LEGAL BATTLE: City faces counter suit in water plant saga

Staff Writer

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New developments have sprouted in the ongoing legal saga of the City of San Benito’s problematic Water Treatment Plant No. 2, including a counter suit recently filed against the city.

Before discussing the suit, however, San Benito City Commissioners and Mayor Celeste Z. Sanchez were expected to discuss at a regular meeting on Tuesday a $25,350 expense from one of the engineering firms named in the city’s lawsuit concerning the plant.

An invoice was issued to the city by Cruz-Hogan Consultants Inc. – one of several defendants named in the city’s lawsuit against the companies involved in the construction of the $17 million water plant – for producing a report on the facility’s “micro filtration failure.”

Mayor Celeste Sanchez said, “That’s [analysis report] a contract that was issued … before I became mayor. If we owe … it needs to be paid, because [Cruz-Hogan] had a contract with the city.”

Still, the city has suspended business with Cruz-Hogan pending its ongoing lawsuit.

It was in August that the City filed a lawsuit that also named Evoqua Water Technologies, LLC; U.S. Filter Wastewater Group Inc.; Siemens Corporation; and CSA Construction, Inc. as defendants. Allegations include negligence, negligent misrepresentation, fraud, breach of warranty, breach of contract and violating the Deceptive Trade Practices Act – all associated with the plant’s construction.

As previously reported, a study conducted by Lou Portillo and Associates PLLC, and Coym, Rehmet & Gutierrez Engineering LP reported that the facility “never operated efficiently except in the early months of operation.”

But on Tuesday, the Commission was also scheduled to go into executive session to discuss pending litigation involving a Cruz-Hogan lawsuit filed against the city on Nov. 3. Although a copy of the Cruz-Hogan lawsuit could not be obtained before press time, the plaintiff’s principal, Orlando Cruz, alleged in a statement that the city left Cruz-Hogan with “no option but to defend itself against the frivolous actions of the City Commission and the malicious actions taken by the City Manager.”

The statement also reads, “Due to the unsubstantiated, false, misleading and malicious statements and comments made by the City Manager Manuel Lara to citizens of San Benito as well as to the City Commission, Cruz-Hogan’s reputation has been maliciously and without justification defamed and has brought negative publicity to the firm.”

Cruz-Hogan had already alleged in September that the Commission was “mislead” by City Manager Manuel Lara and City Attorney Ricardo Morado. Specifically, Cruz-Hogan argued that its report was “blocked” from the Commission by Morado on three separate occasions, “keeping the Commission in the dark for over two months as to the root causes of the water plant’s failure,” according to a September statement provided by Cruz-Hogan.

Cruz-Hogan argued then that it was only allowed to make its presentation after a fourth attempt, by which time the decision to file the suit against the engineering firm had already been made.

Cruz-Hogan’s report – citing a letter from Siemens – makes the case that the membranes “began to fill in October 2008, about eight months after membrane acceptance,” and “the letter [from Siemens] goes on to mention that plant personnel was ‘not always strictly following the operation manual’ (plant protocol) in regards to chemical cleanings.’”

In Cruz-Hogan’s statement issued Tuesday, it was argued that the report also “concluded that the water treatment plant failure was primarily due to the failure by City management to take proper action in the maintenance of the membrane filtration system.”

What’s more, Cruz-Hogan further alleged, “Rather than fix the problem by just simply replacing the membrane filters, which would bring the plant immediately back on line, the city has chosen to try to win the lawsuit lottery. We believe that the process undertaken by the city will only further enrich the attorneys involved with little to no benefit to the city.”

Moreover, Cruz-Hogan charges that Lara and Morado “conspired to concoct a scheme by which Cruz-Hogan’s relationship with the City would be terminated.”

“Manuel Lara’s actions will also continue to cause the citizens of San Benito to be in jeopardy of a failed clean and safe water treatment system, thereby ultimately risking the health and safety of the community,” the Cruz-Hogan statement read, noting that the firm will seek $5 million in “consequential” damages for loss of reputation and breach of contract as well as an additional $5 million in punitive damages against Lara.

The city is also seeking damages in its suit. Although Morado and Lara could not be reached for comment on Tuesday concerning the counter suit, the city attorney fired back to similar accusations Cruz-Hogan made in September.

“The City of San Benito was promised a fully functional water treatment plant that would provide to the City’s needs for many years to come … The City of San Benito did not receive what it was promised,” Morado stated. “In investigating the problems at the water treatment plant, the San Benito City Commission carefully considered all information available, including the report presented by Cruz-Hogan Consultants, prior to making its decision to file a lawsuit against various parties involved in the design and construction of the city’s newest water treatment plant.”

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  1. Looks like it’s time for a NEW CITY ATTORNEY AND CITY MANAGER. Another lawsuit the city has to defend. When are the LAWSUIT going to stop ?

    • Juan on November 20, 2014 at 8:33 am
    • Reply

    Well JR,thats what makes these “Executive Sessions” that you,and the school board use at your leisure so dangerous.Everything in the public domain should always be done in open meetings.
    Looks now as if the Cruz-Hogan group has had a blank check with the city of San Benito,do we dare go back over the records to see what other little mistakes have taken place,over time.
    Strange how when something like this happens we have people jumping up with explanations before questions are even brought up.

  2. The situation is morphing into a complete mess, lawsuit and counter lawsuit.

    Regarding the $25,350 invoice for the report by Cruz-Hogan Consultants, Inc. titled “San Benito Water Treatment Plant NO. 2, Micro Filtration Membrane Failure Analysis and Report” dated July 25, 2014, it is a mystery to me.

    I have perused or reviewed my personal mtg notes and documentation (agendas/minutes) and I cannot locate where the City Commission EVER requested or authorized this report in an open session meeting. It may have been done in Executive Session. However, if indeed a vote was conducted, any City Commission action to approve the request should have been done in open session.

    Another option is that the request may have been a verbal request (by who?) since Cruz-Hogan Consultants, Inc. were under contract or monthly retainer with the City of San Benito to provide engineering services. However, I have never seen the City Commission not be actively involved thru an action item in requesting a report costing this much.

    I believe any expense exceeding $10,000 is presented by the City Manager or assignee to the City Commission for action to approve or deny.

    The key questions I would assert are 1) Who requested the report? 2) Did the City Commission approve the request for the report? 3) Was this done thru a verbal order or thru a City Commission action item?


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