As part of settlement agreement, La Joya ISD approves seven-year contract with Ruth Villarreal Insurance

The La Joya Independent School District and Ruth Villarreal Insurance settled a long-running lawsuit in March.

As part of the settlement agreement, La Joya ISD approved a seven-year contract with Ruth Villarreal Insurance and coughed up $600,000 to cover the company’s legal bills. Ruth Villarreal Insurance, meanwhile, agreed not to collect nearly $2.7 million in damages — plus interest — from La Joya ISD.

“Although my client was entitled to over 3 million dollars, she agreed to take nothing from the district and just be allowed to work without fear of political retaliation,” attorney Javier Peña of Edinburg, who represents Ruth Villarreal Insurance, said in a statement. “This decision on the part of my client is not something we see every day. Her decision allows the District to save those millions of dollars and spend it on the students and employees who have suffered under the old board’s fleecing of the district. My client decided to work in peace instead of taking money from the school. Ruth Villarreal’s character has never ceased to impress me. She stood up to the corrupt, refused to bend the knee to those corrupt politicians, and she was willing to do what is right (legally and morally) at every step even if it meant losing her job and money.”

La Joya ISD approved the settlement after the trial court and the 13th Court of Appeals sided with Ruth Villarreal Insurance.

“Ruth Villarreal is proposing not to collect any cash from the district in the form of any damages,” attorney Jaime “Jerry” Muñoz of Pharr, who represents La Joya ISD, said on March 22, when the school board met to discuss the settlement. “Instead, Ms. Villarreal is proposing that she be allowed to work for the district uninterrupted until she has earned the amount that is currently due and owing to her office.”

The school board voted 4-1 to approve the settlement agreement.

Board President Alex Cantu, Trustee Nereyda Cantu, Trustee Esmeralda Solis and Trustee Anthony Uresti voted to approve the settlement.

Trustee Roberto Zamora voted to reject the settlement agreement. Trustee Alda T. Benavides and Trustee Mary T. Hernandez abstained.

La Joya ISD released the settlement agreement in May after the Texas Supreme Court dismissed the case.

The dispute between La Joya ISD and Ruth Villarreal Insurance dates back to 2012, when the company became the “Broker of Record” for the school district.

Less than a year later, La Joya ISD terminated Villarreal and hired another insurance agent.

Ruth Villarreal Insurance sued La Joya ISD for breach of contract. They reached a settlement in 2017.

As part of the settlement agreement, La Joya ISD paid $300,000 to Ruth Villarreal Insurance and $1.5 million to her attorneys for legal fees.

La Joya ISD also inked an eight-year contract with Ruth Villarreal Insurance.

“In consideration of the services, agreements, and settlement of prior litigation between the parties, in the event that the District terminates this agreement prior to its expiration on December 15, 2024, for any reason, the District shall pay liquidated damages to Agent in the amount of $68,375 per month, for each month remaining on the original term of this agreement at the time of termination,” according to the agreement, which La Joya ISD released under the Texas Public Information Act.

La Joya ISD, though, decided to sue Ruth Villarreal Insurance and canceled the contract in 2020, claiming the company had defrauded the school district.

Ruth Villarreal Insurance denied the allegations and filed a counterclaim against La Joya ISD for breach of contract.

In September 2021, state District Judge Librado “Keno” Vasquez signed a nearly $2.7 million judgment against La Joya ISD. The school district asked the 13th Court of Appeals to review the decision.

While the appeal remained pending, former La Joya school board President Oscar “Coach” Salinas pleaded guilty to a federal extortion charge. Salinas, who served on the school board from 2012 to 2022, admitted that he threatened to cancel the insurance contract for political reasons.

After reviewing the arguments, the 13th Court of Appeals also sided with Ruth Villarreal Insurance.

Faced with the prospect of a multi-million dollar judgment, La Joya ISD settled with Ruth Villarreal Insurance and the school board approved a new, seven-year contract with the company.

If the contract is terminated for any reason, La Joya ISD must pay $68,375 per month to Ruth Villarreal Insurance until April 1, 2031.