Case 2:16-cv-00234 Document 8 Filed in TXSD on 07/25/16 Page 1 of 12

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF TEXAS
CORPUS CHRISTI DIVISION
THE HANOVER INSURANCE
COMPANY
Plaintiff,

Civil Action No. 2:16-cv-00234

v.

ROBSTOWN INDEPENDENT

SCHOOL DISTRICT

Defendant.

______________________________________________________________________________
DEFENDANTS ANSWER TO PLAINTIFFS ORIGINAL COMPLAINT
AND DEFENDANTS COUNTERCLAIM

TO THE HONORABLE HILDA G. TAGLE:

As its answer to Plaintiffs Original Complaint (ECF doc. 1), defendant Robstown
Independent School District (Robstown ISD) respectfully submits the following original
answer and counterclaim.

The numbered paragraphs and titles below correspond to the

numbered paragraphs and titles within said Original Complaint then continue sequentially in the
counterclaim. All defined terms in the Original Complaint shall have the same definitions in this
Original Answer and Counterclaim.
ORIGINAL ANSWER
I. PARTIES
1.

Admitted.

2.

Admitted.
II. JURISDICTION

3.

Admitted.

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III. VENUE
4.

Admitted.
IV. FACTUAL BACKGROUND

A.

The Contract and Project

5.

Admitted.

6.

Admitted.

7.

Admitted.

8.

Admitted.

9.

Robstown ISD denies that an Exhibit A was earmarked to be an amendment

that would be the final guaranteed maximum price from Descon, but Robstown ISD admits that
the process required a final guaranteed maximum price to be provided by Descon and that such
would be an amendment to the GMP Contract.
10.

Robstown ISD denies that a final guaranteed maximum price was never provided

by Descon, but Robstown ISD admits that the final guaranteed maximum price documents
attached as Exhibit 2 and Exhibit 3 to the Original Complaint are the final guaranteed
maximum price documents that operated as amendments to the GMP Contract.
B.

The Demolition and Initial Plans for Demolition of the Project

11.

Admitted.

12.

Admitted.

13.

Admitted.

14.

Admitted.

15.

Admitted.

16.

Admitted.

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17.
C.

D.

Admitted.

Issuance of the Performance Bond

18.

Admitted.

19.

Admitted.

20.

Admitted.

The GMP Proposal by Descon and Bond Riders

21.

Robstown ISD denies that the next set of plans were provided by Gignac to

Descon on October 10, 2014, but Robstown ISD admits that plans for the Project and additional
information were provided by Gignac to Descon prior to and on October 10, 2014.
22.

Admitted.

23.

Admitted.

24.

Admitted.

25.

Admitted.

26.

Admitted.

27.

Robstown ISD denies that as of October 22, 2014, the only plans provided by

Gignac to Descon were the demolition plans in July 2014 and the plans of October 10, 2014, but
Robstown ISD admits that in addition to such plans Gignac also had provided various
renderings, line drawings and samples of other projects to go by in order for Descon to determine
its GMP proposal.
E.

The Payment Procedures under the GMP Contract

28.

Admitted.

29.

Admitted.

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30.

Robstown ISD denies that under the terms of the GMP Contract it and/or its

architect were responsible for verifying all of the costs claimed by Descon for the Project, but
Robstown ISD admits that Gignac, as its architect, was required to follow the terms of the GMP
Contract in confirming that the amounts claimed by Descon did not exceed the schedule of
values agreed upon for the Project.
F.

Overpayments by the District

31.

Admitted.

32.

Admitted.

33.

Admitted.

34.

Denied.

35.

Denied, but Robstown ISD admits that it paid Descon the amount of $52,794.33

in excess of the amount required under the GMP Contract.

36.

Denied, in that Robstown ISD denies that it is obligated to repay the amount

demanded by the Surety in alleged overpayments.

G.

Texas Descons Default

37.

Admitted.

38.

Robstown has no actual knowledge of the date that Descon executed the voluntary

letter of default, but it has no basis to deny that such letter was executed on such date.

H.

39.

Admitted.

40.

Admitted.

41.

Denied.

New Plans Contemplate a Different Scope of Work for the Project

42.

Admitted.

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43.

Admitted.

44.

Denied, but Robstown ISD admits that on or about May 29, 2015, Gignac

submitted additional plans affording more detail for construction of the Project.
45.

Denied, but Robstown ISD admits that on or about June 12 and 22, 2015, Gignac

submitted additional plans affording more detail for construction of the Project.
46.

Denied, but Robstown ISD admits that after September 3, 2015, Gignac provided

additional plans affording more detail for construction of the Project.

47.

Denied, but Robstown ISD admits that by February 2016, Gignac had provided

numerous additional plans affording more detail for construction of the Project.
48.

Denied, but Robstown ISD admits that the October 2014 plans consisted of 23

pages but that Descon had additional materials on which to base its GMP determinations.
49.

Denied.

50.

Denied.

51.

Denied, but Robstown ISD has agreed to work with Surety and any contractor to

clarify elements in the plans concerning insulated panels in order to achieve savings in the costs
of the Project.
I.

