Insurance Agent Scores Victory In La Joya Independent School District Lawsuit

gleason “How Sweet It Is!”

“La Joya ISD’s former insurance agent said trustees breached their contract and favored campaign supporters, according to a lawsuit filed against the district and trustees.”

“Ruth Villarreal served as the district’s insurance agent from 2006 until the board of trustees terminated her services in January. The district renewed her contract as recently as last year, months before a new board of trustees replaced her with Pharr-based insurance agent Bob Treviño.”

“Attorneys for Villarreal allege in the lawsuit filed this month in state District Court that trustees made the move because Treviño supported the Team Liberty slate in November school board elections. During the campaign, the lawsuit alleges, trustees “openly expressed their intention to exclusively award contracts to their supporters, including Defendant Trevino who was one of their main supporters.”

“You give enough money, it doesn’t matter how poor you perform, you’re going to get the contract — at least in La Joya,” said Javier Peña, an attorney for Villarreal:

La Joya ISD filed a counter lawsuit claiming governmental immunity…………………and lost on final appeal on August 21, 2015. Now Villarreal can move forward with her original pleading…………..and possibly another victory, either in or out of the courtroom.


The Court requested full merits briefing on February 27, 2015. The Court denied review of the petition on June 5, 2015. It then denied rehearing on August 21, 2015 File Closed

Immunity from Breach of Contract Claims

This lawsuit arises from La Joya ISD’s contract with a third party administrator (TPA) for administrative services related to the district’s self-funded health benefits plan.  The contract between the district and the TPA contained a clause stating: “This Agreement is solely for the benefit of the parties and their successors and permitted assigns, and does not confer any rights or remedies on any other person or entity.”
However, an exhibit to the contract provided that Ruth Villarreal, the district’s insurance agent, would receive a monthly fee of $2.35 multiplied by the actual number of participating employees at the beginning of each month for consulting services.  When newly-elected members joined the board, the board voted to terminate Villareal as the district’s insurance agent.  Villareal filed suit against the district and individual board members for breach of contract.

The district filed a plea to the jurisdiction, arguing that the district enjoyed governmental immunity from the suit under chapter 271 of the Texas Local Government Code and that Villarreal lacked standing to sue because she was not a party to the contract and the contract expressly stated that it did not confer rights or remedies to third parties.

The trial court denied the plea and the Thirteenth Court of Appeals for Corpus Christi/Edinburg upheld the decision, concluding that the district did not have immunity from Villareal’s breach of contract claim and that Villareal was a third party beneficiary to the contract.

The district filed a petition for review to the Texas Supreme Court, and LAF filed an amicus brief with the court encouraging granting the petition for review in order to correct the lower courts’ rulings.  The Texas Supreme Court has requested briefing on the merits from both parties.  La Joya Indep. Sch. Dist. v. Villareal, No. 14-0771 (pet. filed). LAF’s Attorneys: Jennifer Powell and Eric Muñoz, Eichelbaum Wardell Hansen Powell & Mehl, P.C., Austin

See: Lawsuit Claims La Joya ISD Board Members Accepted Bribes

Controversy Follows Insurance Agents In Rio Grande Valley

La Joya ISD – Politics, Money & Insurance Brokers