1               THE COURT:     All right.   The Subpoena Duces Tecum that you
 2   sent out you sent it to who?
 3               MR. JOHNSON:     We sent it to various parties, your Honor.
 4   The Motion for Protection addresses several subpoenas in general and
 5   this is true as to the subpoenas and the Letters Rogatory they were
 6   directed toward third-party databases that will provide the same type
 7   of information as PublicData.com and DataTrax.
 8               We have multiple witnesses in this case and we've cited the
 9   testimony in our papers where witnesses for TitleMax has said, look,
10   we know this was a web site that we went to.         Can't identify which
11   one.
12               And, so, what we have done, your Honor, is we've done the
13   spade work, which we have to do as Plaintiffs, to go and find
14   evidence.     So, there is not 50,000 of these companies out there.
15   There is a handful of them.        And we have asked those entities some
16   very narrow questions which are:
17               Do you have searches that were done that fall into the
18   category of searches we looking for this this case.
19               Mr. Gannaway and I -- and I and Geoff and do get along very
20   well despite the disputes that we have.        And I pleaded with him.        I

21   said, Geoff,    this doesn't cost your client anything.        If we hit a dry
22   hole with something, it doesn't impact anybody.           It doesn't cost your
23   client money.     It's not a burden.     Anything like that.     But we should
24   be entitled to find out since there are people that said ''yes" we use
25   some web sites and we can't remember which ones.          There was one

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                           0984
                                                                            95

                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014

 1   witness that said I've not heard of PublicData or DataTrax.
 2            So, unless that other limited universe of database providers
 3   we wanted to know whether or not these searches were done.     We have
 4   gotten a response from one of them already.     And low and behold in
 5   the response we find in Integrity searches that were done.     This is
 6   exactly why we did the searches, your Honor.
 7            THE COURT:    Mr. Gannaway --
 8            MR. GANNAWAY:     Your Honor --
 9            THE COURT:        what standing do you have to even raise an
10   objection to these things?     This is not -- Mr. Johnson is right.
11   This doesn't cost you a thing and that it's not your company that is
12   being asked to produce documents.     What standing do you have to
13   complain here?
14            MR. GANNAWAY:     Your Honor, under the Texas Rules, as you
15   know, anyone affected by Discovery Requests.
16            THE COURT:     How are you affected by this?
17            MR. GANNAWAY:    We are affected by this because we -- for the
18   databases that have been shown to have some link to the Plaintiffs'
19   claim, those are PublicData and DataTrax, they have produced
20   documents.   There is a 30,000-page stack from PublicData almost all
21   of which, if not all of which, was reasonable legal searches.        But we
22   have to go through and look at those 30,000 pages to see whether the
23   Plaintiffs might claim about it.
24            As your Honor knows, there is nothing wrong with running
25   these searches.   In fact,   the Temporary Injunction that we entered on

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                     0985
                                                                               96

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014

 1   and agreed basis back last summer said Plaintiffs stipulate Defendant
 2   may continue to use these databases for legal purposes.
 3            Their position here is literally, your Honor, because they
 4   have shown that PublicData and DataTrax were used, they can subpoena
 5   any database owner in the country and it's not a handful, your Honor.
 6   A lot of people buy this information from DMV's including from Texas
 7   and beyond.
 8            THE COURT:     But it's a handful that they are seeking it
 9   from.   It's three by Letters Rogatory, and I don't know about the
10   third-party Deposition by Written Questions.       How many of those?
11            MR. JOHNSON:     There were five subpoenas, your Honor.     And
12   one of which we already have responses.
13            THE COURT:     So, there's eight total.
14            MR. GANNAWAY:     Your Honor, there is no logic to this from
15   those folks to this case.     What they said in their Letters Rogatory
16   Motion, your Honor, was:
17            Through Discovery in this matter -- here's an example --
18   Online Guru,   Incorporated has been identified as a person who has
19   relevant facts during the relevant time period of Defendants'
20   tortious conduct against Plaintiffs and may possess relevant
21   documents.
22            They told your Honor that that person has been identified in
23   this Discovery as a business with relevant facts.       I did a
24   double-take when I saw that Motion filed,    your Honor, because I
25   hadn't heard of Online Guru.

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        0986
                                                                            97

                        ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1            I searched every bit of Discovery we have in the case.        I

 2   took every transcript that has been taken in that case.   That name
 3   and the database name associated with it and it has never come up.
 4            Your Honor, if this kind of activity is permitted to go on,
 5   if subpoenas can be served to anyone in the world that runs a
 6   database whether for legal or illegal purposes that searches were
 7   done, there is going to be no end to the satellite litigation that's
 8   going to be involved in this case.
 9            There is no way that we can try this case if they continue
10   to generate issues for which there has been no proof that the
11   documents that are produced are going to be relevant to this case and
12   they are going to start trying to ask us to produce information
13   regarding all of those searches that might have been and probably
14   were for perfectly legal reasons, your Honor.
15            There is also no limit to what they are -- what they are
16   requesting here.   They haven't limited it in cases the Request for
17   Production they've served on those people to Texas entities and your
18   Honor might not know but a week or two ago these folks filed suit
19   against TitleMax entities in Georgia the Wargo Firm on behalf I guess
20   affiliated entities of LoanStar.
21            They appear to be using your proceeding, your Honor, to get
22   Discovery for those other matters because what they've asked of these
23   databases is not limited to Texas issues.
24            Your Honor, this is a fishing expedition pure and simple
25   just because it doesn't make me produce something, doesn't make it

                        CYNTHIA MARTINEZ MONTALVO, CSR
                             152ND DISTRICT COURT
                                 713-368-6037
                              cynthiam@justex.net




                                                                     0987
                                                                                98

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   less of a fishing expedition they are not entitled to do under the
 2   Rules of Discovery, your Honor.
 3               THE COURT:     But what gives you the right to come in and
 4   complain?
 5               MR. GANNAWAY:     Because I'm affected by it.
 6               THE COURT:     How are you affected by it?
 7               MR. GANNAWAY:     Because if they generate a ream of paper that
 8   shows 50,000 legal searches that we didn't do skip tracing-- which
 9   no one is contesting.        It's perfectly legitimate practice to use the
10   databases.     We are going to have to deal with that issue.
11               Remember, this all came up with respect to the filing they
12   made with your Honor when they originally got in that PublicData
13   production that they said, aha, we found some people that ran
14   searches from TitleMax and they turned up Integrity lien holders.
15               And, so, we came to your Honor and showed you, your Honor,
16   that is just a false non-secular assumption.        And we showed you the
17   very first search that they attached to what they pled in front of
18   your Honor to say that we did something illegal and wrong in breach
19   of the Temporary Injunction.
20               I showed you that was a TitleMax customer.      There was
21   nothing wrong with running those searches.
22               So, their Discovery is overbroad and it affects us because
23   of the allegations that they've made wrongfully that that necessarily
24   means that it was a wrongful search.
25               MR. JOHNSON:     If that's the standard for affecting you, then

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                         0988
                                                                                    99

                            ORAL HEARING ON PARTIES' MOTIONS
                                   NOVEMBER 21, 2014

 1   the whole notion under Texas Law that it has to affect you means that
 2   anyone -- any party can object to a Third-Party Subpoena.             That's not
 3   the Rule.
 4               The Rule is that it has to affect you and what Mr. Gannaway
 5   is saying we don't think you're going to find anything.           I have
 6   stuff.   We have found stuff.          We found license plate searches that
 7   came up with Integrity liens.          This is exactly what he doesn't want
 8   us to get.
 9               THE COURT:     Wait.   Wait.   What's the problem with the
10   license search that came up with Integrity liens?
11               MR. JOHNSON:     Well --
12               THE COURT:     With those license searches?
13               MR. JOHNSON:     Well, your Honor, the point is that with this
14   that these are our customers.                              '
                                            There are searches being done based on
15   the request that they ask.
16               There's an Email account here is from an individual named
17   Blaze DeLeon.       They have identified an individual supplementing their
18   Response in the last two weeks Blane DeLeon who is an individual that
19   they identified that has access to data accounts.
20               Okay.    We think that we're entitled to learn whether Blase
21   DeLeon is doing license plate searches on Integrity customers.             Is
22   he, in fact,    engaging in conduct we are complaining about here.
23               These are third parties.        Doesn't cost them anything at all.
24   They are not affected by this.          And under the standard he's
25   articulating, any party would be able to object to subpoenas in Texas

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                             0989
                                                                           100

                       ORAL HEARING ON PARTIES' MOTIONS
                              NOVEMBER 21, 2014

 1   and that is not the Rule.
 2            MR. GANNAWAY:     Under the standard he's articulating,    I can't
 3   object to any Discovery directed to third parties, your Honor.        That
 4   is simply not the Rule.
 5            How it affects me and my client is just laid out by what
 6   Mr. Johnson said if Mr. DeLeon -- is that his name?
 7            MR. JOHNSON:     Blase DeLeon.
 8            MR. GANNAWAY:     Mr. DeLeon ran searches perfectly legal for
 9   skip tracing and we have to then prove that through some theory that
10   the Defendants have that that must mean that it was illegal, then it
11   affects us, your Honor.     It affects my client.   It affects the work
12   that we have to do and what they have to pay their attorney, frankly.
13            THE COURT:     Okay.   Motion for Protective Order is denied.         I

14   am signing the Letters Rogatory at this point.      I don't know that I
15   have an Order denying the Motion for Protective Order.
16            I have an Order granting it.
17            MR. JOHNSON:     Let me see if we have one, your Honor.
18            MR. GANNAWAY:     Your Honor, with -- understanding the Court's
19   ruling, we will intend to subpoena those third parties ourselves.
20            THE COURT:     That's fine.
21            MR. GANNAWAY:     To the see if LoanStar ran searches.
22            THE COURT:     Pardon me?
23            MR. GANNAWAY:     To see if LoanStar ran searches.
24            THE COURT:     I doubt seriously if LoanStar will object.        It
25   would be an interesting hearing, if they did.

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        0990
                                                                                    101

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1            I don't see where I have an Order denying?               Did y'all file
 2   one?
 3            MR. WARGO:     Your Honor, we can provide one on Monday.
 4            THE COURT:     No.     All right.        You don't have to.   It will
 5   take me five minutes to do i t         --    less than five minutes to do it.
 6            MR. WARGO:     Thank you, your Honor.
 7            THE COURT:     Okay.     Let's see what's left here.
 8            MR. WARGO:     You waited for Los Angeles.
 9            MS. GOEBELSMANN:        You saved the best for last, Judge.
10            THE COURT:     Is that the Continuance?
11            MS. GOEBELSMANN:        No.        Actually that will be last.    This one
12   is two Motions to Compel I believe.              Unless you want to take up the
13   Continuance first?
14            THE COURT:     Hold on just a second.           Okay.   We've done that.
15   We've done the first one.        We've done the second one.         Motion for
16   Continuance I am holding off on.              Responsible Third Party is done.
17   Enforce the Settlement, that is done.
18            Plaintiffs' Motion to Compel Discovery Responses,                Documents
19   and Communications Higher Level TitleMax; is that the one we're
20   talking about?
21            MS. GOEBELSMANN:        That's one of the two Motions to Compel.
22   If it saves time, your Honor, the other Motion to Compel which
23   regards those individual who we believe ran searches in violation of
24   the TI at the same time or prior to.
25            THE COURT:     I don't see that Motion.           What date was it filed

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                                 0991
                                                                                  102

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   on?
 2               MS. GOEBELSMANN:       The Motion to Compel the Responses to the
 3   to the people who we believe were violating the Temporary Injunction
 4   filed on November 5th I believe.
 5               It regards the Sixth Request for Production on documents.
 6               THE COURT:     Okay.     That one I haven't looked at.
 7               MS. GOEBELSMANN:        If Your Honor would like, it's fairly
 8   straight forward and actually regards a number of statements that
 9   opposing counsel made during the last argument.
10               THE COURT:     Okay.     Yeah.   Let's --
11               MS. GOEBELSMANN:       Would you like me to provide you a copy
12   for your reference?
13               THE COURT:     No.     I have it here.      I'm looking at it right
14   here.   I thought I looked at everything but apparently not.              Okay.
15   Go ahead.
16               MS. GOEBELSMANN:       Well, this one would probably seem very
17   similar to their Motion to Compel.           The two Motions to Compel that
18   are before your Honor are very simple and very straight forward.                  All
19   of regards is TitleMax refused to provide us evidence that goes to
20   our core claims as well as our concerns regarding searches that were
21   conducted by several employees in Texas after the entry of the
22   Temporary Injunction in this case.
23               I'm starting with that second issue since it came up in the
24   prior argument.     Back on July 17th TitleMax submitted four
25   declarations to your Honor claiming that certain searches that were

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                               0992
                                                                           103

                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014

 1   run by TitleMax employees after the entry of the Temporary Injunction
 2   in June 2013 were for collection purposes.
 3            When we saw those --
 4            THE COURT:     Were for what?
 5            MR. WARGO:     Collection purposes.
 6            THE COURT:     Thank you.
 7            MS. GOEBELSMANN:     When we saw those documents or those
 8   declarations, we were concerned because they were contradicted by the
 9   PublicData production that Mr. Gannaway referenced earlier and that
10   was 25,000 pages of documents.        With respect to these four employees,
11   90 percent of those documents did not reference or relate to any
12   TitleMax liens.
13            So, we were concerned that they were claiming in these
14   declarations that they were only conducting these searches for the
15   purpose of collections' activities with respect to only TitleMax
16   customers.
17            It just didn't jive.        Our other concern was that excuse had
18   been used previously in this litigation.        At the beginning of the
19   case there was an individual named Ishmael Hernandez named as a
20   Defendant.   He had run an operation that he claimed to DataTrax was
21   using DataTrax's services for collections purposes.        It turned out
22   that lot of those searches that he ran were really relating to
23   customers and when we went to depose him on the issue he pled the
24   Fifth.
25            So, we were very, very concerned about what's going on.           And

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        0993
                                                                        104

                       ORAL HEARING ON PARTIES' MOTIONS
                              NOVEMBER 21, 2014


 1   we served the Sixth Request for Production of Documents on Tit1eMax
 2   in order to obtain documents that supported the allegations that were
 3   made in those declarations as well as to investigate the activities
 4   of these four employees to see if they, too, were involved in the
 5   same illegal market practices that had formed the basis of this case.
 6            We also had served the Seventh Request for the Production of
 7   Documents to the Texas entities and the Second Request for Production
 8   of Documents to the TMX Finance, LLC, to get additional information
 9   regarding the higher-level employees knowledge of understanding of
10   these marketing practices.
11            To date we have gotten very little back from TitleMax.        They
12   have not given us the information that we needed in order to
13   adequately investigate whether or not the four people that we
14   identified in Texas who were conducting those searches after the TIO
15   were, in fact, violating your Orders.
16            And we have no information really with respect to those
17   corporate employees.    Potentially some information that have been
18   produced previously for one employee with respect to deposition she
19   said last year or the earlier this year, but for the most part we
20   haven't gotten much of anything.
21            So, all we really want are those documents so that we can
22   continue to prove up our case.
23            Now, there are several other issues that are also requested
24   in these two Motions.   One of which seeks identification of
25   additional employees for that expanded time period that's not issued

                        CYNTHIA MARTINEZ MONTALVO, CSR
                             152ND DISTRICT COURT
                                 713-368-6037
                              cynthiam@justex.net




                                                                     0994
                                                                                 105

                        ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1   in the Overlap List as well as bonus information regarding those
 2   individuals so we can identify who was really involved in this
 3   conduct as well as that -- again, revisit the issue that the Court --
 4   that your Honor may recall from a prior hearing as to the production
 5   of hard drives for several individuals for whom we still haven't
 6   received sufficient documents.
 7            So, we are just looking for the basic documents and going to
 8   a claims in this case.
 9            THE COURT:     Mr. Gannaway?
10            MR. GANNAWAY:     Your Honor, with respect to -- I will call
11   them the -- Penny Dabney was one of the folks that we submitted a
12   declaration to your Honor in response to their allegation there have
13   been a breach of the TI hearings and the TI Agreement.           They said
14   there was clearly a legal -- clearly breached the TI.
15            We obtained a declaration from Penny Dabney and others.              Ms.
16   Dabney said I only run these searches for locating information
17   related to TitleMax customers.      I have never looked for the
18   Plaintiffs' customers with these-- with any of the searches on these
19   databases.   That was to cut off.       An irrelevant rabbit trail.
20            Their assumption that a search came up that showed
21   Integrity, therefore,    it must be a breach.     And,   if you recall, that
22   I brought to your Honor the exact customer records that relates to
23   the very first Penny Dabney ran a show,       look, your Honor when she ran
24   this search this person has been our customer for a month.           They
25   might previously had an Integrity lien.        And, therefore,    it turned up

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                           0995
                                                                          106

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   as an Integrity lienholder when she ran the search for skip tracing.
 2               Well, we showed your Honor this is a rabbit trail.    Running
 3   a search and finding ''Integrity" doesn't mean something went wrong.
 4               Now, they say, Okay, Mr. Gannaway says it's a rabbit trail.
 5   Make him prove it's a rabbit trail.     For the 8,000 pages of documents
 6   related to the Penny Dobney search that she has already said under
 7   oath were just for TitleMax's business and never to locate
 8   Plaintiffs' customers.
 9               They want us to go through there and every time an Integrity
10   reference occurred to disprove that it could possibly have been
11   related to a search for one of their customers, your Honor.
12               We have produced a lot of documents related to Ms. Dobney.
13   We've agreed to produce them, and we told them there's the search
14   terms we have run.     And those include things like "PublicData'' and
15   "DataTrax.''    That will be the kind of search terms you would expect
16   if these people were running these searches, foregoing around for
17   information around PublicData and DataTrax.
18               We've agreed to produce that information.   We've produced
19   most, if not all, of it already.     They want more.    Your Honor, they
20   want us to go through and not just produce the information in those
21   folks' Email accounts, that says anything about PublicData or
22   DataTrax, they want us to do more and actually comb through the
23   PublicData records, compare them to our records and show and bring up
24   the evidence showing that every search was related to a TitleMax
25   customer.

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                       0996
                                                                              107

                           ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014


 1              Your Honor, that's too much to ask and it's going down a
 2   rabbit trail. that is specifically defined by what folks have sworn in
 3   declarations to the Court.
 4              THE COURT:     Do you have any evidence to that Penny Dabney
 5   has done improper searches?
 6              MS. GOEBELSMANN:      Yes.
 7              THE COURT:    What is it?
 8              MS. GOEBELSMANN:      The searches that result in non-TitleMax
 9   lienholders --
10              THE COURT:    What is it --
11              MS. GOEBELSMANN:      -- over 90 percent of the documents --
12              THE COURT:    Whether is it?
13              MS. GOEBELSMANN:      I can certainly present some of them to
14   you,   your Honor.    As well I have the binder that opposing counsel has
15   presented at the July 18th hearing and actually his representations
16   regarding what that search was and what they revealed really are not
17   consistent with his representations to the Court today.
18              First,    I will provide you the information, if I may,
19   regarding the search results that resulted from Penny Dabney's
20   account.
21              THE COURT:     It's your assertion that Penny Dabney did
22   searches only on TitleMax TMX customers?
23              MR. GANNAWAY:    Your Honor, declaration --
24              THE COURT:    Okay.
25              MS. GOEBELSMANN:      So,    your Honor, the documents that you

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                           0997
                                                                              108

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   have before you and opposing counsel has in his hands what has been
 2   submitted to the Court previously and in a opposition to the Motion
 3   that they filed back in July, which generated the basis from trying
 4   to produce these affidavits to the Court.         It's a summary of all the
 5   searches that were completed by TitleMax employees after the entry of
 6   the Temporary Injunction in this case.
 7               There were the four employees.      Penny Dabney was the most
 8   frequent person to use these searches.         The searches that were
 9   conducted regarding ZIP Codes, regard license plate, that regarded
10   VIN numbers, I believe that is in your hands.         You should have the
11   results that list Integrity as a lien holder.
12               To the extent that opposing counsel thinks that it will be
13   onerous for him to provide responses to this information, I note
14   that -- he already has it all in his possession.           If he didn't from
15   the prior filing, he certainly has it now.
16               We are very concerned because our customer -- our client
17   kept coming up.     Their customers kept coming up.        And --
18               THE COURT:     Well, you just said 90 percent of what Penny
19   Dabney researched came up with your customers, not TMX.
20               MS. GOEBELSMANN:      Not quite, your Honor.    90 percent was not
21   TitleMax.     That doesn't necessarily also --
22               THE COURT:    Okay.    So, I heard Mr. Gannaway saying the
23   research is done by Ms. Dabney are on TitleMax customers.           And I hear
24   you saying your review of the Dabney research indicates that only 10
25   percent were TitleMax customers?

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                           0998
                                                                                 109

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1              MS. GOEBELSMANN:     Yes, your Honor.
 2              THE COURT:     Mr. Gannaway?
 3              MR. GANNAWAY:     Your Honor, there is a lag time.      To give you
 4   the example that I gave your Honor before, there was a gentleman who
 5   a search was ran on August 23rd by Penny Dabney.          The evidence that
 6   you heard is he is our customer.          He had taken out a loan from us on
 7   July 23.    Penny Dabney ran the search on August 23 on payment
 8   collection to see when that loan was due.
 9              The record that came up say that it's an Integrity lien,
10   which suggested at some point this gentleman did have an Integrity
11   lien.   I don't know how often Pub1icData or DataTrax update their
12   databases but at some point he had an Integrity lien.           But it
13   demonstrably shows that this was a TitleMax customer.
14              What happened even though it doesn't say "TitleMax" in the
15   line, that doesn't prove anything.          If you look through the 8,000
16   thousand pages -- Penny Dabney documents -- a lot of them are liens
17   from the person who sold them the car.          Capital one.   The Ford Motor
18   Company.    Something like that.     Sometimes there are lenders.         But
19   there is a very small percentage -- extremely small that will say
20   ''Integrity."
21              And we've shown how that is, why it occurred and we've got
22   an affidavit from the lady saying that she never looked for the
23   Plaintiffs' loans.      And that's borne out by the fact there are so few
24   instances of Integrity lien holders in her 8,000 pages.
25              MS. GOEBELSMANN:     Going towards the public records that the

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                              0999
                                                                                  110

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   prior search that were conducted related to a TitleMax lien, I have
 2   the documents that he provided at the last hearing.            Unfortunately.
 3   I didn't have the opportunity to copy them.          But I can certainly show
 4   your Honor or opposing counsel if we can both approach the Bench and
 5   look at it but basically the search that was run was not a license
 6   plate search.     It was not a VIN search.        It was a Zip Code search.
 7               It resulted in an entry for a car on which TitleMax actually
 8   didn't have a loan.        The contract that they provided to try and say
 9   that this individual actually had a loan with TitleMax regards a 1998
10   Dodge Ram with a VIN number that starts 1B7HC.            The result, though,
11   that we got from PublicData that Penny Dabney did when she ran it was
12   for a 2000 White Dodge VIN No. 1B3 something, something.            They were a
13   different vehicle.
14               That was our loan.     That was our customer that they were
15   looking up.     So, to the extent that they're pointing to this
16               THE COURT:    Wait.   Wait.   Wait.   Wait.    That is your
17   customer that came up.        How do I know they were looking for your
18   customer?
19               MS. GOEBELSMANN:      Because the search result that they
20   provide here was something that was clicked on by that individual in
21   order to view it.
22               And for us to really resolve this discrepancy we need to be
23   able to depose Ms. Dabney to discover what was going on.            And before
24   we conduct her deposition, we need the rest of the documents that we
25   requested our Request for Production.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                               1000
                                                                               111

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1             Notably, Mr. Gannaway represented that some documents were
 2   presented for her.     They   wer~   but they didn't include documents after
 3   a certain time period that they self-collected.         They only produced
 4   documents from 2011 to 2013.
 5             We are needing documents that go beyond 2013 because that's
 6   when she was running these searches that we believe violate the TIO.
 7   We aren't just investigating her involvement in this illegal
 8   marketing practice, we're investigating whether or not she violated
 9   your Court's orders.
10             And we are very concerned about that.        They are moving
11   papers.   They are trying -- 14 instances.        14 instances if they are a
12   violation of the Court Order are very, very concerning to us.
13             So, all that we want to do is get the documents to which we
14   are entitled so that we could affectively depose her.         If it turns
15   out that we deposed her and they are able to prove up this defense
1~   they are now trying to raise, then that will happen; but we can't do
17   that without this information.
18             In addition, with respect to these Requests for Production,
19   there are three other individuals who came up as having conducted
20   those searches after the entry of the TIO.         For those individuals
21   they didn't even run full searches.         Not only did they restrict the
22   time frame for those searches, but they limited those search results
23   to some of their search words to some that aren't even going to be --
24   produce information responsive to a number of these Requests.            They
25   only searched the words ''PublicData'', "Integrity" and "LoanStar."

                          CYNTHIA MARTINEZ MONTALVO, CSR
                               152ND DISTRICT COURT
                                   713-368-6037
                                cynthiam@justex.net




                                                                         1001
                                                                           112

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1             They didn't search ''buyout" or "DataTrax" or "direct mail"
 2   or any of the other terms that they used for Penny Dobney.        So, I
 3   don't know for what purpose they think that they can limit their
 4   production for those three individuals when they've already
 5   demonstrated that they can actually conduct those searches and give
 6   us all the information that is responsive.
 7             They are just trying to prevent us from getting information
 8   we need so that we can continue with this Discovery that's necessary
 9   to prove up our claims and make sure that this conduct is not
10   occurring anymore.
11             THE COURT:    Mr. Gannaway?
12             MR. GANNAWAY:     Your Honor, this is indicative of how they
13   approach every point of Discovery.
14             THE COURT:    Let me ask you a question.
15            MR. GANNAWAY:      Yes, your Honor?
16            THE COURT:     The research that you said Penny Dobney
17   performed you said it was on TitleMax customers?
18            MR. GANNAWAY:     May I approach and show your Honor?
19             THE COURT:    You said that it was on TitleMax customer --
20   yes. you can.   Just a minute.     And she's saying that the search--
21   that she is searching by ZIP Code?
22            MR. GANNAWAY:      I don't think that's true, your Honor.    That
23   is why I handed you this.      If you look at this, this is the search at
24   issue.   This is the first search they attached to their Motion saying
25   that we've done all these illegal things that I know they violated

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                        1002
                                                                                 113

                           ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014

 1   the Injunction.
 2              If you look at the top, that middle data in the date is when
 3   this search was run.       August 23rd, 2013.     If you look in the first
 4   box,   you see there is the long line that has referrals and then it
 5   has DL number filled in the middle there.            Do you see that ''DL state
 6   Texas," if you're following me,        your Honor?
 7              THE COURT:     Not yet.
 8              MR. GANNAWAY:     It's right here.
 9              THE COURT:    Okay.     I got it.
10              MR. GANNAWAY:     So,   I mean, we haven't deposed PublicData
11   yet.   We will.     It's my understanding,     just based on looking at this,
12   that that means that this search was run on August 23 was by driver's
13   license number.      And you will see it popped up a number of people for
14   some reason.      Every one from Anne Waters to Steven Gordon Moran.
15              If you turn to page 2, you see that apparently Ms. Dabney
16   clicked on Steven Gordon Moran.         That was the one she was looking
17   for.
18             And if you turn to the next page, it says "lien holder
19   information Integrity Texas Funding."          So, that's what was produced
20   by PublicData.      That led them to say illegal.        Violating the
21   Injunction.
22             What I showed your Honor was the next page, which is the
23   loan agreement we filed with Steve Moran.            We signed it, as you can
24   see,   in the upper right.       The date of agreement July 24th, 2013.         His
25   loan came due on a month later.         That happens to be the exact date

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                              1003
                                                                             114

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   that Ms. Dobney ran a search, your Honor.
 2             This evidence shows she was looking for a TitleMax customer
 3   and she found him.
 4             MS. GOEBELSMANN:     Your Honor,    I believe he misunderstands
 5   how the   results are being displayed.        If you look on the page that
 6   is the first page of the handout that he provided, under the heading
 7   PublicData.com there is what probably are -- I don't know -- links
 8   or something.   Then Texas is indicated.        Department of Motor Vehicles
 9   and then results for one database search by ZIP Code.
10             So, really it seems like this is not a driver's license.
11   And if it were, it would be really concerning that there is this many
12   people with that number.      It seems like this was a ZIP Code search.
13             MR. GANNAWAY:     There can't possibly be four people in that
14   ZIP Code, your Honor.
15             THE COURT:     I'm sorry?   What?
16             MR. GANNAWAY:     If this was a search of that ZIP Code, 75241,
17   there is only-- there's Anne Waters, Karen Moran-- appears to be
18   Mr. Moran's wife-- Heather Chance and Ida Waters.          That's it.   There
19   is five people that live in that entire ZIP Code --
20             MS. GOEBELSMANN:     It's a very specific ZIP Code search it
21   seems like.
22             THE COURT:     Both of y'all need to stop interrupting the
23   other one.
24             MR. GANNAWAY:     Your Honor, the point is
25             THE COURT:    This was a ZIP code search?

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                         1004
                                                                                 115

                          ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014


 1               MS. GOEBELSMANN:      Yes.
 2               THE COURT:     Well, show me what evidence --
 3               MR. GANNAWAY:     Your Honor, may I be heard?
 4               THE COURT:     What specifically was she researching on this
 5   occasion?     Social Security number?
 6               MR. GANNAWAY:     I believe it was for address information; but
 7   I don't know that for a fact, your Honor.
 8               THE COURT:     Doesn't the search show up in that top box?
 9               MR. GANNAWAY:     You mean what I was pointing to earlier?
10               THE COURT:     Yes.   Yes.
11               MR. GANNAWAY:     I believe so, but we haven't deposed
12   PublicData.     So, I don't know for a fact.
13               THE COURT:     Have you deposed Penny Dabney?
14               MS. GOEBELSMANN:      We haven't been able to because we haven't
15   gotten all the documents that are responsive to these Requests.              We'd
16   hate to depose her and then have to reopen the deposition once they
17   finally do produce everything that they should be producing.
18               THE COURT:     I don't know what this search was for.     You say
19   it's for ZIP Codes, and you say it's driver's license number.           I
20   can't tell what this is.
21               MS. GOEBELSMANN:      Neither can we.    However --
22               THE COURT:    And that doesn't give you the right to go and
23   get thousands of pages of more documents.           You're throwing this out
24   here at me saying this is obviously a ZIP Code search, and I don't
25   see how it is.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                           1005
                                                                           116

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1             I don't even know what the search is for.       It just happened
 2   to turn up four or five people in this particular ZIP Code.        I don't
 3   know what the search terms are.      If it was ZIP Code I would expect it
 4   to turn up more than this.      If it was driver's license numbers,   I
 5   would be amazed that these -- this number of folks have the same
 6   driver's license number.
 7             I don't know what this is a search for.
 8             MR. GANNAWAY:     Your Honor --
 9             THE COURT:     And neither one of you can tell me.
10             MR. GANNAWAY:     Your Honor,   I can tell you this:
11             First of all, Ms. Lovett just pointed out to me, there's
12   27,066 people in that ZIP Code in Dallas.        More importantly, your
13   Honor, say she was looking by ZIP Code to identify her existing
14   customer, the only thing we know is on the day that this customer's
15   loan payment was coming due she ran a search and she clicked on his
16   name specifically.
17             There is no suggestion here whether she looked him up by
18   looking at ZIP Code that he entered on his application, whether she
19   looked him up by driver's license number.        She clicked on him and it
20   was the date that his payment was due.       And there is no suggestion
21   that it wasn't our customer and that's why we were running the
22   search.
23             That is why,    your Honor, going down this road is just it's
24   so far beyond what has already been defined as might be relevant to
25   this case.

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                        1006
                                                                          117

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014

 1             The Overlap List, as you know, ends on June 2013 for a
 2   reason.   That's what the parties agreed to.     That's what your Honor
 3   has enforced in the subsequent Special Master process.      And, now,
 4   they want to go with no limits whatsoever knowing that we have an
 5   Injunction over our heads.      That we have sent out correspondence to
 6   folks telling them that they cannot run or they will be terminated if
 7   they do this kind of a search for anything other than that purpose.
 8             It's a rabbit trail, your Honor.
 9             THE COURT:     Is it your assertion that because Penny Dabney
10   ran a search and it turned up an Integrity client that you're
11   entitled to look at everything Penny Dabney searched?
12             MS. GOEBELSMANN:     We already have search results from
13   PublicData.   What we are asking for in this Request for Production
14   are more much tailor that what you just stated.
15             For instance, we are looking for documents or communications
16   that support or refute the statements that she made in the affidavit
17   that she provided to the Court.
18             We're looking for evidence for those results that involved
19   Integrity liens to show that what they are claiming that these were,
20   in fact, TitleMax customers.      From what they've provided so far, what
21   we've seen is that there is a different car out there that has our
22   loan on it.   And they just happened to have a loan on a totally
23   separate vehicle.
24             For all we know what she is doing is trying to search other
25   vehicles owned by this individual to try to take that business.         That

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                      1007
                                                                                118

                         ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   would be an impermissible, illegal marketing practice to take our
 2   client's in violation of this Court's Temporary Injunction.
 3              THE COURT:     You're fishing here.
 4              MS. GOEBELSMANN:       Your Honor, you have to be able --
 5              THE COURT:     Y'all are fishing here.      What's the specific
 6   Request?
 7              MS. GOEBELSMANN:       I printed three different Requests for you
 8   one by one or I have a handout that I can also asses.
 9              The first Requests specifically regarding the affidavits --
10              THE COURT:     What exhibit number?
11              MS. GOEBELSMANN:       -- are in the exhibits attached to the
12   Motion regarding the Responses as
13              THE COURT:     Do you know what exhibit number that is?
14              MS. GOEBELSMANN:       I wrote them down.     That's actually the
15   handout.
16              THE COURT:     Okay.
17              MS. GOEBELSMANN:       The answers are all otherwise Exhibit D to
18   our Motion.    I'll try to make it easier because there was a number of
19   documents that were submitted.         So, this is the first set of Request
20   for Production that we are concerned about.            They submitted
21   affidavits to your Honor stating certain things that are in
22   contradiction to what the evidence suggests that needs to be
23   explained in that are suspect because we have had the same excuse
24   raised before.
25              So, we are requesting documents that support or refute the

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                             1008
                                                                              119

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   statements that are being made.        If these statements are accurate,
 2   then they shouldn't have any concern with producing this information.
 3               THE COURT:    Except they have to go through the work to get
 4   the information.     That's time consuming.     It's costly and it's-- and
 5   that contributes to why they don't want to have to produce this
 6   information.
 7               This is a bottomless pit y'all are running here.     Y'all are
 8   pursuing a bottomless pit of information.        I'm agreeing with Mr.
 9   Gannaway to that extent.        You are absolutely trying to discover
10   every document that can be -- that is out there relating to certain
11   individuals with TMX, and I have to decide whether or not that's
12   reasonable and that results in the Discovery of admissible evidence
13   or could reasonably -- see, you've got me tongue twisted at this time
14   of day -- could be reasonably calculated to discovery of admissible
15   evidence.
16               You guys are running -- you are running down every rabbit
17   trail that there could be in this instance.
18               MR. WARGO:     Your Honor --
19               THE COURT:    And I am trying to figure whether it's going to
20   be the least bit productive.        I want you to show me, tell me -- and
21   you may have and I'm just missing i t - - what your evidence -- if your
22   evidence is this and it turned up the Integrity people, Integrity
23   loans, tell me why this research done by Ms. Dabney was not research
24   done on TMX customers.
25               MS. GOEBELSMANN:     It was not done on TMX customers because

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                        1009
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                       ORAL HEARING ON PARTIES' MOTIONS
                              NOVEMBER 21, 2014

 1   it shows Integrity lien holders.
 2            THE COURT:     That doesn't mean it wasn't done on TMX
 3   customers, does it?
 4            MS. GOEBELSMANN:    Well, we don't know anything about any of
 5   who TitleMax's customers are.     We requested the information that
 6   would answer that question in our Request for Production so that we
 7   could verify the statements that are being made.
 8            We are really interested in making sure that we are able to
 9   investigate through these Discovery Requests this defense that they
10   raised that this is for collections purposes.
11            We also are entitled to investigate the basis for these
12   affidavits that have been submitted.     So, that is why we served those
13   Requests requesting that information.
14            MR. WARGO:     Your Honor, may I make a suggestion?     What about
15   if we go down one of these with Penny Dabney?     We will stop there if
16   Mr. Gannaway's correct.     If he's not, Mr. Gannaway might agree with
17   us that we can continue.
18            THE COURT:    What do you mean you go down one of these?
19            MR. WARGO:    We take the deposition of Penny Dobney.      We get
20   the documents that we've requested regarding Penny Dobney to see if
21   Mr. Gannaway's correct.
22            If he's correct, it is over.     We won't try to seek
23   information, documentation or further depositions from these people.
24   If the Penny Dabney deposition and the documents that we have asked
25   for concerning Penny Dobney do supp6rt what we believe is the case,

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        1010
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                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   that this TIO of the Court has been violated, then we would like to
 2   go ahead.     And I am sure Mr. Gannaway way would agree that we would
 3   be entitled to that information from the others.
 4               We have asked for three or four and we are happy to go with
 5   one.
 6               THE COURT:     I think it's four.
 7               MR. WARGO:     Four, your Honor.     Penny Dabney looks like she's
 8   the most egregious violater.        So, if we can get that documentation,
 9   sit her down for deposition, and, if this is incorrect, then we've
10   had one deposition and we've have had to incur the time and trouble
11   of getting documents together for one individual.
12               MR. GANNAWAY:     Your Honor, that doesn't change the fact that
13   it's a bottomless pit.        It takes time to do these kind of searches to
14   determine if these are, in fact,          our employees.
15               They have asked you to in their Request for Production to
16   have us believe every TitleMax customer, every person in those
17   searches is a TitleMax customer.           Remember, we're talking about 8,000
18   pages in Ms. Dabney's PublicData search results.
19               They have an affidavit from her.        They can put her on the
20   stand for deposition,       your Honor.
21               THE COURT:     Hold on a second.     Have you produced 8,000 pages
22   of Discovery on Ms. Dabney?
23               MR. GANNAWAY:     PublicData.
24               THE COURT:     PublicData produced 8,000 pages?
25               MS. GOEBELSMANN:     It's all searchable.      All they have to do

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                            1011
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                         ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   is Control F and Integrity and they will get all the results.
 2              THE COURT:    Can't you do that,      too.
 3             MS. GOEBELSMANN:       We can do it as well.
 4             MR. GANNAWAY:     We had Ms. Dabney --
 5              THE COURT:    Wait a minute.       You've got 8,000 pages from
 6   PublicData?
 7              MS. GOEBELSMANN:      Yes.
 8              THE COURT:    And you can yourself do the searches to
 9   determine if it was Integrity or not?
10             MS. GOEBELSMANN:       Yes.
11              THE COURT:    Why don't you?
12             MS. GOEBELSMANN:       We have and we've presented some of those
13   to your Honor that we believe are TI --
14              THE COURT:    Okay.
15             MR. GANNAWAY:      Your Honor, moreover, they can search their
16   own records to see when those Integrity -- when those Integrity loans
17   were bought out.    They are the only ones that have that information
18   and,   they can then cross-examine Ms. Dobney.          She is -- we offered
19   her up for deposition already.           They are the ones with the keys to
20   the information, your Honor, as to whether there was an Integrity --
21   an existing Integrity loan on the date that those searches were run.
22              MS. GOEBELSMANN:      Yeah.     But we're asking for the proof that
23   supports these claims in the affidavits that these were existing
24   TitleMax employees because --
25              THE COURT:     How does she know -- for instance,      look on this

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                            1012
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                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   package that they just provided today.           The first PublicData page the
 2   search box says August 23rd, 2013.
 3            MR. GANNAWAY:     Yes, your Honor.
 4            THE COURT:     You with me?
 5            MR. GANNAWAY:     I'm with you.
 6            THE COURT:     And the PublicData notes Dallas, Texas person.
 7            MR. GANNAWAY:     Yes,    your Honor.
 8            THE COURT:     Okay.     On the next page it shows lien holder
 9   Integrity Texas Funding.
10            How does she know from this information that this search was
11   seeking out a TMX employee -- a TMX customer?
12            MR. GANNAWAY:     Couple of answers,       your Honor.
13            First of all,    this search, according to what PublicData said
14   in their Production, and it's certainly what Ms. Dobney provided in
15   an affidavit that said she never ran a search for Integrity for other
16   Plaintiffs.
17            The second --
18            THE COURT:     Okay.     Let me respond to that.       This is an
19   indicat~on    that that might not be correct,       isn't it?
20            MR. GANNAWAY:     No,    your Honor.
21            THE COURT:     If it comes up with ''Integrity''?
22            MR. GANNAWAY:     As I -- this is exactly -- this is actually
23   the situation where for the gentleman whose records I handed you.
24   This is his search.     And that shows that coming up "Integrity'' has
25   nothing to do with whether he is a current TitleMax customer or not.

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                             1013
                                                                             124

                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1              This is Mr. Moran.     We might have to seal this record
 2   because I have said his name a few times.       But that is exactly where
 3   this is a rabbit trail, your Honor.       We've shouldn't have to go --
 4              THE COURT:     I don't see exactly why it's a rabbit trail.
 5   Maybe I'm not smart enough to figure it out, but I don't see it.
 6   When a search is conducted and the information that is derived from
 7   the search says ''Integrity Texas Funding," how do I know that what
 8   this person is looking for is TMX customers?
 9              MR. GANNAWAY:     She's sworn to in affidavit.   She is ready to
10   be deposed on it, your Honor.
11              The other issue, if they want to look and see, well, when
12   Ms. Dabney did this search was this one of your customers, they can
13   look at August 23rd, 2013.       Go into LoanStar's records.   Was
14   Mr. Moran an Integrity customer as of August 23rd, 2013.        They can go
15   do that.
16              We all know, your Honor, that there is no suggestion -- if
17   the indication here is right that the drivers license number and that
18   we can -- I think we need to depose PublicData to get to the bottom
19   of exactly what they mean search by driver's license number.
20              There is no way that Ms. Dabney intuitively or guessed what
21   someone driver's license might be so that she can figure out if it
22   was an Integrity person.
23              THE COURT:     Is it your contention that because "Integrity"
24   came up they were obviously searching for Integrity?
25              MS. GOEBELSMANN:     And that they have conducted searches

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                          1014
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                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   that, yes, result in our --
 2               THE COURT:    That's not what I asked you.    I asked you:
 3               Is it your contention that because this came up that they
 4   were searching for Integrity?
 5               MS. GOEBELSMANN:      I don't know what they were searching for.
 6   Integrity specifically or other competitors as well.
 7               THE COURT:     Doesn't that matter?   Doesn't .that matter --
 8               MS. GOEBELSMANN:      It does.
 9               THE COURT:    -- what they were searching for?
10               MS. GOEBELSMANN:      It does matter if she was searching for
11   marketing purposes and she found one of our customers, then we need
12   to have the documents that they claim exists that would refute what
13   we're seeing in this evidence.
14               THE COURT:    Okay.    Before we're going to go down that trail,
15   we're going to find out what the searches terms were.
16               If the search terms were by driver's license number and that
17   driver's license number leads you to a TMX customer, then this is not
18   an improper search, is it?
19               MS. GOEBELSMANN:      I don't know.
20               THE COURT:    What's your gut feeling?
21               MS. GOEBELSMANN:      If they were driver's license?   I don't
22   know what information they may have obtained that may be using to
23   search for our customers.         I'm not willing to make a statement to
24   that point because it -- that very well may be driven out of context
25   later on.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                          1015
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                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1            THE COURT:     How would they have obtained your customer's
 2   driver's license number?
 3            MS. GOEBELSMANN:       Again,   this is possible litigation.
 4            THE COURT:     Okay.
 5            MS. GOEBELSMANN:       There are many things to try to locate our
 6   customers.
 7            THE COURT:     Before we go down this trail, either find out
 8   what the search terms were because I think that's important.            If the
 9   search terms are benign search terms or are they actually searching
10   for a TMX customer, then I don't necessarily think you're entitled to
11   get all of this information.
12            MS. GOEBELSMANN:       Essentially the information that we are
13   asking for and regarding our suggestion to help make this           reach a
14   resolution regarding this issue, we have a limited number of items
15   that we believe are TIO violation.
16            We can always do as Mr. Wargo suggested and just have them
17   provide us information regarding to searches and then we can go ahead
18   and depose Ms. Dobney and try to investigate the
19            THE COURT:     Limited to these searches right here.
20            MS. GOEBELSMANN:       Limited to the ones that we believe are in
21   violation of the TIO.     And not just with respect to her affidavit --
22   it is not with respect to outstanding Requests that we have touched
23   on this afternoon.
24            THE COURT:     So, there is 14 searches here?
25            MS. GOEBELSMANN:       Right.   There are 14 searches

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                         1016
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                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1               THE COURT:     You limit it to these 14 -- information on these
 2   14 searches.
 3               MS. GOEBELSMANN:     Yes.   In response to those Requests 12,
 4   25, 37, 11, 24, 36 and 49.
 5               THE COURT:     Let's test this, Mr. Gannaway.   And limit your
 6   Response to these particular Requests -- to the 14 items that are on
 7   this package of information that was provided to you.
 8               MR. GANNAWAY:     A couple of points, your Honor:
 9               May we go through the exercise of deposing PublicData first
10   to see if there was any improper search terms?
11               As your Honor pointed out, this exercise is looking at
12   things that are likely, according tq the basis of the documents, to
13   be searches for specific people by people who knew something like the
14   driver's license number.        I would suggest that a -- the way to
15   approach this is depose PublicData and find out the information to
16   that.
17               THE COURT:     It would seem to me that it would be easier to
18   just provide the information on these 14 searches and conduct the
19   deposition of Ms. Dobney based on that, and I would really prefer you
20   do it that way.
21               MR. GANNAWAY:     Your Honor, I would point out that not all of
22   those searches are run by Penny Dobney.         If you look in the second
23   column --
24               THE COURT:     Then limit it to the searches that are performed
25   by Penny Dobney and I think that's

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                         1017
                                                                                128

                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1            MS. GOEBELSMANN:      Says ''P. Dabney 01."
 2            MR. GANNAWAY:     Your Honor, let me point something else
 3   out --
 4            THE COURT:     Mr. Gannaway, come on.     It's 5:00 o'clock
 5   it's after 5:00 o'clock, and we are not done yet.        You want to be
 6   here till 6:00 or 6:30?
 7            I've made my ruling.      I want you to produce the information
 8   relating to these ten searches by P. Dabney 01.        Take her deposition.
 9   And if the deposition tends to support your claims, then we will take
10   another look at going at more extensive Discovery on things relating
11   to these Requests.
12            MS. GOEBELSMANN:      Your Honor,   just a minor point of
13   clarification:
14            Since they had previously restricted their Production to the
15   time frame of Overlap List in these searches that regard after the
16   TIO was entered, can we ensure that any Production includes the time
17   period after the entry of the TIO?
18            THE COURT:     Yes.
19            MR. GANNAWAY:     With respect to those search?
20            THE COURT:     With respect to just these ten searches.
21            MR. GANNAWAY:     Understood, your Honor.
22            THE COURT:     Is that clear?
23            MR. GANNAWAY:     It is, your Honor.    Understood.
24            MS. GOEBELSMANN:      So, to keep moving forward,     the other
25   Requests that were at issue here that regard the marketing to

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                          1018
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                            ORAL HEARING ON PARTIES' MOTIONS
                                   NOVEMBER 21, 2014


 1   customers by these employees as well as recording it and copying of
 2   license plate numbers as well as searches DMV database, those were
 3   also restricted by time unilateral TitleMax to 2011 to 2013.
 4               And we just want to ensure that, when they make their
 5   Production, that they include the search terms that were used also
 6   use for Penny Dabney for these other individuals.           These are separate
 7   Requests and as well as increase the time frame for those particular
 8   requests.
 9               MR. GANNAWAY:     As I understand from what your Honor just
10   pulled, I will run these searches Penny Dabney, which includes
11   searches in 2014.        And that is going to be the basis for determining
12   whether it's proper to extend Discovery of the time period relating
13   to these searches.
14               I think that makes sense because there is still not any
15   evidence before this Court that there were actually searches done to
16   try to locate Plaintiffs' customers.
17               In fact,   the evidence is just the opposite.      I know they
18   think these people all perjured themselves, but they gave
19   declarations to this Court that said they didn't run searches to
20   locate the Plaintiffs' customers.
21               MS. GOEBELSMANN:      And part of the reason we don't have the
22   full response to any of the individual beyond Penny Dabney.
23               THE COURT:     What specific Request?
24               MS. GOEBELSMANN:      I have them right here.
25               THE COURT:    Okay.    I have them right her in front of me.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                           1019
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                       ORAL HEARING ON PARTIES' MOTIONS
                              NOVEMBER 21, 2014

 1            MS. GOEBELSMANN:        Okay.     So, it's going to be-- it will
 2   seem like a lot, your Honor.
 3            So, it's Request 14,           16 --
 4            THE COURT:     One at a time.
 5            MS. GOEBELSMANN:        Some of these are similar to one another.
 6            THE COURT:     Just one at a time.
 7            MS. GOEBELSMANN:        So --
 8            THE COURT:     Any and all documents or communications
 9   evidencing any contracts; is that what you're talking about?
10            MS. GOEBELSMANN:        Yes.     That refers really to these
11   individuals conducting marketing to customers of competitors,
12   recording or copying license plate numbers.
13            THE COURT:     Hold on a minute.       Maybe I'm looking at the
14   wrong Request No. 14.
15            MS. GOEBELSMANN:        I'm sorry.     I may be combining them all.
16            THE COURT:     Don't.     One at a time so that I can understand
17   what you're dealing with.
18            MS. GOEBELSMANN:        Sure.
19            THE COURT:     Is No. 14 any and all documents or
20   communications evidencing any contracts between Schaefer and
21   DataTrax, PublicData and any other DMV database dated from any time
22   during his employment with TitleMax?
23            MS. GOEBELSMANN:        I'm not sure which Request you're on, your
24   Honor.
25            THE COURT:     Well,    it looks I was -- I clicked on Exhibit D.

