Preview
Electronically Filed
2/12/2018 10:01 AM
Hidalgo County District Clerks
Reviewed By: Kim Hinojosa
CAUSE NO. C-5241-16-G
ENVIRO-LITE SOLUTIONS, LLC § IN THE DISTRICT COURT
Plaintiff & Counter-Defendant, §
§
§
EDINBURG CONSOLIDATED
INDEPENDENT SCHOOL DISTRICT
Defendant & Counter-Plaintiff.
370% JUDICIAL DISTRICT
EDINBURG CONSOLIDATED
INDEPENDENT SCHOOL DISTRICT
Third-Party Plaintiff,
Vv.
USA PROMLITE TECHNOLOGY, INC. 3
FIRST CLASS ELECTRICAL
SERVICES, LLC; AND E-CON GROUP,
LLC HIDALGO COUNTY, TEXAS
Third-Party Defendants
EDINBURG CISD’S THIRD AMENDED ANSWER, COUNTERCLAIMS, AND
THIRD-PARTY PETITION
Defendant and Counter-Plaintiff Edinburg Consolidated Independent School District
(“ECISD”) files this Third Amended Answer, Counterclaims, and Third-Party Petition and would
show the following:
GENERAL DENIAL
1 ECISD generally denies each allegation of Plaintiff Enviro-Lite’s original petition, and
demands strict proof thereof as required by the Texas Rules of Civil Procedure.
2
5 EXHIBIT
A
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Defendant's Third Amended Answer, Counterclaims, and Third-party Claims Hidalgo County District Clerks
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AFFIRMATIVE DEFENSES
2 ECISD affirmatively invokes all protections afforded to it by the doctrine of sovereign
immunity.
3 ECISD affirmatively asserts that it is immune from suit and damages, including suits for
declaratory judgments, pursuant to the Texas Tort Claims Act, and therefore this Court has no
subject matter jurisdiction over Enviro-Lite’s claims.
4 ECISD affirmatively asserts that Enviro-Lite’s damages, if any, are limited by section
271.153 of the Texas Local Government Code.
5 ECISD affirmatively asserts that Enviro-Lite materially breached the contract.
6. ECISD affirmatively asserts that Enviro-Lite engaged in fraud by knowingly making
material representations that were false in order to gain ECISD’s business. ECISD relied upon
these fraudulent and deceptive representations to its detriment.
COUNTERCLAIMS AND THIRD-PARTY PETITION
PARTIES
7 Defendant and Counter-Plaintiff ECISD is an entity in Edinburg, Hidalgo County, Texas.
8 Plaintiff and Counter-Defendant Enviro-Lite Solutions, LLC (“Enviro-Lite”) is a Texas
Limited Liability Company, with its principal place of business in Edinburg, Hidalgo County,
Texas. Enviro-Lite has already appeared in this cause and can be served by serving its attorneys
of record, Andrew K. Meade, Hawash, Meade, Gaston, Neese & Cicack, LLP, 2118 Smith Street,
Houston, Texas 77002, Fax number 713-658-9011, and Bryan Nichols, Hodge & James, 1617 E.
Tyler Avenue, Suite A, Harlingen, Texas 78550, Fax number 956-425-7707.
9 Third-party Defendant USA Promlite Technology, Inc. (“Promlite”) is a Texas
Corporation, with its principal place of business in Houston, Texas. Promlite has already appeared
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in this cause and can be served by serving its attorney of record, Barry Barnes, Barry Barnes &
Associates, PLLC, 440 Louisiana Street, 1880 Lyric Centre, Houston, Texas 77002, Fax number
713-650-0308.
10. Third-party Defendant First Class Electrical Services, LLC (“First Class”) is a Texas
Limited Liability Company, with its principal place of business in Palmview, Texas. First Class
can be served by serving its registered agent, Oscar Huerta, 2002 Obra Dorado, Mission, Texas
78572.
1. Third-Party Defendant E-Con Group, LLC (“E-Con”) is a Texas Limited Liability
Company, with its principal place of business in Edinburg, Hidalgo County, Texas. E-con can be
served by serving its registered agent, Gilbert Enriquez, 3025 S. Sugar Road, Edinburg, Texas
78539.
