Gil Ramirez Grp., LLC v. Hous. Indep. Sch. Dist.

• Decision Date: 18 November 2013
• Docket Number: Case No. 4:10-cv-4872
• Citation: Gil Ramirez Grp., LLC v. Hous. Indep. Sch. Dist., Case No. 4:10-cv-4872 (S.D. Tex. Nov 18, 2013)
• Parties: THE GIL RAMIREZ GROUP, LLC, et al., Plaintiffs, v. HOUSTON INDEPENDENT SCHOOL DISTRICT, et al., Defendants.
• Court: U.S. District Court — Southern District of Texas

THE GIL RAMIREZ GROUP, LLC, et al., Plaintiffs, v. HOUSTON INDEPENDENT SCHOOL DISTRICT, et al., Defendants.

Case No. 4:10-cv-4872

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

SIGNED: November 18, 2013

MEMORANDUM AND ORDER

Pending before the Court are Defendant Houston Independent School District's ("HISD")Motion for Summary Judgment("HISD's Motion";Doc. No. 243) and DefendantsLawrence Marshall("Marshall") and Marshall and Associates' ("M Associates")(collectively, "the Marshall Defendants")Motion for Summary Judgment("Marshall's Motion";Doc. No. 253).¹Also before the Court are a Motion to Exclude Expert Witness(Doc. No. 272) and Objections to Plaintiffs' Summary Judgment Evidence (Doc. No. 277), which are filed by both the Marshall Defendants and HISD.Defendants Marshall and HISD have also filed a Joint Motion to Exclude Expert Testimony of Kenneth Wilson(Doc. No. 275).Finally, HISD has also filed two Motions to Dismiss(Doc. Nos. 241, 244).After considering all of the parties' filings, all responses and replies thereto, all of the evidence presented, and the applicable law, the Court finds that Defendants' motions should be GRANTED IN PART and DENIED IN PART.

I.BACKGROUND²

Plaintiffs The Gil Ramirez Group ("GRG") and Gil Ramirez, Jr.("Ramirez") bring this suit against HISD, Marshall, Clay, two construction businesses, RHJ-JOC ("RHJ") and Fort Bend Mechanical, Ltd.("FBM"), and their owners.GRG is a commercial construction and repair business founded and principally owned by Ramirez.GRG, RHJ, and FBM compete for construction contracts from HISD.Marshall is an HISD trustee and Clay is a business associate of Marshall's.The claims in this lawsuit arise out of alleged improprieties in the awarding of some of HISD's construction and repair contracts.The parties hotly contest the facts in this case.

Plaintiffs contend Marshall has a lengthy history of abusing his position as an HISD trustee.Plaintiffs' Responses to Dispositive Motionsat 38("Plaintiffs' Response";Doc. No. 263).Marshall began working for HISD as a teacher, and after teaching for five years, he was an HISD administrator for about thirty years.Deposition of Lawrence Marshall, Vol. I at 93, Oct. 16, 2012("Marshall Deposition I";Doc. No. 265-170).In 1997, Marshall was elected HISD Trustee, and has served as such since.Id.In 1999, Plaintiffs allege, Marshall attempted to use his influence to assign all HISD employees who did not designate a primary physician to a physicians' group called Peoples First, for which he served as a paid consultant.Deposition of Frank Watsonat 24-30, 44-45, Oct. 25, 2012("Watson Deposition";Doc. No. 265-167).Marshall subsequently served as a consultant for another organization, Community Education Partners("CEP"), from about 2000 through approximately 2003 or 2004, during his time as a trustee.MarshallDepo. I at 96-97, 101.When HISD revised its ethics rules in 2004 to bar trustees from working for school district contractors, he recommended CEP hire Clay, a closefriend and his campaign treasurer.MarshallDepo. I at 97-99.Around the time that he ended his relationship with CEP, Marshall began receiving income from Clay's consulting business.Deposition of Lawrence Marshall, Vol. II at 294-95, Nov. 28, 2012("Marshall Deposition II";Doc. No. 265-171).Marshall denies that this income was from payments CEP made to Clay.MarshallDepo. I at 99.Plaintiffs also allege that Marshall, along with others, received inappropriate gifts from federally funded program vendors, causing HISD to lose millions of dollars of technology funding.Third Amended Complaint at 18, U.S. ex rel Dave Richardson v. Analytical Computer Services, Inc., No. H-05-3836(S.D. Tex. filed Nov. 14, 2005)(Doc. No. 265-106).Plaintiffs allege that Scott Blankenship, a representative of one such vendor, hired Clay as well, and that Marshall also received a portion of the fees this vendor paid to Clay.Pls.'Resp. at 44-45; Marshall Calendar Entries ("Scott" or "Scott B.")(Doc. Nos. 265-108-265-115); Clay bank records (Doc. No. 265-77);Marshall Depo. IIat 403, 414.

The construction company defendants in this case also hired Clay as a consultant.As early as 2003, the predecessor company to RHJ hired Clay to "provide moral support" to Eva Jackson("Jackson"), who subsequently became the owner of RHJ.Deposition of Eva Jacksonat 30-33, Sept. 13, 2012("Jackson Deposition";Doc. No. 265-173).Clay stated that she provided to RHJ "[c]oaching, strategic planning," and similar services to "enter markets" or increase its market share.Deposition of Joyce Moss-Clayat 11, Sept. 11, 2012("Clay Deposition";Doc. No. 265-174).The company paid Clay between $2,000 to $3,000 per month for years, but there were no regularly scheduled meetings and no written work product, and neither Jackson nor Clay could estimate how often they met.ClayDepo. at 11-15;Jackson Depo.at 30-35.Clay paid Marshall as much as seventy-five percent of all fees collected from RHJ.ClayDepo. at 9-10.