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                             1020
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                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1            MS. GOEBELSMANN:        The first one that I was looking at that
 2   relates that -- that relates to James Schaeffer is Request No. 16 and
 3   that is any and all
 4            THE COUBT:     Which exhibit are you referring to?
 5            MS. GOEBELSMANN:        That should also be in Exhibit D.
 6            THE COURT:     Well,    I'm reading No. 14, and it says ''James
 7   Schaefer."
 8            MS. GOEBELSMANN:        Okay.   I'm not sure that we're moving with
 9   respect to No. 14.     The one that I marked that we're moving on that
10   we are concerned about is No. 16.
11            THE COURT:     16:     Any and all documents and communications
12   including but not limited to those located in marketing binders for
13   each TitleMax store in which James Schaefer has worked while employed
14   by TitleMax that refer or relates to James Schaefer marketing to
15   customers of competitors.
16            MR. GANNAWAY:        Your Honor,   that's part of their business.
17   They try to market to customers' competitors.          That is substantially
18   overbroad.
19            MS. GOEBELSMANN:        We believe that it's overbroad and we are
20   happy that it can be restricted to the circumstances that are at
21   issue by using the searches terms for Penny Dabney for any of those
22   employees.   We would like them to employ the same search terms they
23   used for her for these individuals to see if there are any responsive
24   documents.
25            MR. GANNAWAY:        To let your Honor know what the basis for

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                          1021
                                                                           132

                       ORAL HEARING ON PARTIES' MOTIONS
                              NOVEMBER 21, 2014

 1   them seeking all this, if you look at this list, James Schaefer, look
 2   at the subject of these Requests one search that turned up
 3   "Integrity" --
 4            THE COURT:     Hold on.    Before we start doing extensive
 5   searching to determine whether or not everybody has committed a
 6   violation of federal law or any other improper act, let's see what
 7   Penny Dabney's   Discovery turns up.
 8            And then, if it turns up anything, then we will expand this
 9   to the others.
10            MS. GOEBELSMANN:     Our only concern, your Honor, is that if
11   Penny Dobney -- we understand that
12            MR. WARGO:    Christina --
13            MS. GOEBELSMANN:     Okay.
14            THE COURT:    Thank you.
15            MS. GOEBELSMANN:     Moving forward with this same Motion to
16   Compel, the other Requests that we had it issue are 56, 57 and 58.          I

17   have a handout for your Honor.
18            THE COURT:     It'll take me a while to get there, but I'm
19   going to tennis finger here but I'll get there.
20            All documents sufficient to identify each district manager
21   for each district identified in Response to 54 from August 2011 to
22   June 2013.
23            Hold on a minute.     Identity of each district manager -- how
24   many districts were identified in 54?
25            MS. GOEBELSMANN:     Your Honor, we haven't received any

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                       1022
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                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1   response to that.
 2             MR. GANNAWAY:     54 asks for every district in Texas.    So, in
 3   other words, they want a list of every district manager throughout
 4   the State of Texas for almost a two-year time period with no
 5   indication why that would be relevant.
 6             MS. GOEBELSMANN:     It is relevant because there are -- there
 7   is a pending Order from this Court that certain production by your
 8   client is going to be relating to the kind of that occurrence in
 9   certain districts and regions.
10             So, we need to know where -- what those districts and
11   regions were.   We would also like to know what the district or region
12   is so that we will be able to do appropriate Discovery to determine
13   which in this illegal market practice.
14             THE COURT:     But you haven't limited it to any district or
15   region.
16             MS. GOEBELSMANN:    Oh, because we don't know what those
17   districts and regions are.
18             THE COURT:     I thought we were --
19             MS. GOEBELSMANN:     They haven't provided it to us.
20             THE COURT:    Well, 54 is:
21             All documents to identify the geographic state, name and
22   number of each of TitleMax's districts.
23             So, you're asking for district managers in every district in
24   Texas?
25             MS. GOEBELSMANN:    We've requested similar information

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                        1023
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                             ORAL HEARING ON PARTIES' MOTIONS
                                    NOVEMBER 21, 2014

 1   previously in this litigation.        It only went over the time period
 2   from 2012 to 2013.
 3               Since the expansion of the Over Lap List, we are missing
 4   employment history or the number of employees or who they were for
 5   the rest of the state with respect to that time period.
 6               We're trying to       since we've been burdened with trying to
 7   do Third-Party Discovery in order to identify who was employed --
 8   won't talk.     Won't identify the people who were involved.     They won't
 9   give us the contract.        They won't tell us what databases they were
10   using.     Everyone keeps clamming up.
11               We need to know who else was out there so that we can
12   conduct Discovery that was necessary, and it's been effective in this
13   case.
14               We have had the opportunity to depose a number of former
15   employees who have, in fact,       told us that they were engaged in this
16   type     of conduct.    With Randy Rainey over in Dallas.   Mike Martinez
17   over in Dallas.        These people were found based upon similar types of
18   Discovery what they are.
19               When they don't give us this information, they are
20   preventing us from actually being able to prove up the rest of our
21   case and we know that it's affective because it has worked so far.
22               MR. GANNAWAY:     Your Honor, there is nothing linking this
23   Request to any allegation by the Plaintiff.        They literally want a
24   list of every district manager.
25               And then if you parlay that to what she is about to tell

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                        1024
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                          ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014


 1   yo~,   they want to know what every single one of our employees -- 950
 2   employees in Texas what bonuses they were paid.
 3               Under the theory that, if they got a bonus, they must have
 4   done something through good performance that resulted from an illegal
 5   search.     That's literally the theory that they have here, your Honor.
 6               There is not any relevance to that.     And there is not any
 7   reason that they need to know every district manager regardless of
 8   where he's located -- he or she is located -- and regardless of
 9   whether there is an ounce of evidence from anyone or any document
10   that they implicated with any of the Plaintiffs' allegations.
11               MR. WARGO:     Your Honor, the way that has worked as we have
12   found in this case is that people from district to district talk to
13   one another.
14               Mr. Gannaway will admit that.     People hand information from
15   one office to another.        Hey, do a search like this.   Do an illegal
16   search like this and it spreads from office to office.
17               Those are the facts of this case that we have found in
18   Discovery.     But what we're trying to find out here is the name of
19   people --many of these people are going to be former employees.             The
20   names of these people to find out, hey, did this get handed to your
21   district?     Did you hear about this?     Who did you report to?   Did your
22   superior know about this?
23               That is -- as Mr. Johnson had said previously, that's the
24   spade work.     We're going to go ahead and call these people -- many of
25   them are former employees -- and find out did you hear about this.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                         1025
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                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   Did you know about this.         Did higher ups know about this.    That's our
 2   hard work.     But without identifying who those people were, we're
 3   stuck.
 4               And the evidence in this case -- Mr. Gannaway will not be
 5   able to deny this -- is from office to office they traded buy-out
 6   letters.     Word-of-mouth was like, oh, DataTrax, did you use that.
 7   PublicData.com.     That's how it spread from office to office.           And
 8   that's all we're trying to find out.
 9               The burden on them is negligent.        It's infinitesimal.     We
10   just want the names of these people.           We will do the work in
11   contacting them and find out what they knew.
12               THE COURT:     How many districts are there?
13               MR. GANNAWAY:     My client just left.
14               THE COURT:     I just noticed that, yeah.     You have an idea --
15   ballpark?
16               MR. GANNAWAY:     I think -- I want to say       for instance, in
17   Austin there's five to ten districts.           Something in that order to
18   give you a sense.        But I don't know the answer, your Honor.
19               MR. WARGO:    And,   your Honor,   respectfully, we're talking
20   about people who could lead to the Discovery of admissible
21   information.
22               Thank you, your Honor.
23               MR. GANNAWAY:     Your Honor,   I think what he --
24               THE COURT:     Just wait.   I can't listen and read.
25               MR. GANNAWAY:     Understood,   your Honor.   I am sorry.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                             1026
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                            ORAL HEARING ON PARTIES' MOTIONS
                                   NOVEMBER 21, 2014


 1               THE COURT:     So, you are not asking me to compel them to
 2   respond to No. 54, but you are asking me to get them to respond to
 3   56?   It seems to like 54 would be important to responding to 56.
 4               MS. GOEBELSMANN:          Yes.   And we can certainly have them
 5   respond to 54 as well.
 6               THE COURT:    Okay.        I'm going to ask you to respond to 54 and
 7   56.
 8               MR. WARGO:     Thank you,        your Honor.
 9               THE COURT:     If their legwork to date has turned up otherwise
10   wouldn't have turned up except for you identifying names of employees
11   for them to go interview,         I    think -- I think this is discoverable.
12               So,   54 and 56 the objections are overruled.
13               MR. WARGO:    Thank you, your Honor.
14               MS. GOEBELSMANN:          Does the same apply to 57?
15               THE COURT:     You didn't ask me to apply 57?
16               MS. GOEBELSMANN:          Your Honor, 57 is very similar corporate
17   response to 55 and that is just in regards regional managers.                     Our
18   understanding is that there is less regional managers than district
19   managers.
20               THE COURT:    Okay.        Then I agree.       55 and 57 as well.
21               MR. GANNAWAY:     Okay.
22               THE COURT:    What else?
23               MS. GOEBELSMANN:          The last Request in this particular Motion
24   to Compel is Request for Production 58.                Provide bonus information.
25   We are interested in obtaining this information because it will allow

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                                     1027
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                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   us to demonstrate to the jury when we essentially get there that
 2   there was an incentive for these people to engage in a particular
 3   type of conduct.
 4            That people were either being -- were awarded for their
 5   efforts that they engaged.     Or if they weren't being rewarded for
 6   their efforts, that maybe they were unable to meet performance goals
 7   they have been so desperate to do so punish to this particular
 8   methodology for located customers.
 9            THE COURT:    At this time I am going the deny 58.   I tink
10   that is overruled.     I am not sure that that is calculated to lead to
11   the discovery of admissible evidence.
12            We may address that issue at some other time in the future,
13   but at this point in time I'm denying it.
14            MS. GOEBELSMANN:     I think that brings us to the other Motion
15   to Compel, and this is a Motion to Compel where we have not gotten
16   documents on --
17            THE COURT:    Give me the date it was filed.
18            MS. GOEBELSMANN:     It was filed I believe on November 12.
19            THE COURT:     Specific items?
20            MS. GOEBELSMANN:     The specific items Request for Production
21   9 through 17.
22            THE COURT:    Are those items contained in your Motion, or do
23   I need to go look at actual Motion?
24            MS. GOEBELSMANN:     I believe that --
25            THE COURT:     The actual Request for Production.

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                     1028
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                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014

 1             MS. GOEBELSMANN:       It's probably easier for you to look at
 2   the actual Request for Production due to the length of those
 3   particular Requests.      I have a hand out for you.
 4             THE COURT:     Exhibit what?
 5             MS. GOEBELSMANN:       Let's see.
 6             THE COURT:     Exhibit B?
 7             MS. GOEBELSMANN:       It is Exhibit B.   I had to do a double
 8   take.   The letter to our other Motion.
 9             THE COURT:     Okay.    What number?
10            MS. GOEBELSMANN:        These are Requests 9 through 18.   We can
11   start at the top with No. 9.
12             THE COURT:     So, you want text messages from employees to
13   DataTrax, PublicData or DMV?
14            MS. GOEBELSMANN:        We're looking for all documents and
15   communications that involve correspondence between four particular
16   individuals who were employed by TitleMax that regard a number of
17   things including text messages.         And this particular Request is, as
18   you stated, the use of DataTrax, PublicData, DMV databases.
19            MR. GANNAWAY:      As you see, your Honor, we did agree to
20   produce much of what they were requesting
21            MS. GOEBELSMANN:        The problem is though
22            THE COURT:      Don't interrupt.     Come on.
23            MR. GANNAWAY:      I am sorry.
24            THE COURT:      It's going to go much quicker if you don't.
25            MR. GANNAWAY:      So, we --

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                         1029
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                       ORAL HEARING ON PARTIES' MOTIONS
                              NOVEMBER 21, 2014

 1            THE COURT:     Wait a minute.    Hold on a minute.     Let me read.
 2   Where is it?
 3            Necessarily what you're agreeing to produce if there were
 4   any communications from the four employees that are at issue?          Two
 5   are from people associated with DataTrax, PublicData,         DMV databases.
 6            MR. GANNAWAY:     We tried to locate that by looking for the
 7   search DataTrax, PublicData, DMV in the database-- I'm sorry-- in
 8   those folk's Email accounts and nothing came up.
 9            Nothing came up, your Honor.
10            MS. GOEBELSMANN:       Didn't make it clear nothing came up.
11   They said we object to the extent that these things have already been
12   produced, that there are no documents --
13            THE COURT:     Okay.    You need to amend your response.
14            MR. GANNAWAY:     Say "none.''   I will do it.   And I told
15   Mr. Johnson that there were none, but yes.
16            THE COURT:     You still have to do it.
17            MR. GANNAWAY:     Okay.
18            THE COURT:     Okay.
19            MR. GANNAWAY:     Well,   I don't think it's quite accurate that
20   there were none and there were just a couple of items on the
21   Privilege Log that was provided.
22            THE COURT:     File a Supplemental Response to this Request.
23   What's next?
24            MS. GOEBELSMANN:       The remaining Requests are ones that are
25   very familiar to your Honor, I'm sure,      in regard to marketing to

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                          1030
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                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   LoanStar's customers and their use of DMV databases.          Really looking
 2   for communications involving
 3            THE COURT:     Tell me the numbers.
 4            MS. GOEBELSMANN:       So, you can go to-- you can go to No. 11.
 5            THE COURT:     Okay.    Give me the numbers.     Just go down the
 6   list.
 7            MS. GOEBELSMANN:       11.

 8            THE COURT:     Yes.
 9            MS. GOEBELSMANN:       12, 13, 14, 15, 16 and 17.
10            THE COURT:     Any and all documents including text messages by
11   any corporate employee that refer or relate to marketing to customers
12   of LoanStar or Integrity.
13            MR. GANNAWAY:     As you see, I object to the text messages
14   but did say we will produce responsive non-further documents that
15   refer or related to marketing customer of Integrity, which I think
16   meets the Request.
17            And I will -- I can amend to say --
18            THE COURT:     But the question is what they -- what -- here is
19   my issue with Discovery in general.          Y'all may have heard it or not:
20            Saying we will produce doesn't help me because I don't know
21   if you have anything or not.          We will supplement doesn't help me
22   because I don't know if you have anything or not.
23            So, you have to tell me whether you have something to
24   produce and you also have to tell them whether you have or don't have
25   something to produce.

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                          1031
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                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014

 1            MR. GANNAWAY:    Understood and I can amend to do that.     I can
 2   tell them the search terms we used.     With respect to all of their
 3   Requests that she is going through the answer has been ''none'' based
 4   on the word search for these four folks.
 5            MS. GOEBELSMANN:    What were the key words searched that you
 6   used because?   we haven't received that information of all these
 7   individuals.
 8            MR. GANNAWAY:    I will amend and provide to you and explain
 9   it's none.
10            MS. GOEBELSMANN:   To the extent that there's any difference,
11   we would request that you use the same search terms that you used and
12   were listed in the Penny Dabney production:
13            Buy out, DataTrax, direct mails, DMV and Integrity,
14   LoanStar, PublicData, license plate, marketing plans, goals.
15            They   are all listed in the
16            MR. GANNAWAY:    The terms you've just said go far beyond some
17   of the Requests for Production.    We've had search terms that are
18   likely uncover things related to these Requests for Production, but I
19   will explain to you what those terms have been.
20            MS. GOEBELSMANN:    Yotir Honor, we really believe they should
21   be using the same search terms that were used for previously prepared
22   similar Requests because it's resulted in the production of
23   responsive information.
24            And since they've complied before, we know that you are
25   capable of doing it.

                         CYNTHIA MARTINEZ MONTALVO, CSR
                              152ND DISTRICT COURT
                                  713-368-6037
                               cynthiam@justex.net




                                                                     1032
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                             ORAL HEARING ON PARTIES' MOTIONS
                                    NOVEMBER 21, 2014

 1               MR. GANNAWAY:     Your Honor, that doesn't mean that -- for
 2   instance, she used the word "license plate" -- to just give an
 3   example
 4               THE COURT:     She is going to send you their universe of
 5   requested search terms.        You go through those search terms and look
 6   for terms that specifically relate to marketing to customers of
 7   LoanStar.
 8               That is on No. 11.        No. 12 -- these are all marketing?
 9               MR. GANNAWAY:     I will explain to your Honor what I have
10   done:
11               In general there is a lot of search terms we used but the
12   core ones that we have used are:
13               LoanStar,    Integrity,    DataTrax and PublicData.
14               The ones that are likely to relate to these databases.
15               We also searched the term "DMV'' even though that turns up a
16   lot of documents that are unlikely to be responsive.              But the core
17   ones -- PublicData,       Integrity,    DataTrax, LoanStar -- we have
18   definitely done that with respect to all of the four of those folks
19   and their Emails.
20               MS. GOEBELSMANN:     Marketing within a certain number of terms
21   would be a search term that would be very important in responsive to
22   a number of these Requests.
23               THE COURT:     Say that that again.
24               MS. GOEBELSMANN:     Marketing where you can do a certain
25   number of terms with competitors that would be responsive, but we

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                              1033
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                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014

 1   don't want to limit it at this point what we believe the list is.           I

 2   can certainly give some examples as to what should be searched.
 3             MR. GANNAWAY:     But -- and therein lies the problem, your
 4   Honor.   When you say "marketing'' -- anything that has "marketing" and
 5   "competitors," that could be a million documents that have nothing to
 6   do with this lawsuit that we would have to review that if we wanted
 7   to search something like that.
 8             THE COURT:     Have you done searches using search terms --
 9   well, the answer's'going to be "no"?
10             You want to use 4 or 5 search terms, and you want to use 12
11   or 13 search terms.     And my question what I'm curious whether the 4
12   or 5 would turn up what you have obtained versus using the 12 or 13.
13            MS. GOEBELSMANN:      Not necessarily.
14             THE COURT:    And we don't know the answer to that unless you
15   do it.
16             Send your list of search terms.     Consider expanding your
17   list beyond the 4 or 5 and see what kind of-- maybe you can get some
18   kind of an agreement.
19             This electronic Discovery is exploding in this country and
20   I'm not trying to make an editorial comment or something but it's
21   going nuts as everybody knows.
22             Send him your terms.     Expand it beyond the 4 that you're
23   talking about.   May not include every one of them but make a
24   good-faith effort to.
25             MR. GANNAWAY:    And to be fair,   your Honor, with every

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                       1034
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                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   production we have said these are the search terms we've used.          So,    I
 2   don't want to hide behind anything.
 3              THE COURT:     Okay.     That covers -- and that would cover most
 4   of these, wouldn't it?
 5              MS. GOEBELSMANN:       Yes.   Our only concern is that we might
 6   end up before your Honor, again
 7              THE COURT:     You will end up before me again.
 8              MR. WARGO:     May I make this more of a concrete       can we
 9   split the difference and let us pick the terms?          We have a certain
10   amount.    They have a certain amount.
11              I don't even know what their numbers are.        I think they're
12   at 10.    We are at 4.     We will split the difference.     We will pick the
13   search terms.
14             MR. GANNAWAY:      And,     your Honor, if the term is something
15   like ''marketing to competitor,'' I don't think it's fair to us to
16   review 10- or 20,000 documents that might pop up as a result of
17   something that general.
18             MS. GOEBELSMANN:        It would be the search terms that were
19   similarly used for Penny Dabney.          That certainly didn't result in
20   tens upon millions of documents.          You have already indicated that
21   other search terms and didn't have as much.
22              So,   I don't think -- really think, based upon your
23   representations, that we will be in that situation.
24              THE COURT:     I will tell you-- I will tell you what let's
25   do:

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




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                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014

 1            Use their search terms.        See how much documents come up.
 2   Talk between each other and see if you can work it out.        You're going
 3   to be back here.
 4            Mr. Wargo, as much as you think you're not, you're going to
 5   be back here.
 6            MR. WARGO:     I am sorry.     I am trying to avoid that.   What if
 7   we limit it to the Penny Dabney search terms?        Then split --
 8            THE COURT:     Do the search.     Use search their search terms
 9   and see what comes up.
10            MR. GANNAWAY:     I will.
11            THE COURT:     If it's a manageable number.     If it's a not a
12   manageable number then
13            MR. GANNAWAY:     We will work with them.
14            THE COURT:        talk to each other and try to work on it.
15            MR. WARGO:    Thank you, your Honor.
16            THE COURT:     Does that take care of those?
17            MS. GOEBELSMANN:        That takes care of those Requests and I
18   believe that the --
19            THE COURT:     Hard drives.
20            MS. GOEBELSMANN:        I believe that Mr. Wargo can speak as to a
21   particular aspect of these Requests regarding text messages.
22            MR. WARGO:    Well, did you make that representation that
23   there were no text messages responsive to this?
24            MR. GANNAWAY:     No.     Our position was that we do not own the
25   mobile devices that those employees use.        They are their own private

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




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                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   device, and they are not in our custody and control.
 2            We did not ask them for their text messages.        There is one
 3   exception:
 4            At the deposition of Linda McDonald-- who's one of those
 5   four people -- she specifically referenced a text message that would
 6   have been relevant and responsive.       They didn't ask her at that
 7   deposition but we did ask her during a break do you have that text
 8   message that you referenced anymore and she said ''no."
 9            She is no longer with the company.       But that's the only
10   that's the only evidence that there was a relevant text message
11   anywhere any time.
12            MR. WARGO:     Well, your Honor, we understand that       again,
13   it being a small community, we understand that there is a significant
14   amount of text messaging that's going on within that company.
15            And if they're making a representation that they're not
16   their phones, we will then send out subpoenas asking for Verizon or
17   et cetera for that information.
18            Thank you.    We will do the spade work.      Thank you, your
19   Honor.
20            THE COURT:     Is that it?
21            MS. GOEBELSMANN:     Almost.
22            THE COURT:    Hard drives?
23            MS. GOEBELSMANN:     Yes.    The hard drives are the last issue.
24   These are Requests for Production 5, 6 and 7.
25            MR. GANNAWAY:     I can short circuit this, your Honor.       I can

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        1037
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                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014

 1   tell what we've done since the meet-and-confer session we had about
 2   this.
 3            At the meet-and-confer session -- you remember the issue of
 4   the spreadsheet that I'm not sure--
 5            THE COURT:     Not at 5:35 on a Friday afternoon I don't.
 6            MR. GANNAWAY:     I can show you what it is, but that's -- the
 7   one piece of testimony that we have that someone saved a document
 8   that might have had PublicData or DataTrax stuff on it on the
 9   computer Todd Hale who testified to that.
10            THE COURT:     Okay.
11            MR. GANNAWAY:     We searched the hard drive data at the store
12   that he was at for the terms that would likely turn up PublicData and
13   DataTrax stuff.   PublicData, DataTrax and Integrity.    We didn't find
14   anything in that hard drive data.
15            They filed -- after his deposition, they had a specific
16   Request for Production directed to me that said find me that
17   spreadsheet.   I went and looked.    We had already done the search term
18   issues, but we looked at every single Excel spreadsheet in that hard
19   drive data and I found one that might be it.
20            THE COURT:     I do recall that.
21            MR. GANNAWAY:     And Hale wouldn't tell me.   He told me to
22   pound sand when I called him last.
23            THE COURT:     Right.
24            MR. GANNAWAY:     So, there is no more to search on that hard
25   drive.   I have looked for search terms and I have found a document

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                      1038
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                        ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014

 1   that I told them if you will drop the issue of Mr. Hale's store hard
 2   drive data I will give it to you.
 3             I'm not making any representation that it's it, but I will
 4   give it to you.   They've declined.
 5             Now, the other two hard drives they're seeking are from
 6   stores that at which Lucia Grajeda
 7             THE COURT:     Right.
 8             MR. GANNAWAY:     -- and Mr. DeLeon worked.    And those two
 9   folks pled the 5th.
10             Now, there's been no testimony that they saved stuff on
11   those hard drives but -- and at the meet-and-confer that we had on
12   this I told them I have not searched those hard drives because there
13   has been no testimony that there's been anything on them unlike the
14   Mr. Hale hard drive.
15             And I said if you have specific search terms that you want
16   me to look for,   specific documents that you think might be on those
17   hard drives, tell me but I haven't done any searches.
18             Yes, they filed that Motion to Compel.        I went ahead and did
19   searches myself to deal with this issue before we came before your
20   Honor.   And I searched PublicData, DataTrax an Integrity.        We found
21   two documents that were responsive.      One of which was already
22   produced in this case as a paper document.      And one of which
23   demonstrably on its face I am thinking even they will contend,
24   though, that we were searching PublicData to figure out information
25   about an existing TitleMax customer.      That's it.

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                         1039
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                             ORAL HEARING ON PARTIES' MOTIONS
                                    NOVEMBER 21, 2014


 1               I've run the searches that would be likely to recover
 2   anything that is relevant and that is responsive to their Discovery
 3   Requests on those hard drives.        And, therefore, they don't get
 4   anywhere close to the standard that needs to be met by In Re Weekly
 5   Homes to get our hard drives.
 6              We've done the search.       We've produced the information
 7   found.     It's done.
 8              MS. GOEBELSMANN:      Several corrections to what Mr. Gannaway
 9   said.
10               First off with regard to the production that he claims to
11   have made from the Felix DeLeon's data from his hard drive, we got
12   one page that was a result -- it's page 21 of 41 -- from a PublicData
13   or DataTrax search that listed an Integrity lien holder.
14              We don't know where the rest of document is and it had not
15   previously produced in Discovery even though it was responsive to one
16   of the first Requests for Production ever served in this case and
17   should have been provided in response to that Request.
18              Second, we still don't have the spreadsheet that I believe
19   is responsive to the Request for Production regarding Mr. Hale.
20   Although he tried to, you know, make us basically buy a pig in a
21   poke,    say I am not going to tell you what this but drop your entire
22   argument based upon this document, we weren't willing to do that
23   because we don't know what it is he has.
24              THE COURT:      No.   You shouldn't have done that.
25              Mr. Gannaway, that was interesting request on your part.            Do

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                         1040
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                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014

 1   you have       is there a spreadsheet?
 2              MR. GANNAWAY:     Yeah.     I can show it to.
 3              THE COURT:     Why don't you give it to them?     Have you given
 4   it to the Plaintiffs?
 5              MR. GANNAWAY:     No.
 6              THE COURT:     Why not?
 7              MR. GANNAWAY:     Because they said they were still reserving
 8   the right to pursue the hard drive issue.          There is no more hard
 9   drive issue to pursue.       I would like to give it to them and put this
10   issue to bed.
11              THE COURT:    Why can't you give it to them without
12   limitations?     It may put this thing to bed.
13              MR. GANNAWAY:     At your Honor's direction, I will do that.
14              THE COURT:     What's on that that causes you not to want to
15   produce it?
16              MR. GANNAWAY:     Nothing.     It's a list of names and addresses.
17   The point is I don't know that this --what they have asked for in
18   this Discovery Request.       I am making a guess it could be.      It's a
19   list of names and addresses.          I can show it to your Honor
20              THE COURT:     It won't have any meaning to me.
21              MR. GANNAWAY:     Well,    I just -- I just want to let your Honor
22   know if this clearly was Mr. Hale's document I would have produced
23   it, but I don't have any reason to believe that.           I will give it to
24   opposing counsel now.
25              MR. WARGO:    Well,     I can't let that one go, your Honor,

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                           1041
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                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1   because if there is any reasonable belief by an officer of this Court
 2   that this is a relevant document, the gamesmanship involved in waving
 3   the document in front of your Honor saying this may be it but I'm not
 4   going to give to unless you reduce your rights,         your Honor, that's
 5   inappropriate.
 6               THE COURT:     You've got it.
 7               MR. WARGO:     Thank you.
 8               THE COURT:     Right?
 9               MR. WARGO:    Now we do,    your Honor.
10               THE COURT:     You have it now.
11               MR. WARGO:    And we had to move to Compel to get to this
12   point.
13               THE COURT:     You shouldn't have had to do that.    You should
14   have --
15               MR. WARGO:    We sought our fees,    your Honor.
16               THE COURT:     You should have gone ahead and given it to them.
17   Have you provided them with the documentation of the searches that
18   you have done on the other -- on all three of these computers?
19               MR. GANNAWAY:     As part of our response to their Motion and
20   then I produced the documents.
21               THE COURT:    Have you provided the documentation which
22   indicates what the searches were that you performed?
23               MR. GANNAWAY:     I say in the Motion that we looked for
24   DataTrax,    Integrity and LoanStar.
25               THE COURT:    And is there demonstration of those searches?

                              CYNTHIA MARTINEZ MONTALVO,   CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                          1042
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                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014


 1   Does -- I've never performed a hard drive search.         But when you
 2   perform a search of a hard drive using specific terms, does it
 3   produce a document which shows what the nature of the hard drive
 4   search was including what the search terms were and whether the
 5   search was productive?
 6              MR. GANNAWAY:     No.   I will tell you it's sort of like we use
 7   a tool called ''Relativity."       We load all our contents of the hard
 8   drive in Relativity.       It's sort of like Google.     I will search the
 9   word "DataTrax."    And any document on that hard drive that contains
10   the word ''DataTrax'' will come up in a list of search results.          And I
11   will have to click all of them to see if they are responsive to the
12   Request.
13              MR. WARGO:    Your Honor, it depends how you do it.      And I do
14   not doubt that Mr. Gannaway just told you what he did and what
15   happened when he did it.       But this is a very easy thing to do that
16   people do all the time who are in IT.
17              I'm sure his IT guy at his law firm could go on there, run a
18   search and then you would have a print out -- a screen shot that says
19   I ran this and it came back zero.        Absolutely, your Honor.
20              MR. GANNAWAY:     Your Honor, there is no requirement to do
21   that.
22              THE COURT:     No, there isn't.    But there is -- you're asking
23   them to believe you.
24              MR. GANNAWAY:     Whenever we respond to Discovery, we're
25   asking the other side to believe us.         There is nothing extraordinary

                             CYNTHIA MARTINEZ MONTALVO, CSR
                                  152ND DISTRICT COURT
                                      713-368-6037
                                   cynthiam@justex.net




                                                                          1043
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                            ORAL HEARING ON PARTIES' MOTIONS
                                   NOVEMBER 21, 2014


 1   about this one.
 2               THE COURT:     And-- well,     I'm not so sure about that, Mr.
 3   Gannaway.     With the number of times they have been in here and as
 4   much as I know you and Mr. Johnson are working well together,             I don't
 5   feel the love amongst you guys completely.
 6               Have your IT guy -- which I know your firm has or I presume
 7   they do -- produce the report of the review.           Do the search.     Show --
 8   do the screen shot that we're talking.
 9               MR. GANNAWAY:     A screen shot of how many results came up?
10               MR. WARGO:     The search terms and the results.
11               THE COURT:     The search terms and the results.
12               MR. GANNAWAY:     Okay.
13               MR. WARGO:     Thank you,    your Honor.
14               THE COURT:     Because what you're telling me is nothing came
15   up.
16               MR. GANNAWAY:     No.     Two things came up.
17               THE COURT:     Right.
18               MR. GANNAWAY:     Let me be clear:
19               The word ''Integrity'' produced things.         Like Integrity is one
20   of the mantras of the company.           One of the company's core beliefs
21   that their employees should operate under.
22               So, yes,   "Integrity'' came up with results that were not
23   responsive to their Request.           Like "applications" and "Integrity" are
24   part of TitleMax's deal.        Your performance review.        Do you believe
25   you've met this standard.

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                              1044
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                          ORAL HEARING ON PARTIES' MOTIONS
                                 NOVEMBER 21, 2014


 1               So, yes, there were things that came up.        The only two that
 2   related to database searches were the two that I produced to them,
 3   your Honor.
 4               THE COURT:     Do the search again.     Show search terms.
 5   Provide the report and provide it to the Plaintiffs.
 6               MR. GANNAWAY:     And to be clear:
 7               The report there were 40 documents that matched the word
 8   "Integrity".     If that's what they want --
 9               THE COURT:     Does it indicate what those documents are?
10               MR. GANNAWAY:     No.
11               THE COURT:     Do the search.     Produce the report.   Y'all look
12   at it.   And if you need to talk about it -- but go ahead and do it
13   and produce the documents.          Not the documents that --
14               MR. GANNAWAY:     Show them the screen shots of how many came
15   up?
16               THE COURT:     Show them the screen shot and show them what you
17   produced.
18               MR. GANNAWAY:    Okay.
19               THE COURT:    Okay.
20               MR. WARGO:    Thank you, your Honor.
21               THE COURT:    Thank you very much?
22               MS. GOEBELSMANN:        That's all for the Motion to Compel,    your
23   Honor.
24               THE COURT:     Thank you very much.     Motion for Continuance.
25   Did somebody oppose?

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                              1045
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                       ORAL HEARING ON PARTIES' MOTIONS
                              NOVEMBER 21, 2014


 1            MS. LOVETT:     That would be it.
 2            THE COURT:     Why are you opposing it?
 3            MS. LOVETT:     Because the longer this goes on, the more
 4   difficult it's for my client to continue to do business.       There are
 5   corollary lawsuits, as your Honor now knows, in Georgia this week, in
 6   South Carolina all boot strapping from your Honor's litigation
 7   whether you're aware of that or not.
 8            And there is -- assuming that we adhere to the Court's
 9   Orders, and we will to stay away from the rabbit trails and cut to
10   the chase, there is no reason this case can't be tried four and a
11   half months from now, your Honor.
12            There's not --
13            THE COURT:     Well, I'm not so sure I agree with that because
14   you have this new Overlap List that still hasn't been produced and
15   we don't -- and Judge Peoples and his folks are still working on
16   that, correct?
17            MR. JOHNSON:     Yes, sir.
18            THE COURT:     Do you have any kind of indication that when
19   that Overlap List is going to be produced?
20            MR. WARGO:     Do you know, counsel?
21            MS. LOVETT:     I will answer the Judge's question.
22            Your Honor, the answer is:
23            I have no idea when it's going to be produced.        But what I
24   do know is that, according to representations counsel's made here
25   today, when it is produced       because Judge People's is working with

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                        1046
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                        ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014

 1   a technical advisor.     When it's produced we will have a discrete list
 2   of names and we will have -- presumably and we will then have,
 3   according to them if what they told you is correct about their
 4   damages calculation as they were directed to provide under the Order
 5   of this Court, then they will just plug those names, enter that
 6   information and we will have a damage model.
 7             So, my only my plea to the Court is that, if we drag this
 8   out too far -- and perhaps the Court could make an inquiry of Judge
 9   Peoples as to what a reasonable estimate would be.      Because every
10   single day the reputational risk that goes with this and the
11   multiplication of litigation that goes with this is harming my
12   client.
13             We're ready to go.
14             THE COURT:    Well, we can't do anything about multiplication
15   of litigation in Court.
16             MS. LOVETT:     I know that, Judge.
17             THE COURT:    This Court has no any control over that and will
18   not have any control over how many times your client has to respond
19   to any lawsuits filed against them.      So, that's not a factor.
20             The Overlap -- our trial setting in part was determined
21   based on the production of the Overlap List giving the experts enough
22   time to review it and produce reports that are substantive and
23   helpful in getting this case to mediation, among other things.
24             We're done for the year for all practical purposes in doing
25   productive Discovery.