12. Enviro-Lite, Promolite, First Class, and E-con are collectively referred to as “Defendants.”
DISCOVERY LEVEL
13, ECISD asserts that discovery should be conducted in accordance with a tailored discovery
control plan under Texas Rule of Civil Procedure 190.4.
FACTUAL BACKGROUND
14. On or about April 8, 2015, Promlite, by and through Enviro-Lite, its authorized agent,
contracted with ECISD to “perform a full retrofit and or replacement of all existing lighting into
LED light technology” at six of ECISD’s elementary schools. Enviro-Lite subcontracted with E-
Con, who then subcontracted with First Class to perform the contracted electrical work. The scope
of the work was extensive; encompassing nearly every indoor and outdoor light at each school.
15. The contract required that certified (licensed) personnel perform the electrical work and
required that the LED lights qualify under Energy Star or Design Lights Consortium programs in
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order to be eligible for an energy incentive rebate, meet the specifications of approving authorities,
and be installed in a manner that was in compliance with electrical standards and practices of the
National Electrical Code or NFPA70 (NEC). The contract also required that the installation
comply with the standards, practices, lighting levels and measurements of the Illumination
Engineering Society of North America.
16. First Class installed LED lights throughout ECISD’s six elementary schools. First Class
used equipment that was not certified for use in the United States and installed equipment in a way
that was not in compliance with all electrical standards and practices required by the National
Electrical Code and the standards and practice of the Illumination Engineering Society of North
America; damaging the School’s lighting system. In an effort to correct the lighting issues caused
by its initial installation, First Class installed dimmer switches in a manner that violated all
electrical standards and practices, the National Electrical Code, and NFPA 70, causing permanent
damage to the elementary schools’ lighting systems, which ultimately caused multiple fires and
required the rewiring of the schools.
17. The LED lights that were installed were designed and manufactured by Defendants and/or
Shenzhen Ledision Lighting Technology Co., Ltd., based in China. The LED lights were branded
with labels containing “Enviro-Lite Solutions, LLC” and its logo.
18.. To qualify for use in the United States, the LED lights were required to contain valid
Extract, Transform and Load (ETL) or Underwriters Laboratories (UL) markings and numbers.
And, for rebates under the Energy Star or Design Lights Consortium programs, Plaintiffs’ LED
lights were required to be certified by Intertek, which tests, certifies and validates whether lighting
is compliant for use in the United States and Canada.
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19. The LED lights display no UL markings and contain fraudulent ETL markings and
numbers, deceptively indicating the LED lights had been certified by Intertek when they were not.
20. On or about September 23, 2016, Intertek issued a public notice that the LED lights “bear
unauthorized Intertek Certification Marks for the United States and Canada” and that the “products
have not been evaluated by Intertek”. Moreover, Intertek warned that the LED lights “should not
be used” in the United States or Canada.
21, The LED lights also contained erroneous certification labels form Design Lights
Consortium (DLS), falsely indicating the lights were eligible for energy rebates.
22. The LED lights were defective and inadequate to satisfy the contracted purpose of
retrofitting and or replacing all existing lighting into LED light technology. Besides being
unauthorized for use in the United States, the LED lights cannot be snapped into place easily
without additional wiring or effort; cannot operate on independent circuits; and cannot operate
safely with a dimmer switch.
23. E-Con and First Class altered the existing lighting fixtures and installed the LED lights in
a manner that violated the National Electric Code. Most notably, some of the LED lights were
placed in retrofits with dimmers; however, the lights specifically state, “CAUTION: RISK OF
ELECTRIC SHOCK, DO NOT USE WITH DIMMERS,” clearly indicating that the LED lights
cannot safely be operated with dimmers.
24, After the initial installation, some of the schools experienced flickering and other issues
with its lighting systems. ECISD provided notice to Enviro-Lite and provided it with the
opportunity to resolve the issue. After unsuccessful attempts to remedy the issues, ECISD and
Enviro-Lite agreed to call an engineering firm to assist with finding a solution. The engineering
firm made several recommendations. One was suggesting a new dimmer switch that it had tested
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and found to be successful. First Class installed the selected dimmer switch through the elementary
schools; however, the switches were not installed in compliance with electrical standards and
practices of the National Electrical Code or NFPA70 (NEC).
