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SAN BENITO — Locked in a year-long legal battle with the developer of San Benito’s first resaca-side commercial development, officials are going to court against Texas Regional Bank, accusing the financial institution of placing a “fraudulent” $3.4 million lien on city-owned land.
In the lawsuit filed in Hidalgo County, the city’s Economic Development Corporation claims the bank did not receive the agency’s approval when it placed the lien on 9.8 acres on which sits the Resaca Village development.
About two weeks ago, a Texas Regional Bank representative notified EDC officials the bank had placed the lien on the agency-owned land in 2023, Micheal Pruneda, the EDC’s attorney, said during a news conference Thursday.
In the lawsuit, the EDC, a bank customer, demands a jury trial while seeking $1 million in damages.
On Thursday, Jacque Kruppa, Texas Regional Bank’s chief legal officer, did not respond to messages requesting comment.
Now, the EDC’s requesting the court remove the bank’s lien.
“SBEDC, the landowner subject to the fraudulently filed (lien), seeks an order from the court that would result in the removal from all records, public and private, (the lien) recorded by TRB with the knowledge that the document was a fraudulent lien against real property and interests, filed with the intent that the lien be given the same legal effect as a valid lien and recorded knowing that it would cause financial injury,” the EDC states in the lawsuit.
The EDC argues the bank placed the lien on the property “without the lawful consent of the SBEDC’s board of directors and the elected governing body, resulting in a breach of its fiduciary duties” and “against the interests, financial and otherwise, of SBEDC.”
In the lawsuit, officials accuse the bank of negligence, claiming “it knew or should have known that SBEDC would suffer harm from the breach of the duties that it owed to SBEDC proximately resulting in actual damages to SBEDC.”
The lawsuit also argues the bank violated its relationship with the EDC as its customer.
“TRB, as a depository of SBEDC, was in a fiduciary relationship with SBEDC and owed it certain fundamental and non-waivable duties in connection with its administration of accounts, assets and interests,” the lawsuit claims.
The lawsuit argues the bank violated its responsibilities to the EDC including its duties “not to exceed the authority granted to it, … to make and timely disclose conflicts of interest, … to make and timely disclose material facts that might affect SBEDC’s interests, … to treat SBEDC fairly and impartially” and “to act competently.”
The lawsuit widens the city’s legal battle surrounding Resaca Village a year after officials became locked in court actions with VARCO, the Brownsville-based real estate company developing the plaza off Business 77.
Among Texas Regional Bank’s board of directors is Carlos Varela, who is a partner at VARCO.
At Resaca Village, the bank’s branch office anchors the development nearing completion.
In court, the city and VARCO are disputing the Resaca Village’s ownership.
In April 2024, VARCO filed a lawsuit against the city, claiming San Benito’s economic arm breached the parties’ contracts surrounding the development of Resaca Village, failing to “honor its obligations” under an agreement extending its construction timeline while claiming its amendments “void” because city commissioners had not approved them.
In response, the city filed a counter suit, claiming VARCO breached its contract when the company failed to comply with the city’s agreements granting extensions on the project’s completion, originally set for 2022.
Here’s the latest update:
Texas Regional Bank sues San Benito over Resaca Village development