                            CYNTHIA MARTINEZ MONTALVO, CSR
                                 152ND DISTRICT COURT
                                     713-368-6037
                                  cynthiam@justex.net




                                                                         1047
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                        ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014

 1            How much work gets done from Thanksgiving to Christmas on
 2   litigation?
 3            MR. JOHNSON:     Very little, your Honor.
 4            MS. LOVETT:     Unfortunately at my firm a little too much.
 5            THE COURT:     A little too much?
 6            MS. LOVETT:     I've got January trials.
 7            THE COURT:     Okay.   So, I am inclined to grant the Motion for
 8   Continuance.   Problem that I have is at June trial date.      And I will
 9   tell you why I have a problem with a June trial date and that is
10   because our policy on Vacation Letters would allow you, anyone here,
11   here to designate -- well, I shouldn't say that.       Only lead counsel
12   to designate a week in June as a vacation week and that gives you
13   your own little Continuance.
14            You may not do that it that way in Atlanta or Los Angeles
15   but we have that policy here that allows people to have a life during
16   the summer and you can designate four weeks.
17            MR. WARGO:     It gets hot here.
18            THE COURT:     Designate four weeks in the summertime in which
19   time you cannot be compelled to be put to trial.
20            If I grant you a June trial date, which is what you're
21   asking for, who ever the lead counsel is could very easily give
22   themselves a Continuance.
23            And I really want to avoid that because I think we are at a
24   time where we have to fish or cut bait, so to speak.
25            MR. WARGO:     Your Honor, does your rule -- and I'm sorry for

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                       1048
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                           ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014

 1   the ignorance of this -- is it July or summer?
 2               THE COURT:     Summer months.     June, July and August.
 3               MR. WARGO:     Your Honor, we're the Plaintiffs and we want to
 4   try this case and we want to try it soon.           I'm not going-- I take a
 5   vacation, but I'm not going to take vacation to mess up Your Honor's
 6   calendar.
 7               Okay.   So, you have that representation from me.
 8               THE COURT:     Let me just ask it this way:
 9               Who's lead counsel?        Is it --
10               MS. LOVETT:     Yes, sir.
11               THE COURT:     If I grant you a trial date in June -- what is
12   the date -- June what --
13               MR. GANNAWAY:     Your Honor, I think we may have submitted an
14   Order that permitted your coordinator to enter the appropriate date.
15               THE COURT:     Okay.     I will grant the continuance.     I will
16   reset the case for June.           I will put it in the first Docket in June,
17   which is June 1st.        Okay.     I heard a grunt and a groan.     What's the
18   problem with June 1st?
19               MS. LOVETT:     I know I am in trial May 15th in Marshall,
20   Texas for two weeks.
21               THE COURT:     Would you rather be there, or would you rather
22   be here?
23               MS. LOVETT:     Well, habeas corpus, your Honor, I'd rather be
24   with Judge Gilstrap.
25               THE COURT:     June 15th is the next --

                              CYNTHIA MARTINEZ MONTALVO, CSR
                                   152ND DISTRICT COURT
                                       713-368-6037
                                    cynthiam@justex.net




                                                                              1049
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                       ORAL HEARING ON PARTIES' MOTIONS
                              NOVEMBER 21, 2014

 1            MR. JOHNSON:     That is agreeable.
 2            THE COURT:     Is that okay?     I will set it for June 15th so
 3   long as have and assurance by those here -- those lead counsel
 4   because that's really the only attorneys that have vacation
 5            MR. WARGO:     So,    I can't switch it for him if --
 6            THE COURT:     Whoever the lead counsel will not designate that
 7   period as their vacation period.
 8            MR. WARGO:     Yes,    your Honor.
 9            THE COURT:     You agree to that.
10            MR. WARGO:     Yes,    your Honor.
11            THE COURT:     Mr. Johnson?
12            MR. JOHNSON:     Yes,    your Honor.
13            THE COURT:     Mr. Gannaway?
14            MR. GANNAWAY:        I'm not sure who is going to be lead counsel
15   on our side, but we will talk about it with the client.
16            THE COURT:     Well,    I'm going to get to her in just a second.
17   Do you agree to that?
18            MR. GANNAWAY:        I won't do a June 15th vacation.
19            THE COURT:     Thank you.     Ms. Lovett?
20            MS. LOVETT:     I will not.
21            THE COURT:     Thank you very much.
22            Are these the four that matter as far as lead counsel is
23   concerned?
24            MS. LOVETT:     And,    your Honor, the truth is without
25   Mr. Hancock and Garcia to tell you,       I can't represent to you that I

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                         1050
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                         ORAL HEARING ON PARTIES' MOTIONS
                                NOVEMBER 21, 2014

 1   outrank them.    Although,     I can arm wrestle with them.
 2            MR. GANNAWAY:        And I'm certainly not contending for David
 3   Beck.
 4            THE COURT:     Oh,    I forgot that David Beck is on the Pleadings
 5   here.   Is he the attorney in charge?
 6            MR. GANNAWAY:        He's the first listed on the first filing
 7   that we had.     I suppose if that is the standard.        I don't think that
 8   we designated someone -- specifically an attorney in charge in our
 9   initial Pleading I think.
10            MR. WARGO:     Your Honor, we're happy to work with them if
11   they need an extra week or two.        Okay.   So, maybe we can get back to
12   you on that?
13            THE COURT:     I will tell you that on my Docket Sheet lists
14   Johnson and Gannaway as the attorneys.
15            MR. WARGO:     Well,    you have that representation from our
16   said.
17            THE COURT:     And you apparently signed the Pleading.
18   Otherwise, it would be David Beck.
19            Okay.    Anything else?
20            MR. JOHNSON:     Your Honor, we appreciate your time.             And I'm
21   impressed with your stamina.
22            THE COURT:     Well,    I was losing it there.
23            MS. LOVETT:     I'm not the least bit surprised.
24            THE COURT:     And I had represented to my Bailiff this would
25   only take a couple hours.        I guess I was wrong.     For which,   I

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                                1051
                                                             162

                       ORAL HEARING ON PARTIES' MOTIONS
                               NOVEMBER 21, 2014

 1   apologize.
 2            Everybody come get your documents.
 3                      (Hearing ended)
 4
 5
 6
 7

 8
 9
10
11
12
13
14
15
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17
18
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21
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                        CYNTHIA MARTINEZ MONTALVO, CSR
                             152ND DISTRICT COURT
                                 713-368-6037
                              cynthiam@justex.net




                                                          1052
                                                                          163

                           ORAL HEARING ON PARTIES' MOTIONS
                                  NOVEMBER 21, 2014

 1   STATE OF TEXAS
 2   COUNTY OF HARRIS
 3
 4        I, Cynthia Martinez Montalvo, Official Court Reporter in and for
 5   the 152nd District Court of Harris, State of Texas, do hereby certify
 6   that the above and foregoing contains a true and correct transcription
 7   of all portions of evidence and other proceedings requested in writing
 8   by counsel for the parties to be included in this volume of the
 9   Reporter's Record in the above-styled and numbered cause, all of which
10   occurred in open court or in chambers and were reported by me.
11        I further certify that this Reporter's Record of the proceedings
12   truly and correctly reflects the exhibits, if any, offered by the
13   respective parties.
14        I further certify that the total cost for the preparation of this
15   Reporter's Record is $
                              ------- and was paid/will be paid by BECK
16   REDDEN.
17
                                 /s/ Cynthia Martinez Montalvo
18
                                 Cynthia Martinez Montalvo, CSR
19                               Texas CSR 6863
                                 Official Court Reporter
20                               152nd District Court
                                 Harris County, Texas
21                               201 Caroline, 11th Foor
                                 Houston, Texas 77002
22                               Telephone:  713-368-6037
                                 Expiration:  12/31/2014
23
24
25

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                      1053
                                             23rd [61 49/24 109/5 113/3123/2 124/13    713-654-1301 [11 2/6
I                                            124/14                                    713-754-7541 [11 3/13
 s1'111~                                     24 [21 78/14127/4                         713-951-3720 [11 3/6
0                                            24036617 [11 3/3                          713-951-6263 [11 3/6
                                             24046165 [11 2/3                          738764 [11 2/10
o~;!rs~,!I1
01 2
             f{,10
      128 1128 8
                                             24th [11 113/24                           75241 [11 114/16
                                             25 [11 127/4                              7541 [11 3/13
1                                            25,000 [11 103/10                         77002 [31 2/5 3/12163/21
                                             26th [11 2/13                             77010 f1i ,;;:
1-A [11 13/24                                27,066 [11 116/12
1-C [11 15/23                                2721 [11 63/2                             8
10 [41 18/14 108/24145/12 145/16             273379 [11 2/19                           s,ooo [71 106/5 109!15 109!24 121j17
10,000 [11 9/10                              28 [21 77/12 78/12                        121/21121/24 122/5
100 [11 65/25                                284534 [11 2/11                           Bsoo [151 19j1119/1519/22 2o/8 2oj21
1000 [11 3/11                                2ndvr';;1 6;,;;(,,-112 6'117 6"12167/16   2~;~2 ~7!22 ~~~/25 21/7 21/14 21/19 22/6
1001 [11 2/4                                                                           22 22 ;, oa, io
1006 [31 29/14 29/20 30/22                   3
IOK [41 51/10 57/157/158/18                  30 [11 49/18                              9
IOK's [11 58/17                              30,000 [11 95/22                          90 [51 33/8103/11107/11108/18108/20
lOth [31 18/18 49/8 49/15                    30,ooo-page [11 95/20                     90067 [11 2/21
11 [151 5/9 6/213/2 19/1219/16 20/15 36/3
 36/7 38/3 75/15 92/3127/4141/4141/7
                                             30309 [11 2/13
                                             310-853-6300 [11 2/21
                                                                                       95~ f~l 2;~5/1
                                                                                       aOo 1      12
 143/8                                       310-853-6333 [11 2/22
nth [41 37/18 77/1178/1163/21                31St [41 32/20 32/25 34/8 34/8
                                                                                       A
12 [81 72/8 73/8127/3138/18141/9143/8        33 [31 61/6 61/24 72/13                   a tool [11 153/7
 144/10 144/12                               33584 [11 1/3                             abide [21 68/25 85/17
12/31/2014 [11 163/22                        3541 [11 3/12                             ABIGAIL [31 2/11 4/11 65/15
1221 [11 3/4                                 36 [11 127/4                              able [231 6/614/714/714/25 17/5 18/10
13 [41 50/24141/9144/11144/12                37 [11 127/4                              18/14 22/3 36/11 50/23 51/22 68/14 73/10
1301 [11 2/6
                                             ~~~~~ ~:1 ~;g
                                                                                       73/1199/25110/23111/15115/14118/4120/8
13th [21 37/19 49/21                                                                   133/12 134/20 136/5
14 [151 88/2111/11111/11126/24126/25                                                   about [941 6/21 8/20 8/2410/3 10/1110/14
127/1127/2 127/6 127/18 130/3 130/14         4                                         13/7 13/14 25/24 27/3 29/25 32/24 33/16
130/19 131/6 131/9 141/9                     40 [11 155/7                              35/22 39/15 39/18 39/19 39/2142/143/2
15 [31 17/16 61/2 141/9                      404-853-1500 [11 2/14                     43/14 44/14 44/2145/24 46/16 48/16 49/3
15,000 [11 18/14                             404-853-1506 [11 2/14                     50/14 50/20 50/24 52/12 52/14 52/14 53/20
1500 [11 2/14                                41 [11 150/12                             57/16 57/19 57/2157/22 57/25 58/1159/3
1506 [11 2/14                                4500 [11 3/5                               6oj161/2o 61!23 63/23 64/22 65/8 67!21
1520 [11 2/20                                485,000 [11 78/3                           69/3 71/19 74/16 77/178/3 78/24 79/9 79/12
152ND [31 1/10 163/5 163/20                  49 [11 127/4                               84/3 86/3 86/5 89/5 90!7 90!15 90!18 93/3
15th [51 48/7159/19 159/25 160/2 160/18
16 [51 130/3 131/2 131/10 131/11141/9        4:0~ ~~1 7~~~4
                                              :20 1 n2 22
                                                                                       93/13 95/23 96/9 99/22101/20103/25
                                                                                       106/21111/10118/20120/4120/14121/17
17 [51 7/12 38/9 62/6138/21141/9                                                       130/9 131/10 134/25135/21135/22135/25
1700 [11 3/11                                5                                         136/1136/1136/20 144/23 148/1149/25
17th [11 102/24                              so,ooo [21 94/14 98/8                     154/1154/2155/12157/3157/14160/15
18 [31 38/9 63/2 139/10                      so-dollar [21 82/17 84/7                  above [61 1/18 47/19 52/6 52/7163/6163/9
1888 [11 2/20                                54 [91 132/21132/24133/2133/20137/2       above-styled [11 163/9
18th [41 33/10 79/12 89/15 107/15            137/3137/5137/6137/12                     above-titled [11 1/18
1998 [11 110/9                               55 [21 137/17137/20                       absolutely [51 58/14 65/20 87/12 119/9
19th [21 79/7 79/11                          s6 [s1 132/16137/3137/3137/7137/12        153/19
1B3 [11 110/12                               57 [51 132/16137/14137/15137/16137/20     absurdity [11 17/14
IB?:!~ 62
       [~t110(~0         '
           1~~ 1 1'"'1~'"' 118
                                             ss [31 132/16 137/24 138/9                Acanum [11 93/13
1St                                          s:oo [21 128/4128/5                       accept [11 5/25
2                                            s:~5rl~1
                                             l~th     1~8/,5ua/a
                                                  2 102id-1
                                                                                       access [31 68/15 70/5 99/19
                                                                                       according [71 7/18 70/20 70/22123/13
20 [21 30/21 62/23                                                                     127/12156/24157/3
20,000 [41 16/1016/1117/16145/16             6                                         accordingly [11 84/1
2o,oooo [1] t6/n                             6,ooo [11 6oj21                           account [31 77/22 99/16107/20
2000 [11 110/12                              6o [11 44/22                              accounts [41 17/17 99/19 106/21140/8
2003 [11 62/3                                6037 [11 163/22                           accurate [61 37/1175/22 85/24 89/4119/1
201 [11 163/21                               6100 [11 2/6                              140/19
2011 [31 111/4129/3 132/21                   6263 [11 3/6                              aclmowledge [21 87/13 91/16
2012 [51 47/148/2 48/7 53/19 134/2           6300 [11 2/21                             act [11 132/6
2013 [151 21/23 24/4 75/17103/2111/4 111/5   6333 [11 2/22                             acting [11 52/5
113/3113/24117/1123/2124/13124/14129/3       6863 [11 163/19                           action [51 70/16 70/18 71/19 90/6 90/17
132/22 134/2                                 6:00 [21 23/22 128/6                      actions [21 9/18 73/19
2013-33584 [11 1/3
2014 [31 1/17129/11163/22
                                             6:3.~!~1 ~~?/6;/;
                                             6th 2 "176 10
                                                                                       activities [21 103/15 104/3
                                                                                       activity [31 61/9 62/5 97/4
21 [31 63/16 64/21150/12                                                               acts [21 61/9 61/22
21ST [11 1/17                                7                                         actual [61 15/216/25 39/4138/23138/25
22 [11 63/23                                 713-368-6037 [11 163/22                   139/2
22nd [11 82/25                               713-374-3541 [11 3/12                     actually [151 6/7 6oj2 61j2o 101j11102/8
23 [31 109/7 109/7 113/12                    713-470-6100 [11 2/6                      106/22107/15110/7110/9112/5118/14



                                                                                                                        1054
                                               69/21 69/24 70/24 71/10 72/7 72/1178/20      131/3 131/11131/21131/23 132/6132/25
A                                              80/3 80/21 83/8 83/25 85/23 86/23 86/25      133/14134/23 135/6 135/6135/9 135/10
actually•.• [41 123j22 126/9 129/15 134/20     87/9 89/12 91/21 92/3 92/15 93/17 93/22      140/4 141/10 141/11142/10 147/11149/3
add [11 84/11                                  94/195/20 95/2197/13 98/1199/23101/4         149/17151j2o 151/23 152/1153/9 156/18
addition [21 71/23 111/18                      102/18104/21106/19108/4108/14111/13          157/17157/18157/19163/12
additional [41 20/21 24/7104/8 104/25          112/6112/25 115/15 116/11117/24118/17        anybody [21 52/6 94/22
Additionally [11 18/17                         121j25 121j25 122j1123j13 124j16 126/11      anybody's [11 22/13
address [71 79/20 8of6 8oj7 88/3 93/9          127/21129/18130/8130/15130/19131/3           anymore [41 22/23 62/2 112j10 147/8
 115/6 138j12                                  131/11132/1132/20133/21136/8 139/14          anyone [61 64/3 95/15 97/5 99/2135/9
addresses [31 94/4 151/16 151/19               141/10 142/2142/6142/15 143/8 143/18         158/10
adds [11 73/4                                  152/18 153/7153/11153/16 155/22156/6         anything [37] 10/110/19 21/7 42/1142/15
adequately [1] 104/13                          157/24163/7163/9                             42j18 53/1155/13 58/11 64/1173/15 84/5
adhere [1] 156/8                              allegation [4] 19/18 22/7105/12 134/23         85/12 87/8 89/24 91! 4 91!17 91/24 94/21
adjectives [1] 75/3                           allegations [11] 8/20 47/4 47/10 47/19 63/1    94/23 99/5 99/23104/20 106/21109/15
admissible [7] 30/4 30/13 37/16119/12          63/17 63/18 76/7 98/23 104/2 135/10          117/7120/4132/8 141/21141/22144/4145/2
 119/14136/20 138/11                          allege [3] 19/519/7 25/20                     148/14149/13150/2157/14161/19
admit [21 87/13 135/14                        alleged [5] 7/24 38/13 47/2 61/7 69/13        anywhere [41 40/22 67/11147/11150/4
advance [1] 91/23                             alleging [2] 51/23 67/15                      Apex [14] 45/6 45/24 46/7 46/21 50/4 50/4
advisement [1] 91/8                           allow [2] 137/25 158/10                       50/8 51!152!16 52j2o 52!23 52!25 58/12
advisor [2] 35/16 157/1                       allows [1] 158/15                             58/14
affect [3] 68/10 99/1 99/4                    almost [7] 14/10 19/24 24/25 43/17 95/20      apologies [1] 4/21
affected [7] 13/13 95/15 95/16 95/17 98/5      133/4147/21                                  apologize [5] 27/15 44/3 44/6 54/6162/1
 98/6 99/24                                   along [3] 4/19 92/11 94/19                    apparently [8] 50/2 50/10 84/25 85/19
affecting [1] 98/25                           already [26] 17/1717j2o 18j20 27/6 43/25       93/6 102/14113/15 161/17
affective [1] 134/21                           46/9 6S/7 67/2 69/18 71/24 93/2 93/S 93/7    appear [3] 4/22 19/2 97/21
affectively [1] 111/14                        9S/4 96/12106j61o6/19108/14112/4116j24        APPEARANCES [1] 2/1
affects [5] 98j22 10ojs 100j11100j11          117/12 122/19 140/11145/20 148/17149/21       appeared [1] 22/22
100/11                                        also [23] 4/12 6/9 29/15 46/16 s6/18 66/19    appearing [1] 4/12
affidavit [14] 41/2142/6 S3/24 S4/2 S4/14     79/8 81/10 83/17 8S/18 93/S 97/1S104/6        appears [2] 22/24114/17
 S4/17 S5/11SS/12 109/22 117/16121/19         104/23 108/21118/8120/11129/3 129/S           applicable [9] 61/10 61/14 62/s 62/16
123/1S 124/9 126/21                           131/S 133/11141/24143/1S                       62!24 6s/4 6sj12 66/s 66/16
affidavits [6] 13/10 108/4118j9118j21         altercation [3] 63/11 68/3 68/s               application [1] 116/18
120/12 122/23                                 alternatives [1] 33/18                        applications [1] 1S4/23
affiliated [1] 97/20                          Altltough [2] 1S0/20 161/1                    applied [2] 11/4 s2/22
affiliates [1] 4S/12                          always [5] 31j16 77/2190j2o 90j21126j16       applies [6] 4S/2S S2/16 S2/18 58j12 58/13
afoul [11 61/1S                               am [40] 4/21S/8 8/2412/1314/1S15/24           s8/15
after [18] 14/14 24/1S 30/2133/23 36/1        18j11 29/1130/20 30/25 38/4 43/20 49/17       apply [5] 46/22 46/24 64/3 137/14137/1s
7S/2o 8o/6 82/9 102j21103/1104/14 108/s       s3/8 ss/1s s8!12 6o/13 6oj21 62/2s 70!24      appreciate [7] 31/3 38/1 66/2191/12 91/14
111/2111/20 128/S128/1S 128/17148/1S          76/7 81/24 8S/18 87/24 92/1S100/14 101/16      92/13 161/20
afternoon [3] 92/3 126j23 148/s               119/19 121/2 136/2S 138/9 138/10 139/23       approach [9] 12/16 31/17 60/24 81j22
again [19] 4/14 28/7 32j10 36/s S9/23         146/6 146/6 149/23 1S0/21151/18 1S8/7          93/23110/4112/13112/18 127/1S
79/10 80/17 83/1 90/6 90/19 91/7 91/14        1S9/19                                        approaches [1] 88/24
10S/3 126/3 143/23 14S/6 14S/7147/12 1S5/4    amazed [1] 116/s                              appropriate [3] 44/2 133/12 1S9/14
against [8] 13/8 s1/21 66/2S 83/13 89/2       amend [6] 42/12 42/17140/13 141!17142/1       approval [4] 79/2180/18 80/18 88/4
96/20 97/19157/19                             142/8                                         approved [7] 82/19 84/7 84/11 8S/13 87/15
Agency [1] 93/14                              amended [7] 18/2419/2131/9 72/13 76/9          87/20 89/1
agent [2] 9/8 SS/7                            77/10 87/17                                   approving [2] 8S/188/23
ago [4] 16/188/18 89/6 97/18                  among [1] 1S7/23                              are [269]
agree [14] 26/1S 28/14 31/4 32/4 32/9 32/11   amongst [1] 154/5                             area [1] 83/19
36/12120/16121/2137/20 139/191S6/13           amount [3] 14S/10 14S/10 147/14               areas [2] 67/17 83/18
160/9 160/17                                  analysis [2] 7/19 67/S                        aren't [6] S/7 2S/24 62/8 90/9 111/7111/23
agreeable [2] 33/19 160/1                     analyze [1] 43/6                              arguably [2] 64/23 6S/12
agreed [9] 64/1 83/S 84/8 90/24 91/1 96/1     and put [1] 1S1/9                             argue [8] S2/21 S3/18 53/20 54/20 SS/24
106/13 106/18 117/2                           and/or [3] 8/4 8S/188/23                       56/2 61/19 64/17
agreeing [2] 119/8 140/3                      Angeles [41 2j21 72/10 101j8 1S8/14           argued [21 so/24 S2/12
agreement [10] S/12 31/20 32/18 33/24         Anne [2] 113/14 114/17                        arguing [61 49/16 S2/14 S2/14 s8/19 67/1
49/17 88/2110S/13 113/23 113/24144/18         annoyance [1] 72/10                            84/16
agrees [2] 90/20 91/3                         anotlter [9] 11/14 28/2 41/17 41/24 6s/16     argument [2o] 6/4 S2/1S3/2154/14 66/19
alta [1] 98/13                                128/10 130/S13S/13 135/1S                      66/23 68/4 69/18 70/12 70/1771/173/21
altead [13] 11j1612j17 22j2132j16 68/6        answer [19] 22j12 24j2o 4S/19 45/22 49/6       74/9 74/13 84/13 84/1S 91/11102/9 102/24
92/20 102/1S 121/2 126/1713S/24 149/18        S7/2181/2188/188/188/1S 88/16 90/190/2        150/22
152/16 1S5/12                                 120/6 136/18 142/3 144/14 1S6/211S6/22        arguments [1] 6S/18
aid [1] 61/1                                  answer's [1] 144/9                            arm [1] 161/1
aiming [1] 18/23                              answered [2] 51/8 87/18                       around [6] 10/22 so/11 70/21 7S/161o6/16
akin [1] 28j12                                answering [21 89j12 89j21                      106/17
Alex [1] 40/7                                 answers [2] 118/17 123/12                     arrises [1] 29/11
all [1241 4/2 S/7 7/2S 8/6 8/10 11/3 11/13    anticipated [1] 18/24                         articulated [1] 73/9
12j22 12j24 14/8 15j16 18/9 18/18 18j19       any [69] S/119/3 9/719/13 37/13 39/20         articulating [2] 99/2S 100/2
20/10 23/20 23/2S 2S/S 2S/9 26/2130/9         41/19 44/2S SS/13 S9/2 S9/22 61/7 61/8 62/4   as [158] 4/22 6/3 6/14 7/6 7/16 7/20 7/23
32!19 36/4 4S/4 46/s 47/2o 48/24 49!22        64/171/23 8oj3 8oj3 8oj1181j19 82/5 96/s       8/24 9/2S 10/16 10/22 12/612/713/S 13/6
sols so/23 s1/10 s1/18 s1/19 s3/8 s3/14       99/2 99/2S100/3 103/1110S/18107/4112/2         13/614/2 14/S 18/20 19/1S 20/17 20/2S 21/5
s4/14 56/1s7/3 s8j22 s9/t4 61/1161!21 64/1    119/2120/4127/10128/16129/14129/22             23/16 2S/18 26/20 26/25 27/4 27/5 30/19
66/4 66/8 66/12 68/17 69/4 69/7 69/9 69/12    130/8 130/9 130/19 130/20130/21130/21          31/12 32/14 32/1S 33/12 34/4 36/13 36/1S



                                                                                                                         1055
                                              awarding [1] 91/6                             84/10 84/16 86/2 87/17 89/15 91/22 102j18
A                                             aware [4] 30/21 31/12 40/2 156/7              108/1109/4110/23118/24125/14126/7
as •.• [121] 37/3 37/3 37/3 37/739/9 39/25    awav r4f 4f22 6qf8 7oi111!i6fq.               129/15132/4142/24145/6145/7149/19
 42/2147/2 50/7 50/12 51/1152/5 57/14 57/15                                                 149/19
 61/5 61/6 64/6 66/23 68/168/169/4 69/14
                                              B                                             began [2] 9/14 9/17
 69/22 70/8 70/12 70/15 70/18 70/20 70/22     back [31] 6/15 21/121/8 23/17 25/7 28/16      beginning [2] 19/15 103/18
 72/1 72/13 72/16 75/2 75/13 75/13 77/18      42/2147/147/9 53/14 53/19 55/9 55/16 57/6     behalf [9] 4/9 4/114/17 48/10 55/6 ss/8
 77/18 78/178/2 78/5 78/17 78/17 84/2 84/14   64/21 75/1175/15 75/16 76/18 90/6 90/19       59/15 89/16 97/19
 86/5 88/2190/190/190/2 90/4 90/6 91/19       91/4 91/7 96/1102/24104/11108/3146/3          behind [2] 58/20 145/2
 92/17 92/18 93/17 94/5 94/7 94/13 95/14      146/5 153/19 161/11                           behold [1] 95/4
 95/24 96/18 96/23 102/20 102/20 103/19       background [1] 63/23                          being [17] 19/19 40/2 46/16 68/14 75/21
104/3104/3 105/1105/1105/3105/3105/4          bad [3] 51/24 53/19 78/20                     77/2 82/24 91/19 95/12 99/14114/5119/1
106/1107/14108/11111/19113/23116/24           Bailiff [1] 161/24                            120/7134/20138/4138/5147/13
117/1118/12122/3 122/20 123/22 124/14         bait [1] 158/24                               belief[1] 152/1
125/6126/16127/11129/1129/1129/2129/2         baited [1] 31/4                               beliefs [1] 154/20
129/7129/7129/9135/11135/23137/5              ball [2] 49/21 53/11                          believe [40] 6/19 6/2415/1317/8 26/17
137/20 139/17139/19 141/13 144/2144/21        ballpark [1] 136/15                           33/10 40/12 45/13 54/4 61/14 61/16 68/3
 145/16145/21146/4146/4146/20149/22           bang [1] 6/12                                 75/3 77/14101/12101/23102/3102/4108/10
152/19154/3154/4156/5157/4157/9158/12         bar [1] 72/17                                 111/6114/4115/6115/11120/25121/16122/13
 160/3 160/7160/22160/22 161/14               bare [1] 67/4                                 126/15126/20 131/19 138/18 138/24142/20
ASBILL [1] 2/4                                bars [1] 66/19                                144/1 146/18 146/20 150/18 151/23 153/23
aside [2] 66/14 75/6                          base [3] 10/20 21/25 71/11                    153/25 154/24
ask [15] 9/2137/13 43/6 44/17 64/18 97/12     based [29] 7/19 11/6 14/515/2 15/15 18/22     Bench [1] 110/4"
 99/15107/1112/14137/6137/15147/2147/6        18/24 22/3 22/14 28/17 37/3 37/13 37/23       benefit [1] 4/4
147/7159/8                                    37/24 40/19 42/12 46/15 52/22 70/16 80/24     benign [1] 126/9
asked [23] 11/911/9 30/2 37/9 38/16 42/22     84/23 99/14113/11127/19 134/17142/3           Bennett [1] 21/23
49/5 52/16 52/18 52/22 80/10 82/24 83/17      145/22150/22157/21                            besides [4] 12/3 38/6 56/20 56/22
 90/14 94/15 95/12 97/22120/24121/4121/15     basic [2] 90j2o 105/7                         best [4] 68/170/12 78/15 101/9
125/2125/2151/17                              basically [2] 110/5150/20                     between [1o] 6/15 25/1141/9 57/6 69/16
asking [28] 8/110/15 10/1713/23 13/25         basing [2] 70/19 71/21                        70/3 82/6 130/20139/15 146/2
15/5 23/7 25/23 31/23 38/23 39/3 39/12        basis [15] 7/16 8/9 8/1117/122/15 42/18       beyond [13] 15/4 30/7 67/4 81/22 84/5
39/17 40!17 40!25 42/24 8s/s 87/24117!13      47/7 61/15 96/1104/5108/3120/11127/12          93/8 96/7111/5 116/24129/22142/16144/17
122/22126/13133/23137/1137/2147/16            129/11131/25                                  144/22
153/22153/25 158/21                           Bates [1] 13/21                               bill [5] 59/10 82/15 82/17 84/7 84/12
asks [1] 133/2                                be [204]                                      binder [1] 107/14
aspect [2] 79/7146/21                         bear [5] 35/15 s8/25 s8/25 61j12 65/10        binders [1] 131/12
asserted [1] 58/13                            beat [3] 68/10 68/12 68/12                    bit [11] 16/7 25/2175/11 76/1 76/21 76/22
asserting [2] 58/12 91/17                     because [112] 8/14 8/25 9/7 9/710/610/19       76/23 91/18 97/1119/20 161/23
assertion [4] 51/2158/25 107/21117/9          11/1711/2013/1614/1015/1116/717/317/15        bite [1] 12/18
asses [1] 118/8                                21/7 21/14 23/20 23/23 26/126/23 28/11       bitty [2] 86/24 86/25
assistance [1] 7/12                            29/10 31/17 35/17 36/136/22 37/6 38/25       blal! [3] 55/15 55/15 55/15
associated [4] 7/2177/22 97/3140/5            39/23 40/16 43/15 44/14 45/23 49/16 50/1      blame [1] 90/7
assume [8] 17/16 41/4 41/7 41/8 52/16         so/3 sols so/15 51j22 53/19 54/8 56/10        Blane [1] 99/18
52/18 52/22 64/5                              56/17 59/11 60/4 65/19 66/17 71/19 72/8       blanks [1] 19/2
assuming [1] 156/8                            72!19 72/23 78/9 8o/8 83/2 84!12 8s/s         Blase [2] 99/20 100/7
assumption [2] 98/16105/20                    86/1186/23 88/2189/6 90/5 90/19 91/4          Blaze [1] 99/17
assurance [1] 160/3                           91/15 91/20 92/2 92/11 93/6 95/17 96/3        Bob [4] 22j22 22/24 23/123/8
assure [2] 73/1 90/23                         96/24 97/22 97/25 98/5 98/7 98/22103/8        boilerplate [1] 42/10
Atlanta [4] 2/13 92/7 92/9 158/14             108/16110/19111/5115/14117/9118/18            bones [2] 65/10 67/4
atop [1] so/s                                 118/23 119/25 122/24124/2124/23 125/3         bonus [3] 105/1135/3 137/24
attached [3] 98/17112/24118/11                125/24126/8 129/14133/6133/16134/21           bonuses [1] 135/2
attempts [1] 65/16                            137/25141/20141/22142/6142/22149/12           boot [1] 156/6
attention [1] 92/12                           150/23 151/7152/1154/14156/3 156/13           borne [1] 109/23
attorney [4] 48/13 100/12161/5 161/8          156/25157/9158/10158/23160/4                  borrower [2] 77/23 77/23
attorneys [2] 160/4161/14                     BECK [5] 3/4161/3161!4161/18163/15            botlt [10] 20j12 22/17 31/14 32/139/14 41/5
attorneys' [10] 8/3 31/7 31/10 31/16 31/21    beckredden.com [1] 3/7                         41/19 43/12 110/4 114/22
 32/132/6 32/13 32/15 34/6                    becomes [1] 73/2                              bottom [4] 48/s 71j12 72/11124!18
attributable [1] 22/8                         bed [2] 151/10 151/12                         bottomless [3] 119/7119/8 121/13
August [13] 77/1178/179/779/11109/5           been [81] 5/115/12 5/14 5/15 8/4 8/7 8/11     bought [5] 39/4 39/5 40j2142/2122/17
 109/7113/3113/12 123/2 124/13 124/14          13/5 13/20 19/5 19/16 20/11 20/11 20/17      box [3] 113/4 115/8 123/2
 132/21159/2                                   21/16 22/7 24/14 26/3 26/22 27/1 27/6 36/1   breach [3] 98/18105/13 105/21
August 19tlt [2] 79/7 79/11                    37!2o 38/17 38/24 39!2o 54/14 s4/17 s8!10    breached [6] 8/4 62/12 62/16 65/3 65/13
August 2011 [1] 132/21                         61/25 62/24 63/24 64/12 65/7 65/13 67/14      105/14
August 23 [2] 109/7113/12                      67/17 68/24 68/24 73/2 74/23 74/25 76/8      break [2] 80/9147/7
August 23rd [5] 109/5 113/3 123/2124/13       76/20 77/7 78/s 78/6 78/10 82/23 8s/3         breatlt [1] 31/4
 124/14                                        89/24 93/2 95/18 96/18 96/22 97/2 97/10      BRENNAN[1] 2/4
Austin [4] 14/136/22 81/6136/17                97/13 103/18104/17105/13105/24106/10         bridge [2] 69/15 69/25
autltority [1] 88/22                           108/1115/14116/24120/12 121/1134/6           Brief [1] 74/6
autltorized [2] 48/13 63/3                     134/12138/7140/11142/3142/19147/6            briefly [1] 75/13
available [3] 11/14 68/13 70/10                149/10 149/13 149/13 150/17154/3 156/14      bring [4] 31/18 70/1192/10 106/23
avoid [4] 15/6 30/12 146/6 158/23             before [39] 1/1810/413/20 24/6 25/7           bringing [2] 59/14 86/24
award [1] 14/25                                25/14 34/20 36/2 41/23 42/3 43/16 44/22      brings [1] 138/14
awarded [2] 19/19 138/4                       50/24 59/6 59/7 60/2 63/14 63/22 82/23        broad [1] 13/7



                                                                                                                             1056
B                                               115/20 122/2 136/24151/11151/25 156/10       cheat [11 15/25
                                                157/14160/5 160/25                           chose [21 34/9 48/25
broader [11 86/1                               cancelled [21 50/9 50j21                      Chris [11 4/20
broke [11 8/15                                 candidly [31 14/716/7 40/15                   CHRISTINA [31 2/18 4/9 132/12
broken [11 9/24                                cannot [81 36/12 45/14 70/16 70/18 71/5       Christmas [11 158/1
broken-down [11 9/24                            71/11117/6158/19                             circuit [81 23/22 63/7 63/12 63/17 64/22
brought [51 67/14 72/18 75/9 85/11105!22       capable [11 142/25                             67/1776/1147/25
brunt [11 35/15                                Capital [11 109/17                            circumstances [21 48/17131/20
Bryant [11 81/7                                car [31 109/17110/7117/21                     cited [31 62/6 63/7 94/8
buck [11 6/12                                  care [91 53/157/8 63/14 63/20 86/3 86/4       Civil [21 61j12 65/11
Bucket [31 79/23 79/24 8oj2                     86/5 146/16146/17                            claim [181 13/8 13/13 15/15 16j1o 16j22
bunch [21 52/25 69/17                          career [11 74/16                              16/2417/24 19/17 37/5 40/18 62/9 70/19
bundle [11 6/4                                 careful [11 67/18                             70/19 71/5 71/20 95/19 95/23 125/12
Burbridge [11 93/14                            Carolina [11 156/6                            claimant [21 62/1 62/2
burden [81 41/25 42/4 50/8 51/158/25           Caroline [11 163/21                           claimed [11 103j2o
 59/14 94/23 136/9                             carry [21 50/8 83/23                          claiming [61 13/9 18/3 68/23 102/25103/13
burdened [11 134/6                             case [821 6/20 7/10 9/2o 13/5 13/9 13/10      117/19
burdensome [31 39/22 41/22 91/18                17/817/1419/14 29/23 37/8 37/23 37/23        claims [71 66/20102/20 105/8112/9 122/23
business [151 8/18 8/19 22/1 47/20 53/1         37/24 39/19 39/2140/17 40/22 44/13 44/19     128/9 150/10
 56/1156/14 64/2 64/8 64/9 96/23 106/7          46/8 46/20 52/9 53/3 53/24 54/20 55/18       clamming [11 134/10
 117/25131/16156/4                              61/5 62/2 62/6 63/7 67/25 69/3 69/5 69/8     clarification [11 128j13
busy [11 53/1                                   69/9 69/15 69/15 71/15 71/24 72/15 72/20     clarify [51 16/18 25/21 26/20 28j10 32/19
buy [221 27/9 38/13 38/17 38/19 38/24 39/1      73/8 73/18 75/8 75/15 81/7 82/7 82/7 82/7    clause [21 48/448/5
 39/18 40/16 41/8 41/12 41/16 41/19 42/1        84/6 85/9 85/12 85/15 86j12 94/8 94/18       clean [21 27/16 44/22
 79/218oj18 85/2 86/6 88/4 96/6136/5            96/15 97/197/2 97/8 97/9 97/11102/22         clear [81 42/12 42/17 44/12 52/11128/22
 142/13 150/20                                  103/19 104/5 104/22105/8 108/6116/25         140/10 154/18 155/6
buy-out [61 27/9 79/2180/18 86/6 88/4           120/25 134/13 134/21135/12 135/17 136/4      clearly [31 105/14 105/14 151/22
 136/5                                          149/22150/16156/10157/23159/4159/16          click [41 64/13 64/14 64/19 153/11
buyers [11 83/7                                cases [51 52/24 92/2 92/4 92j12 97/16         clicked [71 64/19 71/2110/20 113/16116/15
buying [31 39/19 39/2140/19                    catch [11 23/23                               116j19 130/25
buy~;::~ [11 ;;2/1                             categories [41 49/16 49/17 49/20 50/23        client [191 13/5 19/3 33/23 56/12 67/175/20
buit 1 n80                                     category [21 25j2o 94/18                       86/18 94/2194/23 100/5100/11108/16
c                                              causal [11 73/3
                                               causation [71 10/210/3 10/1417/1119/14
                                                                                             117/10133/8136/13156/4157/12157/18
                                                                                             160/15
CA [21 2/11 2/19                                66/20 69/14                                  client's [11 118/2
calculate [21 9/23 10/25                       cause [151 1/3 1/18 19/13 65/23 65/24 66/6    clients [11 82/9
calculated [51 6/24 8/16 37/16119/14            66/22 70/16 70/18 71/18 71/25 71/25 72/1     close [61 33/8 41/1148/9 48/9 58/6150!4
138/10                                          72/18 163/9                                  clue [11 43/2
calculation [71 7/2 7/18 8/3 8/9 8/1125/19     caused [101 21/6 28/14 61/7 65/25 66/1        co [31 4/20 77/23 77/23
157/4                                           67/7 69/23 69/25 72/13 72/22                 co-borrower [11 77/23
calendar [11 159/6                             causes [11 151!14                             Co-Counsel [11 4/20
California [11 2j21                            causing [21 61/8 86/25                        co-signer [11 77/23
call [61 30/15 30/15 53/15 67/11105j10         cease [31 48/7 48/24 71/3                     coarse [11 90/19
135/24                                         center [11 79/17                              code [151 110/6 112/21114/9 114j12 114/14
called [41 7/1 64/23 148/22153/7               centerpiece [11 63/1                          114/16114/19 114/20114/25 115/24116/2
calling [31 7/17 49/18 85/17                   Century [11 2/20                              116/3 116j12 116/13 116j18
came [361 1/17 27/8 27/9 46/1150/9 50/23       CEO [81 45/8 46/16 46/17 50/7 50/15 52/5      Codes [21 108/9 115/19
58/18 6oj2 71!15 73/14 85/10 86/2 98/11        53/15 53/16                                   colleague [11 4/21
98/15 99/7 99/10 102/23 105/20108/19           CEO's [21 59/6 59/8                           collected [11 111/3
109/9110/17111/19 113/25 124/24 125/3          certain [201 11/17 21/17 23/22 43/5 64/25     collection [31 103/2103/5109/8
140/8 140/9 140/10 149/19 153/19 154/9         71/9 76/6 76/7 88/24 92/14102/25 lll/3        collections [21 103/21120j1o
154/14 154/16 154/22 155/1155/14               118/21119/10 133/7133/9 143j2o 143/24         collections' [11 103/15
can [1171 6/15 7/219/1412/2213/1716/23         145/9 145/10                                  column [11 127/23
18/15 20/24 22/6 25/2 25/8 25/21 28/8          certainly [161 5/2418/1125/125/19 65/4        comb [11 106j22
28/23 29/15 31/3 31/14 31/15 31/20 32/9         65/12 82/14 84/11107/13 108/15 110/3         combining [11 130/15
32/24 36/12 38/12 40/4 40/8 40/23 41/4         123/14137/4144/2145/19 161/2                  come [161 9/19 9/25 30/12 31/13 43/18
43/6 45/3 45/2150/24 51/16 53/15 53/21         certainty [11 21/15                           43/20 71/24 91/7 92/10 97/3 98/3 128/4
57/15 57/20 60/19 61/25 62/8 63/5 63/19        certify [31 163/5 163/11163/14                139/22146/1153/10162/2
64/7 64/25 66/4 66/18 68/170/8 70/1172/21      cetera [11 147/17                             comes [21 123j21146/9
76/9 78/2 78/20 89/1190/2 90/14 90/23          Cgoebelsmann [11 2j22                         coming [101 35/19 44/15 44/18 45/2 53/9
91/14 93/9 93/11 96/4 97/5 97/9 99/2 101/3     chain [11 19/13                               91!4 108/17 108/17116/15 123!24
104/21105/2107/13110/3110/4112/3112/5          challenge [11 43/24                           comma [11 24/23
112/8 112/20 113/23 115/21116/9 116/10         chambers [11 163/10                           comment [21 93/20 144/20
118/8 119/10 120/17121/8 121/19 122/3 122/8    Chance [11 114/18                             committed [31 18j23 62/4132!5
122/15 122/18 124/12124/14124/18 124/21        Chancery [11 7/7                              committing [11 61/17
126/16 126/17128/16 130/16131/20134/11         change [31 24j12 26/5 121j12                  common [21 9/11 9/13
137I 4 139!10 141/4 141/4 141/17 142/1 142/1   changed [11 62/3                              commotion [11 86/25
143/24144/2 144/17145/8 146/2146/20            Chapter [41 49/11 61/6 61/24 63/2             communication [11 58/24
147/25147/25148/6151/2151/19158/16             characterization [11 85/24                    communications [121 38/13 50/17 60/11
161/1 161/11                                   characterized [11 74/13                       84/24101/19117/15130/8130/20131/11
can't [281 12/616/25 17/2 19/9 19/9 21/7       charge [61 56/4 57/3 57/7 73/23 161/5 161/8   139/15140/4141/2
26/10 28/166/23 68/20 71/18 71/18 72/16        charges [11 8/17                              community [11 147/13
73/17 94/10 94/25 100/2 lll/16 114/13          chase [21 24/15 156/10                        companies [41 38/6 51/18 61/4 94/14



                                                                                                                         1057
c                                             contemplating [1] 12/14
                                              contend [3] 7/8 14/18 149/23
                                                                                         127/8 140/20161/25
                                                                                         couriers [1] 70/3
company [24] 9/5 40/3 45/1151/4 51/17         contending [1] 161/2                       course [4] 32/10 64/2 64/9 72/7
 s1/18 s1/19 s6/8 5717 57/17 S7/2o s8/1S9/4   contention [2] 124/23 125/3                court [6o] 1/31/5 4/4 6/s 6/19 6j2o 6j22
81/10 83/9 83/12 83/13 84/4 85/2195/11        contents [1] 153/7                         7/15 9/2210/411/211/1511/1816/1719/19
109/18147/9147/14154/20                       contesting [1] 98/9                        2212 23!2126/s 31!12 44/s 44/16 46/2 49/16
company's [3] ss/23 85/22 154j2o              context [3] 29/1189/14125/24               49/22 s1/9 s8/14 s8/19 59/12 59/14 6oj2
company-wide [2] 83/9 84/4                    continuance [11] 11/17 33/11 60/18 101/10 61/2 65/171/17 71/20 76/17 84/19 86/25
compare [2] 30/9 106/23                       101/13 101/16155/24158/8 158/13 158/22     89/25105/3107/3107/17108/2108/4111/12
compel [28] S/17 S/17 5/18 5/22 6/8 6/17      159/15                                     117/17121/1129/15129/19 133/7152/1157/5
 8/18/8 12/2s 8s/6 89!17 89/19 90/11101112    continue [6] 96/2 97/9104/22112/8120/17 157/7157/8 157/15 157/17163/4163/5 163/10
101/18 101/21101/22 102/2 102/17 102/17       156/4                                      163/19 163/20
132/16 137/1137/24 138/15 138/15 149/18       continued [1] 8/15                         Court's [9] s/25 8/8 22/5 62/9 84/24
152/11155/22                                  continuing [1] 92/19                       100j18 111/9 118/2156/8
compelled [4] 14/13 32/136/21158/19           contract [12] 16/2417/617/2317/2418/3 courthouse [1] 86/3
compelling [1] 35/3                           18/419/5 19/17 35/6 35/8 110/8 134/9       cover [1] 145/3
competitor [1] 145/15                         contracted [2] 22j20 23/1                  covers [1] 145/3
competitors [10] 80/180/S 83/8 88/6           contracts [22] 8/3 15/2216/6 16/8 16/11    Crawley [1] 58/14
125/6 130/11131/15131/17143/25 144/5          16/1316/2016/2116/2517/2017/2218/14        create [1] 86/8
competitors' [1] 85/2                         18/18 18/20 25/19 35/2 35/1135/22 35/24    created [9] 75/14 81/8 81/9 81/12 85j2o
complain [3] 10/1195/13 98/4                  36/4130/9130/20                             86/7 86/17 86/20 87/3
complaining [4] 77/178/23 83/12 99/22         contradicted [2] 54/14 103/8               creates [1] 73/4
complaint [3] 40/18 40/18 76/17               contradiction [1] 118/22                   creation [1] 80/17
completed [8] 33/9 39/24 77/7 77/8 77/9       contribute [1] 65/25                       Criminal [1] 73/19
77/1178/14108/s                               contributed [8] 61/7 62/4 67/9 68/18 72/14 critical [1] 8s/8
completely [4] s/15 29/22 36/14154/5          72/18 72/22 73/12                          cross [1] 122j18
complicated [1] 71/8                          contributes [1] 119/5                      cross-examine [1] !22/18
complied [8] 8/8 74/23 77/2 77/4 79/3         contribution [1] 72/23                     crystal [2] 46/7 so/4
80/20 90/3 142/24                             contributory [1] 61/20                     cso [3] 8/17 10/10 15/16
complies [1] 17/9                             control [4] 122/1147/1157/17157/18         CSR [2] i63/18 163/19
comply [4] 78/15 79/7 79/9 90/15              convert [1] 64/8                           cull [2] 78/4 78/11
complying [1] 74/11                           coordinator [1] 159/14                     culpable [1] 84/13
components [2] 11/12 15/16                    copies [2] 81/25 82/6                      curb [1] 75/5
comprise [3] 10/9 10/10 10/10                 copy [5] 16/2 s8/s 70!2 102j1111oj3        curious [1] 144/11
computer [5] 38/17 38/2155/17 66/8 148/9      copying [2] 129/1130/12                    current [2] 46/13 123/25
computerized [1] 1j21                         core [5] 70/15102j2o 143/12143/16 154/2o currier [1] 70/3
computers [1] 152/18                          corollary [1] 156/5                        custody [1] 147/1
concern [7] 6/2129/10 91/15103/17119/2        corporate [21] 49/10 49/18 49/24 49/25     customer [68] 7/2 7/14 7/17 7i23 8/2 8/18
132/10 145/5                                   so/2152/13 s8/19 6o/3 81!1 81/4 81/1s      8/19 9/25 10/8 10/20 11/711/13 11/14 11/24
concerned [8] 103/8 103/13 103/25 108/16       81!2182/19 85/14 86/4 86/10 87/16 91j22    12/414/614/614/614/1914/1917/1017/10
111/10 118/20131/10 160/23                     104/17137/16141/11                         18/419/5 21/25 22/4 22/10 22/10 22/11
concerning [5] 48/16 55/14 111j12 114/11      corporation [1] 90/9                        22/13 23/8 23/13 25/7 25/17 26/23 27/1
120/25                                        corpus [1] 159/23                           28/15 29/4 30/8 30/12 70/770/7 80/19
concerns [1] 102j2o                           correct [24] 5/9 6/18 18/24 20/9 20/10      81/20 88/24 98/20105/22 105/24106/25
conclude [1] 63/19                             20/22 26/13 26/17 27/25 32/2 51/5 60/19    108/16 109/6 109/13 110/14110/17110/18
conclusively [1] 66/2                          60/20 67/23 76/8 89/3 90/22 120/16 120/21 112/19 114/2116/14 116j21121j16121j17
concrete [1] 145/8                             120/22123/19156/16157/3163/6               123/11123/25 124/14 125/17126/10 141/15
conduct [23] 7/117/217/2415/12 22/8           corrected [2] 78/1178/19                    149/25
 37/9 40/19 43/2144/16 61/9 62/5 71/2 75/5    correcting [1] 6oj21                       customer's [2] 116/14 126/1
 96/20 99/22105/3110/24112/5112/9127/18       corrections [1] 150/8                      customers [66] 6/25 7/19/119/1315/2
 134/12134/16 138/3                           correctly [2] 11/2 163/12                   15/2016/10 20/18 20/18 21/3 21/4 21/10
conducted [7] 9/3 102j21108j9 110j1           correspondence [2] 117/5139/15              21/11 21/11 21/16 22/6 22/17 37/25 47/13
 111/19 124/6 124/25                          cost [5] 94/2194/22 95/1199/23 163/14       47/14 55/17 66/8 66/9 69/20 79/22 80/1
conducting [3l103/14 104/14 130/11            costly [1] 119/4                            8ofs 85/10 85/1186/6 88/4 88/6 88/8 99/14
confer [4] 88/22148/1148/3 149/11             costs [1] 7/21                              99/21 103/16 103/23 105/17 105/18 106/8
Conference [1] 35/18                          could [27] 11/4 24/14 43/10 47/22 48/12     106/11107/22108/17108/19 108/23108/25
conferring [1] 33/23                           53/24 61/25 64/19 66/7 70/13 73/10 78/17   112/17117/20 119/24119/25 120/3 120/5
confirming [1] 17/13                           84/5 86/20 91/19106/10 111/14119/13119/14 124/8 124/1212S/lll25/23 126j6129j1
confused [1] 16/7                              ll9/17120/7136/20 144/5 151/18 153/17      129/16129/20 130/ll131/15 138/8 141/1
confusion [3] 25/22 6s/7 6s/8                  157/8158/21                                141/11143/6
connection [1] 73/3                           couldn't [2] 26/3 85/12                    customers' [1] 131/17
Consent [1] 75/14                             counsel [38] 2/7 2/15 2/23 3/7 3/14 4/20   cut [8] 16/1 23/17 24/6 30/18 65/1105/19
consider [4] 47/19 73/24 90/5 144/16           21/13 21/2130/14 33/147/2 47/5 47/9 47/17 156/9 158/24
consideration [1] 91/8                         48/2 48/3 48/24 49!2 s8/9 88/2190/2o      cuts [3] 82j22 85/4 86/24
consistent [2] 14/17107/17                     90/24 91/2102/9 107/14108/1108/12 110/4 Cvuiliia r~i 16~7~ 16~ii716~il8
consult [1] 86/18                              151/24156/20 158/ll158/21159/9 160/3
consuming [1] ll9/4                            160/6160/14160/22163/8
                                                                                         D
contact [1] 47/13                             counsel's [2] s8/25 156/24                 dfb/a [5] 1/5 1/51/6 1/6 1/7
contacting [1] 136/11                         counter [1] 40/18                          Dallas [9] 14!136/2183/19 84/184/24
contain [1] 22/9                              counter-claim [1] 40/18                     116/12 123/6 134/16 134/17
contained [3] 12/2178/23 138/22               country [2] 96/s 144/19                    damage [15] 6/216/23 7/16 8/9 8/1110/8
containing [1] 38/11                          COUNTY [4] 1j8 1j20 163/2 163/20            11/19 17/9 21/6 26/4 28/14 35/20 37/12 72/1
contains [4] 20/8 50/17153/9 163/6            couple [9] 8/442/9 75/20 8s/6 89/8123j12 157/6