25. The faulty installation of the LED lights caused multiple fires at ECISD’s elementary
schools.
26. Defendants acts and omissions damaged and/or compromised the electrical wiring in
ECISD’s six elementary schools, placing ECISD’s students in imminent danger.
27. Most notably, Defendants acts and omissions resulted in four fires at one of ECISD’s
schools, which led to investigations by local and state officials.
28. On or about October 7, 2016, the Edinburg Fire Marshal’s Office issued a notice to
ECISD’s Superintendent stating the Texas Fire Marshal’s Office, Texas Department of Licensing
and Regulations, City of Edinburg Code Enforcement, and the Edinburg Fire Department Fire
Marshal’s Office had discovered the following conditions at the above-mentioned campuses:
The contractor performing the work, Enviro-Lite Solutions, was not
licensed by the State of Texas to perform this type of service.
The products used by Enviro-Lite Solutions that where purchased from
Ledision, a company based out of China, has an ETL label that is
unauthorized. ETL has declared that all this equipment should be removed
and shouldn’t be used in the United States.
No electrical design package with spec sheets and load calculations were
submitted to the City of Edinburg for review prior to the installation at the
referenced schools and no electrical permit was ever issued for the work
performed. Further, no study was done of pre-existing conditions before the
equipment was installed.
The electrical contractor hired by Enviro-Lite and First Class installed
equipment knowing that is was in violation of manufactured guidelines.
There were four electrical fires at Escandon Elementary and Cavazos
Elementary that were contained to the electrical boxes and that were not
reported to the fire department when fire occurred.
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On September 15, 2016, during their inspection at Escandon Elementary, it
was determined that half of the emergency lights that were installed by First
Class were not working.
No approved UL Retrofit Kit was used in modifying the existing light
fixtures.
In October 5, 2016, we discovered at Eisenhower Elementary, that inside
the components of the tube model bearing the unauthorized ETL Label
“4007161,” were burning from the inside causing the smell of smoke and
the light to turn off.
Several lights at the above-mentioned schools were no longer working.
Several clectrical violations were noticed during their inspections.
29. The Edinburg Fire Marshal’s Office notice stated it was essential that immediate
action take place correcting the described issues and noted that the issues had been brought
to ECISD’s attention on August 4, 2016. Although some of the issues had been addressed
on the date of the notice, the notice stated it is imperative that actions be taken to correct
the situation, especially given the determination that the LED lights were failing.
CounT 1 - BREACH OF CONTRACT AS TO PROMLITE AND ENVIRO-LITE
30. By reason of the foregoing, ECISD is entitled to recovery of damages from Promlite and
Enviro-Lite because they materially breached their contract with ECISD.
31. Enviro-Lite and Promlite entered into a valid and enforceable contract in which they agreed
to install and maintain all existing lighting with LED lights at six ECISD schools. ECISD paid all
amounts owed under the contract.
32. Enviro-Lite and Promlite breached the contract by installing defective LED lights in a
dangerous manner. Enviro-Lite and Promlite installed LED lights that 1) did not qualify under
Energy Star nor Design Lights Consortium programs; 2) were not eligible for an energy incentive
rebate; 3) did not meet minimum requirements or the specifications of approving authorities;
4) were installed in a manner that violated both the electrical standards and practices of the
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National Electrical Code or NFPA70 (NEC) and the standards, practices, lighting levels and
measurements of the Illumination Engineering Society of North America.! Moreover, Enviro-Lite
and Promlite breached the agreement to obtain all governmental permits, consents, and
authorizations and that all electrical work would be performed by certified personnel.
33. Enviro-Lite and Promlite’s material breach caused immediate danger at six elementary
school campuses in ECISD’s district; and resulted in fires in one of the schools. Asa result, ECISD
was required by local and state officials to immediately correct the damage caused by the breach
in order to ensure the safety of its students. To repair the damage caused by the breach, ECISD
was required to rewire each school. Consequently, ECISD suffered significant monetary damages
as a result of the material breach.