In 2009, FBM also hired Clay as a consultant for $3000 per month.ClayDepo. at 28-32.And, FBM paid for tickets, travel expenses, and accommodations for Marshall to attend the Super Bowl in February, 2009.MarshallDepo. II at 314-17.At the game, he sat with Clay's husband, FBM's owner David "Pete" Medford ("Medford"), and Medford's wife.Marshall denies that he was Medford's guest; he states that he was Clay's guest.Id.Plaintiffs allege that Marshall was supposed to disclose such gifts, but never did.See Disclosure of Interest Forms, Jan. 15, 2009-July 16, 2012(Doc. Nos. 265-208-265-15).Plaintiffs also note that the contract between Clay and FBM was dated January 30, 2009, and became effective on February 1, the date of the Super Bowl.Personal Services Agreement between JM Clay and Medford, Jan. 30, 2009(Doc. No. 265-99).It was only after the Super Bowl that FBM made arrangements to pay Clay.Email from Sharon Medford to Harvey Klinkerman, Feb. 4, 2009(Doc. No. 265-2).Additionally, in a recorded conversation with Wayne Dolcefino, Medford states that he has also given Marshall approximately $150,000 in cash gifts since 2008.Conversation between Mr. Pete Medford and Mr. Wayne Dolcefinoat 46, 53("Medford-Dolcefino Recording";Doc. No. 265-181).

Clay reports that she was hired to assist Medford in making charitable contributions to HISD schools.ClayDepo. at 30-48.The sole work product Clay ever produced for FBM was a one-page application for school principals to complete to receive donations.Id.Again, there were no regularly set meetings or email correspondence, and Clay's monthly invoices never contained any relevant details regarding her services.Id.Clay paid Marshall sixty-five percent of all fees collected from FBM.Id. at 49.Clay reports that she shared fees with Marshall because he mentored her.ClayDepo. at 16, 59-60.

The events that give rise to this lawsuit began around late 2007 and 2008.In 2007, voters approved an $805 million bond to construct twenty-four new schools and renovate 134 existing schools.At that time, HISD's only Job Order Contractor ("JOC") was Jamail & Smith, another construction company.Deposition of Elvis Eaglinat 16, July 16, 2013("Eaglin Deposition";Doc. No. 253-4);Deposition of Robert Mooreat 31, July 16, 2013("Moore Deposition";Doc. No. 253-5).A JOC program allows an organization to hire one or more contractors to provide maintenance, repairs, and minor construction and facility upgrade work through a single competitive bidding process, without having to undertake a separate procurement process for each job.Decl. of Elvis Eaglin¶ 3("Eaglin Declaration";Doc. No. 246).A Request for Proposals seeking additional JOCs to complete the work to be paid for by the newly approved bond measure was published, and applications were due in May 2008.EaglinDecl. ¶ 4;2008Supplemental Request for Proposals ["RFP"]: Project 08-03-05("2008 Supplemental Procurement";Doc. No. 253-6).A major factor in selecting JOCs is the pricing coefficient a contractor offers to use.EaglinDecl. ¶¶ 3, 6.The pricing coefficient is a percentile that reflects the difference between the standard price for a particular job in a pricing manual and the price a contractor agrees to charge.Id.

Eleven contractors submitted proposals in May 2008, including GRG, RHJ, and FBM.EaglinDecl. ¶ 4;Email from Elvis Eaglin to Willie T. Burroughs, et al., July 24, 2008(Doc. No. 253-7);Elvis Eaglin, RPF [sic]08-03-05: RFP to Supplement HISD's Current Job Order Contract: Pricing Coefficients for HISD, Aug. 6, 2008("2008 Pricing Coefficients";Doc. No. 253-8).At the time, GRG was a new company.Deposition of Gil Ramirez, Jr.at 19, June 19, 2012("Ramirez, Jr. Deposition";Doc. No. 250).HISD administrators formed a committee to evaluate the proposals and make a recommendation to the Board, which had ultimateresponsibility for awarding the JOC contracts.EaglinDecl. ¶¶ 3-5; Email from Elvis Eaglin to Willie T. Burroughs, et al., July 24, 2008.

After the deadline for proposals, a member of the JOC selection committee communicated with vendors, including RHJ and FBM, regarding their pricing coefficients.According to HISD, no vendors were permitted to change their total coefficients, but vendors were allowed to reallocate within the various categories making up their total coefficients.EaglinDecl. ¶ 19;Eaglin Depo.at 57-58.HISD claims that such communications were not limited to RHJ and FBM, seeid., but Plaintiffs claim that such communications were sent only to RHJ and FBM.SeeEmails from Elvis Eaglin to Eva Jackson (RHJ) and John Thomas (FBM),June 6, 2008(Doc. Nos. 265-64, 265-65).

The selection committee initially eliminated those bidders with a high pricing coefficient, including GRG.EaglinDecl. ¶ 6;2008 Pricing Coefficients.In fact, GRG ranked ninth in terms of pricing coefficients.The...