                                                                                                                          1058
                                               demand [1] 15/8                              difficulty [1] 72/9
D                                              demanding [1] 14/21                          dilatory [1] 37/9
damaged [2] 66/9 66/9                          demonstrably [2] 109/13 149/23               direct [7] 7/20 59/19 61/169/16 82j18112/1
damages [20] 7/1910/2311/2415/119/19           demonstrate [1] 138/1                        142/13
24/1125/13 25/15 25/17 27/3 27/4 28/8 36/11    demonstrated [2] 75/3112/5                   directed [9] 48/25 59/16 59/18 83/7 83/15
37/5 37/7 39/2 61/8 68/23 68/24157/4           demonstration [1] 152/25                     94/6100/3148/16157/4
DANIEL [3] 2/3 4/8 83/1                        denied [2] 84/20100/13                       direction [4] 5/25 84/25 85/17 151/13
Daniel.jobnson [1] 2/7                         denies [2] 47/4 47/10                        directly [2] 39/2 68/23
darn [2] 55/15 75/21                           deny [3] 59/2 136/5 138/9                    disagree [4] 11/8 15/10 29/22 45/23
data [13] 25/141/22 67/12 67/18 75/20          denying [3] 100/15 101/1138/13               disclose [3] 6/23 11j18 63/4
76/1199/19 113/2 148/11148/14148/19 149/2      department [4] 81/1 81/13 89/1114/8          disclosed [1] 63/20
150/11                                         depends [1] 153/13                           discouragement [1] 13/16
database [18] 6/441/4 63/12 68/13 70/5         depo [1] 49/20                               discover [2] 110/23 119/9
71/9 78/6 78/7 78/11 95/2 96/s 97/3 97/6       Deponent [1] so/8                            discoverable [1] 137/11
114/9129/2 130/21140/7155/2                    depose [17] 49/25 50/2 50/22 so/24 53/22     discovered [1] 77/24
databases [22] 63/23 67/13 67/14 78/4          54/24 55/2 57/17 59/10103/23 110/23 111/14   discovery [54] 6/17 6j22 7/119/313/7
79/25 8o/s 87/9 87/1188/s 88/8 94/6 95/18      115/16 124/18 126/18 127/15 134/14           28/1129/1131/9 37/16 43/2144/13 44/23
96/2 97/23 98/10 105/19109/12 134/9            deposed [7] 55/19 85/3 111/15 113/10115/11   46/1146/12 75/7 77/10 78/23 84/3 88/10
139/18 140/5 141/1143/14                       115/13 124/10                                 92/14 93/1 93/9 95/15 96/17 96/23 97/1
DataTrax [41] 61/4 62j2o 62j21 62j22           deposing [1] 127/9                            97/22 98/2 98/22 100/3 101j18 112/8112/13
63/8 65/4 65/23 66/2 66/12 69/770/2 71/7       deposition [34] 27/6 38/15 45/6 49/10         119/12119/14120/9 121/22128/10 129/12
81/20 82/10 94/7 95/1 95/19 96/4 103/20        so/9 so/2151j13 s1!23 s2/13 58/12 s8/14       132/7 133/12 134/7134/12 134/18 135/18
106/15 106/17106/22 109/11112/1130/21          59/2 6oj9 8oj24 81/6 83/11 84/23 91/23        136/20 138/11141/19 144/19 150/2 150/15
136/6139/13 139/18 140/5140/7142/13            96/10 104/18 110/24 115/16 120/19 120/24      151/18 153/24157/25
143/13 143/17 148/8 148/13 148/13 149/20       121/9 121/10 121/20 122/19 127/19128/8       Discovery Responses [1] 31/9
150/13 152/24153/9 153/10                      128/9147/4147/7148/15                        discrepancy [1] 110/22
DataTrax's [1] 103j21                          depositions [4] 70/13 83/15 83/25 120/23     discrete [1] 157/1
DataTraxfPublicData.com [1] 82j10              Deputy [6] 47/9 47/17 48/148/3 49/2 58/9     discretion [1] 57/3
date [29] 9/1411/17 26/25 31/19 32/9 32/15     derive [1] 18/10                             discuss [3] 35/24 59/5 6oj1
32/20 33/3 34/9 79/10 88/18 89/9 90/15         derived [2] 18/7124/6                        discussed [3] 83/1 85/24 89/15
91/24101/25 104/11113/2113/24113/25            describe [1] 10/6                            discussion [4] 46/24 59/3 74/6 86/1
116/20122/21137/9138/17158/8158/9              describes [1] 64/14                          discussions [1] 75/1
158/20 159/11159/12159/14                      describing [2] 10/2 72/12                    disingenuous [1] I0/18
dated [4] 48/2 48/7 79/6 130j21                description [2] 10/711/10                    Dismiss [1] 72/19
dates [3] 18/8 40/16 40/16                     designate [10] S/20 6oj22 61/7 61/25         displayed [1] 114/5
Dave [3] 33/14 33/2133/22                       66/23 158/11158/12 158/16158/18 160/6       dispose [1] 6/6
David [3] 161/2 161/4 161/18                   designated [2] 61/3 161/8                    disprove [1] 106/10
day [13] 1/17 so/150/1150/2158/22 66/6         designation [2] 67/2 67/3                    dispute [2] 48/20 52/24
 66/8 66/12 77/12 92/21116/14119/14157/10      designed [t] 73/5                            disputed [3] 52/10 53/14 57/24
days [8] 33/8 34/2o 44/22 so/24 77/12          designing [2] 85/1 88/23                     disputes [2] 36/1 94/20
78/12 78/15 88/2                               desist [2] 48/7 48/25                        disrespectful [t] 23/20
dead [1] 73/21                                 desperate [1] 138/7                          distraction [2] 52/12 6o/4
deal [sl 73/1 91!13 98/10 149/19 154/24        despite [t] 94/20                            distribute [t] 70/4
dealing [2] 90/19 130/17                       destroys [1] 73/3                            district [23] 1/51/10 62/7 81/7 81/8 82/18
dealt [1] 83/16                                details [2] soj18 77/18                       132/20 132/21132/23 133/2 133/3 133/11
deatlt [3] 82j22 85/4 86/23                    Detective [1] 93/14                           133/14133/23 133/23 134/24135/7135/12
debated [t] 49/9                               determination [1] 36/12                       135/12135/21137/18163/5 163/20
December [3] 14/10 47/148/2                    determine [7] 26/22 40/10 44/16 121j14       districts [7] 132/24133/9 133/10133/17
decide [2] 65/2 119/11                          122/9 132/5 133/12                           133/22 136/12 136/17
decides [1] 41/14                              determined [2] 49/20157/20                   Diverse [1] 62/25
decision [1] 86/10                             determining [1] 129/11                       diversion [t] 6o/4
decisions [2] 69/12 69/24                      device [t] 147/1                             DL [2] 113/5113/5
declaration [3] 105/12105/15107/23             devices [1] 146/25                           DMV [to] 6/3 129/2 130/21139/13 139/18
declarations [6] 102/25 103/8 103/14           did [62] 8/14 8/1512/912/1114/416/116/4       140/5 140/7141/1142/13 143/15
104/3 107/3 129/19                              21/22 25/12 27/24 37/24 40/2 52/19 55/19    DMV's [t] 96/6
decline [1] 13/20                               59/4 60/162/14 62/18 62/20 62/22 64/18      do [150] 6/13 8/18/25 9/210/112/514/4
declined [1] 149/4                              64/19 64/19 6s/23 66/11 69/7 8oj24 83/17     14/2415/115/1816/1217/1518/1519/919/9
deems [t] 75/2                                  88/1 88/11 88/15 89/17 89/18 91/10 95/6      21j12 23/2124!1 26/5 29/1s 31!1s 32/s 32/6
Defendant [14] 5/16 8/12 9/8 46/8 46/20         96/23 98/18 100/25 101/1103/11107/21         35/9 36/22 39/12 40/17 42/20 42/25 43/6
 52/9 53/3 54/20 78/22 79/19 88/2 88/22         109/10 110/11111/21124/12 135/20 135/21      44/21 45/13 45/20 52/8 53/20 55/12 55/13
 96/1103/20                                     135/21135/21135/25136/1136/1136/6            ss/2156/s 56/15 56/18 56/22 s6/24 6oj18
Defendant's [2] 6oj22 78/4                      139/19141/14146/22147/2147/7149/18           61/6 61!1162/22 6s/6 67/1168!17 70!24
DEFENDANTS [15] 3/7 3/14 4/6 4/18 4/19          153/14 153/15 155/25                         71/13 73/6 73/8 73/20 74/20 74/2175/12
 5/19 5/20 12/8 13/8 22/18 36/19 38/14 74/11   didn't [36] 10/110/1110/18 43/8 44/1          75/13 75/19 75/19 76/18 78/9 78/12 83/21
 84/25100/10                                    45/18 51/13 52/17 52/21 53/20 55/24 59/20    83/22 87/2 87/2 87/3 87/4 87/6 87/2190/4
Defendants' [3] 6/3 6/16 96/19                  66/6 66/25 72/24 72/25 84/8 86/8 88/12       94/13 94/17 94/19 95/9 95/12 98/198/8
defense [3] 33/1111/15 120/9                    91/18 92/8 98/8 103!17108/14110/3 110/8      100/12101/5101/5106/22107/4110/17
defined [2] 107/2116/24                         111/2111/21112/1129/19137/15140/10           111/13 111/16 113/5 115/17117/7118/13120/18
definitely [t] 143/18                           145/19145/21147/6148/13                      120/25 121/13 121/25 122/2 122/3 122/8
definition [1] 50/4                            difference [4] 82/6142/10 145/9 145/12        123/25 124/7124/15 126/16 127/20 133/12
DeLeon [7] 99/17 99/18 99/21100/6100/7         different [8] 8/16 27/5 32/6 35/8 49/3        134/7 135/15 135/15 136/10 138/7138/22
 100/8 149/8                                    110/13 117/21118/7                           139/7140/14140/16142/1143/24144/6
DeLeon's [1] 150/11                            difficult [3] 19/3 86/16156/4                 144/15145/25146/8146/24147/7147/18



                                                                                                                         1059
                                            140119 141120 141122141124 14411144114     161119
D                                           14sl2 14sl1114sl1s 14sl22 148ls 1sol3      elucidation [1] 7918
do ••. [27] 148120 1SOI22 1SOI2S 1S1I13     1SOI141SOI18 1SOI23 1S113 1S1I171S1I23     Email [4] 46110 99l16106l2114ol8
 1S219 1S2I13 1S3I13 1S3I13 1S311S 1S3I16   1S41 4 1S611S 16117                        Emails [4] 46l1s so112 sol1s 143119
1S3I20 1S4I71S4I71S418 1S4I241SSI4          done [48] 19110 24I2S 47122 4917 5019      employ [1] 131122
1S5I111SSI121S6I41S61181S6I20 1S6I24         61113 6sl6 7o114 70117 71116 7312 73113   employed [3] 131113 13417139116
1S71141S8I14 160117160118 163IS             78120 9111194112 94112 94117 9SI3 9sls     employee [15] 4613 46l18 46l2o 47123
do it [1] 101ls                              9717 99114101114 101I1S101I1S101I16       48l1148l19 48l2o 4914 sols s1122 S314
Dabney [51] 10SI1110SI1S 105l1610sl23       101I17107IS108I23112I2S119I23119I24         66112 104118 123111141111
106l6106l12107l4107l21108l7108l19           119I2S120I2128IS129I1S13SI4143I10          employee's [1] S1l23
108123 108124 109IS 10917109116 110111      143118 14418 148I1148I17149I171SOI6        employees [42] 38116 38l2o 40125 4112
110I23112I2112I16113I1S114I111SI13 11719    1SOI7150I241S2I18157I241S811               41ls 47l11s712o s8l10 s8l16 s917 6o12o
117111119123 120I1S 120119120120120124      door [1] S9l6                               63I2S 66116617 6611179119 8813 88124
120I2S 12117121122 12214122118 123114       double [3] 20123 96124 13917               102121103111031101041410419104117
124112124120 126I18127I19127I22127I2S       double·take [1] 96l24                      104125 108ls 1o8l712111412212412911
1281112818 12916 129110129122131121         doubt [4] 32I2S 7SI18100I24 1S3I14         131I22134I4134I1S13SI113SI2 13SI19
132111142112 14SI19 14617                   down [27] 8116 9124 13I714I1S 3814 S7l21   13SI2S137I10 139I12140I4146I2S1S4I21
Dabney's [3] 107119121118 13217             s8l21s9l6 6ol9 66l1168l1o 70112 7sl8       employer [2] s1l13 s1l14
Docket [3] 6I141S9I16 161113                 8019 8612 87I2S 8911310711116123118114    employers [1] 63125
Doctrine [6] 4SI24 4617 46l21s2l16 S2l23    119116 120I1S 12011812119 12511412617      employment [2] 13012213414
S212S                                       141IS                                      end [7] 2418 32120 40l16 6616 97I714SI6
document [14] 29116 S3l17119l10 13SI9       drag [1] 1S717                             14SI7
148/7148I2S 149122 1SOI14 1SOI22 1S1I22     dragged [1] 4122                           ended [5] 9114 9117 2SI8 26l1162l3
1S212 1S213 1S313 1S3I9                     dragging [1] 14111                         ends [5] 2SI2S 2619 26111 2611211711
documentation [5] 32114 120123 12118        Dram [1] 72114                             Enforce [5] 7412 7417 7717 90111101117
1S2I17 1S2I21                               dramatically [1] 7SI8                      enforced [1] 11713
documented [1] 7SI6                         drive [14] 148l11148l14148l19 148l2s       engage [2] 7SI7138I2
documents [70] 30123 31l1s 38I1140I2S       14912 149114 1SOI111S118 1S119 1S3I1153I2  engaged [2] 134115 138ls
4113 4619 7013 81124 9SI12 95120 96121      1S313 1S31 8 1S31 9                        engaging [1] 99122
97I11101I18102IS103I7103I10 10311110411     driven [1] 12SI24                          enough [8] 34I11SOI2 so122 S9l23 67l18
10412 1041710418 104I2110SI610SI7106IS      driver [2] 62l2s 72I1S                      68I14124IS1S7I21
106112 107I11107I2S 109116 11012110124      driver's [13] 113112114110 11SI19116I4     ensure [2] 128l16 12914
llli1111I2111I4111IS111I1311SI1511SI23      11616116119 124119 124I2112SI1612SI17      enter [2] 1S7IS1S9I14
117l1s 118l19 118l2s 120120 120124121111    12SI21126I2 127114                         entered [5] 13114 s8I219SI2S116I18
12511212711213018130/19131111131124         drivers [1] 124117                         128116
132120 133121138116 139114140112 141110     drives [10] 10SIS146I19 147122147123       enterprise [1] 7019
141114143116 144IS 14SI1614SI20 14611       149IS149I11149I12 149I171SOI3 1SOIS        enters [1] 411
149I16149I211S2120 1SSI71SSI9 1SSI13        drop [3] 4123 149I11SOI21                  entertain [1] 6ls
1SSI13 16212                                drum [1] 6418                              entire [7] 1sl1120l16 21112 21112 2314
Dodge [2] 110110 110112                     drunk [1] 72I1S                             114119 1SOI21
does [30] 4122 714 719 211212219 22120      dry [1] 94121                              entirely [6] 2111s 27IS S7l16 69115 71I1S
22124 2313 46124 47119 48118 S2l23 S9l10    DTPP [1] 63114                             7917
6413 6sl20 66122 8417 88119 90116 12013     Duces [1] 9411                             entities [13] 46l17 sol6 51I11S3I16 S714
122125 123110 12SI8 125110 137114146116     dude [1] 53119                              59122 6114 89119 94115 97117 97119 97120
153111531215519 158125                      due [5] 10918 113I2S116I1S116I2o 13912      10417
doesn't [53] 9112 17124 21113 2612 26ls     during [6] 18l17 96119 10219 13012214717   entitled [18] 91211012410124 2911s 46l19
26I113SI1S 3717 41117 43118 4512 46122      1S811S                                      53118 54124 5512 821185120 94124 9811
S111S S1I21S2I17 S3l16 S312S SSI22 5718     dut:V f21 4/24 6~/14                        99120 111114 11711112011112113 126110
57113 s811o s8l11s8l22 59115 64l1s 66115                                               entity [11] 23112 4SI1149I3 sols sol7 5213
66122 71122 72116 73123 85117 9016 94121
                                              E                                         s21s 54119 s614 5819 84l12
94122 94122 95111 97I2S 97125 9917 99123 E·mail [5] 217 2115 2122 317 3113             entree [1] 6119
106l3 108121109114 10911s 11sl811s122         each [14] 17I519IS19IS 29117 30112 38l19 entries [1] 7813
120121211121251712517141120 14112114311 7714131113132120132121132123133122             entry [6] 102I21103I1108IS110I7llll2o
doing [16] 3112 39l2o 45114716 5311164111 14612 146114                                  128117
66113 76120 78115 83123 86123 99121117124 earlier [6] 1412 2118 2111010319 104119      envelopes [2] 55116 8SI9
132I4142I2S1S7I24                             11519                                    error [1] 4415
dollar [3] 82115 82117 8417                   easier [4] 8ol9118l18127l17139l1         essentially [4] 71136123 12611213811
don't [132] 5113 6l2o 7114 811911610111       easily [1] 158121                        estimate [1] 1S719
101201112 1113 11171118 11116 121612114       easy [1] 153115                          et [1] 147117
1211814111171101911219116 2012 2014           editorial [2] 93l2o 144120               evaluate [2] 16123 7217
20121 23119 2411 26111 26l23 29122 3013       effect [1] 4216                          evaluated [1] 6318
3013 31123 33116 3312134125 3519 35123        effective [1] 134112                     even [35] 7114 917101121113 20122 2118
37117 40112 40122 4117 43113 44117 44123      effort [1] 144124                         2517 2SI10 2SI10 26110 39119 46122 S1l13
44l2s 49125 so122 s3121s4l8 ssl13 s8l16 efforts [2] 138ls 138l6                         51115 52/17 57113 5914 5917 6218 62113 6415
6ol18 62111 62113 62114 6sl1 6sls 6sl18       egregious [1] 12118                       6614 66125 71122 8ol6 87l16 9519109114
67116717 6718 7113 71110 7218 74IS 77116      eight [1] 96113                           llll21llll23 11611143115 145111149123
8sl23 8613 8614 86ls 861218717 87l13          either [6] 7122 32l2s 38119 40110 12617   1SOI1S
87l13 88l18 89l6 9017 90117 91115 92119       13814                                    event [1] 85l22
9619 99I5100I14101I1101I4101I25109I11 El [1] 73118                                     eventually [2] 3SI1o 6719
11213 112122 11417 11SI7 115112 115118 115124 electronic [2] 4113 144119               ever [5] 8ol6 8ol6 81l19150l161s8l21
116I1116I2116I7119I5120I4122I11124I4          elements [1] 8l1o                        every [29] 29116 37119 4118 sol13 5712
124IS 12515125119 125121126110 129121         else [13] 1213 S7l23 S7l24 S7l25 73115    S9l12 S9l24 7716 7816 9711971210619
130116133116 134119136118 139122139124 8ol14 8716 871218912412812134111137122 106124 112113 113114 119110 119116 121116



                                                                                                                         1060
                                                s2/22 66/n 66/n 67/24 78/s 92/13 95/25        finishing [1] 41/16
E                                               99/22 104/1s 109/23 ns/7 nsj12 n7 j2o         firm [4] 97/19 153/17154/6 158/4
every•.• [11] 121/16 133/2 133/3 133/23         121/12 121/14 129/17 134/15                   first [52] 4/5 6/5 6/10 6/10 6/1619/719/23
 134/24 135/1135/7 144/23 144/25 148/18        factor [1] 157/19                               21/4 21/ll21/ll22/20 23/123/2 23/8 23/13
 157/9                                         factors [2] ll/4ll/5                            24/14 24/19 24/23 39/13 39/15 47/4 48/24
everybody [4] 34/3 132/5 144!21162/2           facts [1o] 48/16 52/23 55/14 67/167/2           55/13 56/23 77/15 78/12 8o/6 8o/15 82/6
everyone [3] 45/1 71/4 134/10                   73/10 73/12 96/19 96/23 135/17                 82/8 82/10 82/14 98/17101/13 101/15 105/23
everything [11] 44/23 46/11 53/10 56/8         factual [2] 64/17 65/2                          107/18 112/24113/3 114!6116/11118/9
 57/5 64/6 91/3 91/3102/14115/17117/11         failed [3] 63/19 79/7 79/8                      118/19 123/1123/13 127/9 131/1150/10
evidence [71] 7/14 8/3 9/20 9/2110/2           failure [2] 90/14 90/18                         150/16 159/16 161/6161/6
 10/1811/1411/2414/2017/1018/1319/12           failures [1] 90/13                             first-hand [1] 55/13
 21/5 26/25 27/1127/12 27/19 27/20 29/24       fair [7] 15/8 33/5 57/18 57/19 59/23144/25     firsthand [4] 55/21 55/25 56/15f'/1
 30/2 30/3 30/19 30/20 30/22 31/5 31/7 32/7     145/15                                        fish [1] 158/24
 37/16 37/19 39/139/20 41/19 43/18 43/20       fairly [2] 33/7102/7                           fishing [4] 97/24 98/1118/3 118/s
 45/13 46/19 54/22 ss/23 s6/s s6/7 56/22       faith [4] 22/14 60/2 78/20 144/24              fit [2] 64/9 75/2
 s6/24 57/25 67/2 71!24 73/24 82/6 82/7        fall [2] 25/20 94/17                           fits [2] 19/13 19/18
 82/18 86/8 94/14102/19106/24107/4109/5        false [4] 16/14 47/16 8o/8 98/16               five [7] 74/16 96/11101/5101/5114/19116/2
 114/2115/2117/18118/22119/12119/15            familiar [1] 140/25                             136/17
 119/21119/22 125/13 129/15 129/17135/9        fan [1] 72/10                                  fix [1] 78/1
 136/4 138/11 147/10 163/7                     Fannin [1] 2/4                                 flat [2] 53/2 54/15
evidencing [2] 130/9 130/20                    far [15] 7/1411/123/16 37/3 67/3 69/15         flattest [2] 53/2 54/15
exact [2] 105/22 113/25                         69/25 90/192/18 116/24117/20 134/21           flier [5] 81/10 81/17 81/19 81j2186j2o
exactly [13] 26/24 6s/s 70!11 73/5 82/15        142/16157/8 160/22                            fliers [11] 79/22 80/17 81/8 82/6 82/8
 84/2 86/1195/6 99/7123/22124/2124/4           fashion [2] 7/23 7/23                           82/19 83/6 83/7 83/14 85/2 88/4
124/19                                         faulty [1] 21/18                               flip [1] 6/15
examine [1] 122j18                             Fax [5] 2/6 2/14 2/22 3/6 3/13                 flipped [4] 27/10 27/12 27/19 27j21
example [5] 67/16 72/14 96/17109/4143/3        February [1] 33/9                              flips [1] 21/4
examples [1] 144/2                             federal [4] 30/22 71/8 73/8132/6               floor [2] 2/13 33/12
Excel [1] 148/18                               fee [7] 31/7 31/16 31/2132/2 32/6 32/14        flyer [1] 81j11
except [8] 5/23 20/10 44/1 60/10 64/13          32/15                                         folk's [1] 140/8
75/23 119/3 137/10                             feel [2] 8/7154/5                              folks [21] 61/14 61/16 61/19 62/1164/7 64/9
exception [1] 147/3                            feeling [2] 25/16 125/20                        64/18 6s/8 68/18 69!21 93/6 96/15 97/18
excerpts [1] 59/2                              fees [12] 8/3 8/17 8/17 9/23 10/10 10/10        105/ll107/2116/S117/6142/4143/18149/9
exchange [2] 30/12 31/14                        15!17 31!10 31!18 34/7 8s/s 152/1s             156/15
excuse [4] 70/23 73/20 103/17118/23            Felix [1] 150/11                               folks' [1] 106j21
excused [1] 63/9                               few [7] 16j2o 41/13 74/22 77/18 93/1109/23     followed [1] 67/18
exemplar [1] 16/2o                              124/2                                         following [3] 1/17 84/25 113/6
exemplars [2] 35/5 35/6                        Fiance [1] 4/2                                 follows [1] 47/3
exercise [3] 63j2o 127/9127/11                 fiduciary [1] 4/24                             Foor [1] 163j21
exercised [1] 90/7                             field [1] 38/21                                foot [1] 14/11
exhibit [11] 12/13 54/3 118/10 118/13 118/17   fields [1] 77 j2o                              forced [1] 6o/8
130/25131/4131/5139/4139/6139/7                Fifth [1] 103/24                               Ford [2] 57/19109/17
exhibits [4] 59/183/16118/11163/12             fight [2] 68/9 91/3                            foregoing [2] 106/16 163/6
exist [2] 51/15 71/3                           figure [5] 93/12 119/19 124/5 124/21149/24     foreseeable [1] 73/19
existing [4] 116/13 122/21122/23 149/25        filched [3] 22/4 23/9 23/12                    forget [1]. 46/16
exists [1] 125/12                              file [6] 8/7 40/1158/17 91/4101/1140/22        forgot [1] 161/4
expand [3] 23/6 132/8 144/22                   filed [25] s/9 S/115/16 s/17 5/19 s/20 5/21    form [3] 18/7 30/4 39/7
expanded [2]. 20/15 104/25                      44/lo 45/25 58/13 6o/8 74/16 93!16 93/19      format [1] 39/7
expanding [1] 144/16                            96/24 97/18 101/25 102/4108/3 113/23          formed [1] 104/5
expansion [1] 134/3                             138/17138/18148/15149/18157/19                former [5] 63/25 82/18 134/14135/19
expect [3] 21/9 106/15 n6/3                    files [6] 16j1l17/16 39/18 40/2141/4 42/1       135/25
expedition [2] 97/24 98/1                      filing [4] 90/10 98/11108/15161/6              forth [5] 6/15 24/24 25/8 42/2157/6
expense [1] 43/5                               filings [1] 51/10                              fortunately [1] 84/18
expert [6] 12/114/7 25/1 25/2 36/15 43/10      filled [1] 113/5                               forward [8] 6/9 24/4 71/24 75/5102/8
experts [2] 29/15 157/21                       filling [1] 64/13                               102/18 128/24132/15
Expiration [1] 163/22                          finalized [1] 18/10                            fought [2] so/10 8s/4
explain [4] 77/19142/8142/19143/9              finally [3] 10/12 76/11115/17                  found [18] 41/12 49/16 54/1 61j2o 70/6
explained [4] 68/21 78/s 83/10 118/23          FINANCE [34] 1/9 1/9 1/10 4/3 45/8 46/3         77/17 98/13 99/6 99/6114/3125/11134/17
explanation [2] 8/15 64/20                      47/2 47/5 47/23 48/9 48/10 48/25 51/4          135/12135/17 148/19 148/25149/20 150/7
exploding [1] 144/19                            51/22 51/24 53/3 53/4 53/6 53/9 53/18 54/19   four [23] 6/6 52/24 93/10 93/11102/24
explore [2] 46/10 46/12                         54/23 54/23 55/4 55/6 55/8 55/9 56/10          103/10 104/4 104/13 108/7 114/13 116/2
expressed [1] 6/21                              59/18 59/20 59/21 79/19 89/17104/8             121/4121/6121/7139/15140/4142/4143/18
extend [2] 4/21129/12                          Finance's [1] 51/23                             147/5156/10158/16158/18160/22
extensive [2] 128/10 132/4                     financial [5] 1/51/612/1513/25 47/17           four-for-one [1] 93/10
extent [9] 18/25 23j22 41/25 92/14108/12       find [21] 9/3 34/142/1 53/22 63/19 68/7        frame [4] 32/22 111/22 128/15 129/7
110/15 119/9 140/11142/10                       93/18 94/13 94/24 95/5 99/5 125/15126/7       frankly [1] 100/12
extra [1] 161/11                                127/15 135/18 135/20135/25136/8 136/11        FRENCH [2] 2/12 2/19
extraordi~~,Y [~~- 153;75                       148/13148/16                                  frequent [1] 108/8
extremelv 2 io. 2   ,·;;a•1o                   finding [1] 106/3                              frequently [1] 38/21
F                                              fine [7] n/s 32/12 32/22 33/2o 42/15 89j2o     Friday [3] 90j12 92/3 148/s
                                                100/20                                        friends [1] 72/11
face [5] 35/12 66/17 66/20 84/22 149/23        finger [1] 132/19                              front [1o] 6/10 21/23 53/2159/24 74/25
fact [23] 7/22 22/3 26/5 39/151/12 51/14       finish [1] 34/6                                 86/7 91/24 98/17129/25 152/3



                                                                                                                          1061
                                             35/18 39/17 40/9 40/20 41/14 43/12 so/18   half [1] 156/11
F                                            57/23 57/24 57/25 59/10 63/21 68/6 71/13   Halloween [1] 93/19
fruitful [1] 35/24                           74/4 75/11 79/18 82/9 83/10 91/12 92/13    hampered [1] 78/s
frustrated [3] 8/25 43/20 92/2               92/20 94/13 95/22 97/4102/15106/9106/20 Hancock [1] 16oj25
frustrating [1] 44/21                        111/5115/22117/4119/3120/15120/18121/2 hand [4] 27/7 55/13 135/14 139/3
frustration [1] 92/1                         121/4 124/3 124/13 124/14 125/14 126/7     handed [5] 12/2416/1112/23 123/23
full [6] 6/21 64/20 68/20 79/20111/21        126/17127/9 135/24137/11138/23 139/24       135/20
 129/22                                      141/4141/4141/5142/16143/5151/25153/17 handful [4] 92j2 94/'5 96/s 96/8
FUNDING [4] 1/7113/19 123/9 124/7            155/12 157/13                              handing [1] 81/24
funds [1] 41/12                              goals [2] 138/6142/14                      handout [4] 114/6 118/8 118/15 132/17
further [9] 11/10 21/2 46/1147/18 89/17      GOEBELSMANN [2] 2/18 4/9                   hands [4] 56/1157/5108/1108/10
 120/23 141/14 163/11163/14                  goes [14] 18/6 21j1 21/8 35/2 39/2 56/3    happen [2] 57/9111/16
future'r2l' •i/2 !>81I2                      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        118/1133/13                                 142/12 142/17142/18 142/22145/1147/24
124/22                                       practices [2] 104/5 104/10                  148/16150/10150/16150/19157/21
personal [8] 53/13 55/14 55/2158/19 63/3 precise [1] 82/25                               productive [3] 119/20153/5 157/25
63/10 63/15 63/20                            precludes [1] 71/8                          profit [14] 7/19 8/212/412/712/1513/24
persons [1] 80/16                            prefer [1] 127/19                           13/2514/3 14/16 14/2115/5 43/4 43/7 43/9
perspective [1] 92/24                        prejudiced [1] 43/23                        profit-and-loss [8] 12/15 13/2414/1614/21
phase [1] 61/11                              prejudicial [1] 44/17                       15/5 43/4 43/7 43/9
phones [1] 147/16                            preparation [1] 163/14                      profits [11] 13/113/8 13/9 13/12 14/14 14/14
phrase [2] 39/9 70/21                        prepare [2] 34/25 76/9                      14/18 14/18 15/15 15/18 37/18
physically [1] 63/11                         prepared [4] 30/135/20 35/21142/21          promotion [2] 5/1 5/2
pick [6] 22/23 65/18 65/19 65/19 145/9       preparing [7] 7/5 7/6 24/18 24/22 34/23     proof[3] 29/17 97/10122/22
145/12                                       85/1 88/23                                  proper [6] 47/20 49/9 49/16 49/22 92/20
picked [1] 18/2                              present [7] 18/13 27/3 29/13 30/19 30/20    129/12
picking [1] 37/2                             31/5107/13                                  properly [1] 78/11
pictnre [1] 73/4                             presented [7] 17/9 25/128/134/15107/15      proposed [1] 33/23
piece [1] 148/7                              111/2 122/12                                protect [1] 68/14
pieces [1] 9/24                              Presiding [1] 1/19                          protected [1] 63/15
pig [1] 150/20                               pressing [1] 92/23                          Protection [6] 5/19 6/3 54/193/5 93/17
pit [3] 119/7119/8 121/13                    presumably [2] 39/17157/2                   94/4
placed [1] 43/1                              presumably and [1] 157/2                    Protective [4] 42/14 45/6100/13 100/15
Plaintiff[sJ 4/13 5/17 7/2o 69/5134!23       presume [2] 39/12 154/6                     proud [1] 72/10
PLAINTIFFS [28] 2/7 2/15 2/23 4/5 4/10 presumed [2] 66/2 71/4                            prove [21] 9/16 25/8 25/9 28/17 28/19
4/115/216/17 6/23 7/8 7/17 8/811/18 22/17 presuming [1] 88/9                             28/20 29/129/3 62/14 67/7 67/8 69/19 73/11
31/5 33/19 36/19 77/14 79/22 92/25 94/13     pretty [1] 55/15                            73/11100/9 104/22106/5109/15111/15112/9
95/23 96/196/20123/16151/4155/5159/3 prevent [1] 112/7                                   134/20
Plaintiffs' [19] 7/19 8/2 8/2 8/3 38/14      prevented [1] 37/11                         proven [1] 69/18
38/16 67/9 74/2 74/7 74/9 88/5 95/18101!18 preventing [1] 134/20                         provide [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 67/4 68/17 69/13 69/24 71/14     140/21                                      providers [1] 95/2
71/16 72/7 72/12 72/2173/7161/9 161/17       privileged [3] 46/12 50/17 6o/12            providing [3] 37/10 37/1180/4
Pleadings [1] 161/4                          probably [1o] 23/23 33/7 44/20 60/11        proximate [1] 7(20
please [1] 70/24                             91/10 92/4 97/13102/16114/7139/1            prudent [1] 59/13
pleasure [2] 21/22 57/2                      problem [11] 14/9 77/17 77/19 84/15 86/25   public [1] 109/25
pled [6] 67/2 73/10 73/1198/17103/23         99/9 139/21144/3 158/8 158/9 159/18         PublicData [sol 61/4 62/22 63/9 65(5
149/9                                        Procedure [2] 61/12 65/11                    65/23 66/2 68/19 69/6 71/7 95/195/19 95/20
plug [1] 157/5                               proceed [1] 6/1                             96/4 98/12103/9 106/14106/17106/21
point [45] 7/22 8/2310/513/414/214/2         proceeding [2] 20/12 97/21                  106/23 109/11110/11111/25 113/10 113/20
14/2317/1117/1418/15 20/13 24/2129/17        proceedings [4] 1/171/21163/7 163/11        115/12117/13121/18121/23121/24122/6



                                                                                                                      1069
p                                             ream [11 98/7                                 relation [11 12/1
                                              reason [131 21/9 23/4 23/6 39/23 46/14        Relativity [21 153/7 153/8
 PublicData .•• [2o1 123/1123/6123/13          50/4 60/3113/14117/2129/21135/7151/23        relevance [11 135/6
  124/18 127/9 127/15 130/21139/13 139/18      156/10                                       relevancy [11 36/13
  140/5 140/7142/14143/13 143/17148/8         reasonable [91 33/3 63/14 63/19 63/20         relevant [381 15/2 37/6 37/7 37/17 41/7
  148/12148/13149/20 149/24150/12              90/16 95/21119/12152/1157/9                   41/18 41/20 41/22 45/14 46/15 50/13 50/20
 PublicData.com [71 27/9 61/18 71/25          reasonably [41 32/10 37/15119/13 119/14        50/20 52/9 52/15 55/14 55/23 55/25 56/24
  82/10 94/7 114/7 136/7                      reasons [21 91/1797/14                         59/8 59/10 60/5 60/7 63/17 84/5 85/12
 pull [41 16/1117!16 s8/216o/9                recall [61 12/6 68/168/11105/4105/21           96/19 96/19 96/20 96/23 97/11116/24133/5
 pulled [21 49/24 129/10                       148/20                                        133/6147/6147/10150/2152/2
 punish [21 74/15 138/7                       recalls [21 8/22 49/11                        reliable [21 19/25 20/3
 punished [11 74/12                           received [41 93/2 105/6132/25 142/6           relief [11 43/15
 pure [11 97/24                               recently [11 57/6                             remaining [11 140/24
 purported [11 53/20                          recipient [11 63/3                            remember [71 23/16 54/12 75/18 94/25
 purports [11 48/15                           reciprocal [21 42/24 44/8                      98/11121/17148/3
 purpose [n1 21/1447/1247/20 64/22            recitation [11 22/3                           remembers [11 46/4
 64/24 66/2 66/14 71/9 103/15112/3 117/7      recite [11 68/1                               remind [11 44/20
 purposes [91 69/17 96/2 97/6103/2103/5       reciting [11 43/17                            reminded [21 47/20 58/11
 103/21120/10 125/11157/24                    recognize [11 70/8                            renewed [11 9/4
 pursuant [71 23/15 42/14 43/9 77/25 84/24    reconsider [21 42/23 82/24                    reopen [11 115/16
 89/25 91/11                                  reconsidered [1] 82/24                        rep [21 49/24 50/21
 pursue [21 151/8 151/9                       record [221 1/2 27/127/1127/16 27/20 47/3     repeat [21 8/18 8/19
 pursuing [11 119/8                            48/20 49/12 51/9 54/25 60/20 72/24 74/4      repeatedly [11 59/2
 put [161 9/20 30/4 38/2141/6 44/25 47/1       74/5 74/6 74/15 83/5109/9 124/1163/9         report [51 135/21154/7155/5 155/7155/11
 50/19 57/12 75/8 82/189/12121/19151/9         163/11163/15                                 reported [31 1/21 51/12 163/10
 151/12 158/19 159/16                         recording [21 129/1130/12                     reporter [31 4/4 163/4 163/19
 putting f~~,?S(~<                            records [91 47/15 77/15105/22106/23           REPORTER'S [41 1/2 163/9 163/11 163/15
ln=amid 1 <I                                   106/23 109/25 122/16 123/23 124/13           reporting [11 52/25
                                              recover [21 28/8 150/1                        reports [31 13/2514/16157/22
Q                                             recovery [11 61/8                             represent [21 37/12160/25
question [201 9/19 22/4 22/5 23/7 24/17       redacted [11 31/14                            representation [161 22/2 46/15 48/12
 30!17 31!24 45/16 45/18 49/5 56/23 73/2      redaction [11 31/13                            48/14 48/15 48/16 50/19 53/10 54/23 57/11
 87/19 88/1 88/15 112/14120/6 141/18 144/11   REDDEN [21 3/4 163/16                          89/11146/22147/15149/3159/7161/15
 156/21                                       reduce [11 152/4                              representations [61 54/13 57/10107/15
questions [41 25/24 57/21 94/16 96/10         refer [31 131/14 141/11141/15                 107/17145/23156/24
quick [11 6/9                                 reference [61 41/5 48/4 81/25102/12           representative [71 49/10 49/18 50/152/13
quicker [11 139/24                             103/11106/10                                  58/19 60/3 91/23
quickest [11 6/8                              referenced [31 103/9147/5147/8                represented [61 6/24 7/1518/19 46/2111/1
quickly [31 41/4 78/2 78/17                   references [11 29/14                           161/24
quite [71 49/9 49/12 76/20 76/23 85/16        referrals [11 113/4                           reputational [11 157/10
 108/20 140/19                                referring [51 70/24 79/5 79/6 89/16131/4      request [441 7/415/2116/916/916/12
quote [~1,18/; ~8/9 64/181/7 84/21
               1
lnuotin~ 1 8~, 18
                                              refers [11 130/10
                                              refinance [11 10/10
                                                                                             31/1136/23 38/15 89/18 90/16 97/16 99/15
                                                                                            102/5104/1104/6104/7110/25117/13 118/6
R                                             refinanced [11 8/21                           118/19 120/6 121/15 129/23 130/3130/14
                                              refinances [11 8/18                            130/23131/2134/23137/23137/24138/20
rabbit [101 105/19106/2106/4106/5107/2        refinancing [11 15/17                         138/25 139/2139/17140/22141/16142/11
 117/8 119/16124/3124/4156/9                  reflected [21 39/9 78/4                       148/16150/17150/19 150/25 151/18 153/12
Rainey [11 134/16                             reflects [11 163/12                           154/23
raise [21 95/9 111j16                         refusal [11 75/7                              requested [121 13/22 43/18 44/13 44/15
raised [51 6/8 27/6 77/6118/24120/10          refused [21 13/12 102/19                       92/25104/23 110/25 120/5 120/20 133/25
Ram [11 110/10                                refute [31 117/16 118/25125/12                143/5 163/7
ran [20 1 61/16 64/10 68/7 98/13 100/8        regard [101 52/9 8oj22 87/9 90/13108/9        requesting [41 97/16118/25 120/13 139/20
 100/21100/23 101/23 103/22105/23105/23        128/15128/25139/16140/25150/10               requests [361 12/25 36/3 36/18 36/18 38/3
 106/1109/5109/7110/11114/1116/15117/10       regarded [11 108/9                             43/9 95/15 111/18 111/24115/15 118/7118/9
 123/15 153/19                                regarding [191 42/22 45/6 80/4 93/1 97/13     120/9 120/13 126/22127/3127/6128/11
Randy [11 134/16                               102/20 104/9 105/1107/16107/19108/9          128/25129/7129/8 132/2132/16139/3
rate [21 48/4 48/5                             118/9 118/12120/20 126/13 126/14126/17       139/10 140/24 142/3 142/17 142/18 142/22
rates [11 15/17                                146/21150/19                                  143/22146/17146/21147/24150/3 150/16
rat!Ier [31 159/21159/21159/23                regardless [31 24/7 135/7 135/8               require [21 92/3 92/12
rationality [11 92/10                         regards [61 101/23 102/5 102/8 102/19         required [41 19/14 61/12 65/11 67I 4
Re [21 48/24150/4                              110/9 137/17                                 requirement [21 67/19 153/20
reach [21 31/20 126/13                        regime [11 61/24                              requires [41 31/12 52/25 6o/4 65/24
read [151 8/15 9/2410/115/16 16/12 36/16      region [41 13/1215/6133/11133/15              requiring [31 76/3 76/6 91/4
 46/5 80/16 82/19 84/19 86/2 86/2 88/13       regional [51 83/18 84/2 84/24137/17           research [51 108/23 108/24112/16119/23
 136/24140/1                                   137/18                                       119/23
reading [51 8/1410/18 10/19 85/25 131/6       regions [31 133/9 133/11133/17                researched [11 108/19
ready [21 124/9157/13                         relate [41 103/11141/11143/6143/14            researching [11 115/4
reality [11 51/17                             related [151 8/17 9/18 11/22 11/25 31/1       resell [21 63/3 67/18
really [291 6/417/25 20/2131/135/2 40/17       64/25 105/17106/6 106/11106/12 106/24        reseller [11 63/8
 42/11 44/12 44/12 53/1 65/19 65/19 92/13      110/1141/15 142/18 155/2                     resellers [21 63/14 65/4
103/22 104/16 104/21105/2 107/16110/22        relates [51 74/10 105/22 131/2 131/2 131/14   reserving [11 151/7
114/10114/11120/8127/19130/10141/1            relating [101 5/2213/136/3 45/1103/22         reset [11 159/16
142/20145/22158/23160/4                       119/10 128/8 128/10 129/12 133/8              resigned [11 9/4



