v.
ROBSTOWN INDEPENDENT
SCHOOL DISTRICT
Defendant.
ORIGINAL COMPLAINT
Plaintiff, The Hanover Insurance Company (the Surety), files this its Original
Complaint against Defendant, Robstown Independent School District (Robstown ISD), and
respectfully states:
I.
PARTIES
1.
The Surety is a New Hampshire corporation with its principal place of business in
Pursuant to Section
17.024(c) of the Texas Civil Practice & Remedies Code, Robstown ISD may be served with
process through its Superintendent, Maria Vidaurri, at 801 North First Street, Robstown, Texas
78380.
II.
JURISDICTION
3.
Jurisdiction is predicated on 28 U.S.C. 1332. The parties are diverse and the
ORIGINAL COMPLAINT
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III.
VENUE
4.
part of the events or omissions giving rise to the Suretys claim occurred in this district.
IV.
FACTUAL BACKGROUND
A.
Texas
Descon,
L.P.
(Descon)
was
predominantly
general
contractor/construction manager on public works projects in the State of Texas. The public
owners of these projects were generally municipalities and school districts.
6.
On May 13, 2014, Descon and Robstown ISD executed a contract entitled
Standard Form of Agreement Between Owner and Construction Manager as Constructor where
the basis of payment is the Cost of the Work Plus a Fee with a Guaranteed Maximum Price (the
GMP Contract).
7.
The GMP Contract was for the construction of the Robstown High School
maximum price by Descon, as a price was not known at the time of the execution of the GMP
Contract in May 2014.
9.
A final guaranteed maximum price was never provided by Descon, and there is no
ORIGINAL COMPLAINT
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B.
No detailed plans were prepared by Gignac as of May 2014, so plans were not
Rather, at the time of execution of the GMP Contract, Gignac had only prepared
initial renderings and concept drawings, which were done in early February 2014.
14.
After execution of the GMP contract, Descon and Robstown ISD discussed fast
As of July 1, 2014, the only detailed plans and specs prepared by Gignac were the
demolition plans.
16.
Robstown ISD agreed to the price submitted by Descon for the demolition
phase.
C.
Under the Texas Government Code, contractors on public works projects are
required to secure payment and performance bonds from a corporate surety authorized to do
business in Texas. TEX. GOVT CODE 2253.021; see also TEX. INS. CODE 3503.002.
19.
On July 30, 2014, the Surety issued performance bond number 10602391-1 on
behalf of Descon in favor of Robstown ISD with a penal sum of $1,584,699 (the Bond), which
ORIGINAL COMPLAINT
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covered the demolition work to be performed by Descon.1 A true and correct copy of the Bond
is attached hereto as Exhibit 1 and is incorporated herein by reference in its entirety.
20.
D.
On October 10, 2014, Gignac provided the next set of plans to Descon following
Based on October 2014 plans, Descon submitted a GMP proposal on October 14,
2014, which quoted a total price of $10.6 million for the Project (inclusive of the demolition
work). A true and correct copy of the GMP proposal is attached hereto as Exhibit 2 and is
incorporated herein by reference in its entirety.
23.
At the same time, Descon provided a separate proposal for a new agriculture barn.
24.
The proposal provided by Descon for the agriculture barn that was subsequently
accepted by Robstown ISD was for a total price of $740,895 (which was over and above the cost
of the High School additions). A true and correct copy of the proposal for the agricultural barn is
attached hereto as Exhibit 3 and is incorporated herein by reference in its entirety.
25.
On October 22, 2014, the Surety executed an Increase Rider raising the penal
limit of the Bond to $10.6 million, which matched the GMP proposal submitted by Descon on
October 13, 2014. A true and correct copy of the Increase Rider is attached hereto as Exhibit
4 and is incorporated herein by reference in its entirety.
26.
On the same day, the Surety executed a separate Increase Rider Number 2 raising
the penal limit of the Bond by $740,895 to cover the new agriculture barn. A true and correct
1 The bond number was filled in by Descons bonding agent, who did not have access to the correct bond numbers
of the Surety. Thus, bond number 10602391-1 was later changed in the Suretys system to reflect No. 1031504.
This is also true of the subsequent bond riders with inaccurate bond numbers (detailed infra).
ORIGINAL COMPLAINT
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copy of the Increase Rider Number 2 is attached hereto as Exhibit 5 and is incorporated herein
by reference in its entirety.
27.