34, ECISD is entitled to recover reasonable and necessary attorneys’ fees under Texas Civil
Practice & Remedies Code chapter 38 because this suit is for breach of a written contract. ECISD
retained counsel, who presented ECISD’s claim to Enviro-lite and Promlite. Neither defendant
tendered the amount owed within 30 days of when the claim was presented.
CounT 2 — BREACH OF EXPRESS WARRANTY AS TO PROMLITE AND ENVIRO-LITE
35. By reason of the foregoing, ECISD is entitled to recovery of damages from Promlite and
Enviro-Lite because they breached their express warranties.
36. Enviro-Lite and Promlite sold the LED lights to ECISD. When the LED lights were sold
to ECISD, Enviro-Lite and Promlite represented to ECISD by affirmation of fact, by description,
and/or promise that the lights had the quality and/or characteristics necessary for the contemplated
work and would meet specifications. These representations became part of the basis of thebargain.
| 7d 4 3Gi) and (iii).
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37. The LED lights did not comply with the representations, and ECISD suffered damages as
a proximate result of the lighting failures.
38. ECISD gave notice of the failures within a reasonable time, but the breach of these express
warranties caused damage to ECISD.
CounT 3 — BREACH OF IMPLIED WARRANTY OF MERCHANTABILITY AS TO ALL DEFENDANTS
39. By reason of the foregoing, ECISD is entitled to recovery of damages from Defendants
because they breached the implied warranty of merchantability.
40. Defendants sold the LED lights to ECISD. The lights were unmerchantable. The lights
would not pass without objection in the trade, were not of fair, average quality, were not fit for
ordinary purposes, and were not of the quality represented. The lights did not conform to the
promises on the description of goods.
41. ECISD has given notice of the unmerchantable goods within a reasonable time, but the
breach of this implied warranty proximately caused damage to ECISD.
Count 4— BREACH OF IMPLIED WARRANTY OF FITNESS AS TO ALL DEFENDANTS
42. By reason of the foregoing, ECISD is entitled to recovery of damages from Defendants
because they breached the implied warranty of merchantability.
43. Defendants sold the LED lights to ECISD. The lights were unmerchantable. The lights
would not pass without objection in the trade, were not of fair, average quality, were not fit for
ordinary purposes, and were not of the quality represented. The lights did not conform to the
promises on the description of goods.
44. ECISD has given notice of the unmerchantable goods within a reasonable time, but the
breach of this implied warranty proximately caused damage to ECISD.
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CounT 5— NEGLIGENCE AS TO ALL DEFENDANTS
General Negligence
45. By reason of the foregoing, ECISD is entitled to recover its damages caused by Defendants’
general negligence in designing, marketing, installing, assembling, and manufacturing the LED
lights.
46. Defendants owed a duty to ECISD and breached that duty by supplying defective LED
lights and negligently installing the lights. Defendants’ breach caused damage to ECISD.
Negligent Failure to Warn or Instruct
47. By reason of the foregoing, ECISD is entitled to recover its damages caused by Defendants’
negligent failure to warn or instruct ECISD of any dangers associated with the intended or
foreseeable use of the LED lights,
48. Defendants owed a duty to ECISD and breached that duty by supplying defective LED
lights and negligently installing the lights. Defendants’ breach caused damage to ECISD.
Negligent Failure to Recall
49. By reason of the foregoing, ECISD is entitled to recover its damages caused by Defendants’
negligent failure to timely recall the LED lights or adequately warn ECISD about known defects.
50. Defendants owed a duty to ECISD and breached that duty by supplying defective LED
lights and negligently installing the lights. Defendants’ breach caused damage to ECISD.
Negligent Misrepresentation and Fraud
Sl. By reason of the foregoing, ECISD is entitled to recover its damages caused by Defendants’
negligent misrepresentations.
52. Defendants made one or more negligent misrepresentations and/or fraudulent statements
to ECISD during Defendants’ course of business.
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53. Defendants supplied ECISD with false information that the LED lights had the quality
and/or characteristic necessary for the contemplated use and would meet specifications.
54. ECISD relied on these false statements.
55. Defendants did not exercise reasonable care or competence in obtaining or communicating
the information or, in the alternative, knowingly made the false statements.
56. If the LED lights had been of the quality and/or characteristics as represented, ECISD
would not have suffered the same degree of harm.
