NO. D-1-GV THE STATE OF TEXAS IN THE DISTRICT COURT OF VS. TRAVIS COUNTY, TEXAS

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1 NO. D-1-GV THE STATE OF TEXAS IN THE DISTRICT COURT OF VS. TRAVIS COUNTY, TEXAS UNIVERSAL INSURANCE EXCHANGE and UNIVERSAL PARATRANSIT INSURANCE SERVICE, CORP. 345TH JUDICIAL DISTRICT RESPONSE TO MOTION FOR CONTINUANCE COMES NOW, H. Koehler Company, Inc., Special Deputy Receiver of Universal Insurance Exchange and Universal Paratransit Insurance Service, Corp. (the "SDR"), responds to the Motion for Continuance filed on March 20, 2007 by Kourosh Hemyari (hereafter "Hemyari" or "Movant") as follows: BACKGROUND FACTS 1. On or about February 19, 2007, counsel for Kourosh Hemyari and the SDR reached agreement upon a proposed Scheduling Order for the hearing of the Application for Approval of Plan of Rehabilitation. The Court entered the agreed Scheduling Order on February 21, Pursuant to the agreement reached by the parties on February 19th, discovery would close on April 2, 2007 and the Application would be heard on April 11, Notwithstanding the agreed April 2nd date for the close of discovery, Hemyari did not serve his first request for production of documents until March 6, Under the Rules of Procedure, a response to this discovery was not due from the SDR until April 9, 2007, or almost one week after the date Hemyari had agreed discovery would close. Thereafter on March 16, 2007, Hemyari served a second request for production of documents along with a request for disclosure and a set of interrogatories. Under the Rules, a response to this second round of discovery is not due from the SDR until April 18, 2007, or one week after the date that Hemyari agreed that the Application, the subject of the discovery, would be heard. Although Mr. Hemyari had almost two weeks (February 19th through March 3rd) to serve discovery so that a response would have been due under the Rules within the agreed discovery period, he did not serve any discovery until such time that the discovery was not due during the agreed discovery U:\3400\PL\Response - Mt for Continuance.doc Page 1

2 period. Mr. Hemyari should comply now with the discovery agreement with which he agreed to comply. 3. Notwithstanding the late discovery requests, the SDR has prepared for the production of documents responsive to Hemyari's document request and those documents are now available to Hemyari at a time before even the date when the SDR's responses are due. The Auditor's Report discussed in the motion for continuance was produced to Hemyari's counsel on the same day the final report was received by SDR's counsel from the Auditor. The first draft of the Report was prepared on February 27th, the Report was revised, and the final was signed on March 12th and sent by overnight mail to counsel for the SDR and was received March 13th. The Report was provided to counsel for Hemyari "as soon as the auditor's report [was] completed by the auditor and delivered to counsel for the Special Deputy Receiver" on March 13th as required by the Court's Scheduling Order. ADDITIONAL RESPONSE IF REQUIRED 4. The Auditor's Report addresses matters and facts that should have been well known to Hemyari concerning the operations of Universal Insurance Exchange ("UIE") during the time that Hemyari controlled UIE, In other words, the information contained in the Report should come as no surprise for the party now moving for continuance. 5. Movant also states that his counsel has other trial commitments. However, presumably, those other trials were known to counsel at the time the agreed scheduling order was submitted to the Court and were considered as part of the process whereby agreement was reached on the setting of this matter for hearing. Moreover, counsel for Movant is a principal in a firm made up of several attorneys who are quite experienced in this area of the law and could assist with this matter. 6. This setting of April 11, 2007 is important to the SDR because of the renewal of significant portions of the business of UIE in receivership, which will occur this summer. Delay of this matter has the potential to affect the sale value of the company and the Application seeks authorization to sell the company. U:\3400\PL\Response - Mt for Continuance.doc Page 2

