Insurance deal remains contentious for La Joya schools

District to negotiate agreement for agent post

LA JOYA — The school board here voted to authorize the district’s administration to negotiate an agreement for an enrolling agent/agent of record for a district health insurance plan and voluntary health products at a special meeting Wednesday, the latest step in years of wrangling between the district and its insurance agents.

Trustee Alda Benavides offered her qualified support for the authorization.

“I’m gonna vote for it, but I’d like to go on record that I would like the new insurance contract — I would like a side-by-side comparison for when we approve the new contract, that it be where the district saves money,” she said.

Benavides requested the contract be short-term, similar to contracts other districts sign, simple and with provisions that protect the district and beneficial to its employees.

Not all of the trustees were prepared to support the authorization. Trustee Mary Hernandez said she would abstain from supporting the vote due to ongoing litigation, while Trustee Alex Cantu said he would vote against the measure because of uncertainty surrounding that litigation.

“For me there’s a lot of unanswered questions,” he said.

The trustees are referring to an ongoing lawsuit between La Joya ISD and Ruth Villarreal Insurance Agency, its insurance agent of record.

In January the district sued Ruth Villarreal Insurance, alleging that the group failed to disclose that its employees and agents did not hold the necessary licenses to provide the services outlined in a contract between the insurance group and the district from February 2017.

The district alleged Ruth Villarreal Insurance breached that contract.

“Defendant has failed to perform its contractual obligations by failing to hold the licenses required to provide services, and requirement that Defendant re-evaluate commission rate every two years so that it remains within industry standards,” court documents read.

That misrepresentation, the district alleged, was fraudulent.

Court documents claim that an independent insurance consultant determined in 2019 the district was “extremely overpaying for the services being provided” by Ruth Villarreal Insurance Agency, advising that an acceptable compensation would be as much as 75% lower.

“Overall there is significant opportunity for improvement if there is the desire,” documents read.

The district is seeking monetary relief over $1 million.

In August, Ruth Villarreal Insurance counter-sued the district, seeking between $200,000 and $1 million.

That countersuit claims that Ruth Villarreal Insurance and LJISD have a long history of litigation tied to the political whips of certain factions in Western Hidalgo County.

“The last time that political corruption reared its ugly head against this Counter-Plaintiff, the Parties ended up in a lawsuit which resulted with the Counter-Defendant losing in court and having to settle due to its breach of contract,” court documents read. “The Settlement resulted in a fully enforceable settlement agreement between the Parties.”

Ruth Villarreal claimed that in October 2019 the district began attempting to break that settlement agreement by making allegations regarding Ruth Villarreal being in breach of the contract.

The district “engaged in this conduct in an attempt to put political pressure on the Counter-Plaintiff’s husband who was a candidate for Hidalgo County Commissioner,” the documents read.

Villarreal is married to Everardo “Ever” Villarreal, who was elected to the county commission in November 2020 and sworn-in Jan. 1.

The suit claims that instead the district partially breached the contract regarding prescription care coverage, by negotiating a separate contract with the prescription care company.

The board is slated to discuss enrolling an agent of record for the district’s health insurance plan and voluntary health products at its Jan. 13 meeting.