57. Defendants owed a duty to ECISD, and their breach of that duty proximately caused
damage to ECISD.
Negligent Retention, Supervision, and Training
58. By reason of the foregoing, ECISD is entitled to recover its damages caused by Defendants’
negligent retention, training, and supervision.
59. Defendants breached their duty to ECISD by failing to exercise reasonable care or
competence in selecting the individuals to install the LED lights.
60. Defendants’ breach proximately caused damage to ECISD.
COUNT 6— PRODUCT LIABILITY AS TO ALL DEFENDANTS
61. By reason of the foregoing, ECISD is entitled to recovery of damages under applicable Texas
law of product liability against all Defendants.
62. Defendants placed the LED lights into the stream of commerce even though the lights were in
a defective and/or unreasonably dangerous condition, which proximately caused ECISD’s damages,
at the time they left Defendants’ possession.
63. The LED lights were defective and/or unreasonably dangerous because they did not function
properly and caused fires.
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64. Defendants knew or should have known of the potential risk of harm caused by the LED lights,
but they did not provide an adequate warning regarding the LED lights.
65. One or more alternative feasible designs exist, which are technologically and economically
feasible and would have prevented the failures at issue.
66. The defects in the LED lights and the resulting failures were a producing and/or contributing
cause of ECISD’s damages.
Count 7— GROSS NEGLIGENCE AS TO ALL DEFENDANTS
67. The conduct of Defendants, when viewed objectively from Defendants’ standpoint at the
time of the conduct, involved an extreme degree of risk, considering the probability and magnitude
of the potential harm to others, and Defendants were actually, subjectively aware of the risk
involved, but nevertheless proceeded with conscious indifference to the rights, safety, or welfare
of others. Therefore, ECISD is entitled to exemplary damages.
CONDITIONS PRECEDENT
68. Pursuant to Texas Rule of Civil Procedure 54, all conditions precedent to the filing of this
lawsuit have occurred.
CLAIM FOR RELIEF
69. Defendant seeks monetary relief over $1,000,000.00.
JURY DEMAND
69. ECISD demands a jury trial and has tendered the appropriate fee.
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PRAYER
70. For these reasons, ECISD asks the Court to dismiss Enviro-Lite’s claims (or, in the
alternative, enter a take-nothing judgment as to those claims) and upon final trial, enter judgment for
damages in an amount in excess of the minimum jurisdictional limits of this Court for actual and
exemplary damages; reasonable and necessary attorneys’ fees; pre- and post-judgment interest; court
costs assess costs; and all other relief to which ECISD is justly entitled.
Respectfully submitted,
O’ HANLON, DEMERATH & CASTILLO, PC.
Us/l Sharesa Y, Alexander
Sharesa Y. Alexander
Texas Bar No. 24064197
Email: syalexander@808west.com
Kevin O’Hanlon
State Bar No. 15235500
Email: kohanlon@808west.com
David J. Campbell
State Bar No. 24057033
Email: dcampbell@808west.com
ATTORNEYS FOR EDINBURG
CONSOLIDATED INDEPENDENT SCHOOL
DISTRICT
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CERTIFICATE OF SERVICE
Thereby certify that a true and correct copy of the foregoing document has been sent to the
following counsel of record on February 12, 2018 to:
Bryan Nichols via e-filing Barry Barnes via e-filing
Hodge & James 440 Louisiana Street,
1617 E. Tyler Avenue, Suite A 1880 Lyric Centre
Harlingen, Texas 78550 Houston, Texas 77002
bnichols@hodgejames.com bbarnes@barnespllc.com
ATTORNEYS FOR PLAINTIFF THIRD PARTY DEFENDANT
AND COUNTER-DEFENDANT USA PROMLITE TECHNOLOGY
ENVIRO-LITE SOLUTIONS
John K. (Ken) Woodard via e-filing
Bush & Ramirez, PLLC Daniel G. Gurwitz via e-filing
5615 Kirby Drive, Suite 900 Atlas, Hall & Rodriguez, LLP
Houston, Texas 77005 818 West Pecan Boulevard
kwoodard.atty@bushramirez.com McAllen, Texas 78501
dgurwitz@atlashall.com
ATTORNEY FOR THIRD PARTY
DEFENDANT FIRST CLASS ATTORNEY FOR THIRD PARTY
ELECTRICAL SERVICES, LLC DEFENDANT E-CON GROUP, LLC
/s/ Sharesa Y. Alexander
Sharesa Y. Alexander
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Preview
