Thompson, Coe, Cousins & Irons, L.L.P.
Attorneys and Counselors
December 27, 2019
Raul S. Villarreal
1 W End Washington St. P3
Laredo, TX 78040
Re: Arturo Dominguez v. Raul S. Villarreal, President, Laredo Licensed U.S. Customs Brokers Association, Inc. and International Bank of Commerce, Laredo, Texas; Cause No. 2019-CVK-002390-D1; In the 49th District Court of Webb County, Texas.
Dear Ms. Salinas and Mr. Villarreal:
Thompson Coe has been retained by your insurance company USLI to represent the Laredo Licensed U.S. Customs Brokers Association, Inc. and Raul S. Villarreal in connection with the above matter. Although not a named party, USLI retained this firm to represent the interests of the Laredo Licensed U.S. Customs Brokers Association, Inc. (hereinafter “LLUSCBA” or the “Association”) as the injunctive relief sought in Mr. Dominguez’s petition directly and adversely impacts LLUSCBA. Thompson Coe’s representation is limited to the specific matter described. We have not been retained, and expressly disclaim any obligation, to provide business, services, representation or advice regarding any other matter not identified in this paragraph. This agreement will govern any subsequent engagements between the parties unless a separate agreement is executed.
A. FACTS FORMING THE BASIS OF THIS LAWSUIT
The lawsuit brought by Arturo Dominguez arises out of his allegations that the Association and in particular, Raul Villarreal, violated the LLUSCBA bylaws in the nomination and election of its current board. It is important to point out that Mr. Dominguez did not complain or challenge the nomination or election process until after he submitted his nominations past the deadline. Though not entirely clear from his pleading, Mr. Dominguez seems to assert the following actions constituted a violation of the Association’s bylaws:
1. Nomination deadline at close of business on August 30, 2019 – Mr. Dominguez asserts that because ballots are to be sent to members thirty (30) days prior to the annual meeting and election, requiring nominations on or before August 30, 2019 (sixty days before the election) constituted a violation of the bylaws. Notwithstanding this assertion, Article VIII, Section 2 of the bylaws require the nominating Committee file its report of nominations for the officers of the Association to the Secretary who in turn shall deliver the ballot with a proxy form to each regular member “not later than 30 days prior to the annual meeting.” The bylaws do not provide a deadline or timeline for when nominations must be submitted to the nomination committee. We understand the Nominating Committee Chairperson, Rodolfo Delgado, requested the nomination deadline to provide himself sufficient time to certify the nominees were qualified and prepare his report to the Secretary. Nothing in the bylaws prohibits the nomination deadline.
2. Nominations by Slate – Mr. Dominguez also asserts that requiring nominations by slate violated the bylaws. He theorizes that because the bylaws do not specifically call for nominations by slate, doing so constitutes a violation. The bylaws are silent as to how nominations shall be submitted. While the bylaws govern the Association and Article VIII specifically governs elections, the bylaws are not designed to govern every procedure and policy utilized by the Association to conduct business in accordance with its bylaws. If this were the case, the bylaws would be hundreds of pages detailing every action of the Association. A policy or procedure of the Association not specifically addressed in the bylaws does not constitute a violation of the same.
3. Mr. Dominguez’s nominations received after the deadline – Mr. Dominguez admits he failed to provide his nominations by the close of business, August 30, 2019 deadline, however, he argues that the rejection of his nominations by the Nomination Committee as untimely violated the bylaws. We find no support for this argument in the bylaws.
4. Voting by e-mail – Mr. Dominguez argues that allowing members to submit votes by e-mail and not casting votes in person at the annual meeting violated the bylaws. The bylaws do not prohibit voting by e-mail nor do they require votes be cast in person at the annual meeting. Instead, the bylaws provide “the Officers and Directors . . . shall be elected prior to the annual meeting or any adjournment thereof.” See Art. VIII, Section 1 (emphasis added). Mr. Dominguez continues to take the position that if not specifically elaborated in the bylaws, the procedure is not allowed. What his petition fails to address is the bylaws do not specifically state that ballots must be cast in person or at the annual meeting. The bylaws only provide that the officers and directors shall be elected prior to the annual meeting or any adjournment thereof. Accepting votes by email before the annual election did not violate the bylaws. Moreover, the Association has received votes by e-mail for the last four (4) election cycles. This only became an issue with Mr. Dominguez this year after he failed to timely provide his nomination slate.
5. Special Meeting to hold new election – Finally, Mr. Dominguez complains that Raul Villarreal ignored his request to call a special meeting and hold a new election. The purpose enumerated in his request, to void the election and hold a new election, is not an action contemplated by the bylaws. The bylaws call for a single election every two (2) years to elect officers and directors. That election was completed on October 30, 2019. To allow a “re-do” of the election because Mr. Dominguez did not agree with the results would not only violate the bylaws, but also set an unmanageable precedent for the Association moving forward.
B. CLAIMS ASSERTED AND RELIEF SOUGHT
Arturo Dominguez filed a lawsuit against Raul Villarreal and the International Bank of Commerce, Laredo, Texas (“IBC”) seeking declaratory relief and injunctive relief. Mr. Dominguez requests the Court to construe the bylaws of the LLUSCBA and declare the nomination and election of 2020-2021 officers void. Mr. Dominguez further requests the Court declare the 2020-2021 officers are not authorized to act on behalf of the Association or access and spend its funds.