As of October 22, 2014, the only plans prepared by Gignac were the demolition
plans in July 2014 and the plans of October 10, 2014, used by Descon for its GMP proposal.
E.
The construction managers fee of 3.8% would be added to all invoices from
subcontractors and suppliers of Descon that provided labor and/or materials to complete the
Project.
30.
Under the terms of the GMP contract, Robstown ISD and/or its architect were
responsible for verifying all of the costs claimed by Descon for construction of the Project,
which meant verifying subcontractor and supplier invoices to corroborate actual work performed
before paying Descon for the invoices plus its construction managers fee.
F.
Between June 2014 and March 2015, the District processed seven payment
34.
The District and/or Gignac failed to comply with the terms of the GMP Contract
ORIGINAL COMPLAINT
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35.
Based on the investigation conducted by the Surety, the District paid Descon a
Despite request by the Surety, the District has refused to repay money to the
During the spring and the summer of 2015, Descon began to experience financial
problems.
38.
default of the GMP Contract. A true and correct copy of the voluntary letter of default is
attached hereto as Exhibit 6 and is incorporated herein by reference in its entirety.
39.
Despite receipt of the voluntary letter of default, Robstown ISD has still not
a total contract sum of $11,340,895, which contemplates the total cost for the high school
renovations, as well as the new agriculture barn. A true and correct copy of payment application
number five is attached hereto as Exhibit 7 and is incorporated herein by reference in its
entirety.
ORIGINAL COMPLAINT
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43.
completion of the Project, which were estimates/values based on the October 2014 plans
provided by Gignac.
44.
On May 29, 2015, Gignac submits a new set of plans for construction of the
Project.
45.
On June 12 and 22, 2015, Gignac again revised the drawings with a total of 84
pages of addenda.
46.
September 2015, Gignac again revised the plans with 40 new pages of addenda.
47.
48.
49.
The District is now seeking a project that has more than 180 pages of plans, the
majority of which significantly alter the original design of the Project bid by Descon in October
2014.
50.
Based on the Suretys investigation, the differences in the plans originally bid by
Descon and the ones subsequently revised by Gignac add $3 million worth of work.
51.
Despite request by the Surety, the District has refused to add money to the
contract balance to cover the cost of the changes to the work reflected in the revised plans.
I.
On May 31, 2016, Robstown ISD asserted a claim against the Bond. A true and
correct copy of the claim by the District is attached hereto as Exhibit 8 and is incorporated
herein by reference in its entirety.
ORIGINAL COMPLAINT
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53.
In its claim, the District demanded that the Surety complete a scope of work based
on all of their revised plans that were not originally bid by Descon.
54.
The claim against the Bond was acknowledged by the Surety on June 3, 2016. A
true and correct copy of this correspondence is attached hereto as Exhibit 9 and is incorporated
herein by reference in its entirety.
55.
as well as the betterments requested by Robstown ISD tied to the revised plans.
56.
On June 16, 2016, the Surety denied Robstown ISDs claim against the Bond
based on the actions of Robstown ISD. A true and correct copy of this correspondence is
attached hereto as Exhibit 10 and is incorporated herein by reference in its entirety.
V.
CONDITIONS PRECEDENT
57.
All conditions precedent to recovery by the Surety against Robstown ISD have
The Surety incorporates herein by reference, as if fully set forth, the allegations
59.
Pursuant to 28 U.S.C. 2201-2202, the Surety requests that the Court enter a
above.
ORIGINAL COMPLAINT
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VII.
REQUEST FOR RELIEF
For the foregoing reasons, The Hanover Insurance Company respectfully requests that
Robstown Independent School District be cited to appear and answer herein and, upon final trial
thereof, that the Surety receive:
1.
A declaratory finding that the Surety does not have any liability under the
Bond;
2.
3.
Such other and further relief to which the Surety is justly entitled.
Respectfully submitted,
LANGLEY LLP
By: /s/ Brandon K. Bains
Keith A. Langley
State Bar No. 11919500
Southern District of Texas Bar No. 19121
Brandon K. Bains Attorney in Charge
State Bar No. 24050126
Southern District of Texas Bar No. 711977
1301 Solana Blvd.
Building 1, Suite 1545
Westlake, Texas 76262
214-722-7160
214-722-7161 (Fax)
klangley@l-llp.com
bbains@l-llp.com
ATTORNEYS FOR THE HANOVER
INSURANCE COMPANY
ORIGINAL COMPLAINT
Page 9