                                                                                                                            1070
                                            road [1] 116/23                                SBOT [4] 2/3 2/19 3/3 3/10
R                                           ROBERT [2] 1/19 24/23                          scenario [1] 29/6
resolution [1] 126/14                       Rogatory [11] 5/21 5/22 6/3 93/3 93/4          Schaefer [5] 130/20131/7131/13 131/14
resolve [t] 110/22                           93/13 93/16 94/5 96/9 96/15100/14              132/1
resolved [3] 5/12 5/15 31/8                 role [2] 85/1 85/19                            Schaeffer [t] 131/2
resources [2] 45/15 48/8                    ROMERO [4] 2/114/11 65/15 69/22                SCHAFFER [4] 1/19 23/1 23/9 24/23
respect [22] 13/3 42/9 77/10 83/2 84/9      room [2] 55/16 69/19                           Schaffer's [2] 22/22 22/24
 89/19 91/24 98/11103/10 103/15 104/16      routinely [2] 74/20 74/21                      scheduling [t] 92/18
 104/18 105/10 111/18 126/21126/22 128/19 RTP [4] 62/8 66/23 67/167/3                      scope [2] 30/7 93/8
 128/20 131/9 134/5 142/2143/18             rule [t4] 29/14 29/25 30/22 43/17 61/25        scrape [t] 18/14
respectfully [to] 15/10 21/13 46/19 55/3     62/17 71/4 72/13 75/15 99/3 99/4100/1         screen [7] 68/20 84/19 153/18 154/8 154/9
 55/22 57/14 57/17 90/11 90/17136/19        100/4158/25                                     155/14 155/16
respective [t] 163/13                       ruled [2] 11/16 43/16                          seal [1] 124/1
respond [t6] 6/17 59/20 8o/10 84/10         Rules [5] 61/12 65/1167/4 95/14 98/2           search [t24] 25/10 26/3 41/21 64/4 64/10
 84/25 90/13 90/18 91/10 91/18123/18137/2 ruling [t31 35/11 36/1 41/23 42/3 43/11           68/7 69/16 98/17 98/24 99/10 105/20 105/24
 137/2137/5137/6153/24157/18                43/19 43/24 44/5 60/13 60/14 92/24100/19       106/1106/3106/6106/11106/13 106/15
responded [21 89/4 89/18                    128/7                                          106/24107/16 107/19 109/5 109/7110/1
responding [7] 48/10 59/16 84/9 90/25       run [261 21/7 25/2 41/4 41/21 61/4 61/15        110/5110!6 110!6 11o/6 11o/19 111;22 111/23
 91/7 91/15 137/3                            66/12 68/20 68/22 69/192/4103/1103/20          112/1112/20 112/23 112/24113/3 113/12114/1
response [341 7/2 18/2118/23 42/1145/25 105/16 106/14110/5 111/21113/3 113/12117/6          114/9 114/12 114!16 114!20 114/25 115/8
 59/21 70!15 71!11 84!21 84!22 85/16 87/16   122/21127/22129/10 129/19 150/1153/17          115/18 115/24116/1116/3 116/7116/15 116/22
 88/10 89/16 89/17 89/2189/2190/9 91/11     running [t6] 24/14 63/25 64/3 65/9 66/8         117/7117/10117/12117/24121/18122/15
 91/20 95/4 95/5 99/18 105/12 127/3 127/6    66/14 66/22 95/24 98/21106/2106/16 111/6       123/2 123/10 123/13123/15123/24 124/6
 129/22 132/21133/1137/17140/13 140/22       116/21119/7 119/16 119/16                      124/7 124/12 124/19 125/16 125/18 125/23
 150/17152/19                               runs rtl -;,;,r,                                126/8 126/9 126/9 127/10 128/19 129/5
responses [11] 31/9 42/13 42/17 77/10
 78/22 84/1 96/12101/18 102/2108/13118/12   s                                               131/22 132/2 135/5 135/15 135/16 140/7
                                                                                            142/2142/4142/11142/17142/21143/5
responsibility [3] 73/4 73/5 75/4           safeguards [t] 63/9                             143/5 143/11143/21144/7144/8 144/10
responsible [t2] 5/20 40/13 56/8 6o/23      said [82] 10/9 11/18 13/613/613!19 16/19        144/11144/16 145/1145/13 145/18 145/21
 61/5 65/24 72/16 72/21 81/1 81/5 88/23     17/417/13 21/24 25/23 25/25 27/7 28/3           146/1146/7146/8 146/8 146/8 148/17148/24
 101/16                                      29/12 37/3 41/6 42/1143/8 44/150/13 51/25      148/25149/15 150/6 150/13 153/1153/2
responsive [t7] 111/24112/6 115/15 131/23 55/24 57/7 57/16 58/23 59!12 63!12 64!22          153/4153/4153/5153/8153/10153/18154/7
 141/14 142/23 143/16 143/21143/25 146/23    65/1 67/7 68/2o 70!9 70112 70!14 71!15 72/6    154/10 154/11155/4 155/4 155/11
 147/6149/21150/2150/15150/19153/11          74/7 77/14 83/2 83/3 83/4 83/20 83/21         searchable [t] 121/25
 154/23                                      83/22 83/23 84/2 87/15 88/9 90/7 90/15        searched [to] 69/6 97/1111/25117/11142/5
rest [6] 36/8 66/18 110/24134/5 134/20       91/22 92/15 94/9 94/2194/24 95/196/1           143/15 144/2148/11149/12149/20
 150/14                                      96/15 98!13 100/6 104!19 105!13 105/16        searches [86] 61/16 63/6 64/1 65/9 66/8
restate [t] 40/5                             106/6 108/18 112/16 112/17112/19 123/13        66/12 66/14 66/22 68/22 69/172/23 72/24
restrict [t] 111/21                          123/15 124/2 129/19 135/23140/11142/16         73/2 73/13 94/17 94/18 95/3 95/5 95/6 95/21
restricted [3] 128/14 129/3 131/20           145/1147/8148/16149/15150/9151/7161/16         95/25 97/6 97/13 98/8 98/14 98/2199/6
result [t3] 7/20 7/2319/18 26/3 26/23       sake [t] 46/23                                  99/12 99/14 99/21100/8 100/21100/23
 73/19107/8110/10110/19125/1145/16          same [30) 13/1414/2015/715/717/1717/22          101/23 102/20102/25 103/14103/22104/14
 145/19 150/12                               29/8 31!1136/18 38/5 39/23 43/143/6 46/14      105/16105/18106/16107/5107/8 107/22
resulted [6] 63/11 85/6 107/19 110/7135/4 57/1163/18 69/4 82/15 82/17 93/17 94/6            108/5 108/8 108/8 111/6 111;2o 111121111/22
 142/22                                      101/241o4/5116/5 118!23 131/22132!15           112/5 121/13 121/17 122/8 122/21124/25
results [t5] 107/19 108!11111/22 114/5       137/14142/11142/21                             125/15 126/17126/19 126/24 126/25 127/2
 114/9117/12117/18119/12121/18122/1         sanctions [5] 74/3 74/8 90/4 91/6 91/20         127/13127/18127/22127/24128/8128/15
 153/10154/9 154/10 154/11154/22            sand [t) 148/22                                 128/20 129/2 129/10129/11129/13 129/15
retread [11 6/20                            satellite [t] 97/7                              129/19 131/21144/8 149/17149/19 150/1
returning [t] 35/25                         satisfied [2] 8/7 66/16                         152/17 152/22 152/25 155/2
reveal [41 37/4 40/14 40/14 40/15           Savanna [4] 81/1 81/5 85/13 86/17              searching [to] 47/14112/21124/24125;4
revealed [2] 9/10 107/16                    saved [3] 101/9 148/7149/10                     125/5 125/9 125/10126/9 132/5 149/24
revealing [t] 17/7                          saves [t1 101/22                               second [27] 11/2012/2413/18 24/23 34/6
reveals [t] 9/11                            saw [6] 13/11 61/17 77/15 96/24103/3 103/7      40/24 47/19 54/12 65/17 74/4 75/24 76/9
revenue [4] 7/20 13/20 43/5 43/5            say [59) 4/4 4/14 8/2410/1916/1516/16           76/15 77/16 82/12 82/14 87/7 93/24101/14
reverse [t] 38/19                           17/717/12 22/25 28/1028/12 29/23 30/7           101/15 102/23104/7121/21123/17127/22
review [111 7/10 43/22 44/16 83/15 84/23     39/25 42/13 42/13 46/23 49/25 51/16 52/17      150/18 160/16
 108/24144/6145/16154/7154/24157/22          52!19 53/22 53/25 54/17 58!1159!15 59/25      secondary [2] ·77/2177/24
reviewed [2] 46/10 83/25                     61!25 62/3 70!24 71!1o 71!18 84/16 85/10      secret [2] 42/10 42/18
revisit [t] 105/3                            85/23 87/14 87/22 88/7 88/19 92/15 98/18      secrets [t] 42/14
rewarded [t] 138/5                           106/4109/9109/14109/19110/8113/20             secular [t] 98/16
RFP's [t] 12/23                              115/18 115/19 116/13 136/16 140/14141/14      Security [4] 77/2177/22 77/25115/5
rhetorical [t] 17/25                         141/17143/23 144/4150/21152/23 158/11         see [so] 9/1410/13 12/22 16/25 17/2 25/19
right [52] 4/2 5/7 5/10 5/24 7/25 9/1311/13 saying [29] 9/2211/5 25/1131/4 41/2147/2        26/9 28!135/17 39/8 40/2154/5 58/5 63/16
 13/713/19 14/15 17/2 19/919/23 20/7 23/25 47/6 60/2 64/6 66/12 70/170/23 71/6 71/11        64/19 77/16 82/5 83/15 95/22100/17100/21
 25/5 25/15 27/7 34/24 37/3 37/4 37/12 38/6 75/21 8o;2o 85/10 85/18 88/9 91!2 99/5          100/23 101/1 101/7 101/25 104/4 109/8 113/4
 45/17 54/10 60/13 63/9 64/18 65/22 69/3     108/22 108/24 109/22 112/20 112/24 115/24      113/5113/13 113/15113/24115/25119/13
 71/20 83/23 86/2 90/2 94/1 95/10 98/3       141/20 152/3                                   120/20122/16124/4124/5124/11127/10
 101/4102/13113/8113/24115/22124/17         says [3t] 43/17 48/6 48/24 49/153/9 53/25       131/23 132/6139/5139/19 141/13 144/17
 126/19126/25 129/24129/25 148/23 149/7      55/7 55/7 57/158/10 58/17 58/18 59/16 61/6     146/1146/2 146/9 153/11
 151/8 152/8 154/17                          62/7 62/17 63/1 63/24 64/1 71/4 73/18 83/2    seeing [t] 125/13
rights [t] 152/4                             88/20106/4106/21113/18123/2124/7128/1         seek [2] 24/11120/22
risk [t] 157/10                              131/6 153/18                                  seeking [to] 18/2o 18/25 31/18 37/6 37/7



                                                                                                                        1071
s                                              71/23 106/24
                                              shown [7] 63/22 65/6 65/12 67/2 95/18
                                                                                             sold [1] 109/17
                                                                                             solicit [3] 79/22 80/18 88/4
seeking••• [5] 85/8 96/8 123/11132/1149/5      96/4109/21                                    soliciting [1] 69/20
seeks [1] 104/24                              shows [13] 37/17 38/25 41/18 53/13 53/13       some [55] 5/14 5/14 6/7 16/1 16/13 21/15
seem [3] 102/16127/17130/2                     85/13 98/8 109/13 114/2120/1123/8 123/24       22/15 25/22 25/23 29/6 31/20 33/18 39/18
seems [5] 91/18 114/10 114/12 114/21137/3      153/3                                          40/2 41/1142/24 44/5 45/15 47/6 57/21
seen [s] 21/25 49/14 50/25 58!17117/21        side [3] 45/2 153/25 160/15                     57/2159/8 63/23 64/8 64/18 64/24 73/3
Select [4] 47/1147/13 47/14 48/8              sides [1] 32/1                                  77/9 77/14 86/10 90/6 90/9 90/17 91/18
self [2] 5/2 111/3                            sign [2] 16/2192!20                             92/10 93/2 94/15 94/25 95/18 98/13100/9
self-collected [1] 111/3                      signed [9] 16/23 19/17 49/158/9 74/10 76/3      104/17107/13 109/10 109/12111/1111/23
self-promotion [1] 5/2                         82/23 113/23 161/17                            111/23 113/14122/12 130/5 138/12142/16
seminars [1] 44/21                            signer [1] 77/23                                144/2 144/17
send [7] 64/7 83/14 86/9143/4144/16           significance [1] 53/17                         somebody [5] 34/149/21 86/8 86/8 155/25
 144/22 147/16                                significant [1] 147/13                         somebody's [1] 18/8
sense [5] 13/19 14/17 15/11129!14 136/18      signing [1] 100/14                             somehow [2] 7/5 9/18
sent [14] 36/19 55/8 56/9 58/8 66/12 81/19    signs [1] 71/6                                 sameness [1] 6/21
 83/7 86/6 86/12 88/17 94/2 94/2 94/3117/5    similar [8] 36/18 37/2102/17130/5133/25        someone [17] 21/4 27/20 39/4 52/25 56/10
sentence [1] 5/24                              134/17137/16 142/22                            62/4 63/10 63/1168/3 68/14 69/13 71/6
separate [2] 117/23 129/6                     similarly [1] 145/19                            71/18 73/7124/21148/7161/8
separately [1] 54/19                          simple [6] 30/17 55/2 72/20 87/2 97/24         something [40] 11/3 28/12 28/23 34/2
September [4] 37/18 75/16 75/16 82/25          102/18                                         45/2149/23 53/20 62/14 62/18 65/17 68/10
serial [1] 82/16                              simpler [1] 7/9                                 68/19 68/24 71/12 74/19 74/20 81/12 84/17
seriously [2] 32/25 100/24                    simply [5] 50/18 72/22 73/8 74/23100/4          90/5 91/2 92/17 94/22 97/25 98/18106/3
served [8] 87/16 93/5 97/5 97/17104/1         since [12] 5/116/24 51/23 89/8 89/14 94/24      109/18110/12110/12110/20114/8127/13
 104/6120/12150/16                             102/23 128/14134/3 134/6 142/24148/1           128/2135/4136/17141/23141/25144/7
serves [2] 21/14 57/2                         single [1o] 19/16 29/16 46/20 50/13 59/12       144/20 145/14 145/17
service [2] 70/2 70/3                          59/25 77/6135/1148/18157/10                   sometimes [3] 41/9 77/23109/18
services [4] 1/5 1/6 4/2103/21                sip [1] 53/24                                  somewhere [1] 57/23
session [3] 88/22148/1148/3                   sir [10] 16/4 32/17 33/9 34/10 34/19 34/22     soon [1] 159/4
set [7] 6/1018/12 49/20 91/24 92/24118/19      76/2 76/5 156/17159/10                        sorry [12] 12/13 15/24 58/12 69/25 85/13
 160/2                                        sit [3] 57/2166/11121/9                         114/15 130/15136/25139/23 140/7146/6
setting [3] 33/8 33/8 157/20                  site [1] 94/10                                  158/25
settlement'[2] 58/23 101/17                   sites [2] 61/5 94/25                           sort [4] 61/21 64/22 153/6153/8
seven [1] 34/20                               sits [1] 50/5                                  sought [5] 6/22 43/15 6o/5 61/8 152!15
Seventh [1] 104/6                             sitting [2] 12/6 66/7                          sounds [1] 64/2
several [5] 94/4102/21104/23105/5150/8        situation [3] 67/24123/23 145/23               source [1] 41/13
severers [1] 66/13                            si:< [2] 26/2 36/18                            South [1] 156/6
shall [2] 79/19 88/2                          Sixth [2] 102/5 104/1                          space [1] 64/14
shameless [2] 5/1 5/1                         skip [3] 98/8 100/9 106/1                      spade [3] 94/13 135/24147/18
she [53] 8/14 8/1410/5 10/5 45/18 45/22       skipping [1] 12/14                             span [2] 41/9 41/11
 51/13 51/14 51/14 51/15 52/12 52/17 52/21    slows [1] 75/8                                 speak [4] 44/2151/6 146/20158/24
 66/23 66/25 104/18 105/23 106/1106/6         smacks [1] 50/3                                speaking [3] 4/5 35/14 38/7
 109/22110/11111/6 111/8 112/21113/16 114/2   small [8] 56/9 56/13 56/17 75/2175/22          Special [12] 7/13 20/20 25/1 30/2 30/11
 114/3115/4116/13116/15116/15116/17            109/19 109/19 147/13                           37/10 77/10 77/20 78/8 78/18 91/25117/3
 116/18 116/19117/16117/17117/24122/18        smart [1] 124/5                                specific [22] 8/5 12/712/1515/5 35/22
 122/25 123/10 123/15 124/9 124/21125/10      SMR [1] 53/11                                   35/24 43/3 45/13 71/9 77/1 83/11 83/12
 125/11134/25135/8142/3143/2143/4147/5        snapshot [2] 22/14 23/18                        114/20 118/5127/13 129/23 138/19 138/20
 147/8147/9                                   so [1sol 5/13 6/5 7/17 8/22 9/15 10!15 1o/22    148/15 149/15 149/16 153/2
she's [5] 10/2 67!1112/20 121/7124/9           11/2 11/2412/22 16/23 18/25 20/12 21/19       specifically [20] 10/15 10/1713/1136/17
sheet [3] 6/1415/25 161/13                     23/22 23/25 24/7 24/17 24/18 24/22 24/24       39/3 47/10 74/10 79/16 80/10 83/6 83/7
sheets [1] 27/9                                24/24 26/4 26/20 26/25 29/19 31/6 31/13        89/21107/2115/4116/16118/9125/6143/6
shell [1] 61/3                                 31/23 31/25 32/5 32/13 33/19 34/4 34/8         147/5161/8
shift [1] 65/16                                34/20 35/3 35/6 35/9 36/1136/23 37/9          speed [1] 7/10
ship [1] 22/7                                  37/10 43/6 44/19 44/23 46/6 46/18 51/6        split [3] 145/9 145/12 146/7
Shop [1] 72/15                                 51/16 52/153/23 54/17 57/13 57/15 57/23       spoken [1] 33/16
short [4] 23/2154!2 76/1147/25                 58/25 59/6 63/1164!7 65/10 65/2166/4          sponsored [1] 85/22
shot [4] 153/18 154/8 154/9 155/16             68/23 70/2 70/3 71/6 73/7 74/19 75/2 76/1     spread [1] 136/7
shots [1] 155/14                               76/8 76/14 78/10 78/1180/9 80/20 83/4         spreads [1] 135/16
should [19] 25/18 25/19 31/8 32/8 41/8         83/5 83/8 83/2184/20 94/12 94/14 95/2         spreadsheet [5] 148/4148/17148/18
51/22 67/15 71/13 74/12 94/23108/10115/17      96/13 98/15 98/22 103/13 103/25 104/21         150/18 151/1
 131/5142/20 144/2 150/17152/13 152/16         104/21105/2105/7107/25 108/22109/23           sprung [1] 38/15
 154/21                                        110/15 111/13 111/14112/2 112/8 113/10        stack [1] 95/20
shouldn't [6] 70/24119/2124/3 150/24           113/19114/10115/11115/12116/24117/20          stage [2] 65/10 67/8
 152/13 158/11                                 118/19 118/25 120/6 120/12 121/8 124/21       stamina [1] 161/21
show [34] 9/1614/1414/2417/10 22/20            126/24 128/24130/1130/3 130/7130/16           stand [6] 21/23 26/2o 42/23 43/12 75/9
 26/6 28/13 59/19 60/4 61/19 62/1162/16        133/2133/10133/12133/23 134/11134/21          121/20
 65/5 67/9 68/18 79/8 84/12 85/14105123        137/1137/12138/7138/7139/12139/25141/4        standard [23] 62/5 62/12 62/17 62/24
106/23 110/3 112/18 115/2115/8 117/19          141/23 145/1145/22 148/24154/2154/22          64/18 65/4 65!12 66/5 67/4 71!14 71!22
119!2o 148/6151/2151/19154/7155/4155/14        155/1156/13157/7157/19158/7158/24159/7        72/18 73/8 81/10 81/11 81/17 81/19 98/25
155/16 155/16                                  160/2160/5 161/11                             99/24100/2150/4154/25161/7
showed [7] 83/16 98/15 98/16 98/20            So at [1] 20/12                                standards [12] 61/10 61/12 61/14 66/17
105/20 106/2 113/22                           Social [4] 77/2177/22 77/24115/5               68/17 69/13 69/25 72/7 72/12 72/13 72/22
showing [7] 13/2514/17 59/3 59/8 60/10        Softech [1] 67/22                              73/7



                                                                                                                             1072
s                                          substantial [2] 34/17 90/13
                                           substantially [1] 131/17
                                                                                        tardiness [1] 91/7
                                                                                        tardy [2] 76j2o 76/23
standing [3] 34/4 95/9 95/12               substantive [1] 157/22                       targeted [2] 83/6 88/24
start [10] 4/7 4/16 25/25 32/8 54/22 66/25 such [4] 36/11 59/13 86/24 87/14             technical [2] 35/16 157/1
 74/22 97/12132/4139/11                    sudden [1] 26j21                             Tecum [1] 94/1
started [7] 9/2210/5 26j2 26j8 26j12 26j12 suddenly [1] 50/24                           Telephone [6] 2/6 2/14 2/213/6 3/12
 26/13                                     sued [4] 62/1 63/12 67/17 68j12               163/22
starting [4] 41/17 45/24 93/7102/23        sufficient [2] 105/6 132j2o                  tell [35] 6/13 21/9 26/15 28/23 31/3 41/17
starts [2] 26j7110j10                      suggest [5] 6/2 34/12 38/24 93/8127/14        45/2155/10 64/2 65/2174/16 79/10 86/20
state [13] 14/114/4 31/9 47/15 47/18 70/9 suggested [2] 109/10 126/16                    90/2 115j2o 116/9 116j10 119j2o 119/23
 70/16113/5133/4133/21134/5163/1163/5 suggesting [5] 16/2518/11 25/15 44/6               134/9 134/25 141/3 141/23 141/24142/2
stated [4] 11/2 51/14 117/14 139/18         64/10                                        145/24145/24148/1148/21149/17150/21
statement [3] 55/155/4125/23               suggestion [5] 116/17116/20 120/14124/16      153/6 158/9 160/25 161/13
statements [7] 15/5 57/22102/8117/16        126/13                                      telling [7] 15/3 57/13 57/23 85/16 87/25
 119/1119/1120/7                           suggests [2] 64/24 118/22                     117/6154/14
states [1] 88/22                           suit [1] 97/18                               tells [1] 44/4
stating [1] 118/21                         Suite [4] 2/5 2j2o 3/5 3/11                  template [2] 17/2318/5
statute [5] 65/2466/19 71/8 72/173/5       sum [1] 55/12                                Temporary [7] 95/25 98/19 102/3 102j22
statutes [1] 61j13                         summarizes [1] 12j22                          103/1108/6118/2
statutory [3] 64/24 67/19 68j21            summary [7] 12j18 29/14 29/16 29/20          ten [3] 128/8 128j20 136/17
stay [2] 33/25156/9                         29/25 30/22108/4                            tends [1] 128j9
stealing [2] 55/17 69/20                   summer [4] 96/1158/16 159/1159/2             tennis [1] 132/19
STECKER [1] 2/11                           summertime [1] 158/18                        tens [4] 39/15 39/18 40/20145/20
stenotype [1] 1j21                         superceding [1] 61j21                        term [5] 23/11143/15 143j21145/14 148/17
step [1] 19/7                              superior [1] 135/22                          terminated [1] 117/6
steps [1] 68/14                            supplement [3] 89/11 89/12 141j21            terms [53] 8/12 10j618j2118j25 19/2
Steve [1] 113/23                           Supplemental [3] 88/16 89/21140/22            23j16 29/24 106j14 106/15 112/2 116/3
Steven [3] 40/7113/14 113/16               supplementation [2] 14/9 8o/8                 125/15125/16126/8126/9126/9127/10
stick [1] 59/24                            supplemented [2] 8oj6 90/2                    129/5 131/21131/22142/2 142/11142/16
stickY [1] 82/1                            supplementing [1] 99/17                       142/17142/19142/21143/5 143/5 143/6
still [17] 8/25 9/1619/20 24/6 25/17 35/14 support [7] 67/167/3 73/24117/16118/25        143/11143/20 143/25 144/8 144/10 144/11
 41/12 66/22 67/175/9 105/5 129/14140/16    120/25128/9                                  144/16 144/22145/1145/9 145/13 145/18
 150/18 151/7156/14 156/15                 supported [1] 104/2                           145/21146/1146/7146/8 148/12148/25
stipulate [3] 25/13 25j16 96/1             supporting [1] 8/20                           149/15153/2153/4154/10154/11155/4
stipulation [2] 66/21 72/24                supports [1] 122j23                          test [1] 127/5
stole [1] 16/10                            suppose [1] 161/7                            testified [8] 27j2o 27/23 38/20 40/6 50/13
stolen [1] 15/3                            supposed [5] 7/6 20/11 20/16 20/20 71/7       59/25 68/18 148/9
stop [6] 10j18 47/8 57/12 65j18114j22      supposedly [1] 22/3                          testify [1] 49/22
 120/15                                    supposition [1] 29j12                        testimony [16] 27/6 39/25 39/25 61/15
stopped [2] 8/1410/19                      sure [31] 8/2412/1717/19 21/18 28/3 36/1      63/24 64/12 64/20 65/7 80/24 82/20 83/11
store [6] 40/14 81/9 83/13 131/13 148/11    44/19 44/23 55/15 57/8 62/25 64/16 70/6      83/16 94/9 148/7149/10 149/13
 149/1                                      75/5 75/19 81/2192/19 93/25112/9 120/8      TEXAS [69] 1/71/8 1/10 1j10 1j2o 2/5 3/5
stores [3] 13/1147/11149/6                  121/2130/18 130/23 131/8138/10 140/25        3/12 13/1114/114/1715/6 30/22 37/18 37/24
story [1] 91j16                             148/4 153/17 154/2 156/13 160/14             46/17 47/7 47/1147/15 47/20 48/16 48/25
straight [3] 6/9 102/8 102j18              surprised [1] 161/23                          49/19 50/7 51/18 53/10 57/4 57/4 59/22
straight-forward [1] 6/9                   surrounding [1] 60/11                         61/12 63/13 65/1170/9 72/8 72/1179/20
strapping [1] 156/6                        suspect [1] 118/23                            79/20 80/23 82/7 82/8 86/6 86/8 86/12
strategies [1] 83/9                        SUTHERLAND [1] 2/4                            89/19 95/14 96/6 97/17 97/23 99/199/25
strategy [13] 17/8 79/25 80/5 80/1184/4    sutherland.com [1] 2/7                        102/21104/7 104/14113/6113/19 114/8 123/6
 86/4 87/3 87/9 87/10 87/14 87/2188/5 88/8 switch [1] 160/5                              123/9124/7133/2133/4133/24135/2159/20
Street [1] 2j12                            sworn [3] 13/10107/2 124/9                    163/1163/5 163/19 163/20 163/21
                                           system.~3~)8/ 1l,38/22 71/3
                                                         0
streets [1] 68/3                                                                        text [11] 139j12 139/17 141j1o 141!13 146/21
strike [1] 13/6                            sustemtc 1 '7c::                              146/23147/2147/5147/7147/10147/14
structure [2] 52/6 52/8                                                                 than [10] 8/5 57/20 76/21 76j22 76/23
struggled [1] 72/9                         T                                             91/25101/5116/4117/7137/18
stuck [1] 136/3                            tagged [1] 54/21                             Thank [30] 18/137/142/19 45/17 48/23
stuff [11] 30j1o 38/25 47/6 84/3 84/4 86/5 tailor [1] 117/14                             54/7 58/3 6oj15 6oj16 72/3 73/25 79/14 87/5
 99/6 99/6148/8 148/13 149/10              take [34] 14/7 28/6 28/8 29j2o 30/2 30/3      92/16101/6103/6132/14136/22137/8
stuffed [1] 85/9                            39/14 39/15 41/24 46/19 51/23 53/24 59/24    137/13146/15147/18147/18152/7154/13
stuffing [1] 55/16                          64/9 75/4 89/1190/6 90/17 91/5 91/8 96/24    155/20 155/21155/24160/19160/21
styled [1] 163/9                            101/5101/12117/25118/1120/19128/8128/9      Thanksgiving [1] 158/1
subject [5] 25/10 55/14 62j8 63/14132/2     132/18139/8146/16159/4159/5 161/25          that [1247]
submission [1] 92/24                       taken [6] 25/6 27/170/13 81/7 97/2109/6      that reasonable [1] 33/3
submit [1] 42/5                            takes [2] 121j13 146/17                      that's [146] 5/10 5/24 9/1310/3 10/1411/5
submitted [10] 41j2o 53/24 77/13 102/24 taking [6] 28/5 29!24 53/1 57/8 68/14            n/511j814/23 15/1715/1816/1217/1119;5
 105/11108/2 118/19 118/20 120j12 159/13    69/19                                        20/25 21/5 22/7 23/6 23/7 24/11 25/1126/24
subpoena [5] 93/7 94/196/4 99/2100/19 talk [9] 26/10 35/21 61/20134/8 135/12             27/5 28/10 28/1129/25 30/730/25 31/131/2
subpoenas [9] 93/2 93/5 93/16 94/4 94/5 146/2146/14155/12160/15                          32/22 33/5 36/14 36/2136/22 37/23 39/10
 96/1197/5 99/25147/16                     talked [4] 33/14 50/14 50/14 70/13            40/141/16 41/16 41/20 41/2142/15 43/11
Subsection [1] 63/4                        talking [26] 13/7 27/3 29/25 32/24 39/15      43/19 45/14 45/25 46/13 46/2146/2148/8
subsequent [1] 117/3                        43/2 44/14 45/24 49/3 52/12 57/19 61/23      51/151/4 53/3 53/5 53/6 53/7 54/154/25
subsequently [1] 28/16                      67/21 69/3 78/3 79/9 86/3 89/5 93/3 93/12    55/7 55/7 55/18 56/10 56/14 56/18 57/11
substance [1] 42/16                         101/20121/17130/9 136/19 144/23 154/8        57/18 58/18 59/9 59!12 59/12 6of3 62!2



                                                                                                                     1073
                                                 149/10 149/13 156/12                         69/18 73/13 75/175/6 77/13 83/1183/25
T                                               therefore [4] 89/1105/21105/25150/3           85/13 86/7 86/1193/6 93/17 94/15 95/19
that's ••• [73] 62/17 63/5 64/3 64/8 64/17      therein [1] 144/3                             95/22 96/10 96/15 97/13 97/17 97/22 98/21
 66/8 67/23 68/16 70/19 70/24 71/13 71/20       therein lies [1] 144/3                        99/12 100/19 101/23 103/3 103/7103/7
 71/21 71/2172/8 72/14 73/12 73/13 73/21        these [127] 5/I18/510j2o 11/311/512/24        103/11103/22 104/3 104/14104/16104/21
 75/22 75/22 77/22 79/23 8oj8 81j12 81j12        16/2118/14 23/20 29/17 36/18 40/8 42/1       105/1106/14106/20 111/20111/20 111/22
 82j1 84/7 85/4 87/16 90!11 90!15 91!24 92/8     46/5 51/1157/22 61/14 61!19 61/2162!11       111/22112/4112/5117/18120/12121/16
 92/15 97/7 98/25 99/2100/20 101/21104/25        63/6 65/9 67/11 69/2169/24 70/170/2 70/3 122/12122/16122/16122/21127/3127/22
 107/1109/23 111/5112/8 112/22 113/19            70/4 71/25 72/24 73/12 74/17 77/4 78/23      128/19 129/2129/7131/12 131/21133/10
 114/18116/21117/2117/2118/14ll9/4119/11         81/5 81/20 82/6 82/14 82/19 83/6 83/6        133/16135/17136/2 138/22 139/2 140/8
 125/2126/8127/25131/16135/5135/23               83/24 85/18 90/18 90/20 90/23 91/ll91/19 142/19 143/5 143/18 146/16146/17146/25
 136/1136/7136/8 147/9 147/10 147/14148/6        94/14 95/3 95/10 95/25 96/2 97/18 97/22      147/4149/8149/11149/12149/16150/3
 149/25152/4155/8155/22157/19160/4               99/14 99/23103/10103/13103/14104/4           152/25 155/9 157/5 160/3 160/3
the core [1] 70/15                               104/10 104/24105/16 105/18 105/18 106/16 though [11] 39/19 47/16 66/4 88/15 90/4
theft [2] 37/24 66/10                            106/16108/4108j8111/6111j18111/24            109/14110/10139/21143/15149/24150/15
their [116] 7/18 8/9 9/4 9/18 10/110/13          112/25115/15116/5117/19119/1120/9120/11 thought [9] 11/2013/17 34/3 63/17 64/9
 11/9 11/10 13/12 14/1114/14 15/1216/9 16/9      120/15 120/18 120/23 121/13 121/14122/23     65/8 92/8 102j14 133/18
 19/14 19j18 21/5 21/1122/14 24/10 24/14         122/23126/19127/1127/1127/6127/18128/8 thousand [9] 57/20 58/16 59/7 6oj2o
 24/14 25/14 25/15 25/17 25/19 27/6 27/13        128/11128/15128/20 129/1129/6129/6           82!22 85/4 86/24 89!8109/16
 28/13 31/5 36/3 37/9 37/24 39/19 39/21          129/10129/13 129/18 130/5 130/10 131/23     thousands [4] 39/16 39/18 40/21115/23
 40/19 41/2 41/3 41/5 41/13 42/1142/13 43/10     132/2 134/17135/19135/20 135/24136/10       three [15] 6j210j1238/6 52/24 77/177/4
 46/8 46/13 47/2 47/9 47/17 48/148/5 48/5        138/2139/10140/11142/4142/6142/18            81/24 92/12 93/15 96/9111/19112/4118/7
 48/5 51!10 51!10 53/9 53/18 54/155/11 57/1      143/8143/14143/22145/1145/4146/21            121/4 152/18
 57/157/5 59/14 63/163/9 64/7 66/166/1           147/24152/18160/22                          through [31] 13/2 16/117/16 28/7 32/20
 66/7 66/11 66/18 66j2o 70/4 75/20 84j12        they [361]                                    34/13 37/18 39/17 40/20 47/9 47/14 54/5
 90/13 90/18 91/15 96/3 96/15 98/22 99/17       they're [36] 13/9 13/23 13/25 14/1316/25      59/1 82/9 82/23 83/11 95/22 96/17100/9
 100/12 102/17105/12105/20 106/11108/17          18/2s 24/7 24/1125/1125/15 28/s 38/4 40!2 106/9106/20106/22 109/15 119/3 120/9
 109/11111/23112/3 112/24 121/15 122/15          40/18 42/1142/13 42/15 51/19 52/2 59/14      127/9 135/4138/21139/10142/3143/5
 123/14128/14129/4131/16137/9138/4               61/23 64/5 66/2 68/23 69/6 70/19 71/7 71/24 throughout [1] 133/3
 138/6141/1142/2143/4143/19145/11146/1           71/25 72/177/1110/15145/11147/15147/15 throw [3] 70/20 71/17 71/20
 146/8146/25147/2147/16150/2152/19               149/5                                       throwing [1] 115/23
 154/21154/23 157/3 160/7                       they've [16] 13/10 16/13 16/2419/16 41/18 thus [2] 7/1411/1
theirs [4] 31j12 39/15 66j2o 73/11               49/7 57/24 80/10 87/8 97/17 97/22 98/23     TI [5] 101/24 105/13 105/13 105/14 122/13
them [118] 5/15 9/15 9/17 9/1710/710/8           112/4117/20142/24149/4                      till [2] 23/22 128/6
 10/1112/714/8 14/1414/20 15/5 15/8 15/19       thing [15] 6/16 21/2128/2 31/2 34/7 43/6     time [68] 6/615/5 16/13 20/5 21/10 22/14
 16/216/816/1216/1216/1317/319/1419/18           45/5 60/17 64/22 84/1187/2 95/11116/14       23/17 23/18 24/4 24/9 26/6 29/19 31/14 32/9
 21/17 26/2 27/10 27/2128/12 30/9 31/11          151/12 153/15                                32/22 33/4 36/1141/9 41/1150/10 55/24
 31/13 36/2137/6 37/12 38/16 40/10 40/25        things [30] 8/s 13j6 25/9 25j12 52j11 83j12 57/21 69/13 69/24 72/7 74/24 75/11 76/7
 41/10 41/15 44/22 45/16 55/19 56/19 64/7        83/13 90/8 90/10 90/18 90/20 90/20 91/7      78!6 78/12 8o/3 8s/s 91/s 91!6 91!9 96/19
 64/8 67/12 70/15 71/8 73/4 73/1177/9 77/15      91/15 91/19 92/1195/10 106/14112/25118/21 101/22 101/24104/25106/9 109/3 111/3
 77/16 78/14 78/16 78/18 80/9 80/17 81/25        126/5 127!12 128/10 139/17140/11142/18       111/22 119/4 119/13 121/10 121/13 128/15
 83/3 86/20 87/21 87/25 89/13 89/20 91/21        154/16 154/19 155/1157/23                    128/16129/3 129/7129/12130/4130/6
 91/23 93/2 94/15 95/4 99/23 10S/ll106/13       think [95] s/10 S/13 S/23 S/24 6/4 6/s 6/7 130/16130/21133/4134/1134/5138/9
 106/13 106/23 107/13 109/16109/17110/3          7/9 7/118/19/9 9/2111/1512/1412/1815/23 138/12138/13147/11153/16157/22158/19
 113j2o 117/6118/14126/16129/24129/25            16/616/1817/1317/14 20/2 20/4 22/12 23/9 158/24 161/20
 130/15 131j22 132/1135/25 136/9 136/11          25/2126/8 26/24 28/10 28/12 30/4 31/8       times [7] 8j2o 11j6 32/6 42/21124/2154/3
 137/1137/2137/4137/11141/24142/2144/23          31/13 31/25 32/8 32/2133/16 33/20 35/23      157/18
 146/13 147/2 149/1149/12149/13 151/3 151/9      35/24 39/9 39/2139/22 39/25 40/14 40/15 timing [1] 31/21
 1S1/ll152/16 152/17153/11153/23 155/2           40/22 42/8 42/1143/1144/144/4 44/25 46/7 tiniest [2] 90/8 90/10
 155/14 155/16 155/16 157/3 157/19 161/1161/1    49/9 51/25 57/18 65/21 66/13 67/16 68/16    tink [1] 138/9
 161/10                                          69/18 75!12 8s/23 89/16 90/3 92!23 93/1o TIO [8] 104/14111/6111/20 121j1126j15
them data [1] 67/12                              99/5 99/20 112/3 112/22 121/6 124/18 126/8 126/21128/16 128/17
them down [1] 89/13                              126/10127/25129/14129/18 136/16136/23 title [6] 1/5 1/5 1/7 79/2188/3 88/25
themselves [5] 31/18 51/10 51/10 129j18          137/ll137 /11138/14 140/19 141/15 145/11    titled [1] 1/18
 158/22                                          145/15145/22145/22146/4149/16158/23         TITLEMAX [So] 1/10 20/18 22/10 23/1
then [74] 4/5 6/3 9/1410/12 16/10 25/2           159/13 161/7161/9                            24/10 24/13 24/14 24/23 25/8 25/12 25/13
 26/2 26/21 28/7 28/7 28/16 29/18 30/8 30/9     think what [1] 136/23                         27/8 27/10 27/19 27/22 28/6 28/7 28/9
 30/12 31/17 32/9 32/14 33/7 34/9 34/13         thinking [2] 93/6 149/23                      28/15 28/16 29/18 38/18 38/18 39/5 39/5
 34/14 34/2135/10 35/2138/9 40/9 43/12          thinks [1] 108j12                             41/5 41/14 49/158/9 59/17 59/22 63/25 66/1
 49/3 49/23 s1/22 58/22 6o/9 63/7 64!21         third [21] 5/20 60/23 61/5 65/24 72/16        66/7 70/7 78/10 79/19 79/20 82/12 82/13
 68j12 68j21 73/2 83/23 8s/3 88j12 90!11         72j21 73/5 73!12 82/13 82/1s 8s/5 88/25      8s/1194/9 97/19 98/14 98/2o 1o1/19 102!19
 91/7 93/16 93/16 98/25100/9 100/10 111j16       93/194/6 96/10 99/2 99/23100/3 100/19        102/24103/1103/12 103/15104/1104/11
 113/4I14/8114/9115/16119/2121/1121/9            101/16 134/7                                 105/17106/24107/81o7/221o8/5108/21
 122/18 125/11125/17126/10 126/17127/24         third-party [7] 73/5 88/25 93/194/6 96/10 108/23 108/25109/13 109/14110/1110/7
 128/9 132/8 132/8 134/25 137/20 146/7           99/2134/7                                    110/9112/17112/19114/2117/20121/16
 146/12147/16152/20153/18157/2157/5             this [441]                                    121/17122/24123/25 129/3 130/22 131/13
theory [6] 13j16 24j1o 55/18 100j9 135/3        Thomas [3] 48/149/2 57/11                     131/14139/16149/25
 135/5                                          those [123] 5/22 6/5 8/10 9/10 13j2 13/14 TitleMax's [5] 65/16 106!7120/5 133/22
there [185]                                      15/715/1617/2018/2018/2118/2519/119/1 154/24
there's [28] 11/3 22/7 27/5 39/22 42/8           19/13 19/17 20/19 20/19 21/10 21/16 25/12   TMX [6o] 1/91/91/10 4/2 41/5 45/8 46/3
 48/4 48/20 51/17 55/10 56/4 59/1160/10          26/127!8 27!24 29j1s 36/s 38/20 40!1         47/2 47/4 47/5 47/10 47/10 47/17 47/19
 73/24 75/22 77/2177/23 84/18 93/5 96/13         40/10 44/24 49/17 49/20 49/22 50/18 57/10 47/23 48/8 48/9 48/10 48/25 51/4 51/22
 99/16 106/13 114/17116/11136/17142/10           s8/16 61/4 63/23 64/8 64/18 6s/s 6s/8 67/9 51/23 51/24 52/153/3 53/3 53/6 53/6 53/9



