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New information reveals that disputes remain ongoing between Hidalgo County and the contractors it hired to build the county courthouse, leaving officials anticipating litigation.
Meanwhile, at least one subcontractor on the project has already filed suit, alleging more than a million dollars in nonpayment.
The concerns over future litigation come via correspondence the county issued in response to a Texas Public Information Act request from The Monitor seeking documents related to an inspection of the new county courthouse earlier this spring.
The county hired Houston-based firm Wiss, Janney, Elstner Associates, or WJE, to inspect the courthouse — both inside and out — to determine the extent of what the firm characterized as “construction defects.”
The inspection took place from April 12-13, and in early July, the newspaper submitted a request seeking the firm’s findings.
The county has since released a four-page executive summary that briefly describes issues with the courthouse’s roof, stucco and windows. But beyond that, the county has sought Texas Attorney General opinions on whether it must release the information.
However, a letter the county released late last week to further detail the reasons for the request sheds some light on the impasse between the county and its contractors.
In the letter, the county states that disagreements with the contractors remain ongoing.
“(T)he county has received communication from the contractor indicating further disputes as to future work performance on this ongoing construction project,” the letter states before citing a provision of the Texas Public Information Act that allows for certain litigation materials to be withheld from public disclosure.
“As such, the County asserts that it may withhold such documents pursuant to (Sec.) 552.103 of the Government Code,” the letter states.
The county further asserts that WJE’s inspection report, which it refers to as “Exhibit B,” are “related to litigation that is pending and reasonably anticipated” and that “the information in Exhibit ‘B’ will be used in these pending and anticipated action.”
LITIGATION BEGINS
Meanwhile, at least one subcontractor involved in the construction project has already filed a lawsuit.
Victoria Air Conditioning Ltd., an HVAC company based out of Victoria, has sued Morganti, the firm serving as construction managers on the courthouse project.
Victoria Air Condition, or VAC, claims Morganti owes it nearly $1.8 million for installing HVAC systems in the building and for returning to repair work that had been damaged by Hurricane Hanna.
In the suit, which VAC filed on Dec. 2, 2022, the company makes three claims: breach of contract, payment owed for services rendered and action on the bond, which seeks to recoup the payments from the two surety companies that have guaranteed the construction project.
VAC claims that Morganti refused to provide a copy of its contract with Hidalgo County, refused to provide project schedules, failed to pay VAC in a timely manner and failed to grant VAC any time extensions for its work, despite numerous delays to the project overall.
VAC claims that Morganti repeatedly failed to make good on requests for payment and change orders, including by allegedly refusing to submit those payment requests to the county on VAC’s behalf, nor by permitting VAC to submit them itself.
The HVAC company also claims that communication with Morganti was so poor, VAC was forced to obtain project information by submitting open records requests directly to the county.
“VAC has obtained documents through a Texas Public Information Act request to the Owner (Hidalgo County) that (Morganti) signed a change order issued by the Owner…” VAC states in an Aug. 24, 2021 “notice of claim” letter it sent to Morganti.
The letter, which VAC included as part of the lawsuit, details the company’s requests for payment, as well as its numerous attempts to communicate with Morganti.
The notice of claim also alleges a deep organizational disarray that plagued nearly every aspect of the project from the get-go.
“(Morganti’s) concrete pour schedule was not coordinated with the BIM Modeling schedule causing out of sequence work on all floors of the building, beginning with the 1st floor,” VAC alleges, referring to the highly detailed three-dimensional computer modeling known as “building information modeling.”
“The failure of MTI to recognize the importance of the BIM Model to locate floor penetrations, concrete imbeds, and conflicts with structure was a critical mistake by MTI and caused delays by all trades and out of sequence work,” VAC further states in the notice of claim letter.
That out of sequence work caused construction crews to be “stacked” — forcing multiple laborers with differing specialties to attempt to complete work at once, which in turn exacerbated delays, according to VAC.
Morganti filed its initial response to the suit’s allegations on Jan. 17.
In sum, Morganti and the two surety companies deny all of VAC’s claims and further alleges that VAC is violating its contract by suing.
“Defendants (Morganti) plead that Plaintiff’s claims, in whole or in part, are barred by the construction subcontract agreement between Morganti and Victoria, which requires that all disputes arising out of the agreement shall be subject to binding arbitration,” the response reads.
Morganti has asked the court to either pause or dismiss the lawsuit until the dispute has gone through the arbitration process.
“Thus, the entire action should remain stayed until such time as mediation and, if mediation is unsuccessful, arbitration have been completed,” the company states in a motion to dismiss.
Meanwhile, in its correspondence with The Monitor, the county stated it would release a redacted copy of the WJE inspection report to the newspaper. To date, that redacted report has not been received.