Claims against the Bond by the District

52.

Admitted.

53.

Denied.

54.

Admitted.

55.

Admitted.

56.

Admitted.
V. CONDITIONS PRECEDENT

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57.

Denied.
VI. CAUSE OF ACTION DECLARATORY JUDGMENT

58.

Robstown ISD incorporates by references its admissions and denials of the

allegations contained in Sections 1-57 of Plaintiffs Original Complaint.

59.

As Plaintiffs request for relief, this paragraph need not be admitted nor denied;

however, Robstown ISD denies that the Surety does not have liability under the Bond.
DEFENDANTS COUNTERCLAIM
60.

Robstown ISD, the defendant herein, brings this counterclaim against plaintiff,

The Hanover Insurance Company (Surety), in connection with the construction of high school
renovations and the construction of an agricultural barn pursuant to a contract with Texas
Descon, L.P. (Descon).
JURISDICTION
61.

Robstown ISDs counterclaims form part of the same case and controversy as the

claims brought by the plaintiff. Robstown ISD, as the counter-plaintiff, also invokes the Courts
supplemental and pendent jurisdiction under 28 U.S.C. 1367.
VENUE
62.

Venue properly lies with this Court.

PARTIES

63.

Robstown ISD, as the defendant and counter-plaintiff herein, is a Texas

independent school district organized and operating under provisions of the Texas Education,
with its principal offices at 801 N. First Street, Robstown, Texas.
64.

The Hanover Insurance Company (Surety) is a New Hampshire corporation

with its principal place of business at 440 Lincoln Street, Worcester, Massachusetts 01653 and is

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authorized to do business in the State of Texas. The Surety already is a party to this suit as the
plaintiff herein.
FACTUAL ALLEGATIONS
65.

On or about May 13, 2014, Robstown ISD and Texas Descon, L.P. (Descon)

executed a contract entitled Standard Form of Agreement Between Owner and Construction
Manager as Constructor where the basis of payment is the cost of work plus a fee with a
guaranteed maximum price (the GMP Contract).
66.

The GMP Contract was for the construction of additions to Robstown High

School (the Project). The GMP Contract provided that during the preconstruction phase
Descon would develop cost estimates. Pursuant to Section 2.2.1 of the GMP Contract, at a time
to be mutually agreed upon by the owner and the construction manager and in consultation with
the architect, the construction manager shall prepare a guaranteed maximum price proposal for
the owners review and acceptance.
67.

On or about July 1, 2014, Robstown ISD and Descon agreed upon a price of

$1,503,597 for the demolition phase of the Project.

68.

On July 30, 2014, the Surety issued Performance Bond No. 10602391-1 on behalf

of Descon in favor of Robstown ISD with a penal sum of $1,584,699 (the Bond) which
covered the demolition work to be performed by Descon.
69.

Continuing in the preconstruction phase, Robstown ISD and its architect, Gignac

& Associates, LLP (Gignac) provided plans, drawings, renderings, and other completed work
both by Descon and other contractors for Descon to examine in order to develop a guaranteed
maximum price proposal contemplated by the GMP Contract.

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70.

On or about October 14, 2014, Descon submitted a proposal which quoted a

guaranteed maximum price of $10.6 million for completion of the high school additions,
inclusive of the demolition work then underway.
71.

On or about October 14, 2014, Descon additionally provided a separate proposal

for construction of a new agricultural barn for a guaranteed maximum price of $740,895, which
amount would be in addition to the $10.6 million for the high school additions.
72.

On October 22, 2014, the Surety executed an increase rider raising the penal limit

of the Bond to $10.6 million in order to match the GMP proposal submitted by Descon on
October 14, 2014.
73.

On the same day, the Surety executed a separate increase rider no. 2 raising the

penal limit of the Bond by $740,895 to cover the new agricultural barn.
74.

Descon completed the demolition and commenced construction of the

improvements comprising the Project in the fall of 2014 and early 2015.
75.

During such period, Descon submitted seven applications for payment reflecting

that the total amount of $3,392,055 in work that had been completed and stored to date, with
$132,477 withheld as retainage by Robstown ISD. As a result, the amount of $3,259,578 was
paid by Robstown ISD to Descon, with a balance of $8,081,317 remaining under the GMP
Contract, including retainage.
76.

Such payments were made by Robstown ISD based upon review of the

applications for payment by Gignac and confirmation of the conformity of such amounts to the
schedule of values provided by Descon.
77.

On September 3, 2015, the Surety delivered a voluntary letter default executed by

Descon on June 2, 2015, in which it declared itself to be in default under the GMP Contract.

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78.

On or about September 3, 2015, the Surety took over the site of the Project and

excluded Descon and its subcontractors from completing any further work on the Project. On or
about September 9, 2015, representatives of the Surety met with Robstown ISD and Gignac and
advised them that the Surety would solicit proposals for a new contractor to complete the Project
as required by the GMP Contract. Representatives of the Surety stated that work would resume
within approximately two to three months.
79.

