Sweetwater Schools To Pay $7.35 Million To Contractor

By Sandra G. Leon

Sweetwater Union High School Districpic_suhsdconstructiont (SUHSD) has agreed to settle a five-year lawsuit with a contractor that claimed his contracts were wrongfully terminated in retaliation for not giving political contributions to a school board member.

The multimillion-dollar settlement was reached with HAR Construction, and its principal, Hector Romero, more than five years after his contracts to build two schools were abruptly cancelled in 2011. Romero claimed he was wrongfully terminated when he refused to participate in a “pay-to-play” scheme that existed at the time.

“HAR Construction is pleased with the settlement,” Romero said after the Board’s vote on Monday night. “We thank the new board and administration for their changed approach and constructive efforts to resolve this matter in a fair and equitable way,” Romero added.

HAR and Romero sued for wrongful termination of its contracts and sought damages of nearly $16 million caused by the cancellations. After his company was terminated on the projects, the complaint alleges, HAR, its surety company, and its bank incurred millions of dollars in costs directly related to the cancellations.

Romero claimed he was asked for political contributions in 2010 by then-Board member Pearl Quinones, and, after he refused to give her the money, his contracts were cancelled in retaliation. Quinones was later convicted in 2014 of one felony count of conspiring to commit a crime and one misdemeanor count of failing to report gifts from a contractor in a wide-ranging corruption scandal where 15 school officials were indicted by the District Attorney. Those charges were not related to the HAR contracts.

For its part, the District has long argued that Romero’s company did not perform as required, and that the cancellation was justified because of “the company’s failure to execute work in an efficient manner to stay on schedule,” the District wrote in a statement.

The current school board does not include any of the members that served at the time the contracts were cancelled. Quinones, along with Arlie Ricasa, Greg Sandoval, Bertha Lopez, and Jim Cartmill all pleaded guilty to various charges in connection with the corruption scandal.

Board member Greg Sandoval and then-Superintendent Jesus Gandara both served time in jail: Sandoval was sentenced to six months in jail, but served 45 days in custody and 135 days of home detention; Gandara was sentenced to seven months in jail, but served only 60 days in custody and remained on house arrest for the remainder, wearing an electronic bracelet and reported to his probation officer twice a week.

Every one of the 15 indicted school officials eventually pled guilty to a variety of charges connected to receiving gifts from contractors.

After years of delays, the HAR case was expected to go to trial this year, until both sides agreed to begin mediation sessions a few months ago to seek a resolution. The District also sought to limit the potential costs of additional legal fees and the risk of losing a multimillion claim.

“The SUHSD Board inherited this matter from the previous board,” commented School Board President Nick Segura, who was elected in November 2014. “Our goal and focus is to address and settle this lawsuit with full transparency, fair accountability, and fiscal responsibility,” Segura added.

Up until late last year, the District was represented on the case by attorney Daniel Shinoff and his firm, Stutz, Artiano, Shinoff & Holtz. Shinoff and his firm also represented the Sweetwater District in a 2014 Title IX girls sports lawsuit that lasted seven years and ended up costing the District over $1 million in legal fees.

Shinoff was also the lawyer that represented the San Ysidro School District from 2011 to 2014 in a similar contract wrongful termination case. In that case, the San Ysidro District refused to negotiate and went to trial in February 2014. At trial, the District was hit with a $12 million jury verdict.  As a result of that case, the San Ysidro District sued Shinoff and his firm for malpractice, alleging Shinoff did not inform the District of settlement offers presented by the contractor. The firm settled the malpractice case by paying $1.8 million to the District.

Critics of the District have long argued that outside legal counsel had a conflict-of-interest because they stood to benefit from on-going legal cases that generated more fees for themselves.

In October 2015, the  Sweetwater District hired its own inside legal counsel to oversee its legal matters. Attorney Jennifer Carbuccia is an employee of the District, and oversees cases handled by outside legal counsel. Carbuccia’s contract was extended last week through June 30, 2019.

 

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