                                                                                                                               1074
                                              129/16 131/17146/14159/4159/4                upper [1] 113/24
T                                            trying [19] 64/5 64/6 64/7 93/12 93/18        ups [1] 136/1
TMX •.• [31] 53/18 54/18 54/23 54/23 55/4 97/12108/3 111/11111/16 112/7117/24119/9         us [77l 7/2 9/14 9/22 to/6 13/12 14/25 17/15
 55/6 55/8 55/8 55/9 56/10 59/16 59/18        119/19 134/6 134/6135/18136/8144/20          21/9 21/14 25/18 25/19 26/128/14 30/3 30/8
 59/20 59/20 59/21 87/10 89/17 90/24 91/18 146/6                                           32/12 36/21 36/22 37/1139/12 39/19 40/17
 104/8107/22108/19119/11119/24119/25         turn [14] 12(23 50/1159/13 62/6 62/23         40/20 40/20 40/22 40/22 41/17 42/25 43/4
 120/2123/11123/11124/8 125/17126/10          63/16 63/22 64!21113/15113/18116/2116/4      48/8 52/16 52j18 52j22 6o/8 66/9 66/9
to give [1] 61/1                              144/12 148/12                                66/15 69/7 72/9 77/1177/12 78/12 80/11
to her [1] 160/16                            turned [8] 98/14 103/21105/25 117/to          84/18 85/10 86/24 87/8 91/4 97!12 98/22
today [12] 21/15 26j2131/2 32/14 33/11        119/22132/2137/9 137/10                      99/8 100/11102/19 104/12 106/9 106/20
 34/8 45/165/2 73/23 107/17123/1156/25       turnover [1] 78/10                            106/22109/6110/22111/12 112/6 112/7
today's [1] 26/25                            turns [4] 111/14 132/7 132/8 143/15           120/17121/16126/17133/19 134/9 134/9
Todd [1] 148/9                               twisted [1] 119/13                            134/15134/19134/20 138/1138/14145/9
together [3] 19/3 121/11154/4                two [31] 5/17 5/19 10/12 12/14 24j2125/11     145/15 150/20 153/25
told [22] 4/24to/8to/to 43/4 50/12 54/15 38/6 38/9 38/16 38/2o 40/9 52/to 74/9 81/5        USC[t] 63/2
 59/25 60/7 78/16 78/18 84/4 91/21 91/23      92/12 97/18 99/18 101/12101/21102/17         use [21] 43/to 63/4 63/6 64/174/14 87/11
 96/22 106/13 134/15 140/14148/21149/1        104/24133/4140/4149/5149/8149/21             94/24 96/2 98/9 108/8 129/6136/6139/18
 149/12 153/14 157/3                          154/16155/1155/2159/20 161/11                141/1142/11144/10 144/10 146/1146/8
tongue [1] 119/13                            two-year [1] 133/4                            146I 25 153! 6
too [12] 53/1 69/15 69/25 75/3 75/22 84/13 type [7] 14!2115/7 30j2o 38/5 94/6 134/16       used [22] 23/9 27/8 61/25 79/22 81/to 82/9
 104/4to7/1122/2157/8158/4158!5               138/3                                        88/4 89/196/4103/18112/2129/5131/23
took [2] 51/13 97/2
tool [1] 153/7                               types
                                             tvnicallvr':-f7
                                                    [3~ 2 81~Jt:\~~4/17
                                                                1 01 2
                                                                                           142/2142/6142/11142/21143/2143/11
                                                                                           143/12 145/1145/19
top [6] 51/454/256/3113/2115/8139/11
topic [1] 49/to                             u                                              uses [1] 63/5
                                                                                           using [19] 27/9 66/25 71/8 75/3 79/25 80/3
tort [1] 73/20                               Uh [1] 81j16                                  8o/5 87/9 88/5 88/8 97/21103/21125/22
tortfeasor [1] 73/20                         Uh-huh [1] 81/16                              131/21134/10142/21144/8 144/12 153/2
                                             ultimate [1] 61/23                            usual [':~ 4o/:/J.0/2
                                                                                                    11
tortious [3] 7/24 16j24 96/20
tortiously [1] 8/4                           ultimately [2] 62/11 62j12                    usuallv 1 -=t8 21
total [3] 55/13 96/13 163/14
totally [1] 117/22
                                             unable [1] 138/6
                                             unacceptable [1] 36/14                        v
touch [1] 25/11                              uncover [1] 142/18                            vacation [7] 158/10 158/12159/5 159/5
touched [1] 126/22                           under [19] 24/10 29/16 41/19 49/19 58/14      160/4 160/7 160/18
tough [1] 41/21                               61/24 72/13 91/8 93/7 95/14 98/1 99/199/24   value [1] 21/19
toward [1] 94/6                               100/2106/6114/6135/3154/21157/4              various [2] 70/4 94/3
towards [2] 83/7109/25                       underlying [1] 30/9                           vehemently [1] 49/9
tracing [3] 98/8to0/9 106/1                  understand[17] 5/615/13 22/19 29/7 35/9       vehicle [3] 47/15 110/13 117/23
track [1] 38/17                               45/2 45/8 51/17 58/8 78/16 86/192/1129/9     vehicles [2] 114/8 117/25
tracked [1] 68/9                              130/16 132/11147/12 147/13                   vendor [1] 70/1
tracks [1] 53/14                             understanding [5] 76/10 100j18 104/9          vendors [1] 70/2
Tracy [22] 45/6 45/14 46/16 47/23 48/10       113/11137/18                                 veracity [1] 57/22
 48/14 48/18 52/14 53/5 53/8 55/15 56/156/7 Understood [11] 8/6 33/2 33/13 38/8 42/5       verbiage [1] 82/16
 56/to 56/10 56/13 57/2 57/6 57/7 57/11       74/1 89/10 128/21128/23136/25142/1           verify [1] 120/7
 58/22 58/23                                 undisputed [5] 53/3 53/5 53/6 53/7 73/13      Verizon [1] 147/16
trade [3] 42/10 42/14 42/18                  Unfortunately [3] 84/18110/2158/4             verse [1] 49/11
traded [t] 136/5                             unilateral [1] 129/3                          version [1] 87/17
trafficking [1] 38/13                        Unitech [1] 62/6                              versus [1] 144/12
trail [11] 105/19106/2106/4106/5107/2        universe [4] 10/23 83/3 95/2143/4             very [43] 6/9 8/23 8/25 20/22 26/4 33/22
 117/8 119/17124/3124/4125/14126/7           unless [8] 7/25 33/24 35/4 68/20 95/2          41/4 44/21 45/17 48/17 49/23 52/11 54/2
trails [1] 156/9                              101/12 144/14 152/4                           56/3 56/23 75/15 85/1194/16 94/19 98/17
transaction [3] 18/5 40/9 40/13              unlike [1] 149!13                             102/16102/18 102/18103/25 103/25 104/11
transactions [1] 40/to                       unlikely [1] 143/16                           105/23 108/16 109/19 111/10 111/12 111/12
transcript [2] 85/25 97/2                    unrelated [1] 71/15                           114/20125/24137/16140/25143/21153/15
transcription [1] 163/6                      until [5] 19j1o 35/23 35/23 36/1191/19        155/21155/24158/3 158/21160/21
transcripts [1] 84/23                        unusual [1] 50/15                             view [3] 41/19 46/6 110j21
TRAURIG [1] 3/to                             up [84] 7/to 9/25 16/1117/16 18/14 21/23      Vin [6] 48/157/11108/to 110/6110/10
treat [1] 51/1o                               24/8 25/8 30/12 31/14 31/18 34/8 35/18        110/12
treated [1] 67/17                             35/19 37/2 37/19 43/2o 44/22 58/6 64/8       violate [1] 111/6
treatment [2] 42/25 44/8                      64/25 68/9 68/to 68/12 68/13 97/3 98/11      violated [4] 66/5 111/8 112/25 121/1
trial [34] 1/3 9/2018/13 28/1 28/6 28/25      98/14 99/7 99/10 101/12 102/23 104/22        violater [1] 121/8
 29/19 30/5 31/17 32/10 32/11 33/8 33/8 34/9 105/20 105/25 106/23 108/17108/17108/19       violates [2] 61/10 62/5
 34/12 34/13 34/15 34/18 34/21 34/21 43/10    109/9 110/15 110/17111/15 111/19 112/9       violating [3] 102/3 104/15113/20
 43/19 43/20 44/15 44/18 44/19 44/22157/20 113/13115/8116/2116/4116/17116/19117/to         violation [6] 101/23 111/12 118/2 126j15
 158/8 158/9 158/19 158/20 159/11159/19       119/22 122/19 123/21123/24124/24125/3         126/21132/6
trials [1] 158/6                              132/2 132/7132/8 134/10 134/20 137/9         Virginia [4] 82/2 82/12 86/5 86/9
tried [4] 23/16140/6 150/2o 156/10            137/10140/8 140/9140/10143/15144/12          virtually [1] 82/16
TRO [4] 6/25 7/15 21/23 22/14                 145/6145/7145/16 146/1146/9 148/12           visual [1] 61/1
trouble [1] 121/to                            153/10 154/9 154/15 154/16 154/22 155/1      volume [5] 1/213/213/1144/14163/8
true [5] 64/6 64/16 94/5 112/22 163/6         155/15 159/5                                 VOLUMES [1] 1/2
truly [2] 75/8 163/12                        update [2] 32/10 109/11                       voluminou,; f2l '20/u qof2q
truth [1] 160/24
try [17] 52/17 68/1 68/7 77/18 83(11 97/9
                                             updated [3] 76/4 84/184/3
                                             upon [11] 7/19 10/2014/5 15/2 18/22 18/24
                                                                                           w
 11o/8 117!25118/18 12o/22 126/5 126/18       84/23 134/17145/20145/22150/22               wait [22] 16/1517/217/2119/22 27/14 28/1



                                                                                                                        1075
w                                             108/18115/2120/4122/3124/11125/6
                                              125/24129/1129/2 129/7130/25 131/6
                                                                                          94/13 94/16 94/25 95/2195/2196/12 97/10
                                                                                          98/8 101/22104/24108/3 109/10 110/7
wait••• [161 31/4 36/1152/19 52/19 52/19      133/20137/5137/20140/19144/9146/22          111/13113/22129/10130/23131/4131/13
54/18 67/6 99/9 99/9 110/16110/16110/16       147/12151/21151/25154/2154/4156/13          133/13 141/15 149/6 149/21149/22152/21
110/16 122/5 136/24140/1                      157/14158/11159/23 160/16161/15 161/22      153/3 154/6158/18 158/20 159/17161/25
waited [11 101/8                              WEUBHIRE [21 1/5 4/2                        163/9
waiting [31 10/7 35/7 37/3                    went [161 8/14 25/7 28/7 28/15 28/16 37/19 whichever [11 34/8
want [741 4/5 5/25 6/2011/1612/414/24         42!2157/6 68/5 68/7 94/1o 103/23106/3       while [71 40/1 72/10 76/18 82/24 83/5
14/2415/115/1915/1916/2119/419/5 27/16        134/1148/17149/18                           131/13 132/18
28/3 28/10 30/3 30/3 30/8 32/6 33/2134/2      were [1531 7/115/3 16/718/20 18/20 20/17 White [11 110/12
40/20 42/3 42/12 52/10 59/24 60/18 60/19      2o/18 2o/19 21!10 22!13 22!17 23!8 36/5     whiz [11 71/1
66/5 66/18 68/25 74/5 74/19 85/23 86/6        37/2 39/14 40/6 41/19 42/149/16 49/20       who [851 4/22 15/20 17/24 20/17 20/18
87/19 87/2187/25 89/12 90/4 92/13 99/7        49/22 50/12 50/15 52/17 59/25 59/25 60/1    21/3 21/3 22/13 22/17 22/20 24/19 27/12
101/12 104/21106/9 106/19 106/20106/22        61/16 63/17 63/17 63/25 64/6 64/1167/18     27/19 40/6 40/13 42/142/2 45/8 47/22
111/13117/4119/5119/20124/11128/5128/7        69/6 73/13 77/8 77/9 79/2180/4 80/15 80/17 47/25 48/12 50/25 51/12 51/13 51/14 53/1
129/4133/3134/23135/1136/10136/16             80/23 81/8 81/8 81/2182/19 83/2 83/7        55/18 56/10 56/12 57/3 61/5 61/7 61/16 61/25
139/12 144/1144/10 144/10 145/2 149/15        83/13 84/14 85/9 86/3 86/6.86/12 88/3       62/8 62/9 66/1168/8 68/12 68/12 69/18
151/14 151/21155/8 158/23 159/3 159/4         88/24 89/1 89/2 89/4 89/5 90/23 93/15 94/5 69/23 70j2o 70/22 79/2180/3 8oj118oj17
wanted [51 45/1 65/19 65/19 95/3 144/6        94/17 95/3 95/5 96/4 96/11 97/6 97/14102/3 8o/23 8o/25 81/184/7 84/11 85/3 85/2o
wants [21 17/15 40/20                         102/20 102/25103/2 103/4103/8 103/8         86/7 86/17 86/20 87/20 88/3 94/2 96/18
WARGO [241 2j10 2j12 2/19 4/12 4/15           103/13 103/13 103/14103/22103/25 104/2      99/18101/23102/3 104/14105/2109/4
20/24 21/22 23/19 27/14 36/25 40/24 51/2      104/41o4/14 104/15 106/7106/16 108/5        109/17111/19 120/5 127/13 134/4134/7134/8
56/20 56/22 70/2172/6 72/12 74/13 87/24       108/7108/8 108/25110/1110/12 110/14         134/11134/15 135/21136/2136/20 139/16
90/23 97/19 126/16 146/4 146/20               110/17111/1111/2114/11116/21117/19 118/19 148/9 153/16 158/21160/14
Wargo's [11 73/21                             122/17122/21122/23124/24125/4125/5          who's [61 4/5 24/8 50/13 57/7147/4159/9
wargofrench.com [31 2/15 2j22 2j22            125/9 125/15 125/16 125/21126/8 128/25      Whoever [21 34/23 160/6
warned [11 59/25                              129/2 129/5 129/15 132/24133/11133/18       whole [71 14/2 30/1143/19 46/2152/25
was [2301                                     134/4134/8134/9134/15134/17135/2136/2 91/16 99/1
wasn't [71 43/15 44/9 55/16 55/16 84/4        138/4138/4138/6139/16139/20140/3            whom [71 11/3 18/13 21j22 50/25 54/18
116/21120/2                                   140/15140/20 140/20 142/5 142/12 142/21     59/19 105/5
wasted [11 50/10                              145/18 146/23 149/21149/24151/7152/22       whose [81 17/5 21/3 21/4 23/8 23/12 24/13
Waters [31 113/14 114/17114/18                153/4154/22155/1155/2155/7157/4163/10 69/5 123/23
waving [11 152/2                              weren't [31 33/19 138/5 150j22              why [421 19/16 20/1 20/3 22/6 23/6 23/7
way [291 6/15 17/9 17/10 18/15 30/20 35/14    what [2821                                  34/25 36/2137/22 37/23 41/7 46/2148/18
37/13 38/16 38/24 39/140/13 41/23 51/8        what's [171 10/23 37/17 48/16 53/7 56/13    50!2151/8 65/2170!12 71!2184/7 84/8 85/4
51/16 59/15 61/8 62/4 66/16 75/22 89/14       57/19 67/24 68/2185/10 99/9101/7103/25 86/2187/13 87/13 90/11 91/17 95/6 109/21
92/4 97/9121/2124/20127/14127/20135/11        118/5 125j2o 140!23 151!14159!17            112/23 116/21116/23 119/5 119/23120/12
158/14 159/8                                  whatever [71 20/5 34/14 39/6 39/7 41/13     122/11124/4133/5151/3151/6151/11156/2
ways [21 41/19 43/12                          64/3 80/9                                   158/9
we [5901                                      whatsoever [21 78/21117/4                   wide [41 14/4 83/9 83/12 84/4
we'd [31 36/10 43/6 115/15                    when [661 9/19 11/13 13/714/9 16/716/15 wife [11 114/18
we're [671 6/13 6/14 9/20 9/23 9/2510/7       20/19 21/4 21/8 23/12 23/15 24/12 28/25     wiggle [11 55/20
10/2414/1014/1914/2515/417/1118/13            31/17 35/17 38/17 38/19 40/15 43/16 45/24 wiggliest [11 55/20
21/8 26/127/3 31/2 31/6 32/14 32/24 35/3      46/1150/15 50/22 51/13 51/14 52/23 57/23    wild [21 24/15 41/14
35/12 35/2137/4 37/6 37/7 38/7 39/15 42/24    61/17 63/8 63/20 63/25 66/25 70/24 77/8     wild-goose [11 24/15
44/14 45/146/10 49/3 52/14 53/1156/1          77/1182/23 82/25 88/17 90/15 96/24 98/12 will [1371 4/6 6/5 7/19 8/24 8/2411/13
59/16 63/18 78/3 85/5 85/20 90/5 91!12        103/3 103/7103/23 105/23 106/1109/8         12/19 14/7 14/7 17/717/12 17/15 19/119/2
99/20 101/19 111/8 117/18 121/17122/22        110/11111/6112/4113/2122/16122/16124/6 21/15 21/18 23/12 24/25 25/125/16 29/23
125/13 125/14125/15 131/8 131/9 134/6         124/11129/4134/19138/1144/4148/22           30/4 30/7 30/8 30/15 30/15 34/134/17
135/18 135/24136/2 136/8 136/19 139/14        153/1153/15 156/18 156/23 156/25 157/1      35/10 37/12 39/25 40/14 40/14 40/15 42/5
153/24154/8 157/13 157/24159/3 161/10         Whenever [11 153/24                         42/13 42/17 44/1146/12 49/5 54/19 60/14
we've [401 20/4 30/2 47/6 49/14 49/21         where [491 8/14 9/13 9/14 11/21 13/12 13/21 62/23 63/16 63/22 64/2 69/19 73/173/24
55/8 55/19 61!13 61!15 65/6 65/6 65/7 69/18   21/10 25/2 26/6 26/8 26/9 26/9 26/9 26/11 . 74/16 75/2 75/4 75/5 75/12 75/13 77/18 79/8
78/20 84/1 85/6 94/8 94/12 101/14101!15       26/1126/12 27/6 30/4 30/25 40/8 40/17       79/17 80/9 82/15 83/22 86/22 87/4 88/13
101/15 106/13 106/18 106/18 109/21109/21      49/8 57/7 57/24 57/25 63/1165/6 65/10       91/8 91/16 94/6100/19100/24101/4101/11
112/25117/21120/20121/9121/10122/12           65/12 69/13 69/19 70/13 73/13 75/11 80/18   105/10 106/15 107/18 108/12109/19 111/16
124/3 133/25 134/6 142/17145/1148/1150/6      88/15 89/11 89/15 94/9 101/1123/23 124/2    113/11113/13 117/6 120/15 122/1128/9
150/6                                         133/10 135/8 138/15 140/2 143/24150/14      129/10 130/1132/8 133/12 135/14 136/4
web [31 61/4 94/10 94/25                      158/24                                      136/10 137/25140/14141/14141/17141/20
website [11 63/10                             wherever [11 86/17                          141/21142/8 142/19 143/9145/7145/12
week [131 34/12 34/14 60/14 77/9 90/3         whether [471 12/719/1 20/21 21/5 21/10      145/12 145/23 145/24 145/24 146/10 146/13
91/10 91/19 92/25 97/18 156/5158/12158/12     22/6 22/10 23/8 24/7 26/22 27/5 39/140/10 147/16147/18149/1149/2149/3149/23
161/11                                        40/2141/18 43/22 44/17 45/25 52/8 52/14     151/13 151/23 153/6153/8153/10 153/11
Weekly [11 150/4                              61/9 67/18 72/20 85/13 85/2185/2195/3       156/9156/21157/1157/2157/2157/5157/6
weeks [71 10/12 41/13 75/20 99/18 158/16      95/22 97/6 99/20104/13107/12111/8116/17 157/17 158/8 159/15 159/15 159/16 160/2
158/18 159/20                                 116/18 119/11119/19 122/20 123/25 129/12     160/6 160/15 160/20 161/13 163/15
weigh [21 34/2 75/2                           132/5135/9141/23141/24144/11153/4156/7 willing [21 125/23 150j22
well [691 4/22 10/2 11/15 12/20 20/22         which [751 6/8 6/23 7/15 7/15 8/6 8/9       wipe [11 61j21
25/24 26/4 29/23 33/1133/12 34/4 35/4         10j2o 11!18 23/2 5 26/5 29!12 3o/2o 30!21   wished [11 6oj1
36/15 37/24 44/144/9 45/23 46/23 51/7         32/20 35/9 37/4 37/1137/12 39/2 41/25       withhold [11 42/14
59/19 67/8 67/16 79/17 80/2 80/22 84/14       42!25 45/9 49/15 49!22 50/8 54/13 58!23     withholding [31 42/11 42/15 42/18
88/12 90/22 91/11 94/20 99/1199/13 102/16     59/159/2 59/4 59/15 60/11 61/8 67/15 71/8 within [n1 19/13 19/13 26/4 26/6 33/8
102/20 104/3 105/1105/3 106/2107/14           74/10 79/179/3 79/5 88/8 91/16 91/19 94/10 57/10 76/7 80/25 88/2143/20147/14



                                                                                                                            1076
w                                             160/8 160/10 160/12
j..:...::__ _ _~---------lYet [7] 7/2210/16 33/17 6oj18113/7113/11
 without [7] 17!718/15 2oj2o 111/17136/2      128/5
  151/11160/24                               yield [2] 7/22 29/19
 witness [4] 36/15 49/18 49/18 95/1          you [478]
 witnesses [2] 94/8 94/9                     you a [1] 112/14
 won't [13] 30/9 30/14 30/15 44/20 50/18     you'd [2] 71/17 71/20
  80/16120/22134/8134/8134/8134/9            you're [57] 5/7 7/4 8/111/2114/1214/13
  151/20160/18                                14/2015/415/616/1018/3 28/25 29/3 29/20
 word [11] 10/3 29/2174/14 92/11136/6         31/3 31/4 35/7 40/25 43/2 45/17 45/24 54/10
  142/4143/2153/9153/10 154!19155/7           57/17 57/19 57/23 65/22 66/13 67!15 71/6
 Word-of-mouth [1] 136/6                      78/23 80/20 83/23 86/23 86/24 90/15 91/15
 words [8] 10/2218/7 55/20 75/6111/23         93/3 93/12 99/5113/6115/23 117/10118/3
  111/25 133/3 142/5                          126j10 130/9 130/17130/23 133/23 140/3
 work [19] 12/117/8 27/8 31/13 35/16 37/4     144/22146!2146/4146/4153/22154/14
  64/3 94/13 100/11119/3 135/24136/2 136/10 156/7158/20
  146/2146/13146!14147/18158/1161/10         you've [13] 14/1418/419/2219/23 20/5
 worked [7] 55/18 61/24 78/1131/13134/21 20/6 20/6 35/4119/13122/5142/16152/6
  135/11149/8                                 154/25
 working [4] 76/14154/4156/15156/25          you've had [1] 20/6
 works [1] 51/17                             Young [31] 45/6 45/14 46/16 47/23 47/23
 world [1] 97/5                               48/10 48/14 48/18 49/2 50/150/3 50/14
 would [116] 5/25 6/24 6/25 7/12 7/15 8/6     50/24 52/15 53/5 53/8 56/2 56/7 56/10 56/13
  8/9 8/1610/814/2315/1018/618/18 20j11 56/24 57/257/6 57/7 57/12 58!1158/22
  2o/17 21!9 21/16 22j12 25!17 28!17 28j2o    58/23 59/3 59/5 6o/10
  29/12 29/19 30/13 31/9 32/20 33/6 34/12    your [574]
  36/10 39/8 41/6 41/24 41/25 43/143/10 44/7i;,ourseiir;.l t</a 122/8
  47/8 49/9 50!23 53/23 54/17 58/5 6o/11       z
  61!19 61j21 61!24 64/9 67/9 68/2168/25    F-::-::--,-,-,--,--,---------l
  70/6 70/6 71/3 71/19 72/6 72/6 72/14 73/7  zero [3] 68/24 87/9153/19
  73/16 75/11 78/18 80/7 84/11 84/16 84/21   ZIP [17] 108/9 110/6 112/21114/9 114/12
  86/16 88/13 91/2191/23 93/8 99/25100/25 114/14114/16114/19 114/20114/25 115/19
  102/7102j11102/16 106/15 114/11116/3        115/24116/2 116/3 116/12116/13 116/18
  116/5 118j1120/6 121j1121j2 121/2125/12    zone [1] 13/6
 126/1127/14127/17127/17127/19 127/21
 131/22133/5133/11137/3142/11143/21
 143/21143/25 144/6 144/12145/3 145/18
  147/5148/12150/1151/9151/22153/18156/1
  157/9 158/10159/21159/21161/18 161/24
 wouldn't [10] 8/7 70/14 70/17 71/2 71/16
  74/14 91/1137/10145/4148/21
 wrestle [1] 161/1
 writing [2] 31/9 163/7
 written [3] 6/17 59/4 96/10
 wrong [17] 8/139/20 53/12 54/24 57/16
  62!15 62j18 62j22 64/11 65/8 68!21 95/24
  98/18 98/21106/3 130/14161/25
 wrongful [2] 40/19 98/24
 wrongfully [1] 98/23
 wrot<~'r;;l·-A~l~ ~;;;;:~o/12 118/1A
y
y'all [12] 26/9 32/6 33/14 40/21 92/11101/1
114!22 118/5 119/7119/7141/19155/11
yay [1] 26/16
yeall [7] 18j2 81/14 86/23102/10 122j22
 136/14 151/2
year [8] 19/24 20j16 25/10 79/11104/19
 104/19133/4157/24
years [2] 20j12 30j21
yellow [1] 82/1
yes [84] 11/23 23/24 24/20 25/4 25/25
 26/14 26/18 27/17 27/23 28/24 29/2 29/5
 29/7 31/22 32/3 32/17 33/9 34/10 34/16
34/19 34/22 36/9 38/10 38/20 45/4 45/7
51/3 51/6 51/20 52/4 52/2156/2159/19
 6o/24 62!19 65/14 67/17 69/2 72!5 76!2 76/5
76/13 76/16 76/19 76/2176/23 76/25 77/3
 80/13 81/10 86/15 89/7 89/23 93/4 93/15
 94/24107/6109/1112/15112/20115/1115/10
 115/10 122/7122/10123/3 123/7125/1127/3
128/18130/10 137/4140/15141/8145/5
 147/23149/18154/22155/1156/17159/10



                                                                                            1077
Tab V
                                                                                      1

                              MOTION FOR PROTECTION
                                  JULY 18, 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 FOR PROTECTION

15
16
17         On the 18th 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




                                                                                  1078
                                                                       2

                             MOTION FOR PROTECTION
                                 JULY 18, 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. JOSEPH W. OZMER, II
     SBOT NO. GA. 001542
14   WARGO FRENCH LLP
     999 Peachtree Street, NE
15   26th Floor
     Atlanta, Georgia 30309
16   Telephone: 404-853-1500
     Fax:  404-853-1561
17   E-mail: Jozmer@wargofrench.com
     Counsel for PLAINTIFFS
18
     MR. GEOFF GANNAWAY
19   SBOT NO. 24036617
     MR. BRYON RICE
20   SBOT NO. 24065970
     BECK REDDEN
21   1221 McKinney
     Suite 4500
22   Houston, Texas 77010
     Telephone: 713-951-6263
23   Fax:  713-951-3720
     E-mail: Ggannaway@beckredden.com; brice@beckredden.com
24   Counsel for DEFENDANTS
25

                         CYNTHIA MARTINEZ MONTALVO, CSR
                              152ND DISTRICT COURT
                                  713-368-6037
                               cynthiam@justex.net




                                                                    1079
                                                                                      67

                               MOTION FOR PROTECTION
                                     JULY 18, 2014

 1   produce that person and say it --
 2            THE COURT:     Okay.    All right.   Let's see.   I don't think
 3   they need to produce the person or persons who approved that type of
 4   marketing because I don't know what it gets you.
 5            As far as what you just referred to, if your position is
 6   going to be that these were the acts of rogue employees, then they
 7   should be entitled to conduct Discovery to find out whether or not
 8   others above these rogue employees were involved in that.
 9            And if that's marketing materials such as approving letters
10   and so forth,   then you need to identify them.       But if you come in and
11   say these were rogue employees and you haven't provided them
12   information that they could use to prove otherwise, then that is
13   going to be a problem at trial.       And I think they are asking for that
14   information in this Request.

15            It's broad, I agree.       And if you can narrow it and focus it
16   a little bit more, that will be better.         But asking for the person
17   that approved all the marketing directed at former -- directed at
18   people who have loans at other places, that he just showed me would
19   qualify and I just don't see why you need to know the identity of the
20   person who put that out there -- who approved that.
21            But I do see why you would want to know identity of the
22   person who said -- who recommended or suggested or prepared the
23   materials which would be specifically geared towards you customer.
24            Does that make sense?
25            MS. GOEBELSMANN:       Exactly.   And what the intent was is what

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                                    1080
                                                                                71

                               MOTION FOR PROTECTION
                                   JULY 18, 2014

 1   STATE OF TEXAS
 2   COUNTY OF HARRIS
 3
 4        I, Cynthia Martinez Montalvo, Official Court Reporter in and for
 5   the 152ND District Court of Harris, State of Texas, do hereby certify
 6   that the above and foregoing contains a true and correct transcription
 7   of all portions of evidence and other proceedings requested in writing
 8   by counsel for the parties to be included in this volume of the
 9   Reporter's Record in the above-styled and numbered cause, all of which
10   occurred in open court or in chambers and were reported by me.
11        I further certify that this Reporter's Record of the proceedings
12   truly and correctly reflects the exhibits, if any, offered by the
13   respective parties.
14        I further certify that the total cost for the preparation of this
15   Reporter's Record is $_______ and was paid by Beck Redden.
16
                                Is/ Cynthia Martinez Montalvo
17
                               Cynthia Martinez Montalvo, CSR
18                             Texas CSR 6863
                               Official Court Reporter
19                             152ND District Court
                               Harris County, Texas
20                             201 Caroline, 11th Floor
                               Houston, Texas 77002
21                             Telephone: 713-368-6037
                               Expiration: 12/31/2014
22
23
24
25

                           CYNTHIA MARTINEZ MONTALVO, CSR
                                152ND DISTRICT COURT
                                    713-368-6037
                                 cynthiam@justex.net




                                                                              1081
Tab 1
In re Alcatel USA, Inc., 11 S.W.3d 173 (2000)
4:ffexsui0 cfrz?s
                                                                         5 Cases that cite this headnote
     KeyCite Yellow Flag- Negative Treatment
Distinguished by   ln rc 11u~h.  Tcx.App.-Dallas,   June 12,2009
                                                                   J3J   Pretrial Procedure
                    11 S.W.3d 173                                         .-" Corporate officers, agents, and
               Supreme Court of Texas.                                   employees
                                                                         If the party seeking the apex deposition
        In re ALCATEL USA, INC. tjkja DSC
                                                                         of a high-level corporate official has
       Communications Incorporated, Relator.                             arguably shown that the official has any
                                                                         unique or superior personal knowledge of
               No. 98-1243.             Jan. 6,
                                                                         discoverable infonnation, the trial comt
             2000.       I   Argued Dec. 1,
                                                                         should deny the motion for protection
         1999·          Decided Jan. 6, 2000.
                                                                         and the party seeking discovery should be
Competitor brought action against corporation for theft                  entitled to take the apex depositions.
of trade secrets. The 193rd District Court, Dallas
                                                                         21 Cases that cite this headnote
County, allowed competitor to take apex depositions
of corporation's high-level executives. Corporation
sought mandamus relief. The Dallas Court of Appeals                141   Pretrial Procedure
conditionally granted mandamus relief. Competitor                         >"'" 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·<ml Motor Co., 116 P.R.D. 140. 142 (D.Mass.l987).
16    II S.W.3d atl78.
17    !d. at 179.
18    /d. at 178.
19    See S.,peadmark. Inc. v. Federated Dep't S'!ores, Inc., 176 F.R.D. 116. 118 (S.D.N.Y.l997).
20    TEX.R. CIV. P. 192.6(b)
21    TEX.R. CIV. P. 192.4(a).
22    See Crml'll Central. 904 S.\V.2d at 128.
23    Johnson v. Fourth Court of Appeals. 700 S. W .2d 9\6, 917 {Tcx.1985).
24    See Flores v Fourth C'ourt o.(Apr1eals. 777 S. \V .2d 38. 41 ~42 {Tcx.19X9).



End of Document                                                     C;J 2015 Thomson Reuters No clatm to origtnal US Government Works
Tab 2
Baxter v. Palmigiano, 425 U.S. 308 (1976)
96s.ct. 1ssT4h.Ed.2d sfo                 -------
                                                                    Mr. Justice Brennan filed opinion concurring in part
                                                                    and dissenting in part in which Mr. Justice Marshall
     KcyCitc Yellow Flag- Negative Treatment                        joined.
Not Followed on State Law Grounds      Fischer v. Hooper,   N.H.,
 June 16, \999

                 96 S.Ct. 1551
                                                                     West Headnotes (14)
        Supreme Court of the United States

        Joseph BAXTER eta!., Petitioners,                                   Federal Civil Procedure
                                                                     Ill
                              v.                                             "~__, In general; certification in general
             Nicholas A. PALMIGIANO.                                        Without certification of action as class
      Jerry J. ENOMOTO eta!., Petitioners,                                  action and identification of class, action
                              v.                                            is not properly a class action. Fed. Rules
         John Wesley CLUTCHETTE et al.                                      Civ.Proc. rule 23(c)(l, 3), 28 U.S.C.A.

     Nos. 74-1187 and 74-1194.     Argued                                   31 Cases that cite this headnote
   Dec. 15, 1975. I Decided April 20, 1976.

Actions were brought by state prison inmates alleging                121    Constitutional Law
                                                                             .;o... Prisons
that procedures used in prison disciplinary proceedings
violated their constitutional rights. In one action, the                    Constitutional   L~nv

District Comt, 328 F.Supp. 767, granted substantial                          -= Prisons
relief, and the Court of Appeals, 497 F.2d 809,                             Although one of named plaintiffs in
510 F.2d 613, affirmed. In the other, the district                          action by state prison inmates alleging
cou1t denied relief and the Comt of Appeals, 487                            that procedures used in disciplinary
F.2d 1280. reversed. On remand by the Supreme                               proceedings at prison violated their rights
Comt, 418 U.S. 908, 94 S.Ct. 3200. 41 L.Ed.2d                               to due process and equal protection
1155, the Court of Appeals, 510 F.2d 534. affirmed                          had been paroled and other had died,
prior decision but modified opinion, and the Supreme                        where parties stipulated to intervention of
Court granted certiorari in both actions. The Supreme                       another inmate as named party plaintiff
Court, Mr. Justice White, held that prison inmates                          and fmther stipulated that such inmate
do not have right to either retained or appointed                           had been brought before disciplinary
counsel in disciplinary hearings; that permitting                           committee for infraction that could have
adverse inference to be drawn from inmate's silence                         also lead to state criminal proceedings,
at his disciplina1y proceeding is not, on its face,                         that he asked for and was denied attorney,
invalid practice; that mandating confrontation and                          and that he was assigned to "segregation"
cross-examination of witnesses at prison disciplina1y                       for unspecified number of days for
proceedings effectively preempts area that has been                         infraction, such inmate had standing to
left to sound discretion of prison officials; and that                      raise issues involved in action before
where there was no evidence that prison inmates in                          Supreme Court. U.S.C.A.Const. Amend.
one action were subject to "lesser penalty" of loss of                       14.
privileges, but rather it appeared that all were charged
with "serious misconduct," requiring procedures such                        45 Cases that cite this headnote
as notice and opportunity to respond even when inmate
is faced with temporary suspension of privileges was
                                                                     J3J    Federal Courts
premature.                                                                    _= Constitutional rights, civil rights, and
                                                                            discrimination in general
Judgments ofCoUJts of Appeals reversed.
                                                                            Where state adult correction authority
                                                                            regulations, although concededly state
Baxter v. Palmigiano, 425 U.S. 308 (1976)



        law, diq not even mention right to                      are compelled in such proceedings
        counsel when charges brought were also                  to furnish testimonial evidence that
        crimes under state law and did not                      might incriminate them in later criminal
        suggest whether inmate 1s silence might                 proceedings, they must be offered
        be used against him in proceeding itself,               whatever immunity is required to supplant
        complaint by prison inmate claiming                     privilege and may not be required to
        that disciplinmy hearing violated his                   waive such immunity. U.S.C.A.Const.
        due process rights did not mention                      Amend. 5.
        or challenge any rule o1· regulation of
        authority but asked that disciplinary                   54 Cases that cite this headnote
        decision be declared invalid and its
        enforcement enjoined, statute requiring           171   Prisons
        convening of three judge court did not                   ."""· Statements, confessions, and
        appear to be applicable and thus Supreme                admissions; sel [-incrimination
        Comt was not deprived of jurisdiction
                                                                Where no criminal proceedings were
        on ground that case involved issues that
                                                                pending against state inmate, state did
        should have been heard by three-judge
                                                                not insist or ask that inmate waive his
        court subject to review on direct appeal.
                                                                Fifth Amendment privilege against self-
        28 U.S.C.A.    ~   2281.
                                                                incrimination but notified him that he was

        86 Cases that cite this headnote                        privileged to remain silent if he chose,
                                                                although his silence could be used against
                                                                him, and his silence in and of itself was
 141    Prisons                                                 insufficient to support adverse decision
         "''"" Counsel or other assistance                      by disciplinary board, permitting adverse
        Prison inmates do not have right to                     inference to be drawn from his silence
        either retained or appointed counsel in                 was not invalid practice. U.S.C.A.Const.
        disciplinary hearings.                                  Amends. 5, 14.

        200 Cases that cite this headnote                       I 084 Cases that cite this headnote


 151    Prisons                                           181   Prisons
         -....... Counsel or other assistance                    ~= Discipline and misconduct

        State authorities were not in error in                  Disciplinary       proceedings     in     state
        failing to advise prison inmate that he                 prisons involve correctional process and
        was entitled to counsel at disciplinary                 important state interests other than
        hearing and that state would furnish                    conviction for crime.
        counsel if he did not have one of his
        own since inmates do not have right to                  9 Cases that cite this headnote
        either retained or appointed counsel in
        disciplinary hearings.                            191   Constitutional Law
                                                                 ~·   Silence
        143 Cases that cite this headnote
                                                                Aside       from       privilege        against
                                                                compelled self-incrimination, in proper
 161    Prisons                                                 circumstances silence in face of
         ~-o.. Statements, confessions. and                     accusation is relevant fact not barred
        admissiorfs; self-incrimination                         from evidence by the due process clause.
        Prison     disciplinaty    hearings     are not         U.S.C.A.Const. Amends. 5, 14.
        criminal    proceedings, but if inmates



        Next
Baxter v. Palmigiano, 425 U.S. 308 (1976)
96°S . Ci. ·155 ·r4'7""L~E<I2.<f8 f()" ~--·~·-·-
                                      -· --~"'~------~--~


          I 08 Cases that cite this headnote                 1131   Civil Rights
                                                                     .= Criminal law enforcement prisons

 II 01    Prisons                                                   Record in action by state prison inmates
           ·w.;.;. Statements, confessions. and
                                                                    alleging that procedures used in prison
          admissions; self-incrimination                            disciplinary proceedings violated their
                                                                    rights to due process and equal protection
          Permitting adverse inference to be
                                                                    contained no evidenc~::; of abuse of
          drawn from prison inmate's silence at
                                                                    discretion by state prison officials in
          disciplinary proceeding is not, on its face,
                                                                    connection with confrontation and cross-
          invalid practice.
                                                                    examination of witnesses at disciplinary
          164 Cases that cite this headnote                         proceedings. U.S.C.A.Const. Amend. 14.

                                                                    97 Cases that cite this headnote
 1111     Prisons
           .""'·' Cross-examination and confrontation
                                                             1141   Prisons
          Mandating confrontation and cross-                         >-.. 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 <?f evidence            accusation is a relevant fact not barred from evidence
that incriminated him; and, as far as this record reveals,         by the Due Process Clause. Adamson v. CalifOrnia,
his silence was given no more evidentiary value than               332 U.S. 46, 67 S.Ct. 1672, 91 L.Ed. 1903 (1947);
was warranted by the facts surrounding his case. This              United States ex rei. Bilokumsky v. Tod. 263 U.S.
does not smack of an invalid attempt by the State                  149, 153-154, 44 S.Ct. 54, 56. 68 L.Ed. 221, 223
to compel testimony without granting immunity or to                (1923); Raffel v. United States, 271 U.S. 494,46 S.Ct.
penalize the exercise of the privilege. The advice given           566,70 L.Ed.2d 1054 (1926); Twining v. New Jersey.
inmates by the decisionmakers is merely a realistic                211 U.S. 78, 29 S.Ct. 14, 53 L.Ed. 97 (1908). See
                                                                   also United States v. Hale, 421 U.S. 171. 176-177,


          Ne:.:t
Baxter v. Palmigiano, 425 U.S. 308 (1976)
96 s~cC1551,47CECI~za·s1 o-~-~-~-~~··
95 S.Ct. 2133, 2136, 45 L.Ed.2d 99, 104 (1975);             refusing to call a witness, whether it be for irrelevance,
Gastelum-Quinones v. Kennedy, 374 U.S. 469, 479,            lack of necessity, or the hazards presented in individual
83 S.Ct. 1819, 1824. 10 L.Ed.2d 1013. 1020 (1963);          cases." ld., at 566. 94 S.Ct., at 2980, 41 L.Ed.2d, at
Grunewald v. United States. 353 U.S. 391.418-424,           956.
77 S.Ct. 963,981-984, I L.Ed.2d 931, 950-954 ( 1957).
Indeed, as Mr. Justice Brandeis declared, speaking          We were careful to distinguish between this
for a unanimous court in the Tad case, supra, which         limited right to call witnesses and other due
involved a deportation: "Silence is often evidence of       process rights at disciplinary hearings. We noted
the most persuasive character." 263 U.S., at 153-154,       expressly that, in comparison to the right to call
44 S.Ct., at 56, 68 L.Ed., at 224. And just last Term       witnesses, "(c)onfrontation and cross-examination
in Hale, supra, the Cowt recognized that "(f)ailure         present greater hazards to institutional interests." Id.,
to contest an assertion ... is considered evidence of       at 567,94 S.Ct., at 2980,41 L.Ed.2d, at 957. We said:
acquiescence ... if it would have been natural under the    '"If confrontation and cross-examination of those
circumstances to object to the assertion in question.''     furnishing evidence against the inmate were to be
422 U.S., at 176, 95 S.Ct .. at 2136, 45 L.Ed.2d, at        allowed as a matter of course, as in criminal trials, there
                                                            would be considerable potential for havoc inside the
                                                            prison walls. Proceedings would inevitably be longer
                                                            and tend to unmanageability." Ibid.
 *320 ** 1559 II 0 I The short of it is that permitting
an adverse inference to be drawn from an inmate's
silence at his disciplinary proceedings is not, on          We therefore concluded that "(t)he better course at this
its face, an invalid practice; and there is no basis        time, in a period where prison practices are diverse
in the record for invalidating it as here applied to        and *322 somewhat experimental, is to leave these
Palmigiano. 4                                               matters to the sound discretion of the officials of
                                                            stateprisons." /d. at 569, 94 S.Ct., at2981, 41 L.Ed.2d,
                                                            at 958.

                           IV                                **1560 Although acknowledging the strictures of
                                                            Wolff with respect to confrontation and cross-
In Wolff v. McDonnell, we held that "the inmate
                                                            examination, the Court of Appeals for the Ninth
facing disciplinary proceedings should be allowed
                                                            Circuit, on rehearing in No. 74-1194, went on to
to call *321 witnesses and present documentary
                                                            require prison authorities to provide reasons in writing
evidence in his defense when permitting him to do
                                                            to inmates denied the privilege to cross-examine
will not be unduly hazardous to institutional safety or
                                                            or confront witnesses against them in disciplinary
correctional goals." 418 U.S., at 566, 94 S.Ct., at 2979,
                                                            proceedings; absent explanation, failure to set forth
41 L.Ed.2d, at 956. We noted that "(o)rdinarily, the
                                                            reasons related to the prevention of one or more of the
right to present evidence is basic to a fair hearing; but
                                                            four concerns expressly mentioned in Wolff would be
the unrestricted right to call witnesses from the prison
                                                            deemed prima facie abuse of discretion.
population carries obvious potential for disruption
                                                             1111 1121 1131 This conclusion is inconsistent
and for interference with the swift punishment that
                                                            with Wolff. We characterized as "useful," but did
in individual cases may be essential to canying out
                                                            not require, written reasons for denying inmates the
the correctional program of the institution." Ibid.
                                                            limited right to call witnesses in their defense. We
The right to call witnesses, like other due process
                                                            made no such suggestion with respect to confrontation
rights delineated in Wolff, is thus circumscribed
                                                            and cross-examination which, as was there pointed
by the necessary "mutual accommodation between
                                                            out, stand on a different footing because of their
institutional needs and objectives and the provisions of
                                                            inherent danger and the availability of adequate
the Constitution that are of general application." !d ..
                                                            bases of decision without them. See 418 U.S.,
at 556, 94 S.Ct .. at 2975. 41 L.Ed.2d. at 950. Within
                                                            at 567-568, 94 S.Ct., at 2980-2981. 41 L.Ed.2d,
the reasonable limitations necessary in the prison
                                                            at 957-958. Mandating confrontation and cross-
disciplinary context, we suggested, but did not require,
                                                            examination, except where prison officials can justify
that the disciplinary committee "state its reason for
Baxter v. Palmigiano, 425 U.S. 308 (1976)
96S.cC 1551, 47    L.Ed.2<f8w--·-~-~~-~----~--~-----·---·--· -----~---~ ---~---·-·




their denial on one or more grounds that appeal to         Appeals in Nos. 74-1187 and 74-1194 are either
judges, effectively preempts the area that Wolff left to   inconsistent with the "reasonable accommodation"
the sound discretion of prison officials. 5 We add that    reached in Wolff, or premature on the bases of the
on the record before us *323 there is no evidence of       records before us. The judgments in Nos. 74-1187 and
the abuse of discretion by the state prison officials.     74-1194 accordingly are Reversed.

                                                           Judgments reversed.

                           v                               Mr.   Justice   STEVENS      took   no      part   in   the
 [14[   Finally, the Court of Appeals for the Ninth        consideration or decision of these cases.
Circuit in No. 74-1194 held that minimum due process
                                                           Mr. Justice BRENNAN, with whom Mr. Justice
such as notice, opportunity for response, and statement
                                                           MARSHALL joins, concurring in pa11 and dissenting
of reasons for action by prison officials was necessary
                                                           in part.
where inmates were deprived of privileges. 510 F.2d,
at 615. We did not reach the issue in Wolff; indeed, we    I agree that consideration of the procedural safeguards
said: "We do not suggest, however, that the procedures     necessary where an inmate is deprived only of
required by today's decision for the deprivation of good   privileges is premature on this record, and thus I join
time would also be required for the imposition of lesser   Patt V of the Court's opinion, which leaves open
penalties such as the loss of privileges." 418 U.S., at    whether an inmate may be deprived of privileges in the
572 n. 19. 94 S.Ct., at 2982. 41 L.Ed.2d, at 960. Nor      absence of due process safeguards.
do we find it necessary to reach the issue now in light
of the record before us. None of the named plaintiffs       *325 Parts II and IV of the CoUJt's opinion simply
in No. 74-1194 was subject solely to loss of privileges;   reaffirm Wolff v. McDonnell. 418 U.S. 539, 94 S.Ct.
all were brought before prison disciplinary hearings for   2963, 41 L.Ed.2d 935 ( 1974). I continue to believe
allegations of the type of "serious misconduct," 418       that Wolff approved procedural safeguards sh011 of the
U.S .. at 558, 94 S.Ct .. at 2975. 41 L.Ed.2d, at 952.     minimum requirements of the Due Process Clause, and
that we held in Wolff to trigger procedures therein        I dissent from Parts II and IV for the reasons stated
outlined. See n. 1, supra. Without such a record, we       by my Brother Marshall, 418 U.S., at 580. 94 S.Ct .. at
are unable to consider the degree of"liberty" at stake     2986, 41 L.Ed.2d. at 964.
in loss of privileges and thus whether some sort of
                                                           Pati Ill of the Comt's opinion, however, confronts an
procedural safeguards are due when only such "lesser
penalties" are at stake. To the extent that the Court of   issue not present in Wolff 1 and in my view reaches
Appeals for the Ninth Circuit required any procedures      an erroneous conclusion. The Court acknowledges that
in such circumstances, the Court of Appeals *324           inmates have the right to invoke the privilege against
acted prematurely, and its decision on the issue cannot    compulsory self-incrimination in prison disciplinary
                                                           proceedings, Ante, at 1556, but nevertheless holds that
stand. 6
                                                           "permitting an adverse inference to be drawn from
                                                           an inmate's silence at his disciplinary proceedings
 **1561 We said in Wolff v. McDonnell: "As the             is not, on its face, an invalid practice," Ante, at
nature of the prison disciplinary process changes in       1558, and was proper in the circumstances of this
future years, circumstances may then exist which will      case. This conclusion cannot be reconciled with
require further consideration and reflection of this       the numerous cases holding that the government is
Court. It is our view, however, that the procedures we     barred from penalizing an individual for exercising
have now required in prison disciplinary proceedings       the privilege; precedents require the holding that if
represent a reasonable accommodation between the           government officials ask queStions of an individual
interests of the inmates and the needs of the               *326 to elicit incriminating information, as happened
institution." 418 U.S., at 572. 94 S.Ct., at 2982. 41      here, the imposition of any substantial sanction on
L.Ed.2d. at 960. We do not retreat from that view.         that individual for remaining silent violates the Fifth
However, the procedures required by the Courts of          Amendment. That principle prohibits reliance on any



          Next     ,.-,
Baxter v. Palmigiano, 425 U.S. 308 (1976)
96   sct:1ssi~4TCEct2Cis1o~~           ~~~--~~~~~~~~~~~~        ···~ -~~-~~---~--·----~~·~···~-- ~~~~~-·




inference of guilt from the exercise of the privilege in    274, 282 (1973). See Maness v. Meyers, supra, 419
the context of a prison disciplinmy hearing.                U.S., at 473, 95 S.Ct., at 597, 42 L.Ed.2d, at 592
                                                            (White, J., concurring in result).

