Board members can be sued individually for giving contracts to campaign contributors says 13th Court of Appeals

LA JOYA INDEPENDENT SCHOOL DISTRICT, ET AL v. RUTH VILLARREAL, 13-13-00325-CV (Tex. App. – Corpus Christi, July 3, 2014).

This is a breach of contract and Texas Tort Claims Act case.

In 2005 the District and American Administrative Group, Inc. (“AAG”) entered into a contract where AAG would be the third-party administrator of the District’s employee health plan and Villarreal was the broker entitled to commission for setting up the deal.  In 2012 the Individual Defendants ran for the school board and openly expressed their intent to award contracts exclusively to campaign supporters. After winning the election, the District replaced Villarreal with Trevino, an acknowledged campaign supporter. Villarreal brought suit against the District for breach of contract and sued the Individual Defendants for tortious interference with a contract and civil conspiracy. The Defendants filed a plea to the jurisdiction which the trial court denied and the Defendants appealed.

The court first held the District and AAG (later renamed HBS) are the only contracting parties, so Villarreal is not a party to the contract. The court noted that Chapter 271 of the Texas Local Government Code can encompass claims brought by third-party beneficiaries, and since Villarreal is named as the broker entitled to commission within the contract, she qualifies and has the ability to sue. The court also noted that the failure to plead recoverable damages is not a jurisdictional defect.

The individual Defendants asserted they were immune under §22.0511 of the Texas Education Code, which provides immunity “for any act that is incident to or within the scope of duties” of the Individual Defendants’ professional positions. However, the court agreed with Villarreal’s claims the Individual Defendants, aware of Villarreal’s existing contract rights, planned and decided to target her contract rights in satisfaction of an accepted bribe—conduct that would not fall within or incident to the Individual Defendants’ statutory duties. The court also noted Villarreal was not required to exhaust statutory administrative remedies because the tort claims were against the individuals, not the District, and not for their acts within their official duties. As a result, the trial court properly denied the plea.

If you would like to read this opinion click here.    Panel: Justice Benavides, Justice Perkes, and Justice Longoria.  Memorandum Opinion by Justice Perkes. The attorneys listed for Villarreal are Craig M. Sico,  Clif Alexander, and Javier Pena.  The attorneys listed for LJISD are Elena P. Serna, Miguel Alberto Saldana, and  Jaime J. Munoz.