3 ALTERNATIVE PROPOSAL 7. If, contrary to the foregoing, it is determined that a short continuance should be granted, the SDR requests that only a short delay be ordered with the April 11th hearing date before the Special Master being retained for hearing and disposition of any other matters in this proceeding filed herein by other claimants (not Mr. Hemyari) and for a status conference. PRAYER The SDR respectfully requests that Mr. Hemyari's motion for continuance be denied, or alternatively, that the April 11, 2007 hearing date be retained to hear any other matters in this proceeding and for status conference, and that the hearing of the Application for Approval of Plan of Rehabilitation be continued for only a short period at most. Respectfully submitted, BRIAN E. RIEWE, P.C Spicewood Springs Rd., Suite 101 Austin, Texas Telephone: 512/ Facsimile: 512/ State Bar No Gregory C. Douglass State Bar No By: WISENER * NUNNALLY * GOLD, L.L.P. 625 W. Centerville Rd., Suite 110 Garland, Texas Telephone: 972/ Facsimile: 972/ Robert H. Nunnally, Jr. State Bar No Attorneys for the Special Deputy Receiver U:\3400\PL\Response - Mt for Continuance.doc Page 3

4 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing document has been served on all interested parties in accordance with the Texas Rules of Civil Procedure and TEX. INS. CODE ANN. 21A.007(d) this 28th day of March Mr. Tom Collins, Special Master by serving his Docket Clerk, Ms. Jean Sustaita Texas Department of Insurance 333 Guadalupe, Tower III, 5th Fl., MC-305-1D Austin, Texas jean.sustaita@tdi.state.tx.us Mr. Jimmy Guillot Ms. Leanne Foster Ms. Evelyn Jenkins Ms. Jemmie Russell Ms. Myra Garrett Texas Department of Insurance P.O. Box Austin, Texas jimmy.guillot@tdi.state.tx.us leanne.foster@tdi.state.tx.us evelyn.jenkins@tdi.state.tx.us jemmie.russell@tdi.state.tx.us myra.garrett@tdi.state.tx.us Ms. L. Kalli Smith, Asst. Attorney General Attorney General's Office P.O. Box Austin, Texas kalli.smith@oag.state.tx.us Mr., P.C Spicewood Springs Rd., Suite 101 Austin, Texas briewe@riewelaw.com Mr. Larry Parks (Atty for Kourosh A. Hemyari) Long, Burner, Parks & DeLargy 106 E. 6th Street, Suite 300 Austin, Texas lparks@longburner.com Mr. Robert J. Andreotti (Attorney for Robert Flick) Hahn Law Firm, P.C. 900 Jackson St., Suite 180 Dallas, Texas rjandreotti@yahoo.com Mr. Mark T. Curry (Atty for Commerce & Industry) Mark T. Curry & Associates 510 Bering Drive, Suite 300 Houston, Texas mcurry@mtcurry.com Mr. Donald H. Kidd (Atty for B. Brown & S. Brown) Jim S. Adler & Associates 1900 West Loop South, 20th Floor Houston, Texas dkidd@jsapc.com Mr. Jon E. Arsenault, General Counsel Connecticut Insurance Department P.O. Box 816 Hartford Connecticut jon.arsenault@po.state.ct.us Ms. Belinda Miller, Deputy General Counsel Florida Office of Insurance Regulation 200 East Gaines Street Tallahassee, Florida belinda.miller@fldfs.com Mr. Warren Byrd, Executive Counsel Legal Services Division Louisiana Department of Insurance Post Office Box Baton Rouge, Louisiana wbyrd@ldi.state.la.us Mr. Mark Haire, Director of Legal Division Mississippi Insurance Department 1001 Woolfolk State Office Building 501 North West St Jackson, Mississippi mark.haire@mid.state.ms.us Mr. David Woolsey, Supervisor Department of Banking and Insurance P. O. Box 325 Trenton, New Jersey dwoolsey@dobi.state.nj.us U:\3400\Cert of Serv.doc Page 1

5 Mr. Todd Dewey 2111 Skylark Drive Arlington, Texas Mr. John Werner Reaud, Morgan & Quinn, L.L.P. P.O. Box Beaumont, Texas Mr. Dan Lair 2 Springcrest Court Allen, Texas dlair@sbcglobal.net Mr. Harry Sivley, Jr. (Rep. for Richard W. O'Dom) Regulatory Technologies, Inc. 645 Hembree Parkway, Suite A Roswell, GA sivley@regtech.net Mr. Stan Broome (Atty-Fletcher, Polete, et al) Broome & Bobo, LLP 105 Decker Court, Suite 850 Irving, Texas SBroome@LawHBB.com Mr. Edward M. Lavin (Atty-Bill Hall Jr. Trucking) Attorney at Law 8918 Tesoro Dr. #418 San Antonio, Texas elavin@satx.rr.com briewe@riewelaw.com U:\3400\Cert of Serv.doc Page 2

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