                                                            Thus, the Fifth Amendment not only excludes from use
                                                            in criminal proceedings any evidence obtained from
As we have frequently and consistently recognized:
                                                            the defendant in violation of the privilege, but also is
"The     constitutional    privilege     against   self-
                                                            operative before criminal proceedings are instituted: it
incrimination has two primary interrelated **1562
                                                            bars the government from using compulsion to obtain
facets: The Government may not use compulsion
                                                            incriminating information from any person. Moreover,
to elicit self-incriminating statements, see, E. g.,
                                                            the protected information "does not merely encompass
Counselman .v. Hitchcock, 142 U.S. 547, 12 S.Ct.
                                                            evidence which may lead to criminal conviction, but
195 (35 L.Ed. I 110), and the Government may not
                                                            includes information which would furnish a link in the
permit the use in a criminal trial of self-incriminating
                                                            chain of evidence that could lead to prosecution ....
statements elicited by compulsion. See, E. g., Haynes
                                                            Hoffman v. United States, 34 I U.S. 479.486,71 S.Ct.
v. Washington, 373 U.S. 503, 83 S.Ct. 1336. 10
                                                            814,818,95 L.Ed. 1118, 1124 (195J).".Maness v.
L.Ed.2d 513." Murphy v. Waterfi·ont Comm'n, 378
                                                            Meyers. supra. at 461, 95 S.Ct., at 592. 42 L.Ed.2d.
U.S. 52, 57 n. 6. 84 S.Ct. 1594, 1598, I 2 L.Ed.2d 678.
                                                            at 585. And it is not necessary that a person be guilty
683 (1964).
                                                            of criminal misconduct to invoke the privilege; an
                                                            innocent person, perhaps fearing that revelation of
Indeed, only weeks ago we said that "the privilege          information would tend to connect him with a crime he
protects against the use of compelled statements As         did not commit, also has its protection." 'The privilege
well as guarantees the right to remain silent absent        serves to protect the innocent who otherwise might be
immunity." Garner v. United States, 424 U.S. 648.           ensnared by ambiguous circumstances.' " Grunewald
at 653. 96 S.Ct. I I 78, at I 182. 47 L.Ed.2d 370, at       v. United States, 353 U.S. 391, 421, 77 S.Ct. 963,
376 ( 1976) (emphasis supplied). Malloy v. Hogan, 378       982, I L.Ed.2d 931, 953 (1957), quoting Slochower v.
U.S. 1.84 S,Ct. 1489, I 2 L.Ed.2d 653 ( 1964), held that    Board of Education, 350 U.S. 551,557-558,76 S.Ct.
the Fifth Amendment the "essential mainstay" of our         637, 64 I, 100 L.Ed. 692, 699 ( 1956). See E. Griswold,
"American system of criminal prosecution," ld., at 7,       The Fifth Amendment Today I 0-22 (I 955); Ratner,
84 S.Ct., at 1493, 12 L.Ed.2d, at 659 protects "the right   Consequences of Exercising the Privilege Against
of a person to remain silent unless he chooses to speak     Self~lncrimination, 24 U.Chi.L.Rev. 472 (1957).

in the unfettered exercise of his own will, and to suffer
                                                            Accordingly, the fact that no criminal proceedings
no penalty ... for such silence." ld., at 8, 84 S.Ct., at
                                                            were pending against Palmigiano, Ante, at 1557,
 I493, I2 L.Ed.2d, at 659. See Spevack v. Klein. 385
                                                            does not answer the crucial question posed by this
U.S. 51 I, 514. 87 S.Ct. 625. 17 L.Ed.2d 574 (1967).
                                                            case. The evidentiary *328 use of his statements
As The Chief Justice noted last Tenn: "This Cowt
                                                            in a criminal proceeding lurked in the background,
has always broadly construed (the Fifth Amendment)
                                                            but the significant element for this case is that the
protection to assure that an individual is not compelled
                                                            Fifth Amendment also prohibits the government from
to produce evidence which later may be used against
                                                            compelling an individual to disclose information that
him as an accused in a criminal action." *327 Maness
                                                            might tend to connect him with a crime. Maness
v. Meyers, 419 U.S. 449,461. 95 S.Ct. 584,592,42
                                                            v. Meyers, supra, pointed up this distinction in its
L.Ed.2d 574, 585 I 975). Further, "a witness protected
                                                            recognition that availability of motions to suppress
by the privilege may rightfully refuse to answer unless
                                                            compelled testimonial evidence **1563 do not
and until he is protected at least against the use of
                                                            remedy the Fifth Amendment violation. 419 U.S., at
his compelled answers and evidence derived therefrom
                                                            460, 463, 95 S.Ct., at 592, 42 L.Ed.2d, at 584.
in any subsequent criminal case in which he is a
defendant. Kastigar v. United Stales, 406 U.S. 441,
92 S.Ct. 1653,32 L.Ed.2d 212 (1972)." Lefkowitz v.                                     I!
Turley. 4 I4 U.S. 70, 78, 94 S.Ct. 316, 322, 38 L.Ed.2d



         Ne:d
Baxter v. Palmigiano, 425 U.S. 308 (1976)
g-ss:-ci--1ss(47T~Ecrza     BTo-· -~-~--   ~~·




It was this aspect of the privilege that we relied on in     Gardner v. Broderick, 392 U.S. 273, 88 S.Ct. 1913,
a line of cases beginning with Garrity v. New Jersey,        20 L.Ed.2d I082 ( 1968), involved a policeman called
385 U.S. 493. 87 S.Ct. 616, 17 L.Ed.2d 562 (1967),           to testifY before a grand jury investigating police
and leading up to Lefkowitz v. Turley, supra. The            corruption. He was warned of his constitutional right
Court says today that "this case is very different,"         to refuse to give any incriminating information, but
Ante, at 1557, but in my view the Garrity-Lefkowitz          was also asked to waive immunity, and told that if he
cases are compelling authority that drawing an adverse       refused to do so, a state statute required that he be
inference from an inmate's exercise of the privilege to      discharged. He refused to waive immunity and was
convict him of a disciplinary offense violates the Fifth     discharged. Gardner invalidated the state statute on the
Amendment.                                                   ground that the Fifth Amendment does not permit the
                                                             government to use its power to discharge employees
In Garrity policemen were summoned to testifY in             to coerce disclosure of incriminating evidence. Jd., at
the course of an investigation of pOlice corruption.         279, 88 S.Ct .. at 1916, 20 L.Ed.2d, at 1087. *330
They were told that they could claim the privilege,          Sanitation Men v. Sanitation Comm'r. 392 U.S. 280, 88
but would be discharged if they did. Garrity held that       S.Ct. 1917.20 L.Ed.2d 1089 (1968), decided the same
imposition of the choice between self-incrimination
                                                             day, turned on the same ground. 3
and job forfeiture denied the constitutionally required
"free choice to admit, to deny, or to refuse to answer."      **1564 Lefkowitz v. Turley, supra, 414 U.S. 70.94
Lisenba v. California, 314 U.S. 219,241, 61 S.Ct. 280,       S.Ct. 316, 38 L.Ed.2d 274. the most recent decision
292. 86 L.Ed. 166, 182 ( 1947). Subsequent criminal          involving noncriminal penalties for exercising the
convictions were therefore set aside on the ground that      privilege, concerned two architects summoned to
the unconstitutionally compelled testimony should not        testify before a grand jury investigating charges of
have been admitted in evidence at trial.                     corruption relating to state contracts. They refused to
                                                             waive the privilege, and a state statute provided that
In Spevack v. Klein, supra, 385 U.S. 511, 87 S.Ct.
                                                             such a refusal would result in cancellation of existing
625, 17 L.Ed.2d 574, decided the same day as Garrity,
                                                             state contracts and ineligibility for future contracts for
an attorney refused to honor a subpoena calling
                                                             five years. The architects brought suit, claiming that
for production of certain financial records; the sole
                                                             the statute violated the privilege against compulsory
basis for the refusal was the privilege against self-
                                                             self-incrimination. The Court held that in the absence
incrimination. He was disbarred for exercising the
                                                             of a grant of immunity the government may not compel
privilege, and *329 the disbarment was challenged in
                                                             an individual to give incriminating answers. 414 U.S.,
this Court as infringing the Fifth Amendment. Relying
                                                                                                                  4
on ,\fa/loy v. Hogan. supra, 378 U.S., at 8, 84 S.Ct.,       at 79, 94 S.Ct., at 323, 38 L.Ed.2d. at 282. A
at 1493, 12 L.Ed.2d, at 659. Spevack held that the           "substantial economic sanction" in the form of loss of
privilege protects individuals against any penalty for       contracts was held sufficient to constitute compulsion
their silence and that its protection bars "the imposition   within the meaning of the Fifth Amendment. ld., at 82,
of any sanction which makes assettion of the Fifth           94 S.Ct., at324, 38 L.Ed.2d, at 284. The penalty, again
Amendment privilege 'costly.'" 385 U.S., at 515.87           imposed in a noncriminal context, was held to infringe
                                                             the Fifth Amendment.
S.Ct., at 629. 17 L.Ed.2d. at 577. 2 See Griffin v.
California. 380 U.S. 609.614,85 S.Ct. 1229. 1232. 14         It follows that settled jurisprudence until today has
L.Ed.2d I06, I09 ( 1965 ). Spevack expressly stated that     been that it is constitutionally impermissible for the
"(t)he threat of disbarment and the loss of professional     government to impose noncriminal penalties as a
standing, professional reputation, and of livelihood         means of compelling individuals to forgo the privilege.
are powerful forms of compulsion," 385 U.S .. at 516,        The Court therefore begs the question by "declin(ing)
87 S.Ct., at 628. 17 L.Ed.2d, at 578. and therefore          to extend the ''33 I Griffin rule" to prison disciplinmy
held that by inferring professional misconduct, and          proceedings, ante, at 1558. Affinnance of the Court of
penalizing that misconduct, solely on the basis of an        Appeals' holding that reliance on an inmate's silence is
invocation of the privilege, the State had violated the      barred by the Fifth Amendment is required by Spevack.
Fifth Amendment.                                             Gardner, Sanitation 1\len, and Lefkowitz.
Baxter v. Palmigiano, 425 U.S. 308 (1976)
96&   cCT551~4ITECI2cf8Tif~ ~~      -··-·   ~ ---~     --   ~~ -~   · ·- ·   ··-~······~-~- -~-···   ~~~




                                                             Lefkowitz. He was told that criminal charges might be
The Court's attempted distinction of those cases plainly     brought against him. He was also told that anything
will not wash. To be sure, refusal to waive the privilege    he said in the disciplinary hearing could be used
resulted in automatic imposition of some sanction in
                                                             against him in a criminal proceeding. 7 Thus, the
all of those cases. The Court reasons that because
                                                             possibility of self-incrimination was just as real and
disciplinary decisions must be based on substantial
                                                             the threat of a penalty just as coercive. Moreover, the
record evidence, !'dorris v. Travisono, 310 F.Supp.
                                                             Fifth Amendment does not distinguish among types
857. 873 (RI 1970), 5 and Palmigiano's silence "at           or degrees of compulsion. It prohibits " 'inducement
the hearing in the face of evidence that incriminated        of any sort.'" Bram v. Unit~d States, 168 U.S. 532,
him ... was given no more evidentia1y value than was         548, 18 S.Ct. 183, 189, 42 L.Ed. 568. 575 (1897).
warranted by the facts surrounding his case," Ante, at       "We have held inadmissible even a confession secured
1557, no automatic imposition of a sanction results,         by so mild a whip as the refusal, under certain
and therefore the use of such silence "does not smack        circumstances, to allow a suspect to call his wife
of an invalid attempt by the State to compel testimony       until he confessed." Malloy v. Hogan, 378 U.S., at
without granting immunity or to penalize the exercise        7, 84 S.Ct., at 1493, 12 L.Ed.2d, at 659. Palmigiano
of the privilege," Ibid.                                     was forced to choose between self-incrimination and
                                                             punitive segregation or some similar penalty. Since the
But the premise of the Garrity-Lefkowitz line was not
                                                             Court does not oven·ule the Garrity-Lefkowitz group
that compulsion resulted from the automatic nature
                                                             of decisions, those precedents compel the conclusion
of the sanction, but that a sanction was imposed that
                                                             that this constituted impermissible compulsion.
made costly the exercise of the privilege. Plainly the
penalty imposed on Pahnigiano 30 days in punitive
segregation and a downgraded classification made                                         III
costly the exercise of the privilege no less than loss
of government *332 contracts or discharge from a              The Court also draws suppmt from the "prevailing
state job. Even accepting the Court's assertion that a        rule that the Fifth Amendment does not forbid adverse
disciplinary conviction does not automatically follow       . inferences against parties to civil actions when they
from an inmate's silence, in sanctioning reliance on          refuse *334 to testify in response to probative
silence as probative of guilt of the disciplinary offense     evidence offered against them." Ante, at 1558. That
charged, the Court allows prison officials **1565 to          rule may prevail, but it did not have the approval of this
make costly the exercise of the privilege, something          Court until today. Some commentators have suggested
Garrity-Lefkowitz condemned as prohibited by the              that permitting an adverse inference in some civil cases
Fifth Amendment. For it cannot be denied that the             violates the Fifth Amendment. Comment, Penalizing
disciplinary penalty was imposed to some extent, if not       the Civil Litigant Who Invokes the Privilege Against
                                                              Self-Incrimination, 24 U.Fla.L.Rev. 541, 546 (1972);
solely, 6 as a sanction for exercising the constitutional
                                                              Comment, 1968, U.Ill.L.F. 75; Note, Use of **1566
privilege. See Griffin v. California, supra, 380 U.S.
                                                              the Privilege Against Self-Incrimination in Civil
609,85 S.Ct. 1229, 14 L.Ed.2d 106; United States v.
                                                              Litigation, 52 Va.L.Rev. 322 (1966). I would have
.Jackson . .190 U.S. 570, 581-582, 88 S.Ct. 1209, 1216,
                                                              difficulty holding such an inference impermissible
20 L.Ed.2d 138. 146 ( 1968). That plainly violates the
                                                              in civil cases involving only private pmties. But I
Fifth Amendment.
                                                              would hold that compulsion violating the privilege is
It is inconsequential that the State is free to determine     present in any proceeding, criminal or civii, where
the probative weight to be attached to silence. Garrity-      A government official puts questions to an individual
Lefkowitz did not consider probative value, and               with the knowledge that the answers might tend to
other precedents deny the State power to attach any           incriminate him. See Garner v. United States, 424 U.S.
probative weight whatever to an individual's exercise         at 653, 96 S.Ct. at 1181.47 L.Ed.2d at 376; Sanitation
of the privilege, as I develop more fully in Part IV.         Men v. Sanitation Comm'r, 392 U.S., at 284, 88 S.Ct..
                                                              at 1919.20 L.Ed.2d. at 1092.
 *333 The compulsion upon Palmigiano is as obvious
as the compulsion upon the individuals in Garrity-
Baxter v. Palmigiano, 425 U.S. 308 (1976)
96S.cC1551, 47 L.Ed.2cf8T6-··-· ··~~-

                                                          immunity for any testimony given at disciplinary
Such a distinction is mandated by one of the
                                                          hearings. 8
fundamental purposes of the Fifth Amendment: to
preserve our adversary system of criminal justice by
preventing The government from circumventing that                            *336 **1567 IV
system by abusing its powers. Garnerv. United States,
supra. 424 U.S. at 653, 96 S.Ct. at 1182, 47 L.Ed.2d      I would therefore affirm the judgment of the Court
at 376. Only a few weeks ago, we said "That system        of Appeals in No. 74· I I 87 insofar as that court held
is undermined when a government deliberately seeks        that an inmate's silence may not be used against
to avoid the burdens of independent investigation by      him in a prison disciplinary proceeding. This would
compelling self-incriminating disclosures." Ibid.         make unnecessary addressing the question whether
"One of the most important functions of the privilege     exercise of the privilege may be treated as probative
is to protect all persons, whether suspected of crime     evidence of quilt. Since the Comi, however, indicates
or not, from abuse by the government of its powers of     that invocation of the privilege is probative in these
investigation, arrest, trial and punishment. It was not   circumstances, Ante, at 1558-1559, I express my
solicitude for persons accused of crime but the desire    disagreement. For we have repeatedly emphasized that
to maintain the proper balance between government         such an inference has no foundation. Indeed, the very
and the persons governed that *335 gave rise to the       cases relied upon by the Court expose its error and
adoption of these constitutional provisions." Ratner,     support the conclusion that Palmigiano's silence could
Consequences of Exercising the Privilege Against          not be treated as probative.
Self-Incrimination, 24 U.Chi.L.Rev. 472, 484 (I957)
                                                          United States ex rei. Biiokumsky v. Tod, 263 U.S.
(footnote omitted).
                                                           149,44 S.Ct. 54, 68 L.Ed. 221 ( 1923), quoted Ante,
                                                          at 1558, involved a deportation proceeding in which
In a civil suit involving only private parties, no        the deportee failed to deny that he was an alien. But
patiy brings to the battle the awesome powers             he also failed to claim or attempt to prove that he
of the government, and therefore to permit an             was a citizen. Alienage was not an element of any
adverse inference to be drawn from exercise of the        crime, and his silence was held probative of his *337
privilege does not implicate the policy considerations    alienage. The inference was plainly permissible since
underlying the privilege. But where the government        the deportee faced no possibility of incrimination, and
"deliberately seeks" the answers to incriminatory         there was therefore no implication of the privilege.
questions, allowing it to benefit from the exercise of    But Palmigiano's predicament was that answers to the
the privilege aids, indeed encourages, governmental       questions put to him by the prison officials could
circumvention of ou1· adversary system. In contrast,      connect him with a crime.
an affirmance of the judgment in Palmigiano's case
                                                          The Court also quotes part of a sentence from United
would further obedience of the government to the
                                                          States v. Hale, 422 U.S. 171, 95 S.Ct. 2133, 45
commands of the Fifth Amendment. Cf. United States
                                                          L.Ed.2d 99 (1975). We said in Hale that "(i)n most
v. Karathanos, 531 F.2d 26, 35 (CA2 1976) (Oakes, J.,
                                                          circumstances silence is so ambiguous that it is of little
concurring); Amsterdam, Perspectives on the Fourth
                                                          probative force." Id., 419 U.S. at 176.95 S.Ct. at 2136.
Amendment, 58 Minn.L.Rev. 349 (1974).
                                                          45 L.Ed.2d at I 04. We also noted that its probative
Nothing in this record suggests that the State does not   force increases where a person "would be more likely
use the disciplinary procedure as a means to gather       than not to dispute an untrue accusation." Ibid. We
evidence for criminal pros_ecutions. On the contrary,     emphasized that "(f)ailure to contest an asse1iion,
Palmigiano was told that he might be prosecuted,          however, is considered evidence of acquiescence Only
which indicates that criminal proceedings are brought     if it would have been natural under the circumstances
in some instances. And if the State does not intend       to object to the assertion in question.'' Ibid. (emphasis
to initiate criminal proceedings, the Fifth Amendment     supplied). That was not the case since Hale's silence
problem can be readily avoided simply by granting         was in response to notice that he had a right to remain
                                                          silent, and that any statements he made would be
Baxter v. Palmigiano, 425 U.S. 308 (1976)
9ffS.ct15sf..   47L.Ed.2ifsfa--·~--~··--~-·····-·-·----·--                            ........- -...._ ..._ ..._._. __ _

used against him in court. These excerpts from Hale·           against compuls01y self-incrimination in Harris v.
require the conclusion that Palmigiano's silence also          New York, 401 U.S. 222. 91 S.Ct. 643, 28 L.Ed.2d
had no probative force. Palmigiano was also advised             I ( 1971 ), the California Supreme Cow1 recently
that he had a right to remain silent, that he might be         construed Califomia's constitutional prohibition to
prosecuted, and that anything he said could be used            forbid use of an accused's inculpatory statement
against him in court.                                          obtained in violation of custodial interrogation
                                                               safeguards announced in Miranda v. Arizona, 384 U.S.
Finally, Grunewald v. United States, 353 U.S. 391,             436, 86 S.Ct. 1602. 16 L.Ed.2d 694 ( 1966). The court
77 S.Ct. 963. I L.Ed.2d 931 ( 1957), is particularly           said, People v. Disbrow. 16 Cal.3d I 01. 113·115, 127
persuasive authority that Palmigiano's silence is not          Cai.Rptr. 360, 368, 545 P.2d 272,280 ( 1976): "We ...
probative. We there considered whether one Halperin's          declare that Harris is not persuasive authority in any
exercise of the privilege was probative of guilt, and          state prosecution in Califomia. . . . We pause ...
we concluded that his silence, in the circumstances,           to reaffi1m the independent nature of the Califomia
was "wholly consistent with innocence." Id., at 421,77         Constitution and our responsibility to separately define
S.Ct .. at 982, I L.Ed.2d. at 952. "Halperin repeatedly        and protect the rights of California citizens despite
insisted ... that he was innocent and that he pleaded          conflicting decisions of the United States Supreme
his Fifth Amendment privilege solely on the advice
                                                               Court interpreting the federal Constitution." 10
of counsel." !d .. at 422. 77 S.Ct .. at 983. I L.Ed.2d.
at 953. Similarly, Palmigiano here maintained that              *340 The fact that Palmigiano is a prison inmate
he was innocent and that he claimed the privilege              cannot, of course, distinguish this case from the cases
on *338 the advice of counsel. Grunewald was a                 in the Garrity-Lefkowitz line, since "a prisoner does
situation where "the Fifth Amendment claim was made            not shed his basic constitutional rights at the prison
before a grand jury where Halperin was a compelled,            gate." Wolffv. McDonnell, 418 U.S., at 581, 94 S.CL
and not a voluntary, witness; where he was not                 2963. at 2987, 41 L.Ed.2d 935, at 965 (Marshall, J.,
represented by counsel; where he could summon no               dissenting); see Jackson v. Bishop, 404 F.2d 571, 576
witnesses; and where he had no opportunity to cross-           (CAS 1968) (Blackmun, J.). I must therefore view
examine witnesses testifying against him." Ibid. That          today's decision as another regrettable disregard ofMr.
was similar to Palmigiano's situation; inmates have            Justice Frankfurter's admonition that our interpretation
only a very limited right to call witnesses, and an            of the privilege **1569 is not faithful to the Founding
even more limited right of cross-examination, Ante, at         Fathers' purpose when it does not reflect the teaching
1559. Grunewald is thus most persuasive authority that         of history:
Palmigiano's silence was not probative. See **1568
Flint v. Mu lien, 499 F.2d I 00, I 03 (CA I ). cert. denied,   "This command of the Fifth Amendment ... registers
419 U.S. I 026. 95 S.Ct. 505. 42 L.Ed.2d 30 I (1974). 9        an important advance in the development of our liberty
                                                               'one of the great landmarks in man's struggle to make
To accord silence probative force in these cases               himself civilized.' Time has not shown that protection
overlooks the hornbook teaching "that one of the               from the evils against which this safeguard was
basic functions of the privilege is to protect Innocent        directed is needless or unwarranted. This constitutional
men." Grunewald v. United States, supra, 353                   protection must not be interpreted in a hostile or
U.S. at 421. 77 S.Ct. at 982, I L.Ed.2d at 952                 niggardly spirit. Too many, even those who should
(emphasis in original). If this Comt's insensitivity           be better advised, view this~ privilege as a shelter for
to the Fifth *339 Amendment violation present                  wrongdoers. They too readily assume that those who
in this case portends still more erosion of the                invoke it are either guilty of crime or commit perjury
privilege, state courts and legislatures will remember         in claiming the privilege. Such a view does scant honor
that they remain free to afford protections of                 to the patriots who sponsored the Bill of Rights as
our basic liberties as a matter of state law.                  a condition to acceptance of the Constitution by the
See ivtichigan v. Mosley. 423 U.S. 96, 120-121;                ratifying States." Ullmann v. United States. 350 U.S.
96 S.Ct. 321, 332. 46 L.Ed.2d 313, 334 (1975)                  422, 426-427. 76 S.Ct. 497, 500. I 00 L.Ed. 511, 518
(Brennan, J., dissenting). Contra1y to this Court's            ( 1956) (footnotes omitted).
interpretation of the Federal Constitution's privilege


          Next '
Baxter v. Palmigiano, 425 U.S. 308 (1976)
96s~cc1ss1~47      c.td.2ds1o

Parallel Citations

96S.Ct.I551,47L.Ed.2d810


Footnotes
*     The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for
      the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321. 337, 26 S.Ct.2R2,
      287. 50 L.Ed. 499, 505.
      Respondents John Wesley Clutchette and George L. Jackson brought suit "on their own behalf: and, pursuant to Rule
      23(b){ I) and Rule 23(b)(2) of the Federal Rules of Civil Procedure, on behalf of all other inmates of San Quentin State
      Prison subject to defendants' jurisdiction and affected by the policies, practices or acts of defendants complained of
      herein." Plaintiffs' Amended Complaint, I Record 33 (No. 74- I I 94). The District Court treated the suit as a class action,
      Clutchette v. Procunier. 328 F.Supp. 767. 769-770 (N.D.Cal.l971 ), but did not certify the action as a class action within
      the contemplation ofFed.Rules Civ.Proc. 23(c)(l) and 23(c)(3). Without such certification and identification of the
      class, the action is not properly a class action. Indianapolis School Comm'rs v. Jacobs. 420 U.S. 128. 95 S.Ct. 848.
      43 L.Ed.2d 74 (1975). We were advised at oral argument in No. 74-1194 that respondent Clutchette was paroled in
       1972, two years after the suit was filed; counsel lOr respondents conceded that the case is moot as to him. Tr. of Oral
      Arg. (No. 74-1194), p. 34. We were further advised that respondent Jackson died after the suit was filed. However,
      the parties stipulated on June 21, 1972, to the intervention of Alejandro R. Ferrel as a named party plaintiff in the
      suit. 3 Record 285 (No. 74-1194). The parties further stipulated the facts that, like Clutchette and Jackson, Ferrel was
      an inmate at San Quentin who was brought before a disciplinary committee for an infraction that could have also led
      to state criminal proceedings, that he asked for and was denied an attorney at the hearing, and that he was assigned
      to ·•segregation.. for an unspecified number of days tOr the infraction. Ferrel, we were told at oral argument, is still
      incarcerated at San Quentin. Tr. of Oral Arg. 34 (No. 74-1194). He thus has standing as a named plaintiff to raise the
      issues before us in No. 74-1194.
2     The United States as Amicus curiae suggests that No. 74-1187 is not properly before the Court because the case involves
      the constitutionality of regulations of the Rhode Island Adult Corrections Authority and hence should have been heard
      by a three-judge court, subject to review here on direct appeal. The applicable regulations of the Authority when this
      case was brought had been promulgated as the result of a negotiated settlement of litigation in the District Com1 for
      the District of Rhode Island. Morris v. Travisono. 310 F.Supp. 857 ( 1970). It is conceded that they have become state
      law, and it would appear that they are of statewide effect. The rules on their face, however, although regulating in
      some detail the procedures required in prison disciplinary hearings, do not expressly grant or deny, or even mention,
      the right to counsel where charges brought are also a crime under state law. Nor do they suggest, one way or the other,
      whether an inmate's silence may be used against him in the proceeding itself Palmigiano's complaint did not mention or
      challenge any rule or regulation ofthe Authority; nor did it seek an injunction against the enforcement of any identified
      rule. What it asked was that the Board's disciplinary decision be declared invalid and its enforcement enjoined. Neither
      Palmigiano nor the State asked or suggested that a three-judge court be convened. It would not appear that the District
      Court considered the validity of any of the Authority's rules to be at stake. That court ruled Palmigiano was not entitled
      to be represented by counsel, not because the applicable mles forbade it but because it considered the controlling rule
      under the relevant cases was to this effect. The Court of Appeals, although quite aware that constitutional attacks on
      the Rhode Island prison rules might necessitate a three-judge court, see Souza v. Travisono, 498 f.2d 1120, 1121-1122
      ((';\I 1974 ), evidently did not doubt its jurisdiction in this case. On the record before us, the provisions of28 U.S.C.
      s 2281 with respect to three-judge courts would not appear to be applicable.
3     The Court based its statement on 3A J. Wigmore, Evidences 1042 (Chadbourn rev. 1970), which reads as follows:
      ''Silence, omissions, or negative statements, as inconsistent: (I) Silence, etc., as constituting the impeaching statement.
      A Jhilure to assert a fUct, when it would have been natural to assert it, amounts in effect to an assertion of the non-
      existence of the fact. This is conceded as a general principle of evidence (s I 071 infra ). There may be explanations,
      indicating that the person had in truth no belief of that tenor; but the conduct is 'prima facie' an inconsistency.
      ·'There are several common classes of cases:
      ·'(1) Omissions in legal proceedings to assert what would naturally have been asserted under the circumstances.
      ·'(2) Omissions to assert anything, or to speak with such detail or positiveness, when formerly narrating, on the stand
      or elsewhere, the matter now dealt with.



         Ne:.;t
Baxter v. Palmigiano, 425 U.S. 308 (1976)
96 S.Ct. 1551, 47L.Ed.2d 816-~~~--~----------·-·-------·---
      ''(3) Failure to take the stand at all, when it would have been natural to do so.
      ·'In all of these much depends on the individual circumstances, and in all of them the underlying test is, would it have
      been natural for the person to make the assertion in question?" (Emphasis in original.) (Footnotes omitted.)
4     The record in No. 74-1187 shows that Palmigiano was provided with copies 9f the Inmate Disciplinary Report and
      the superior's investigation report, containing the charges and primary evidence against him, on the day before the
      disciplinary hearing. At the hearing, Captain Baxter read the charge to Palmigiano and summarized the two reports.
      In the face of the reports, which he had seen, Palmigiano elected to remain silent. The Disciplinary Board's decision
      was based on these two reports, Palmigiano's decision at the hearing not to speak to them. and supplementary reports
      made by the officials filing the initial reports. All of the documents were introduced in evidence at the hearing before
      the District Court in this case. App. 197-202 (No. 74-1187).
5     The Court of Appeals also held, in its initial opinion (unmodified in rehearing with respect to this point), that ''the
      disciplinary committee must be required to make its fact finding determinations based solely upon the evidence
      presented at the hearing" in order "(l)or the right to confront and cross-examine adverse witnesses to be meaningful."
      497 F.2d, at 820. Because we have held that there is no general right to confront and cross-examine adverse witnesses,
      it follows that the Court of Appeals' holding on this point must fall with its rejected premise. Due to the peculiar
      environment of the prison setting, it may be that certain facts relevant to the disciplinary determination do not come
      to light until after the formal hearing. It would be unduly restrictive to require that such facts be excluded from
      consideration, inasmuch as they may provide valuable information with respect to the incident in question and may
      assist prison officials in tailoring penalties to enhance correctional goals. In so stating, however, we in no way diminish
      our holding in Wolff that ''there must be a 'written statement by the fact finders as to the evidence relied on and reasons'
      for the disciplinary action.'' 418 U.S .. at 564, 94 S.Ct., at 2979. 41 L.Ed.2d, nL 955.
6     Petitioners in No. 74-1194 have not challenged the holdings of the Court of Appeals for the Ninth Circuit with respect
      to notice, 497 1'.2d, al 818. or to the right to be heard by a "neutral and detached" hearing body. !d .. at 820. Cf. 41 S
      U.S .. at 570-571, 94 S.Ct .. at 2981-2982. 41 L.Ed.2d. at 959-960. Because these holdings are no longer in issue, it is
      unnecessary for us to consider them.
      I agree that No. 74- I 194 is not moot, since the intervening plaintiff(Ferrell) has a personal stake in the outcome of this
      litigation. But the citation oflndianapolis School Comm'rs v. Jacobs, 420 U.S. 128.95 S.Ct. 848,43 L.Ed.2d 74 { 1975),
      is inapposite. We held that case moot because the named plaintiffs no longer had a personal stake in the outcome, and
      the action had not been formally certified as a class action. Id .. at 129. 95 S.Ct .. at 849. 43 L.Ed.2d. at 77. We did
      not, however, hold that without such formal certification "the action is not properly a class action.'' Ante, at 1554 n. I.
      Jacobs applies only to the determination ofmootness, and did not deal with whether, for example, a court of appeals
      may treat an action as a class action in the absence of formal certification by the district court. Moreover, the propriety
      of the certification need not be addressed, since there is a.plaintiJTwith a personal interest in the outcome. Youakim v.
      Miller, 425 U.S. 231, at 236-237 n, 2. 96 S.Ct. 1399. at 1402,47 L.Ed.2d 701. at 706-707.
2     Although this quotation is from the plurality opinion of four Justices, Mr. Justice Fortas, who concurred in the judgment,
      ·'agree( d) that Spevack could not be disbarred for asserting his privilege against self-incrimination," 385 U.S., at 520.
      87 S.Ct.. at 631. 17 L.Ed.2d. at 581. thus providing a majority for that proposition. He wrote separately because he
      was ofthe view that state employees enjoyed a Jesser protection. He agreed with the result, however, becat1se Spevack
      like Palmigiano was not a state employee. Ibid. See (Jardncr v. Broderick. 392 U.S. 273.88 S.Ct. 1913,20 L.Ecl.2d
      I 082 ( 1968).
3     In Sanitation Men 15 sanitation employees called before the Sanitation Commissioner investigating alleged
      improprieties '-Vere told that a claim of the privilege as a basis for refusing to answer questions concerning their official
      duties would result in their discharge. Three employees answered and denied the charges, but when later called before
      grand juries refused to waive immunity and were discharged tbr doing so. The Court held that to put the employees
      to a choice between their constitutional rights and their jobs was compulsion that violated the privilege. 392 U.S., at
      284.88 S.Ct .. at 1919,20 L.Ed.2d. at 1092.
4     ''(T)he State intended to accomplish what Garrity has specifically prohibited to compel testimony that had not been
      immunized." 414 U.S.    ill   82. 94 S.Ct. at 325, 3::-1 L.Ed.2d at 284.
5     Although Morris imposes a substantialMevidence standard for appellate review of findings in disciplinary proceedings,
      nothing in that case supp011s the Court's assumption that an inmate's silence alone would not meet this evidentiary
      standard. Ante. at 1557;      c1:
                                   Ante, at 1555 n. 2. But if silence alone provides an evidentiary premise sufficient for
      discipline, the Court's distinction of the Garrity-Lefkowitz cases crumbles. I therefore read the Court's opinion to imply




         1'-Jext
Baxter v. Palmigiano, 425 U.S. 308 (1976)
96·s.ct. 1551,-47l.Ed.Zd a1o             ·-----·
      that the Fifth Amendment bars conviction of a disciplinary violation based solely on an inmate's silence. Tn No. 74-1187,
      petitioners concede that an inmate's silence, without more, would not be substantial evidence.
6     As the Court notes, the only evidence, other than Palmigiano's silence, before the Disciplinary Board consisted of
      written reports made by the prison officials who filed the initial charges against Palmigiano. On the whole, the record
      inspires little confidence that his silence was not the sole basis for his disciplinary conviction. At the hearing a prison
      official read the disciplinary charges to Palmigiano and then asked him: "What happened here, Nick?" Palmigiano's
      response was again to request the presence of counsel, which had previously been denied. When the renewed request
      was denied, Palmigiano stated that he would remain silent on the advice of counsel. The official thereafter asked: "Do
      you intend to answer any questions for the board?" Consistent with his earlier statement, Pahnigiano replied that he
      did not. The Board excused him from the hearing room; he was called back within five minutes and informed that he
      had been found guilty and sentenced to 30 days' punitive segregation, with a possible downgrade in his classification.
7     In this respect it is not clear that all of the Morris requirements were observed in Palmigiano's disciplinary hearing.
      Under the prison's rules, each inmate must be advised that "statements he makes in his defense at a disciplinary hearing
      are probably not admissible for affirmative use by the prosecution at a trial." Brief for Petitioners in No. 74-1187, pp.
      4-5. Pahnigiano, however, was told that anything he said could be used against him at a criminal trial. In any event, the
      uncertain warning required by the prison rules would hardly satisf)' constitutional requirements. Seen. 8, Infra. In this
      respect, the Cmut's holding that the prisoner has no right to counsel exacerbates the difficulty, for surely the advice of
      counsel is essential in this complex area. See Maness v. Meyers. 419 U.S. 449,95 S.Ct. 584.42 L.Ed.2d 574 (1975).
8     Although my view is that only transactional immunity can remove the self-incrimination problem, Piccirillo v. New
      York. 400 U.S. 548, 562.91 S.Ct. 520,527,27 L.Ed.2d 596,605 (1971) (Brennan, J., dissenting), that view is not
      presently the Jaw. See, E. g., Lefkowitz v. Turley, 414 U.S. 70, 84, 94 S.Ct. 316. 325, 38 L.Ed.2d 274. 285 (1973);
      Kastigar v. United States, 406 U.S. 441.92 S.Ct. 1653, 32 L.Ed.2d 212 (1972).
      Although Rhode Island prison officials are not authorized by statute to grant immunity, my Brother White has suggested
      that a witness who fails to persuade a judge that a prospective answer is incriminatory ·'is nevertheless protected by a
      constitutionally imposed use immunity if he answers in response to the Uudge's) order and under threat of contempt.''
      Maness v. Meyers. 419 U.S., at 474, Y5 S.Ct .. at 599. 42 L.Ed.2d. at 592 (concurring in result). See Fowler v. Vincent,
      366 F.Supp. 1224, 1228 (S.D.N. Y.1973 ); Sands v. Wainwright, 357 F.Snpp. 1062, I 093 (M.D.Fln.l973). Although an
      inmate would not be testifying in response to a court order, his answers in response to questions of prison officials are
      nevertheless compelled within the meaning ofthe Fifth Amendment. Thus, there would be immunity for any statements
      given. The inmate must, however, be informed of the existence of the immunity. As my Brother White said, "a witness
      may not be required to answer a question if there is some rational basis for believing that it will incriminate him, at
      least without At that time being assured that neither it nor its fruits may be used against him." !Vfancss v. Meyers, supra.
      419 ll.S .. at 473. 95 S.Ct.. at 598. 42 L.Cd.2d. at 592. (emphasis in original).
9     The other cases cited by the Court likewise do not support a holding that Palmigiano's silence should have probative
      force. No self-incrimination problem was presented in Gastelum-Quinones v. Kennedy. 374 U.S. 469.83 S.Ci. 1819.
      I 0 L.Ed.2d I 0 13 ( 1963). That case involved a deportation proceeding, and the subject of that proceeding remained
      silent, but not for Fifth Amendment reasons. Moreover, the Court held that ·'deportation is a drastic sanction'' and "must
      therefore be premised upon evidence ... more directly probative than a mere inference based upon the alien's silence."
      !d., at 479, 83 S.Ct.. at 1824, 10 L.Ed.2d, at 1020. We held that particular deportation order not based on substantial
      evidence. Id .. at480. 83 S.Ct .. at 1825. I 0 L.Ed.2d, at 1020. Similarly, the Court did not address any self-incrimination
      issue relevant to the instant case in Adamson v. CalifOrnia. 332 U.S. 46,67 S.Ct. 1672. 91 LEd. 1903 (1947), and
      Twining v. New Jersey. 211 U.S. 78. 29 S.Ct. 14. 53 L.Ed. 97 ( 1908). Those cases were based on the premise, overruled
      in Malloy v. 1-Iognn, 378 U.S. I. 84 S.Ct. 1489, 12 L.Ed.2d 653 (1964), that the Fifth Amendment protection against
      self-incrimination was not applicable to the States. Finally, whether Raffel v. United States. 271 U.S. 494. 46 S.Ct.
      566. 70 L.Ed. I 054 ( 1926), remains Jaw is subject to much doubt. See United States v. 1-lalc. 422 ll.S. 171, 175 n. 4,
      95 S.Ct. 2133.2136.45 L.Ed.2d 99, 104 (1975); United States v. Grunewald, 233 F.2d 556.575 (CA2 1956), (Frank,
      J., dissenting), rev'd, 353 U.S. 391,77 S.Ct. 963, I L.Ed.2d 931 (1957).
10    Other state courts have also rejected Harris as a matter of state constitutional law. Commonwealth v. Triplett, 462 Pa.
      244. 341 A.2d 62 ( 1975); State v. Santingo. 53 1-Jaw. 254, 492 P.2d 657 ( 1971 ). In addition, admission of incriminating
      statements for impeachment purposes can be prohibited by statute notwithstanding the decision in Harris. Butler v.
      State. 493 S.W.2d 190 (Te.x.Cr.App.1973). See United States v. Jordan, 20 U.S.C.tvLA. 614.44 C.M.R. 44 (1971).
      Finally, it should be noted that there need not be a state constitutional counterpart to the Fifth Amendment or a specific
      statutory prohibition to reach this result; use of incriminating statements can be prohibited by a state court as a matter
Baxter v. Palmigiano, 425 U.S. 308 (1976)
9EfS~Cf   155T; 47   L~E-Cf2d81Cf-----------------··------~----~«---~-~-·-----~~------ ----~----



      of public policy in that State. See In rc Pillo, II N.J. 8. 93 A.2d 176 (1952); State v. Miller. 67 NJ. 229. 245 n. I. 337
      A.2d 36, 45 n. I (1975) (Clifford, J., concurring in part and dissenting in part).


End of Document                                                      © 2015 Thomson Reuters. No claim to original U.S. Government Works




          Next
Tab 3
Boales v. Brighton Builders, Inc., 29 S.W.3d 159 (2000)




                  29 S.W.3d 159                            West Headnotes (29)
             Court of Appeals of Texas,
               Houston (14th Dist.).
                                                           Ill   Fraud
   Tom L. BOALES, Brenda K. Boales, Mark S.                       >"" 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)
                               ~~~----~----~-~----"--~--~~<N--•-----~--~-~-----~-- --~~~~------·~---~--~ ~~--- ~




 [4[    .Judgment                                                Cases that cite this headnote
             Sales of real and personal property
        Similarity of representations by sales            [8[    Vendor and Purchaser
        agents of both developer and builder                      r- Recording and registration
        to home purchasers as to why property
                                                                 Nothing in state law requires sales
        taxes were so low amounted to no more
                                                                 and purchase agreements containing
        than a scintilla of probative evidence,
                                                                 provisions relating to plans to issue bonds
        and thus was insufficient to raise a
                                                                 and impose property taxes to be filed of
        genuine issue of material fact on issue of
                                                                 record.
        whether developer and builder conspired
        to defraud purchaser. Vernon's Ann.Texas                 1 Cases that cite this headnote
        Rules Civ.Proc., Rule 166a(i).

        2 Cases that cite this headnote                   [9[    Negligence
                                                                   ~""~ Violations of statutes and other

                                                                 regulations
 [51    Conspiracy
         r  Nature and Elements in General                       Negligence per se tort claims are
                                                                 established when a plaintiff shows that
        An actionable civil conspiracy requires
                                                                 a defendant, without excuse, violates a
        a combination by two or more persons
                                                                 statute or ordinance setting an applicable
        to accomplish an unlawful purpose or to
                                                                 standard of care if the statute is designed
        accomplish a lawful purpose by unlawful
                                                                 to prevent an injury to that class of persons
        means.
                                                                 to which the injured party belongs.
        3 Cases that cite this headnote
                                                                 I Cases that cite this headnote

 [6[    Conspiracy
                                                          [1OJ   Antitrust and Trade Regulation
         <'"' Nature and Elements in General
                                                                  *''~ Tortious conduct and negligence in
        The elements of civil conspiracy are (I)                 general
        two or more persons; (2) an object to
                                                                 Negligence
        be accomplished; (3) a meeting of minds
                                                                   ~= Standard established by statute or
        on the object or course of action; (4)
                                                                 regulation
        one or more unlawful, ovett acts; and (5)
                                                                 The Deceptive Trade Practices Act
        damages as the proximate result.
                                                                 facially does not establish an applicable
        4 Cases that cite this headnote                          standard of care for imposing liability
                                                                 based on negligence per se; the act,
                                                                 rather, is a comprehensive consumer-
 [7[    Conspiracy
                                                                 protection plan establishing its own
         .'-· Conspiracy to defraud
                                                                 penalties. V.T.C.A .. Bus. & C.§ 17.41 et
        A common purpose on part of developer                    seq.
        and builder to sell homes in subdivision,
        together with their failure to file                      3 Cases that cite this headnote
        of record the purchase agreements
        containing alleged misrepresentations,
                                                          [II[   .Judgment
        was not wrongful, and thus, purchasers
                                                                   _;..;;. Sales cases in general
        could not recover for civil conspiracy to
                                                                 Genuine issue of material fact existed
        commit fraud.
                                                                 as to whether developer and builder




        Ne:·:t
Boales v. Brighton Builders, Inc., 29 S.W.3d 159 (2000)


         made certain misrepresentations to home
         purchaser that they intended purchasers           JISI   Release
         to rely upon and whether purchasers                        .·-~   Release of specific indebtedness or
         foreseeably relied on the representations,               liability in general
         precluding summary judgment for builder                  Release executed by homeowners, by its
         and developer on purchasers' claim that,                 own language, concerned the builder's
         under doctrine of promissory estoppel,                   misrepresentations regarding an adjacent
         builder and developer were liable for                    easement, and thus, did not apply to
         purchasers' reliance on their alleged                    release homeowners' claims that builder's
         misrepresentation as to why district                     sale representative misrepresented why
         propetty taxes were low.                                 district property taxes were low.