Electronically Filed 2/12/2018 10:01 AM Hidalgo County District Clerks Reviewed By: Kim Hinojosa CAUSE NO. C-5241-16-G ENVIRO-LITE SOLUTIONS, LLC § IN THE DISTRICT COURT Plaintiff & Counter-Defendant, § § § EDINBURG CONSOLIDATED INDEPENDENT SCHOOL DISTRICT Defendant & Counter-Plaintiff. 370% JUDICIAL DISTRICT EDINBURG CONSOLIDATED INDEPENDENT SCHOOL DISTRICT Third-Party Plaintiff, Vv. USA PROMLITE TECHNOLOGY, INC. 3 FIRST CLASS ELECTRICAL SERVICES, LLC; AND E-CON GROUP, LLC HIDALGO COUNTY, TEXAS Third-Party Defendants EDINBURG CISD’S THIRD AMENDED ANSWER, COUNTERCLAIMS, AND THIRD-PARTY PETITION Defendant and Counter-Plaintiff Edinburg Consolidated Independent School District (“ECISD”) files this Third Amended Answer, Counterclaims, and Third-Party Petition and would show the following: GENERAL DENIAL 1 ECISD generally denies each allegation of Plaintiff Enviro-Lite’s original petition, and demands strict proof thereof as required by the Texas Rules of Civil Procedure. 2 5 EXHIBIT A Electronically Filed 2/12/2018 10:01 AM Defendant's Third Amended Answer, Counterclaims, and Third-party Claims Hidalgo County District Clerks Reviewed By: Kim Hinojosa AFFIRMATIVE DEFENSES 2 ECISD affirmatively invokes all protections afforded to it by the doctrine of sovereign immunity. 3 ECISD affirmatively asserts that it is immune from suit and damages, including suits for declaratory judgments, pursuant to the Texas Tort Claims Act, and therefore this Court has no subject matter jurisdiction over Enviro-Lite’s claims. 4 ECISD affirmatively asserts that Enviro-Lite’s damages, if any, are limited by section 271.153 of the Texas Local Government Code. 5 ECISD affirmatively asserts that Enviro-Lite materially breached the contract. 6. ECISD affirmatively asserts that Enviro-Lite engaged in fraud by knowingly making material representations that were false in order to gain ECISD’s business. ECISD relied upon these fraudulent and deceptive representations to its detriment. COUNTERCLAIMS AND THIRD-PARTY PETITION PARTIES 7 Defendant and Counter-Plaintiff ECISD is an entity in Edinburg, Hidalgo County, Texas. 8 Plaintiff and Counter-Defendant Enviro-Lite Solutions, LLC (“Enviro-Lite”) is a Texas Limited Liability Company, with its principal place of business in Edinburg, Hidalgo County, Texas. Enviro-Lite has already appeared in this cause and can be served by serving its attorneys of record, Andrew K. Meade, Hawash, Meade, Gaston, Neese & Cicack, LLP, 2118 Smith Street, Houston, Texas 77002, Fax number 713-658-9011, and Bryan Nichols, Hodge & James, 1617 E. Tyler Avenue, Suite A, Harlingen, Texas 78550, Fax number 956-425-7707. 9 Third-party Defendant USA Promlite Technology, Inc. (“Promlite”) is a Texas Corporation, with its principal place of business in Houston, Texas. Promlite has already appeared Page 2 of 14 Electronically Filed 2/12/2018 10:01 AM Defendant's Third Amended Answer, Counterclaims, and Third-party Claims Hidalgo County District Clerks Reviewed By: Kim Hinojosa in this cause and can be served by serving its attorney of record, Barry Barnes, Barry Barnes & Associates, PLLC, 440 Louisiana Street, 1880 Lyric Centre, Houston, Texas 77002, Fax number 713-650-0308. 10. Third-party Defendant First Class Electrical Services, LLC (“First Class”) is a Texas Limited Liability Company, with its principal place of business in Palmview, Texas. First Class can be served by serving its registered agent, Oscar Huerta, 2002 Obra Dorado, Mission, Texas 78572. 1. Third-Party Defendant E-Con Group, LLC (“E-Con”) is a Texas Limited Liability Company, with its principal place of business in Edinburg, Hidalgo County, Texas. E-con can be served by serving its registered agent, Gilbert Enriquez, 3025 S. Sugar Road, Edinburg, Texas 78539. 12. Enviro-Lite, Promolite, First Class, and E-con are collectively referred to as “Defendants.” DISCOVERY LEVEL 13, ECISD asserts that discovery should be conducted in accordance with a tailored discovery control plan under Texas Rule of Civil Procedure 190.4. FACTUAL BACKGROUND 14. On or about April 8, 2015, Promlite, by and through Enviro-Lite, its authorized agent, contracted with ECISD to “perform a full retrofit and or replacement of all existing lighting into LED light technology” at six of ECISD’s elementary schools. Enviro-Lite subcontracted with E- Con, who then subcontracted with First Class to perform the contracted electrical work. The scope of the work was extensive; encompassing nearly every indoor and outdoor light at each school. 