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U.S. District Court for the Western District of Texas Rules in Favor of Bracewell Client, Resulting in $2.9 Million Settlement

SAN ANTONIO – The U.S. District Court for the Western District of Texas ruled in favor of Bracewell LLP client Bexar County, Texas (Bexar County) on a cross-action against performance bond surety NGM Insurance (NGM), which ultimately resulted in a $2.9 million settlement in favor of Bexar County.

In 2011, Bexar County entered into an agreement with software developer American Cadastre LLC (AmCad) to provide Bexar County with an integrated justice system by the end of a five-year $18,962,100 contract. NGM issued a performance bond for AmCad’s work in 2013 and continued that bond in 2014 in an amount of $3.8 million.

In 2014, AmCad ceased operations and filed for bankruptcy. NGM filed a lawsuit in Virginia federal court and made claims in the bankruptcy court to enforce indemnity agreements claiming its $3.8 million bond guaranteed the completion of the contract without qualification. Bexar County made a claim against NGM’s $3.8 million bond. NGM then filed an action in federal court in San Antonio claiming its bond was limited and did not guarantee the completion of the contract. Bexar County filed a counterclaim for breach of contract and moved for summary disposition on coverage raising the issue of judicial estoppel, claiming NGM’s position in the prior indemnity and bankruptcy proceedings was contrary to the one it took before the Texas Federal Court.

The Court found that judicial estoppel applied and granted summary judgment on the scope of the NGM bond in favor of Bexar County. The case was resolved at mediation for $2.9 million.

Bracewell lawyers who handled the case are:

Partner: Richard C. Danysh

Associate: Jacqueline A. Garza-Rothrock