         3 Cases that cite this headnote                          Cases that cite this headnote


I I 21   Estoppel                                          JI6J   Release
          .---O-'   Future events; promissory estoppel             ,"", General rules of construction
         Although promissory estoppel is usually a                Releases must be construed like all other
         defensive plea, it can be used by a plaintiff            contracts.
         as an affirmative ground of relief.
                                                                  2 Cases that cite this headnote
         2 Cases that cite this headnote

                                                           JI7J   Release
JI3J     Estoppel                                                  ~--     General rules of construction
                    Future events: promissory estoppel            If a release is capable of a certain or
         The requisites of promissory estoppel                    definite legal meaning or interpretation,
         are (I) a promise, (2) foreseeability of                 then effect must be given to the
         reliance thereon by the promisor, and (3)                parties' intentions as expressed within the
         substantial reliance by the promisee to his              language of the release.
         detriment.
                                                                  Cases that cite this headnote
         3 Cases that cite this headnote

                                                           JISI   Release
1141     Appeal and Error                                          ,;;;-. General rules of construction
          /"" Striking out part of pleading                       A release will be construed in light of the
         Error in    striking    from          plaintiff          facts and circumstances surrounding its
         homeowners'        pleadings             their           execution.
         contradefensive        allegations   regarding
         ratification, adoption, and estoppel                     4 Cases thttt cite this headnote
         was harmless, considering that the
         counterdefenses could still be raised in          1!91   Release
         response to an future claim by defendant                  .--·· General release
         developer and builder that their sales
                                                                  A general, categorical release clause must
         agents lacked authority to make the
                                                                  be construed narrowly.
         representations that were the subject of
         the lawsuit.                                             3 Cases that cite this headnote

         I Cases that cite this headnote
                                                           J20J   Release
Beales v. Brighton Builders, Inc., 29 S.W.3d 159 (2000)


         .-· Scope and extent in general                           Apex doctrine did not apply to preclude
        Any claims not clearly within the subject                  deposition of general counsel for
        matter of a release are not discharged,                    builder in action by homeowners, where
        even if such claims existed at the time                    homeowners did not seek to depose him
        the release was executed; the releasing                    merely because his corporate position, but
        instrument must mention the claim to be                    rather because they alleged he had first-
        released.                                                  hand knowledge of certain facts.

        2 Cases that cite this headnote                            ::?:   Cases that cite this headnote


 \21\   Appeal and Error                                    \25\   Pretrial Procedure
         .~" Depositions, affidavits, or discovery                  .·-- Protective Orders Before
                                                                   Examination
        The Court of Appeals reviews a trial
        court's decision regarding a discovery-                    Privileged Communications and
        related protective order under an abuse of                 Confidentiality
        discretion standard.                                        .;~~ Subject Matter: Particular Cases

                                                                   Requested deposition of general counsel
        4 Cases that cite this headnote                            for builder in action by homeowners as
                                                                   to the advice he gave to builder1s vice
 [22[   Privileged Communications and                              president during contract negotiations
        Confidentiality                                            with developer and to builder's sales
         _... ~ Professional Character of                          representatives during training sessions
        Employment or Transaction                                  on buyer disclosure and the Deceptive
                                                                   Trade Practices Act (DTPA) were likely
        The lawyer-client privilege extends to all
                                                                   protected by attomey-client privilege,
        matters concerning litigation or business
                                                                   warranting protective order.
        transactions, regardless of whether the
        matters are pertinent to the matter for                     I Cases that cite this headnote
        which the attorney was employed.

        I Cases that cite this headnote                     \26\   Antitrust and Trade Regulation
                                                                    . -"- Consumers. purchasers, and buyers:
                                                                   consumer transactions
 1231   Privileged Communications and
        Confidentiality                                            Homeowners alleging that builder's
          .=· Communications from client to                        and developer's sale representatives
        attorney and from attorney to client                       misrepresented why district property
                                                                   taxes were low to induce them to purchase
        Under attorney-client privilege, the
                                                                   were complaining about an aspect of the
        statements and advice of the attorney
                                                                   real estate and the transaction involved,
        to the client are as protected as the
                                                                   and thus, were "consumers" within the
        communications of the client to the
                                                                   meaning ofDeceptive Trade Practices Act
        attomey.
                                                                   (DTPA). Y.T.C.A .. Bus. & C.§ 17.45(4).
        Cases that cite this headnote
                                                                     1 Cases that cite this headnote

 1241   Pretrial Procedure
                                                            \27\    Appeal and Error
             Corporate ofticers, agents. and
                                                                     ~o.o.. Extent of Revie\V Dependent on
        employees
                                                                    Nature of Decision Appealed from




                                                     1 '!
Beales v. Brighton Builders, Inc., 29 S.W.3d 159 (2000)


        On appeal, in the interest of judicial            in favor of Brighton Builders, Inc., George Wimpey,
        economy, Comi of Appeals may review               Inc., and George Wimpey of Texas, Inc. Because we
        grounds for summary judgment asserted             find that the Water Code does not preclude some of
        at trial and preserved for appeal even if         the homeowners' causes of action, we reverse and
        such grounds were -rejected by the trial          remand for a trial on the merits of those claims.
        court.                                            We also affirm multiple rulings by the trial court on
                                                          discovery, special exceptions, and pmtial summary
         I Cases that cite this headnote                  judgment on conspiracy, effectively dismissing·many
                                                          of the homeowners' other contentions.
 1281   Antitrust and Trade Regulation
             r   Purpose and construction in general
        The Deceptive. Trade Practices Act                                    I. Background
        (DTPA) is designed to protect consumers
        from any deceptive trade practice made in         Appellants allege that from 1992 to 1994, appellees
        connection with the purchase or lease of          defrauded them on their new home purchases made
        goods or services. V .T.C.A., Bus. &     C.*      in the Aberdeen Trails subdivision. The subdivision
        17.45(4).                                         was in Municipal Utility District No. 14, which
                                                          was established to provide water, sewer, drainage,
         I Cases that cite this headnote                  and flood control facilities in the district. Appellants
                                                          complain that appellees told them that subdivision
                                                          taxes were low because the utility district bonds
 !29J   Antitrust and Trade Regulation
                                                          already had been retired and that any future tax
            Real property in general
                                                          increases were to be limited to increases to deal with
        The        Deceptive      Trade      Practices    the increased cost of maintenance. Appellants also
        Act      (DTPA)     can   make     actionable,
                                                          allege that appellees told them that the utility district
        misrepresentations about real          estate.
                                                          encompassed certain nearby commercial properties
        Y.T.C.A., Bus. & C.§ 17.45(4).
                                                          and that the taxes paid by these properties helped
                                                          pay off the bonds and would help keep taxes low.
        Cases that cite this headnote
                                                          In reality, appellants allege in their suit, the district
                                                          had not yet issued bonds when appellants purchased
                                                          their homes. After appellants purchased their homes,
                                                          the district issued bonds and assessed taxes to pay for
Attorneys and Lnw Firms
                                                          the bonds, increasing appellants' tax rate by 700% in
*162 Joseph F. Nistico. Jr., W. Lance Stodghill,          I 994. Appellants also complain that the commercial
Richard Paul Martini, Houston, for appellants.            properties mentioned by appellees fell outside the
                                                          district.
C. Ed Harrell, Stacey Beth Saunders, Houston, for
appellees.                                                Appellants originally consisted of I I 7 individuals who
                                                          sued the developer, Wimpey, and the builders from
Panel consists of Chief Justice MURPHY and Justices       whom they purchased their homes, Brighton and Perry
HUDSON and WITTIG.                                        Homes, a joint venture. Subsequently, in an attempt
                                                          to expedite the resolution, the trial court severed the
                                                          case, creating an "A" case involving the sale of eight
                      OPINION                             homes in the subdivision. The trial cou1i then granted
                                                          several special exceptions and motions for summary
DON WITTIG, Justice.                                      judgment dismissing all claims made against Perry
                                                          Homes by Perry Homes homeowners Tom L. Beales,
Tom L. Beales and multiple homeowners in Aberdeen
                                                          Brenda K. Boales, James W. Dunbar, Shaun C. Hills,
Trails subdivision appeal from ana-evidence summary
                                                          Carla D. Hills, and Linda Lanier. The court then
judgment and dismissal on special exceptions granted
Boales v. Brighton Builders, Inc., 29 S.W.3d 159 (2000)


severed the claims of the Peny Homes homeowners
in the "A" case into a "B" case so the judgment                Section 50.30 I oft he Water Code requires any person
would be final and appealable. The "B" cause came              who proposes to sell or convey real prope1ty in a
before this court as Boa/e.\' v. Peny Homes, a Joint           utility district to provide written notice to purchasers
1-'en!ure, No. 14-98-00975-CV, 2000 WL 674922                  that the property is in the district and may be subject
(Tex.App.-Houston [14 th Dist.] May 25. 2000.                  to district taxes. See Act of May 29, 1989, 71 st
no pet. h.) (not designated for publication). The trial        Leg., R.S., ch. 935, § I, 1989 Tex. Gen. Laws 3977-
court likewise granted several special exceptions and          78. 1 Section 50.301(n) of the code provides that the
motions for summary judgment dismissing all of the             remedies detailed in subsections (I ) and (m) are the
claims made against Brighton and Wimpey. These                 exclusive remedies for violations of the section. See id.
causes of action against Brighton and Wimpey were              at 3979. Subsection (n) provides, in pat1, as follows:
severed into this "C" case so the judgment would be
final and appealable.
                                                                  Notwithstanding any part or provision of the general
The causes of action asserted by appellants are                   or special laws or the common law of the state to
fraud, fraud in a real estate transaction, breach of              the contra!)', the relief provided under Subsections
warranty, violation of the Deceptive Trade Practices              (/) and (m) shall be the exclusive remedies for a
Act, negligence, negligence per se, promissory                    purchaser aggrieved by the seller's failure to comply
estoppel, conspiracy to violate the section 32.47 of              with the provisions of this section.
the Penal Code, conspiracy to commit real estate                  ld [Emphasis added.]
fraud, conspiracy to violate the DTPA, fraudulent               131 Under subsection (I) if the seller fails to comply
inducement, and money had and received. Appellants             with the provision of the section, the purchaser can
 *163 also assert a claim of breach of fiducia1y               recover all of the costs relative to the purchase of the
duty against Wimpey and breach of contract against             prope1ty, plus interest and attorney's fees (rescission).
Brighton.                                                      Under subsection (m) the pul'chase!' can recover
                                                               maximum damages of $5,000, plus attorney's fees.
                                                               See id We must give full effect to an unambiguous
                                                               statute according to all of its tenns and context. See
                     IJ. Discussion
                                                               Liberly }fut. Ins. Co. v. Garrison Contractors, Inc ..
                                                               966 S. W.2d 482. 484 (Tex.l998).
             A. Water Code Preemption
                                                               The statute plainly limits the remedies but expressly
111 In their second point of error, appellants complain        only for failure to comply with the notice provisions
the trial court erred in sustaining appellees' special         of section 50.30 I. The substance of the plaintiff-
exceptions on grounds that the Water Code preempted            appellants' complaints is not that appellees failed to
appellants' causes. We will deal with this question first      comply with the notice requirements, but that appellees
because this is the only issue advanced at trial that          actively misrepresented facts to induce appellants to
addresses all of the appellants' claims.                       purchase homes. Although appellees committed some
                                                               technical errors in complying with section 50.30 I,
 121 When a trial court dismisses a case upon                  appellants do not complain primarily of appellees'
special exceptions for failure to state a cause of             failure to comply with that section. In fact, even had
action, we review that issue of law under a de novo            appellees complied with section 50.30 I, appellants
standard. See ,)'anc!Jez v. /luntsvi/le lndep. Sch. /Jist ..   would have a cause of action for misrep!'esentations
844 S.W.2d 286, 288 (Tex.App.-1-Iouston [I ''                  falling outside the purview of section 50.30 I.
Dist.j \992, no writ). We must accept as true all
material factual allegations and all factual statements        The Legislature did not express an intent that section
reasonably inferred from the allegations set f01ih in the      50.30 I immunize property sellers from any liability
respondent's pleadings. See Sorolw/;t v. Rhodes. 889           arising from all fraudulent acts committed during the
S. \V.2d 239, 240 (Tex.1994).                                  sale of property within a utility district. We hold
Beales v. Brighton Builders, Inc., 29 S.W.3d 159 (2000)


the Water Code does not preclude appellants' extra-         a scintilla of evidence exists because such evidence
statutOJy causes of action. We sustain appellants'          lacks probative force, and in legal effect, is no evidence
second issue.                                               at all. See Kindred v. Con/Chem .. f11c., 650 S. \V .2d 61.
                                                            63 (Tex.l983 ).

                                                             [5[    [6[ An actionable civil conspiracy requires a
                    B. Conspiracy
                                                            combination by two or more persons to accomplish an
 [4[ In their first point of error, appellants complain     unlawful purpose or to accomplish a lawful purpose by
the trial court erred in granting pmtial summary            unlawful means. See Alassey v. Armco Steel Co., 652
judgment to appellees *164 on appellants' claims            S. W .2d 932, 934 (Tex.l983 ). The elements are (I) two
of conspiracy to defraud, to defraud in a real estate       or more persons; (2) an object to be accomplished; (3)
transaction, and to violate the DTPA. Appellees moved       a meeting of minds on the object or course of action;
for summaty judgment on the conspiracy claims on            (4) one or more unlawful, overt acts; and (5) damages
grounds that: (I) the failure to file certain sale and      as the proximate result. !d
purchase agreements (discussed below) is not an
unlawful act; (2) no case law suggests that violations       [7[    As proof of a common object or purpose,
of the DTPA, or real estate fraud can be the underlying     appellants cite (I) the defendant-appellees' desire to
tort to support a conspiracy claim; (3) plaintiffs cannot   sell homes in the subdivision, (2) the substantially
show a meeting of the minds to commit unlawfui'acts;        identical misrepresentations, (3) the failure to file of
and (4) there is no evidence of an object or common         record certain sales and purchase agreements signed
purpose to be accomplished, meeting of the minds on         by appellees that stated that utility district bonds had
common purpose, or one or more unlawful or overt            not yet been sold and that provided that the agreements
acts where the parties understood that the other patties    were not to be filed of record. Defendant-appellees'
shared a common purpose.                                    common purpose to sell homes, the signing of sales
                                                            and purchase agreements, and the failure to file those
If, after adequate time for discovery, no probative         agreements of record will not support a finding of
evidence exists of one or more essential elements of a      civil conspiracy. None of the acts is wrongful and the
claim on which a party would have the burden of proof       agreement to perform a lawful act cannot serve as the
at trial 1 a no-evidence summmy judgment is proper.         basis for a finding of conspiracy. See Times Herald
See TEX.R. CIV. P. 166a(i); l:·sco Oil''· Sooner Pipe       Pri111ing Co. v. .-UI. !Jelo Corp., 820 S.W.2d 206,
& Sapp(v Cmp., 962 S.W.2d 193, 197 n. 3 (Tex.App.           216-17 (Tex.App.-Houston [14 111 Dist.] 1991. no
-Houston [I 51 Dist.]1998. pet. denied). We review          writ). Nothing is unlawful about selling homes, signing
a no-evidence summary judgment under the same               otherwise proper agreements, and failing to file those
legal sufficiency standard as a directed verdict. See       agreements of record when not otherwise required to
Lampasas v. Spring Cir., Inc., 988 S.W.2d 428. 432          do so by law. The only evidence proffered to show
                                                            a meeting of minds to commit unlawful activity is
(Tex.App.--Houston [ 14 111 Dist.] 1999, no pet. h.)
                                                            the substantially similar representations on the part
We view the evidence in the light most favorable to
                                                            of sales representatives of Brighton and Wimpey.
the nonmovant, disregarding all contrary evidence and
                                                            These sales representations, by non-principals, without
inferences. See :\Jerrell !Jml' Pharmaceuaculs. Inc. v.
                                                            more, constitute a mere scintilla of evidence of a
Havner, 953 S.W.2d 706, 71 I (Tex.l997). We will
                                                            meeting of minds of the principals to accomplish an
sustain a no-evidence point if: (1) there is a complete
                                                            unlawful purpose. Although appellees' sales people did
absence of a vital fact, (2) we are barred by rules
                                                            offer similar- *I 65 not identical-representations
of law or evidence from giving weight to the only
                                                            regarding why district taxes were low, this evidence
evidence offered to prove a vital fact, (3) the evidence
                                                            of unlawful common purpose, standing alone, is too
offered is no more than a mere scintilla, or (4) the
                                                            slight to support a conspiracy claim. The trial court did
evidence offered conclusively establishes the opposite
                                                            not err in granting partial summary judgment in favor
of a vital fact. See Lampasas, 988 S.W .2d at 432. If the
                                                            of appellees on the appellants' civil conspiracy claims.
proffered evidence is so weak as to create no more than
                                                            We overrule appellants' first point of error
a "mere surmise or suspicion" of a vital fact, less than

                                                                                                                          .,
                                                                                                                          '
Boales v. Brighton Builders, Inc., 29 S.W.3d 159 (2000)



                                                             all conspiracy-related causes of action. We view the
                                                             specific orders discussed here simply as additional
                                                             grounds on which the trial court granted summary
 C. Failure to File Sale and Purchase Agreements
                                                             judgment or special exceptions in favor of appellees
In their third point of eJTor, appellants complain           regarding conspiracy to violate the Penal Code and
the trial collli erred in granting appellees' special        the DTPA. We view the complained-of language as
exceptions on appellants' conspiracy claims based            the trial comt's explanation of why it acted and a
on appellees' failure to file of record certain sales        delineation of the legal issued being decided. We
and purchase agreements between Brighton and                 discuss the issues here in the interest of judicial
Wimpey. The trial court signed three orders-January          economy. The trial court did not err in dismissing
23, 1998; January 30, 1998; and June 29, 1998                appellants' conspiracy claims that were based upon
-dismissing appellant-plaintiffs' conspiracy claims          appellees' failure to file the sale and purchase
based on conspiracy to violate section 32.47 of the          agreements. We overrule appellants' third point of
Penal Code and the DTPA. The court included in its           error.
orders ce11ain language stating the court's belief that
the failure to file the sale and purchase agreements
did not violate the Penal Code or the Water Code.                         *166 D. Negligence Per Se
Appellants do not appeal those particular portions of
the orders dealing With the Water Code. The comt in          In their foUith point of error, appellants complain
its order of June 29, which related to Wimpey only,          the trial court erred in dismissing their claims for
also stated that the failure to file the sale and purchase   negligence per se, based on violation of section 32.47
agreements did not violate the DTPA.                         of the Penal Code and the DTPA, and promiss01y
                                                             estoppel.
 !81 Brighton and Wimpey signed cettain sales and
purchase agreements containing provisions relating to         191     1101    Negligence per se t01t claims are
plans to issue bonds and impose property taxes. The          established when a plaintiff shows that a defendant,
agreements fmther stated that the contracts were not         without excuse, violates a statute or ordinance setting
to be filed of record in the county property records.        an applicable standard of care if the statute is designed
Nothing in state law requires such agreements to             to prevent an injury to that class of persons to which
be filed of record. There could be any number of             the injured par(y belongs. See U Chico Col)>. 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<ground
            MEMORANDUM OPINION
                                                                On June I, 2006, the Plaintiffs notified BP of their
             Court of Appeals of Texas,
                                                                intent to depose Manzoni. On June 6, BP moved
               Houston (1st Dist.).
                                                                for protection and moved to quash the notice on the
             In re BP PRODUCTS NORTH                            grounds that Manzoni, a resident of London, England,
                AMERICA INC., Relator.                          was not subject to deposition in Texas. Footnoted in
                                                                BP's motion was an objection to Manzoni's deposition
      No. 01-o6-oo613-CV.                 Aug. 4, 2006.         on the grounds that Manzoni, an "upper level corporate
                                                                official,'' was not subject to deposition under the
Original Proceeding           on   Petition   for   Writ   of   Crown Central guidelines. BP stated that it would later
Mandamus.                                                       file a brief in support of its objection. On June \4,
                                                                the Plaintiffs moved to strike as legally insufficient
Attorneys and Law Firms
                                                                BP's motion to quash and BP's " 'Objection' to the
Katherine D. MacKillop, Otway B. Denny, Stephen                 deposition of John Manzoni" because BP had not filed
Fernelius, Graig J. Alvarez and James B. Galbraith, for         the requisite affidavit by Manzoni.
BP Products North America Inc.
                                                                On June 16, BP submitted its brief in suppm1 of its
John Eddie Williams, Jim S. Hart, Collyn A. Peddie,             apex objection and appended the affidavit ofManzoni,
Byron iVI. Buchanan, James C. Dean, Brent W. Coon,              which stated as follows, in pertinent part:
Robert E. Ammons, Arturo J. Gonzalez and James D.
Nebout, for Plaintiffs' Steering Committee.                       3. I am Chief Executive of Refining and Marketing
                                                                  of BP p.J.c. and have held this position since 2002.
Panel consists ofChiefJustice RADACK and Justices                 I am also a Group Managing Director of BP p.l.c.
ALCALA and HIGLEY.                                                and have held this position since 2003. In my
                                                                  positions, I have global responsibility for refining
                                                                  and marketing and ultimate responsibility for 17
              MEMORANDUM OPINION                                  refineries, a similar number of chemical plants,
                                                                  25,000 retail stations, pipelines and terminals. I
ELSA ALCALA, Justice.                                             rep011 directly to Lord Browne, who is Group Chief
                                                                  Executive ofBP p .I.e. and the highest official in BP
 *1 By petition for writ of mandamus, relator, BP
                                                                  p.J.c.
Products North America Inc., challenges the trial
cow1's June 21,2006 order granting the motion of the
Plaintiffs' Steering Committee ("Plaintiffs") 1 to strike
                                                                  5. I am not a director, officer or employee of BP
BP's " 'Objection' to and/or Motion for Protection
                                                                  Products North America Inc., an indirect wholly
Regarding the Deposition of John Manzoni,'' Group
                                                                  owned subsidiary corporation of BP p.J.c .... BP
Managing Director and Chief Executive of Refining
                                                                  Products North America Inc. owns and operates the
and Marketing of BP p.J.c. 2 In its sole issue, BP                Texas City Refinery. I do not manage or authorize
contends that the trial court abused its discretion
                                                                  the day-to-day operations of BP Products North
in striking the affidavit of Manzoni as insufficient              America Inc. or of the Texas City Refinery.
to invoke protection under the "apex doctrine"
established in Crmv11 Cc~ntral Petroleum Corp. v.                 6. I do not have unique or superior knowledge of
Garcia. 904 S. W.2d 125 (Tex.\995). 3                             information, much less unique or superior personal


...••.......••.... --·-···   ··-·-----~~---~----~---~----···----~--~ ·-·--··--~-                                    ··--······-··
In re BP Products North America Inc., Not Reported in S.W.3d (2006)


  knowledge, concerning the allegations made in the          having knowledge conceming the accident and that he
  lawsuits arising out of the March 23, 2005 accident        failed to state that he has" 'no knowledge of any facts
  at the BP Products N01th America's Texas City              relevant' to this lawsuit as Crown Central and Alcatel
  Refinery. Information concerning the accident and          require." In addition, the Plaintiffs filed a supplemental
  the investigation of the accident was provided to          motion to strike, voicing the same contentions.
  me from employees of both BP p.J.c. and BP
  Products North America Inc. I did not participate          On June 21, after a hearing, the trial comt granted the
  in the investigation of the March 23, 2005 accident.       motion to strike, ordering that
  I therefore have no personal knowledge of facts
  relevant to the accident or the allegations made                        BP Products' Motion for
  in the lawsuits filed against BP Products North                         Protection for and/or objection
  America Inc.                                                            to the deposition of John
                                                                          Manzoni on alleged "apex''
   *2 7. I have no unique personal knowledge of the                       grounds is stricken/denied/
  Texas City facility or its operations, including any                    overruled because, in the
  safety issues or concerns. Information concerning                       exercise     of the       Court's
  the Texas City facility or its operations, including                    discretion, it finds that BP
  any safety issues or concerns was provided to me                        has failed to invoke properly
  from employees of both BP p.l.c. and BP Products                        that doctrine by failing to file
  North America Inc., including Michael Hoffman,                          an affidavit complying with
  Group Vice President for Refining, who rep01ts to                       Crown Central and Alcatel and
  me on these issues.                                                     has not, therefore, presented an
                                                                          issue for this Court to decide. In
  8. Thus, the only knowledge I have concerning the                       addition, this Court specifically
  accident, the investigation of the accident and the                     finds that Mr. Manzoni has
  other allegations made against BP Products North                        admitted knowledge of relevant
  America Inc. is second hand. Ce11ainly, I do not                        facts of the case precluding
  possess relevant knowledge equal to or greater in                       reliance on Apex.
  quality or quantity than executives and employees of
  BP Products N011h America Inc. or other executives         It is from this order that BP seeks mandamus relief.
  or employees of BP p.l.c.

  9. After the March accident, BP Products North
  America Inc., in part with the aid of loaned                                Standard of Review
  personnel from affiliated companies, immediately
                                                             A party is entitled to mandamus relief if a trial court
  began an investigation of the incident. That
                                                             abuses its discretion or violates a legal duty and the
  investigation was performed by a group of highly
                                                             party has no adequate remedy by appeal. Walker
  qualified and knowledgeable individuals, who were
                                                             v. Packer. 827 S.W.2d 833, 839-40 (Tex.l992); /11
  directed to use all resources to find the causes of
                                                             re Ta)'lor. 113 S.W.3d 385, 389 (Tex.App.-Houston
  the accident and to report the causes to the public.
                                                             [I st Dist.] 2003. orig. proceeding). A trial court
  All of these activities were at the direction of and
                                                             abuses its discretion if "it reaches a decision so
  monitored by persons other than me, although l have
                                                             arbitrary and unreasonable as to amount to a clear
  kept myself informed about the progress and results
                                                             and prejudicial error of Jaw." Walker, 827 S.W.2d
  of the investigation.
                                                             839-40;see Taylor, 113 S.W.3d at 389. With respect to
On June 19, BP filed a second motion for protection          factual issues, matters are committed to the trial court's
based on its objection and filed a response to Plaintiffs'   discretion, and the reviewing court may not substitute
motion to strike. On June 20, the Plaintiffs filed a         its judgment for that of the trial court. rvalker, 827
brief in support of their motion to strike, objecting to     S. \V.2d at 839: 7c(v!or, 113 S. W.3d at 389. The relator
Manzoni's affidavit on the grounds that he admitted          must establish that the trial court reasonably could
                                                             have reached only one decision. IYalker, 827 S.W.2d
In re BP Products North America Inc., Not Reported in S.W.3d (2006)


at 840. With respect to a trial court's determination of        is a reasonable indication that the official 1s deposition
legal principles, however, review is less deferential.          is calculated to lead to the discovery of admissible
/d.; '/(~Fior, 113 S.W.3d at 389. A trial comi has no           evidence and (2) that less intrusive methods of
discretion to incorrectly determine what the law is or          discovery are insufficient, the trial court should modifY
to improperly apply the law to the facts. H'ulker, 827          or vacate the protective order. !d.
S. \V .2d at 840. A clear failure by the trial court to
analyze or apply the law correctly will constitute an           Since Crown Central, the Texas Supreme Court has
abuse of discretion and may result in an extraordinary          clarified that it is improper to collapse the two discrete
writ. !d.                                                       inquiries in Crown Central into a single test. A lea tel,
                                                                II S. W.3d at 176. For instance, the Crown Central
 *3 Generally, the scope of discovery is within the             guidelines should not be interpreted to require a party
trial court's discretion. In re Colonial PipeUne Co., 968       seeking an apex deposition to show that the official to
S.W.2d 938,941 (Tex.1998). However, the trial court             be deposed has unique or personal knowledge that is
abuses its discretion if it issues a discovery order in an      unavailable through less intrusive means./d.
arbitrary or unreasonable manner, or without reference
to guiding rules and principles. See id. If there has been      At issue in the instant case is whether Manzoni 1s
a clear abuse of discretion and there is no adequate            affidavit is sufficient to invoke protection from
remedy by appeal, mandamus will issue to correct the            deposition under Crown Central. Pursuant to Crown
order. !r;J. Mandamus relief is appropriate if the trial        Central, the apex deposition guidelines are invoked
court erroneously permits the deposition of an apex             by including with a motion for a protective order, an
official./n re Alcatel L".\11. Inc .. I I S. W.3d 173. 175-76   affidavit by the official "denying any knowledge of
(Tcx.2000 ).                                                    relevant facts." Crown Cenlral. 904 S. W .2d at 128.
                                                                Here, the trial court found that BP failed to properly
                                                                invoke the Crown Central doctrine because it failed
                                                                "to file an affidavit complying with Crown Central and
                    Apex Deposition
                                                                A lea tel." In addition, the trial court found that Manzoni
In ordering or preventing an apex deposition, a                 had admitted knowledge of relevant facts of the case,
trial court must apply the guidelines set out in                which precluded reliance on the apex doctrine.
Crown Centred Petroleum COJ'lJoration v. Garcia, 904
S.W.2d 125 (Tex.l995). In re Daisy Xi/g. Co .. 17                *4 The Plaintiffs contend that, because Manzoni's
S.W.3d 654, 656 (Tex.2000). Under Crown Central, a              affidavit failed to specifically deny "any knowledge
corporation may shield a high~ level corporate official         of relevant facts," it was properly found to be
from a deposition by filing a motion for a protective           insufficient to invoke the apex doctrine. Specifically,
order with an affidavit by the official "denying any            the Plaintiffs contend that Manzoni's affidavit as
knowledge of relevant facts." CroH'n Central, 904               insufficient because it uses the following qualifYing
                                                                language:
S.W.2d at 128. 5 The trial court detetmines the
motion by first considering whether the proponent of              6. I do not have unique or superior knowledge of
the deposition has "arguably shown that the official              information, much less unique or superior personal
has any unique or superior personal knowledge of                  knowledge concerning the allegations made in the
discoverable information." /d. If the proponent fails             lawsuits arising out of the March 23, 2005 accident
to make such a showing, "the trial court should grant             at the BP Products North America's Texas City
the motion for protective order and first require the             Refinery. Information concerning the accident and
party seeking the deposition to attempt to obtain the             the investigation of the accident was provided to
discovery through less intrusive methods." !d. These              me from employees of both BP p.l.c. and BP
methods could include taking the depositions of lower~            Products North America Inc. I did not participate
level employees or directing discovery requests to                in the investigation of the March 23, 2005 accident.
the corporation itself. !d. If, after making a good               I therefore have no personal knowledge offacts
faith effort to obtain the discovery through less                 relevant to the accident or the allegations made
intrusive means, the proponent shows that ( 1) there
In re BP Products North America Inc., Not Reported in S.W.3d (2006)


  in the lawsuits filed against BP Products North          Christi 1998, orig proceeding), as "the only reported
  America Inc. (Emphasis added).                           case involving a potential deponent who, like Mr.
                                                           Manzoni here, admits knowledge about the case in
  7. I have no unique personal knowledge of the Texas      question." In Columbia, an official's affidavit "did
  City facility or its operations, including any safety    not contain a broad denial of 'any knowledge of
  issues or concerns .... (Emphasis added).                relevant facts" and denied only that he had "personal
                                                           knowledge of many aspects of the lawsuit." !d.
In addition, the Plaintiffs contend that Manzoni admits
                                                           The court held that the official's affidavit "failed to
that he has knowledge regarding the matters at issue,
                                                           satisfY the threshold requirement of Crown Central,
as follows:
                                                           to 'deny any knowledge of relevant facts." ' !d.
  6 .... Information concerning the accident and the       However, Columbia has been cited solely in apparent
  investigation of the accident was provided to me         disagreement. 6
  from employees of both BP p.l.c. and BP Products
  North America Inc ....                                   BP contends that the affidavit is sufficient to invoke
                                                           Crown Central because it properly denies knowledge
  8. Thus, the only knowledge I have concerning the
                                                           of relevant facts. Specifically, BP contends that, while
  accident, the investigation of the accident and the      Manzoni's affidavit does not specifically deny "any
  other allegations made against BP Products North
                                                           knowledge of relevant facts," the language in the
  America Inc. is second hand .... (Emphasis added).       affidavit has been interpreted to satisfy Crown Central.
                                                           BP contends that Crown Central does not require the
During the hearing on the motion to strike, the
                                                           use of any "magic words." In addition, BP contends
Plaintiffs raised the following as evidence that
                                                           that the Plaintiffs failed in their burden to demonstrate,
Manzoni has knowledge of relevant facts: (!)
                                                           as required under Crown Central, that Manzoni has
testimony that the Chemical Safety Board reported
                                                           "unique or superior personal knowledge." Plaintiffs
that one of the causes of the explosion was a lack
                                                           respond that, because the doctrine was not invoked, the
of corporate oversight and that Manzoni is "the guy
                                                           burden never shifted to the Plaintiffs to show "unique
in charge of corporate oversight" and (2) testimony
                                                           or superior personal knowledge."
that, the day after the explosion, Manzoni flew in from
Great Britain and gave a press conference in Texas
                                                           BP argues that, since Crown Central, there are
City, during which he stated that "on behalf of the
                                                           only a few cases in which appellate courts have
corporate parent we take responsibility for this, we'll
                                                           affinned refusals to quash apex depositions, citing
get to the bottom of it and we'll fix it."
                                                           JI-IC Ventures I.. P. v. J·Ust Trucking, Inc .. 94 S.W.3d
                                                           762. 777-78 (Tex.App.-San Antonio 2002, no pet.)
In addition, the Plaintiffs presented to the trial court
                                                           and In re Columbia Rio Grande J-Jealthcare. 977
for in camera inspection a letter from BP's CEO,
                                                           S.W.2d 433,434 (Tex.App.-Corpus Christi 1998, orig
Lord John Browne, to BP staff regarding the interim
                                                           proceeding).
conclusions and recommendations prepared by the
team of personnel investigating the explosion ("Fatal
                                                           In JHC, the appellate court upheld the trial court's
Accident Repmt") stating that "! have asked John
                                                           refusal to quash a deposition of an apex affidavit
Manzoni to lead the next stage of implementation
                                                           official because the trial court was within its discretion
within the Refining and Marketing segment. He will
                                                           to find that the company was "wrongfully resisting
insure that all the changes necessary are made."
                                                           discovery" of the official. .11/C, 94 S.W .3d at 777-78.
Further, Plaintiffs contend that BP's website states
                                                           Importantly, in JHC, the patty wishing to depose
that "When an explosion at the Texas City Refinery
                                                           the apex official presented deposition testimony by
in the U.S. killed 15 people and injured 170 last
                                                           a witness who said that the apex official was the
March, Manzoni handled the situation with care and
                                                           "only person" with knowledge of relevant facts. /d.
sensitivity."
                                                           The court's decision, therefore, was not premised
                                                           on the adequacy of the apex official's affidavit, but
 *5 The Plaintiffs rely on In re Columbia Rio Grande
                                                           rather on the evidence introduced that rebutted the
1/ea/rhcare. 977 S.W.2d 433, 434 (Tex.App.-Corpus


         Next              i ,,
In re BP Products North America Inc., Not Reported in S.W.3d (2006)
                                                                     -------
contents of the affidavit. ld at 778. JHC, therefore,                     Texas City Refinery. (Emphasis
is distinguishable from the situation before us. As                       added).
discussed above, Columbia has been exclusively met
with disagreement.                                           See Texas Genco, 169 S.W.3d 766; El Paso Healthcare
                                                             .~,·~.. 969 S.W.2d at 73.

We think that the better rule is that a mechanical
                                                               6. I do not have unique or superior knowledge of
application of Crown Central in determining the
                                                               information, much less unique or superior personal
sufficiency of an affidavit to invoke the apex doctrine
                                                               knowledge, concerning the allegations made in
is to be rejected. See In re Texas Genco, 169 S.W.3d
                                                               the lawsuits arising out of the March 23, 2005
764. 768 (Tex.App.-Waco 2005, orig. proceeding)
                                                               accident at the BP Products North America's Texas
(concluding that affidavit in which official attested
                                                               City Refinery.lnformation concerning the accident
that he had "no involvement in the operation or
                                                               and the investigation of the accident was provided
management of the [plant]" and had "no specialized or
                                                               to me from employees of both BP p.l.c. and BP
unique knowledge of the operations" and "no personal
                                                               Products North America Inc. I did not participate
knowledge ... other than what has been reported to
                                                               in the investigation of the March 23, 2005 accident.
me" was sufficient to invoke protection under Crown
                                                               l therefore have no personal knowledge of facts
Central doctrine); In re Burlington N. and Santa
                                                               relevant to the accident or the allegations made
Fe l(v. Co .. 99 S.Vv'Jd 323, 316 n. 3 {Tex.App.-
                                                               in the lawsuits filed against BP Products North
Fort Worth 2003. orig. proceeding) (concluding that
                                                               America Inc.
affidavit in which official attested that he had "no
specific or superior knowledge with regard to the ...           7. I have no unique personal knowledge of the
issue in the suit or with regard to any other aspect            Texas City facility or its operations, including any
of the case" was sufficient to invoke protection under         safety issues or concerns. Information concerning
Crown Central doctrine and explaining that there is             the Texas City facility or its operations, including
no requirement that a party must specifically recite            any safety issues or concerns was provided to me
language of Crown Central in an affidavit to show that         from employees of both BP p./.c. and BP Products
affiant has no knowledge of relevant facts); In re El           North America Inc., including 1\1ichael Hoffman,
Paso I lealthcare ,~J·c<.. 969 S.W.2d 68,73 (Tex.App.-EI        Group Vice President for Refining, who reports to
Paso 1998. orig. proceeding) (con~luding that affidavit         me on these issues.
in which official attested that he had no personal
knowledge of the employees' jobs or of the day-to-             8. Thus, the only knowledge I have concerning the
day administration was sufficient to invoke protection         accident, the investigation of the accident and the
under Crown CeniJ·al doctrine); A:HR Corp. v. F.nlow.          other allegations made against BP Products North
926 S.W.2d 640,643-44 (Tex.App.-Fort Worth 1996,               America Inc. is second hand. Certainly, I do not
no pet.) (concluding that affidavit in which official          possess relevant knowledge equal to or greater in
attested that he had no "'personal knowledge of the            quality ofquantity than executives and employees of
conduct, actions, or events at issue," or "the training"       BP Products North America Inc. or other executives
employees received, or "the decisions related to or            or employees ofBP p.l.c.
procedures for changing" policies was sufficient to
                                                               9. After the March accident, ... [t]hat investigation
invoke protection under Crown Central doctrine).
                                                               was performed by a group of highly qualified and
                                                               knowledgeable individuals .... All of these activities
 *6 Based upon an analysis of these cases, the
                                                               were at the direction of and monitored by persons
following specific statements in Manzoni's affidavit
                                                               other than me, although I have kept myself informed
constitute a sufficient denial of relevant facts to invoke
                                                               about the progress and results of the investigation.
protection under Crown Central:
                                                             See Crown Central, 904 S. W.2d at 126: Texas Genco,
             5....     do   not   manage
                                                             169 S.W .3d at 768; Burlington Northern. 99 S.W.3d
             or authorize the day-to-day
                                                             at 326 n. 3; El Paso J-lealthcare .~vs., 969 S.W .2d at 73;
             operations of BP Products
                                                             Enlow, 926 S.W.2d at 643-44.
             North America Inc. or of the


         !'Je:d
In re BP Products North America Inc., Not Reported in S.W.3d (2006)
                                                                      ..... ·- ..........   -·~-····   _
                                                                                                       .................   ---~··   · · · - ..................




Manzoni denied having any unique or superior                                                    Conclusion
personal knowledge ofthe day-to-day operations of the
Texas City refinery, of any safety issues or concerns,             *7 We hold that the trial court abused its discretion
or of the allegations at issue in the suit. Having                in striking BP's affidavit. We therefore conditionally
"some knowledge of discoverable information" does                 grant BP's petition for writ of mandamus, direct the
not render an affidavit insufficient. A!cate!, 11 S. W.3d         trial court to vacate its June 21, 2006 order striking
at 179. We conclude that Manzoni sufficiently denied              BP's affidavit, and direct the trial court to reinstate BP's
any knowledge of relevant facts and that BP provided              motion for protection. 7 We are confident that the trial
the trial court with a sufficient affidavit under Crown           court will promptly comply, and our writ will issue
Central. See id. at I 75: Burling! on. 99 S.\V.3d at 326.         only if it does not.




Footnotes
       The trial court appointed a Plaintiffs' Steering Committee to speak on behalf of claimants for purposes of resolving
       discovery matters prior to trial.
2      The respondent is the Honorable Susan E. Criss of the 212th District Court of Galveston County.
3      An ·'apex deposition'' is the deposition of a corporate officer who is at the top of the corporate hierarchy. Crown Cemra!
       P,;otro!eum Corp. ''· Garcia, 904 S. W.2d 125. 126 ('r.::x.l995). Under the "apex doctrine," a corporate officer may be
       protected from deposition if the "'Crown Central guidelines" are met.ld.
4      The underlying suit is In re: Texas City E>.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<s.




           Next
Tab 9
Simon v. Bridewell, 950 S.W.2d 439 (1997)



                                                                           :=   Scope of inquiry and powers of com1
                                                                          With respect to disputed factual issues,
     KeyCite Yellow Flag~ Negative Treatment
                                                                          court ruling on mandamus petition may
Distinguished by   In rc Miscavigc,   Tcx.App.-Austin,   July 17,
20\4                                                                      not substitute its judgment for trial court's.

                    950 S.W.2d 439                                        Cases that cite this headnote
              Court of Appeals of Texas,
                          Waco.
                                                                    131   Mandamus
                                                                           ~-~ Matters of discretion
  Melvin SIMON and Herbert Simon, Relators,
                     v.                                                   Relators in mandamus proceeding must
                                                                          establish that trial court could reasonably
       Honorable Wayne BRIDEWELL,
                                                                          have reached only one decision.
     Judge, 249tb Judicial District Court,
     Johnson County, Texas, Respondent.                                   Cases that cite this headnote

       No. 10-97-213-CV.                Aug. 6, 1997.
                                                                    141   Pretrial Procedure
Plaintiff sued, among others, general partners in                          .-· C01vorate officers.   age~ts,   and
limited partnership that allegedly owned, managed,                        employees
and provided security for shopping mall at which                          Apex deposition doctrine applies in suits
fatal shooting occurred, claiming negligence, gross                       where party seeks to depose corporate
negligence, breach of contract, and Deceptive Trade                       president or other high level corporate
Practices Act (DTPA) violations. The 249th District                       official, and is invoked when corporate
Court, Johnson County, Wayne Bridewell, J., denied                        official files motion for protection
partners1 motion for protective order from notices of                     accompanied by affidavit denying any
deposition served by plaintiff. After granting partners'                  knowledge of relevant facts.
motion for leave to file petition for mandamus relief,
the Court of Appeals held that pa11ners were not                          I Cases that cite this headnote
entitled to protective order under apex deposition
doctrine on ground that they were cochairs of board of
                                                                    lSI   Pretrial Procedure
directors of corporation that was not party to suit.
                                                                           -p'· rvtotions for protective orders and
                                                                          proceedings thereon
Petition denied.
                                                                          Once apex deposition doctrine is
                                                                          invoked by corporate official, burden
                                                                          of persuasion shifts to party seeking
 West Headnotes (10)                                                      deposition to show that official possesses
                                                                          some pe1iinent personal knowledge of
                                                                          relevant facts; if party seeking discovery
 Ill     Mandamus
                                                                          does not make this showing, com1
          <""' Presumptions and burden of proof
                                                                          should grant motion for protection and
         Relator in mandamus proceeding bears                             first require party seeking deposition to
         burden of showing it has no adequate                             attempt to obtain discovery through less
         remedy by appeal and that com1 abused its                        intrusive methods.
         discretion in taking action of which relator
         complains.                                                       1 Cases that cite this headnote

         Cases that cite this headnote
                                                                    161   Pretrial Procedure

 121     Mandamus
Simon v. Bridewell, 950 S.W.2d 439 (1997)


        ~'""" Corporate officers, agents, and
       employees                                                1 Cases that cite this headnote

       Cochairs of board         of directors   of
       corporation were not entitled to protective       191    Pretrinl Procedure
       order under apex deposition doctrine in                   >" 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


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