15. The contract required that certified (licensed) personnel perform the electrical work and required that the LED lights qualify under Energy Star or Design Lights Consortium programs in Page3 of 14 Electronically Filed 2/12/2018 10:01 AM Defendant's Third Amended Answer, Counterclaims, and Third-party Claims Hidalgo County District Clerks Reviewed By: Kim Hinojosa order to be eligible for an energy incentive rebate, meet the specifications of approving authorities, and be installed in a manner that was in compliance with electrical standards and practices of the National Electrical Code or NFPA70 (NEC). The contract also required that the installation comply with the standards, practices, lighting levels and measurements of the Illumination Engineering Society of North America. 16. First Class installed LED lights throughout ECISD’s six elementary schools. First Class used equipment that was not certified for use in the United States and installed equipment in a way that was not in compliance with all electrical standards and practices required by the National Electrical Code and the standards and practice of the Illumination Engineering Society of North America; damaging the School’s lighting system. In an effort to correct the lighting issues caused by its initial installation, First Class installed dimmer switches in a manner that violated all electrical standards and practices, the National Electrical Code, and NFPA 70, causing permanent damage to the elementary schools’ lighting systems, which ultimately caused multiple fires and required the rewiring of the schools. 17. The LED lights that were installed were designed and manufactured by Defendants and/or Shenzhen Ledision Lighting Technology Co., Ltd., based in China. The LED lights were branded with labels containing “Enviro-Lite Solutions, LLC” and its logo. 18.. To qualify for use in the United States, the LED lights were required to contain valid Extract, Transform and Load (ETL) or Underwriters Laboratories (UL) markings and numbers. And, for rebates under the Energy Star or Design Lights Consortium programs, Plaintiffs’ LED lights were required to be certified by Intertek, which tests, certifies and validates whether lighting is compliant for use in the United States and Canada. Page 4 of 14 Electronically Filed 2/12/2018 10:01 AM Defendant's Third Amended Answer, Counterclaims, and Third-party Claims Hidalgo County District Clerks Reviewed By: Kim Hinojosa 19. The LED lights display no UL markings and contain fraudulent ETL markings and numbers, deceptively indicating the LED lights had been certified by Intertek when they were not. 20. On or about September 23, 2016, Intertek issued a public notice that the LED lights “bear unauthorized Intertek Certification Marks for the United States and Canada” and that the “products have not been evaluated by Intertek”. Moreover, Intertek warned that the LED lights “should not be used” in the United States or Canada. 21, The LED lights also contained erroneous certification labels form Design Lights Consortium (DLS), falsely indicating the lights were eligible for energy rebates. 22. The LED lights were defective and inadequate to satisfy the contracted purpose of retrofitting and or replacing all existing lighting into LED light technology. Besides being unauthorized for use in the United States, the LED lights cannot be snapped into place easily without additional wiring or effort; cannot operate on independent circuits; and cannot operate safely with a dimmer switch. 23. E-Con and First Class altered the existing lighting fixtures and installed the LED lights in a manner that violated the National Electric Code. Most notably, some of the LED lights were placed in retrofits with dimmers; however, the lights specifically state, “CAUTION: RISK OF ELECTRIC SHOCK, DO NOT USE WITH DIMMERS,” clearly indicating that the LED lights cannot safely be operated with dimmers. 