On or about February 25, 2016, the Surety delivered to Robstown ISD

information that it had received guaranteed maximum price proposals from three contractors to
complete the work on the Project identified as follows:
Alpha Building Corporation
$14,053,994.00
D Wilson Construction, Co.
$17,358,000.00
Prodigy Construction Management $12,831,893.20
The Surety stated that Prodigy Construction Management did not have sufficient bonding
capacity to enter into a contract for the full amount.
80.

The Surety has failed to tender any of the above contractors as responsible

contractors for completion of the Project according to the GMP Contract.

81.

Under the bid proposal by Alpha Building Corporation, the additional amount

required to complete the Project under the GMP Contract is $5,972,677 in excess of the amount
of $8,081,317 currently held by Robstown ISD.
82.

Under the GMP Contract, Texas Descon was required to complete the Project by

June 14, 2016.

83.

Under the GMP Contract, Descon was required to pay $1,000 per day in

liquidated damages for each day after the scheduled completion date that it failed to have the
Project completed.

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84.

The amount of liquidated damages established in the GMP Contract at $1,000 per

day was based upon the uncertainty in the calculation of actual damages to be suffered by
Robstown ISD, including its administrative staff, teachers and students, as a result of being
deprived of the completed improvements for their various educational uses and the difficulties in
providing educational services at Robstown High School with the demolition, noise, dust, debris,
and other construction activities occurring in the middle of the school buildings. Such amount of
$1,000 per day is a reasonable estimation of the actual damages and is not in any way a penalty
or punitive sum.
85.

Under the GMP Contract, Descon was required to maintain the Project premises

and adjacent areas in a safe and workmanlike manner.

86.

Since Descon was removed from the Project by the Surety on September 3, 2015,

the Surety has failed to maintain the Project premises and adjacent areas in a safe and
workmanlike manner.
CAUSES OF ACTION
87.

The Surety has failed to perform its contractual obligations as surety under the

Bond following the default of Descon by failing to complete the Project or assure completion of
the Project according to the terms of the GMP Contract or tender a new contractor to do so.
88.

The Surety has failed to perform its contractual obligations as surety under the

Bond following the default of Descon by failing to maintain the Project premises and adjacent
areas in a safe and workmanlike condition after the Surety locked out Descon from said Project
premises.
89.

The Surety has failed to perform its contractual obligations as surety under the

Bond following the default of Descon by failing to compensate Robstown ISD for the difference

10

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in the actual costs to be incurred by it for completion of the Robstown High School additions and
construction of the agricultural barn and the guaranteed maximum price of $11,340,895 provided
pursuant to the GMP Contract.
90.

The Surety has failed to perform its contractual obligations as surety under the

Bond following the default of Descon by causing extraordinary delays in the completion of the
Project from the time provided for Descon under the GMP Contract.
91.

As the direct and proximate result of the defaults by the Surety enumerated above,

Robstown ISD has suffered damages equal to the following:

(a) the difference between the cost of completion of the Project under the GMP Contract
with Descon and the actual cost of completion of the Project by a new contractor;
(b) the costs incurred by Robstown ISD in cleaning up and maintaining the premises
comprising the Project area in a safe and workmanlike manner; and
(c) the liquidated damages at the rate of $1,000.00 per day due to the extraordinary
delays caused by the default of Descon under the GMP Contract and the default by the
Surety in assuring the completion of the Project.
92.

Robstown ISD has been required to engage the services of the undersigned

attorneys and has incurred reasonable and necessary attorneys fees in the enforcement of the
GMP Contract and the Bond. Such reasonable attorneys fees are recoverable pursuant to
Section 3.18.1.1 of AIA Document A201-2007, the General Conditions of the Contract for
Construction, as incorporated by referenced in Section 12.2.2 of the GMP Contract, and TEX.
CIVIL PRACTICE & REMEDIES. CODE Section 38.001.

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PRAYER
Wherefore, premises considered, Robstown ISD, as the defendant and counter-plaintiff
herein, denies that the Surety, as plaintiff, is entitled to any of the relief it seeks and respectfully
prays that the Court grant Robstown ISD relief as to the enforcement of the performance bond
issued by the Surety, its legal damages, its reasonable attorneys fees and expenses incurred, and
such other and further relief to which it may be entitled, at law or in equity.

Respectfully submitted,
WOOD, BOYKIN & WOLTER
A Professional Corporation

By: /s/ John D. Bell

John D. Bell
615 N. Upper Broadway, Suite 1100
Corpus Christi, Texas 78477
(361) 888-9201
(361) 888-8353 (facsimile)
jdbell@wbwpc.com
ATTORNEY FOR DEFENDANT

CERTIFICATE OF SERVICE
I certify that a true and correct copy of the foregoing instrument has been filed in
accordance with the Electronic Case Files System of the Southern District of Texas, on this the
_____ day of July, 2016, which will provide a copy, to:
Brandon K. Bains
1301 Solana Blvd.
Building 1, Suite 1545
Westlake, Texas 76262
/s/ John D. Bell
John D. Bell

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