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San Benito schools’ mold lawsuit settled

By Pallavi Agarwal, The Valley Morning Star (September 2, 2004).

SAN BENITO, Texas — Three years after two San Benito campuses were rid of mold, the company that installed the school district’s heating and cooling systems has agreed to pay the school district $15 million.

Honeywell International Inc.’s $15 million settlement falls short of the $180 million in damages and attorney fees that the school district was seeking in a lawsuit that was headed to trial this week.

But School Board President Oscar De La Fuente, Jr., said that the settlement would cover a $7 million loan to pay for the mold remediation and save the district legal fees from a prolonged lawsuit.

The money will also cover $729,000 the district has paid in interest on the two-year-old loan, and attorney fees whose percentage is still being worked out, schools interim superintendent Antonio Limon said.

"We will break even with this settlement," he said.

First National Bank of Edinburg had given the loan, which had to be renewed every year and did not allow for payment on the principal, Limon added.

The school district alleged in its 2002 lawsuit that Honeywell installed and mismanaged faulty heating and cooling systems at SBCISD from 1994 to 2001.

A November arbitration in Minnesota was going to decide the outcome of the litigation involving mold cases at Bertha Cabaza Middle and Dr. Raul Garza Elementary schools, where most of the mold was found and cleaned up.

Limon said that the mold consultant had given all 13 campuses a "clean bill of health" and that he did not anticipate any future substantial cost in mold clean up.

A statement issued by the company stated that there was no basis to the school district’s allegations of fraud and that "we believe that we would have prevailed at trial."

The statement added that no mold was found in any of these schools and that the school board has not done any mold remediation over the last 2 years since moisture concerns were raised.

"Honeywell had a successful working relationship with the San Benito schools for more than eight years," the statement adds. "All along this case was shaped by the district’s mold consultant, Assured Indoor Air Quality."

The statement said that the mold consultant gained millions of dollars to assess the cause of moisture in the schools and resolve the problem.

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