THE FULL STORY WHY INSURANCE WON'T COVER BISD

By Juan Montoya
If one was to read the Brownsville Herald's one-sided coverage of the lawsuit brought against the Brownsville Independent School District, four of its trustees, and its superintendent and legal counsel, it would seem that the only reason the insurance won't cover the damages was because it was one of its clients suing another.
That, however, like the AIM Newspapers logo, is only shedding half of the light of its sun logo on the reason for AIG/Chartis is denying coverage to the four trustees, the district, and the others.
In fact, while most of us have to wait for out requests for information the full 10 days, the BISD's legal counsel made the insurer's letter available on the very day it received it from its insurance carrier in this instance and did not disclose the full contents of the notice of claims denial.
Lucy Longoria and Catalina Presas-Garcia filed the lawsuit in U.S. District Court in Brownsville claiming First Amendment retaliation, libel, slander and other violations against BISD, the other four members of the BISD Board of Trustees, Superintendent Carl A. Montoya and board attorney Baltazar Salazar individually and in their official capacities.
The women allege First Amendment retaliation, First Amendment prior restraint, defamation, common law defamation, libel, slander, violation of the two women’s Fifth Amendment right to liberty without due process, intentional infliction of emotional distress, civil conspiracy, violation of the Texas Open Meetings Act, and violation of the First Amendment related to the censure.
Presas-Garcia’s was censured at the April 2 and July 23, 2013, board meetings and a motion to censure Longoria was tabled.
Salazar later sought, and was denied, the authority to initiate moves to remove the two trustees from the board.
The firm's claim analyst David Standish said in his notice to Judy Cuellar, BISD's Insurance Administrator, that it was also denying the coverage because of the nature of the acts contained in the women's lawsuit.
"Notwithstanding the above, exclusion (b)(2) precludes coverage for all claims alleging, arising of or resulting, directly or indirectly, from libel, slander, or defamation of character."
In a statement, BISD said the exclusion clause would release AIG from covering defense of the claims against BISD, Trustees Herman Otis Powers Jr., Minerva Peña, Hector Chirinos, and Cesar Lopez, and Superintendent Carl A. Montoya.
Salazar, the board attorney, carries his own professional liability insurance.

And what is the nature of these "wrongful acts?"

Among some of the charges was that the majority violated the Texas Open Meetings Act and that the defendants actions led to corruption in several actions by the board in the awarding of lucrative contracts.
Longoria and Presas-Garcia charge that the harassment and retaliation against them has been persistent and ongoing since 2011.
At various points in time, both questioned the majority’s decisions and actions pertaining to insurance contracts and agreements, employee voluntary group insurances, insurance consultants and other issues. They say that their speech and actions in questioning the majority’s decisions were made as trustees and at time as private citizens.
They claim that the defendants had established a practice of steering lucrative contracts to specific individuals and/or companies and that decisions had already been made prior to the specific committees' recommendations so that specific contracts were awarded to specific vendors.
On one occasion, the lawsuit states that they became aware of the fact that (the late board president Enrique) Escobedo went to a job site at the new Brownsville Academic Center in September, 2011, to negotiate a change order with a subcontractor to sub-contract with Escobedo’s brother’s company, American Surveillance, instead of Circle Industries, the company that had already been contracted by Texas Descon, L.P.
These facts, the lawsuit states, were documented in a letter written by Carlos Guerra, an employee of BISD.
Among some of the other issues included in the lawsuit are the termination of legal counsel and the awarding it to another pre-chosen firm before the firm's work was over. Powers is quoted as saying that since the previous board had also terminated the former legal representatives, it was the turn of the new board to terminate this one.
The day after Thompson and Horton’s services were terminated, (both women) witnessed Dr. Montoya having lunch with Baltazar Salazar (the eventual counsel chosen) at Amigas Restaurant, and it appeared that they were already negotiating Salazar’s contract which they claim was a violation of Board policy and of the Texas Open Meetings Act.
They charge they were cut off when Longoria questioned the awarding of a $3,000 raise to Port of
Brownsville commissioner Martin Arambula, also a BISD employee, and linked it to a a $3,000,000 contract awarded by the port to American Surveillance, a company owned by (the late Enrique) Escobedo’s brother (Jaime), and Escobedo’s employer. Escobedo was also Vice President of American Surveillance. Catalina suspected that the contract given to American Surveillance in conjunction with the timing of Escobedo pushing for Arambula’s pay raise and the granting of a payday loan contract to Arambula’s sister with the BISD were linked.
While Longoria was questioning the board about these actions, Escobedo cut her off, called for a vote and did not allow her to speak in violation of Robert's Rules of Order.
Shortly after that, Escobedo invoked procedural limitations on the legitimate conduct of the women as trustees and submitted three revised local policies, BED (Local), BE(Local) and BDB(Local).
The net effect of these changes, the women charge, is that of excluding both of them as trustees from submitting agendas, disallowing their comments, disallowing adequate and allotted time for their comments on issues before the board, removing both from all committees of the board, and prohibiting them as elected trustees from participating in any debate over issues pending before the board.
Another issue raised by the women was their objection of the hiring of Baltazar Salazar on April 2, 2013, as district counsel because of previous felony arrests/convictions. Salazar had tried to  expunge three offenses from his record, all which were felony theft by check cases, without success.
Those arrests were recorded in  107th District Court of Cameron County. Although the trial court initially granted Salazar’s request for the expunction, that decision was overturned by the Court of Appeals, Thirteenth District of Texas, Corpus Christi-Edinburg, on August 15, 2013.
Although district policy prohibits the employment of individuals with felony arrests and/or convictions on cases involving moral turpitude (theft) , the majority voted to hire him anyway. On December 10, 2013, the same board  majority voted to extend Salazar’s contract for another three years.
The women charge that Salazar lied on his application regarding what he was formally convicted of and the disposition of his charges, and BISD, in a conspiracy to hire an attorney that would do its "dirty work," purposely did not look into his criminal past.
There are numerous other instance where the women charge that the defendant board members conspired to hire BISD employees who had helped Escobedo get contracts for his surveillance company, and also appoint a trustee (Cesar O. Lopez) who was purchasing agent in Mercedes when American Surveillance was granted a contract with the Mercedes ISD.
The women also questioned the appointment Lucio Mendoza as the BISD's new CFO because Mendoza was the former Purchasing Director from Mission ISD and he had recently recommended and awarded a  $865,000.000 surveillance contract to American Surveillance, the Escobedos' company, even though American Surveillance was not the lowest bidder.
Both women charge that as a result of the First Amendment violations and the violation of the Texas Open Meetings Act by the defendants they have violated their rights by interfering with their duties and responsibilities in the capacity as a public officer entrusted with governing and overseeing the management of the district.
The women are being represented by the Law Firm of Star Jones and the Frank Perez Law Firm, of Brownsville.