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Millions at stake in La Joya ISD health insurance suits

LA-JOYA-LOGOLa Joya ISD leaders believe they've missed out on millions of dollars in savings promised by their insurance company. At the same time, La Joya Independent School District's former insurance broker, Ruth Villarreal, believes the district owes her more than $2 million after terminating her contract in January.

The tangled controversy surrounding the district's employee health insurance is being played out in two different district courts. It all started in February when Villarreal filed a lawsuit in the 92nd District Court alleging La Joya ISD breached its contract when the school board voted to terminate her as its broker in January.

Attorneys for the school district fired back, filing a motion to dismiss because the court lacked jurisdiction and stating the district's contract is with HealthSmart Benefit Solutions. Villarreal as the insurance broker is merely a third party and was not a signatory on the contract, states Miguel Saldaña, district attorney.

Visiting Judge David Welling Chew ruled against the district, indicating the court has jurisdiction over the case. Attorneys for the school district took the ruling to the 13th Court of Appeals on Aug. 5; a hearing on the appeal is set for Thursday.

Meanwhile, the week before, a different set of attorneys hired by the district filed a lawsuit in the 275th District Court against HealthSmart and Ruth Villarreal, alleging they breached their contract with the district by "charging fees in excess of those represented and agreed, charged duplicative and/or overlapping fees and costs and/or charged fees and costs for members for which no fees were owed, resulting in substantial over charges to Plaintiff."

The suit quickly was amended, dropping Villarreal, but her attorneys turned around, intervened and filed a counterclaim.

To Villarreal's attorney, Javier Peña, the fact that Villarreal originally was included in the district's lawsuit proves she is a stakeholder in the matter.

At a hearing Wednesday in the 275th District Court, attorneys for the school district and attorneys for HealthSmart made an agreement to seek an audit of the finances.

"We will cooperate with the audit and find out whether HealthSmart has done it right or not," said Norman Jolly, attorney for the district. "This will give us a chance to work it out."

The district also agreed to file an amended petition and instead of requesting money damages, the petition will request an investigation of a potential claim.

Attorneys for the district also argued against allowing Villarreal to intervene, stating that the case filed in the 275th District Court is completely separate from the 92nd District Court and has nothing to do with Villarreal.

Peña, Villarreal's attorney, said rulings made in the district's case has a direct effect on the case filed in 92nd District court. He's filed a motion to combine the cases to the 92nd District Court, but because Chew's ruling is being appealed, that case is frozen.

"They're trying to get around those rules; they're trying to circumvent those rulings," Peña said. "It's very creative pleading. We're at risk of having inconsistent rulings on all of the same issues."

Instead, Peña suggested 275th District Court Judge Juan Partida himself move the case over to the 92nd District Court. There may be different attorneys, Peña said, but the parties are the same.

La Joya ISD attorney Norman Jolly said Villarreal was included because of a lack of communication. He also read from the complaint filed by Villarreal alleging the current insurance broker bribed members of the school board. Jolly said he doesn't want to get involved in that aspect of the argument.

"We don't want to work with the other lawyers," Jolly said. "Our case has nothing to do with the problems that they're having in politics."

As of Wednesday, Judge Partida had not issued a ruling on the motion to strike Villarreal as an intervenor.

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