This case started with the filing of Plaintiffs' Petition for Writ of Habeas Corpus and Class Action Complaint in Zamora-Garcia v. Trominski (Docket No. 7:02-cv-00144) in the U.S. District Court for the Southern District of Texas, McAllen Division, in 2002. The Petition and Complaint, later amended for the sixth time on October 27, 2006, involves both individual and class-wide claims against Federal Defendants (which include officials in the Department of Homeland Security, or "DHS"), Bonding Defendants (which include Fairmont Specialty Insurance Company and Stonington Insurance Company), and Defendant Santiago Sol arising out of these Defendants' alleged mishandling of surety and cash bonds secured by immigrants during the pendency of their removal proceedings.
As against Defendants Fairmont and Stonington ("Insurer Defendants"), Plaintiffs seek individual and class-wide relief for breach of contract in the sixth amended complaint. More specifically, Plaintiffs allege that Insurer Defendants, through their agent, Aaron Federal Bonding Agency ("Aaron Bonding"), enter into surety contracts with the indemnitor Plaintiffs, wherein Insurer Defendants agree to post surety bonds for the surety bonded immigrant Plaintiffs with the DHS (or its predecessor entity in relevant respects, the Immigration and Naturalization Service, or "INS") to enable the surety bonded immigrants to leave confinement while their removal proceedings are pending. For these services, the indemnitors pay up-front, non-refundable fees equal to half of the total bond and agree to indemnify Insurer Defendants for the full amount of the bond should the bond be breached for failure of the bonded immigrant to attend a DHS-scheduled appearance. Moreover, Insurer Defendants require the indemnitors to pay, or guarantee the payment of, roughly half the amount of the bond in monthly installments into a "Build-Up Fund," or collateral account, that Insurer Defendants may draw from in paying on the bond to DHS in the event the bond is breached. According to Plaintiffs, Insurer Defendants contractually agree to provide notice to both the indemnitors and bonded immigrants of all appearances scheduled by DHS of which Insurer Defendants receive notice but "never provide advance notice of DHS-scheduled appearances" to either, thus resulting in bond breaches. In addition, Plaintiffs allege that although the surety bond contracts require Insurer Defendants to return the collateral posted after Federal Defendants cancel a bond, Insurer Defendants' policy is to silently retain the collateral. Plaintiffs claim that Insurer Defendants' failure to provide notice of DHS-scheduled appearances and failure to return the collateral posted in the event of bond cancellation constitute actionable breaches of contract for which Plaintiffs seek damages and equitable relief.
On September 15, 2006, the District Court (Judge Randy Crane) granted in part and denied in part Insurer Defendants' motion to dismiss. The District Court determined that it had supplemental jurisdiction to consider Plaintiffs' claims against Insurer Defendants. The District Court granted Insurer Defendants' motion to dismiss Plaintiffs' class-wide claim for negligent misrepresentation/gross negligence and the intentional infliction of emotional distress claims of Plaintiffs Irma and Manuel Sandoval. However, the District Court denied Insurer Defendants' motion to dismiss Plaintiffs' class-wide claims for breach of contract and fraud.
On November 16, 2006, the District Court also denied Insurer Defendants' motion to transfer venue.
Plaintiffs filed a motion for class certification on October 24, 2006. Plaintiffs sought to certify three classes with claims against Bonding Defendants ("Surety Bond Classes") and four classes with claims against Federal Defendants/Respondents ("Federal Classes"). In two orders issued on April 25, 2007, the District Court granted in part and denied in part Plaintiffs' motion for class certification. With regard to the Federal Classes, the District Court granted Plaintiffs' motion to certify the second group of Plaintiffs within the Supervision Class. In addition, the District Court granted Plaintiffs' motion to certify the Obligor Cash Bond Class, Immigrant Cash Bond Class A, and Immigrant Cash Bond Class B.
With regard to the Surety Bond Classes, the District Court granted Plaintiffs' motion to certify the Indemnitor Notice Class and the Bonded Immigrant Class.
In September 2007, both Fairmont and Stonington filed motions for partial summary judgment. On September 30, 2008, the District Court granted in part and denied in part their summary judgment motions, dismissing claims for intentional infliction of emotional distress To the extent that Fairmont and Stonington requested summary judgment on the individual claims of Plaintiffs for intentional infliction of emotional distress, and the claims of members of the Indemnitor Notice Class with Fairmont and/or with claims that accrued before September 30, 2001, the motions were granted. All other relief was denied.
In November 2008, the parties reached a partial class settlement. According to the terms of the Settlement Agreement, later approved by the District Court, Defendants agreed to give a $2 million debt reduction to the members of the Indemnitor Notice Class, and to contribute $1.575 million to a settlement fund for both certified classes, allocating $1.45 million to the Indemnitor Notice Class and $125,000 to the Bonded Immigrant Class. In addition, Defendants agreed to pay attorneys' fees, costs, and expenses, in the amount of $1.7 million. Defendants agreed to pay up to $25,000 for notice and class administration expenses.
On February 12, 2012, the District Court approved the parties' Joint Motion for Final Approval of Partial Class Settlement and the case was terminated.Xin Chen - 07/07/2011