Within hours of filing his petition and without providing Mr. Villarreal or the Association an opportunity to respond or participate at the hearing, Mr. Dominguez sought and obtained an ex parte Temporary Restraining Order (“TRO”) which for all practical matters prohibits the Association, its officers or Mr. Villarreal from conducting LLUSCBA business. Specifically, the TRO prohibits the Association, its officers and Mr. Villarreal from:
1. Withdrawing or spending any funds of the LLUSCBA on deposit at IBC or any other financial institution;
2. Entering into any contracts on behalf of the LLUSCBA;
3. Transacting any business on behalf of the LLUSCBA; and
4. Representing the interests of the LLUSCBA.
A strict interpretation of the Restraining Order prohibits the Association from paying its employee; paying monthly operating costs (rent, internet service); monitoring and providing vital notifications to the Members’ custom brokers businesses; and planning and preparing for scheduled seminars and industry related activities.
Unless Mr. Dominguez agrees to withdraw or otherwise modify the TRO’s prohibitions, they will remain in effect until State District Judge Joe Lopez hears this matter on January 7, 2020 at 9:00 a.m. in the 49th Judicial District Courtroom located at the Webb County Justice Center, 1110 Victoria St., Suite 304, Laredo, Texas 78040. At the January 7, 2020 hearing, Judge Lopez will decide whether the TRO should be turned into a Temporary Injunction through the pendency of this litigation; whether the restrictions should be lifted; or whether the restrictions should be modified. While we are confident the law and the bylaws favor the Association, please understand the possibility exists that the Judge could grant a Temporary Injunction that prohibits the Association from conducting its business through the pendency of this litigation. Surprisingly, Mr. Dominguez named only Mr. Villarreal in his lawsuit, however, all of the relief he requests and the potential harm that will result impacts the Association directly.
C. SCOPE OF REPRESENTATION
Thompson Coe will use its available resources to represent you. I will have overall responsibility for this representation. Generally, we try to assign responsibilities and tasks based on the degree of experience and expertise required for a particular project or aspect of a matter. We may also utilize our paralegals and other support staff as needed. In doing so, we strive to handle your representation in a manner that is as efficient and economical as possible. Designation of the persons who will work on the matter is at the sole discretion of Thompson Coe, although Thompson Coe agrees to make reasonable attempts to satisfy your preferences.
All communications between you and Thompson Coe are strictly confidential. Throughout the course of our representation, we will be analyzing and reporting all material information to both you and to USLI, unless you instruct us otherwise.
E. NO GUARANTEE OF OUTCOME OR SUCCESS
Because the outcome of any contested legal proceeding, dispute or negotiation is inherently unpredictable, Thompson Coe makes no representations or warranties as to the outcome of this matter. Any expressions on our part concerning the probable outcome of this matter will reflect our best professional judgment. However, any such expressions are not guarantees, and are limited by our knowledge of the facts and based on the state of the law at the time they are expressed.
F. COOPERATION OF CLIENT(S)
To enable us to provide effective representation, you agree to: (1) disclose to Thompson Coe, fully and accurately and on a timely basis, all facts and documents that are or might be material or that we may request; (2) apprise Thompson Coe on a timely basis of all developments relating to the representation that are or might be material; (3) attend meetings, conferences, and other proceedings as necessary; (4) inform us of any changes in your address or other contact information; and (5) otherwise cooperate fully with us.
G. TERMINATION OF REPRESENTATION
You may terminate Thompson Coe’s representation at any time, with or without cause, by notifying us, however you should consult with USLI before doing so as it may affect rights under your insurance policy.
The ethical rules governing attorneys either require or allow us to withdraw from representing you in certain circumstances, including but not limited to your non-payment of fees or expenses, your misrepresentation of or failure to disclose material facts, actions contrary to our advice, and conflicts of interest with another client. If our withdrawal becomes necessary, we will give you reasonable notice under the circumstances. If we elect to withdraw, you agree to cooperate with us by executing any documents necessary to evidence the termination of our representation, in court or otherwise.
H. DOCUMENT RETENTION POLICY
Thompson Coe’s current policy, which is subject to change without notice, is that when our engagement on a matter concludes, we close the file, send it to off-site storage, hold it for five years, and then have it destroyed. If you wish to take possession of any portion of the file belonging to you before its destruction, please notify us in writing and we will send that portion to you. We presently intend, but are not required, to send you a letter reminding you of this policy when the matter is concluded.
I. GOVERNING LAW
Except as otherwise stated herein, this agreement shall be construed under and in accordance with the laws of the State of Texas. All obligations to the parties are performable in the State of Texas.
We look forward to representing you in this matter. Finally, please let me know if you have any questions or concerns whatsoever about the forgoing terms or our representation in this matter.
Click on file names to download and view documents:
2019.12.03 Temporary Restraining Order.pdf
2019.12.03 Plaintiff's Original Petition and Application for Temporary Restraining Order.pdf
2019.12.03 Verification and Affidavit in Support of Application for Temporary Restraining Order.pdf
2019.12.12 Extended TRO.pdf