UTMB sues construction company after mechanic's lien issued

GALVESTON � Because a mechanic's lien was placed on one of the school's clinics, the University of Texas Medical Branch-Healthcare Systems is suing a Spring construction company for failing to pay its subcontractors.

According to a lawsuit filed Oct. 26 in Galveston County District Court, the plaintiff claims American Central Construction and contractor Robert A. Covey of Hurst committed a breach of contract and fraud against UTMB-HCS when it incurred more than $20,000 in debt.

"The plaintiff reasonably relied on the defendants' misrepresentations to its detriment and suffered damages," the original petition says.

UTMB-HCS argues that the missed payments earned its clinic in the central part of Galveston the lien as well as the threat of another.

Court papers show the plaintiff and American Central entered into a written agreement back in January.

The company and co-defendant Covey consented to act as the general contractor and provide labor, manpower, and supplies while UTMB-HCS agreed to pay a flat fee of an estimated $390,000 with an initial payment of close to $27,000 due upon the start of the project.

The contract also states that the plaintiff had the right to withhold payments to the defendants if they failed to pay their subcontractors.

American Central subcontracted with Affordable Quality Plumbing and Miller Bros. Floors, drawing combined payments of up to $30,000.

The defendant, however, failed to punctually honor its debts to each business, the suit alleges.

"In response to the repeated payment demands, the plaintiff requested that the defendants honor their obligations under the contract and avoid burdening the property with mechanic's liens by paying the subcontractors," it states.

UTMB-HCS claims Covey, individually and on behalf of American Central, intentionally made material misrepresentations that all subcontractors had been paid.

"The plaintiff reasonably relied on the defendants' misrepresentations," the suit says.

"It learned that the defendants had failed to pay... contrary to the defendants' numerous representations and in breach of their contractual duties."

Affordable Quality Plumbing eventually filed a complaint with the Galveston County Clerk's Office in April.

The plaintiff paid for the property's release plus the prevention of legal action on behalf of Miller Bros. Floors.

Represented by Galveston attorneys Christopher C. Garcia and David A. Talbot III, the plaintiff seeks monetary damages including, but not limited to, the funds paid to remove or prevent the liens.

Galveston County 122nd District Court Judge John Ellisor is presiding over the case.

Case No. 09CV2002