Contreras: Right to repair vs. frivolous lawsuits
The Texas Legislature during its 2019 session passed a law requiring school districts and other governmental entities to give architects, engineers and contractors an opportunity to correct work deemed to be defective after a construction project is completed.
The law is known as the Right to Repair act, and by its formal name, H.B. 2826. The law’s purpose was to mandate communication between local governmental entities, architects, engineers and contractors to jointly address areas of concerns and avoid costly litigation. It is unfortunate to report that, in fact, some predatory plaintiff attorneys are working with some area school districts to file lawsuits against contractors, architects, engineers and the many subcontractors who work with them in the construction of campuses across the Rio Grande Valley. In doing so, these attorneys – many of them based outside of the Valley – are working with their clients, the school districts, and local attorneys to evade the 2019 law in claiming that past contracts between the parties allows them to circumvent Right to Repair.
In doing so, they are denying area designer and builders the opportunity to work with school districts to properly address any perceived problems in the post-construction phase of project completion. It is also a dubious legal claim that is being questioned by state Rep. Terry Canales, D-Edinburg, as he has asked the state attorney general for an opinion on the matter. “Lawyers are trying to bootstrap themselves to older contracts, claiming they are grandfathered, and therefore not subject to the new law,” Canales said in a statement. “It’s possible these loopholes are not legal, and therefore, the contracts with the school districts are void as a matter of law.”
As an opinion from the AG is awaited, there is no doubt the impact these frivolous lawsuits are having on area contractors, engineers, architects and subcontractors. The cost of insurance premiums is soaring for Valley industries involved in school construction work, with many insurance companies no longer covering our region. One RGV architectural firm, ERO, reports seeing an increase of 360 percent in premiums in recent years. Deductibles are now upwards of $100,000 per claim in dealing with litigation.
Lawsuits against contractors also touch the many subcontractors they utilize, whom are local residents, local tax-payers, local small business owners that are the backbone of our region. One RGV construction company, D. Wilson of McAllen, wrote a letter to Canales stating that 85 percent of its contract revenue is assigned to local contractors and vendors. Wilson’s president and chief executive officer, Josue Reyes, noted in the letter that its history with just one area school district included 10 projects with over 200 subcontractors involved in the work.
The subcontractors include plumbers, electricians, and welders, your neighbors and friends, and their companies play a crucial role in the RGV economy. Frivolous lawsuits adversely affect their companies and employees just as it does for the general contractors who utilize their services. The continued operations of some local businesses will be in peril if the loophole to the Right to Repair continues unabated and some plaintiff lawyers and area school districts are allowed to go around the law.
The need is urgent in addressing this issue and we commend area legislators for their willingness to see to it that Right to Repair is followed. We urge area school districts to communicate with their contractors under current law and work in a cooperative fashion to make the necessary repairs and contain costs for everyone in keeping our local economy humming with jobs and growth.
Sergio Contreras is President/CEO of Rio Grande Valley Citizens Against Lawsuit Abuse