24, After the initial installation, some of the schools experienced flickering and other issues with its lighting systems. ECISD provided notice to Enviro-Lite and provided it with the opportunity to resolve the issue. After unsuccessful attempts to remedy the issues, ECISD and Enviro-Lite agreed to call an engineering firm to assist with finding a solution. The engineering firm made several recommendations. One was suggesting a new dimmer switch that it had tested Page 5 of 14 Electronically Filed 2/12/2018 10:01 AM Defendant's Third Amended Answer, Counterclaims, and Third-party Claims Hidalgo County District Clerks Reviewed By: Kim Hinojosa and found to be successful. First Class installed the selected dimmer switch through the elementary schools; however, the switches were not installed in compliance with electrical standards and practices of the National Electrical Code or NFPA70 (NEC). 25. The faulty installation of the LED lights caused multiple fires at ECISD’s elementary schools. 26. Defendants acts and omissions damaged and/or compromised the electrical wiring in ECISD’s six elementary schools, placing ECISD’s students in imminent danger. 27. Most notably, Defendants acts and omissions resulted in four fires at one of ECISD’s schools, which led to investigations by local and state officials. 28. On or about October 7, 2016, the Edinburg Fire Marshal’s Office issued a notice to ECISD’s Superintendent stating the Texas Fire Marshal’s Office, Texas Department of Licensing and Regulations, City of Edinburg Code Enforcement, and the Edinburg Fire Department Fire Marshal’s Office had discovered the following conditions at the above-mentioned campuses: The contractor performing the work, Enviro-Lite Solutions, was not licensed by the State of Texas to perform this type of service. The products used by Enviro-Lite Solutions that where purchased from Ledision, a company based out of China, has an ETL label that is unauthorized. ETL has declared that all this equipment should be removed and shouldn’t be used in the United States. No electrical design package with spec sheets and load calculations were submitted to the City of Edinburg for review prior to the installation at the referenced schools and no electrical permit was ever issued for the work performed. Further, no study was done of pre-existing conditions before the equipment was installed. The electrical contractor hired by Enviro-Lite and First Class installed equipment knowing that is was in violation of manufactured guidelines. There were four electrical fires at Escandon Elementary and Cavazos Elementary that were contained to the electrical boxes and that were not reported to the fire department when fire occurred. Page6 of 14 Electronically Filed 2/12/2018 10:01 AM Defendant's Third Amended Answer, Counterclaims, and Third-party Claims Hidalgo County District Clerks Reviewed By: Kim Hinojosa On September 15, 2016, during their inspection at Escandon Elementary, it was determined that half of the emergency lights that were installed by First Class were not working. No approved UL Retrofit Kit was used in modifying the existing light fixtures. In October 5, 2016, we discovered at Eisenhower Elementary, that inside the components of the tube model bearing the unauthorized ETL Label “4007161,” were burning from the inside causing the smell of smoke and the light to turn off. Several lights at the above-mentioned schools were no longer working. Several clectrical violations were noticed during their inspections. 29. The Edinburg Fire Marshal’s Office notice stated it was essential that immediate action take place correcting the described issues and noted that the issues had been brought to ECISD’s attention on August 4, 2016. Although some of the issues had been addressed on the date of the notice, the notice stated it is imperative that actions be taken to correct the situation, especially given the determination that the LED lights were failing. CounT 1 - BREACH OF CONTRACT AS TO PROMLITE AND ENVIRO-LITE 30. By reason of the foregoing, ECISD is entitled to recovery of damages from Promlite and Enviro-Lite because they materially breached their contract with ECISD. 31. Enviro-Lite and Promlite entered into a valid and enforceable contract in which they agreed to install and maintain all existing lighting with LED lights at six ECISD schools. ECISD paid all amounts owed under the contract. 32. Enviro-Lite and Promlite breached the contract by installing defective LED lights in a dangerous manner. Enviro-Lite and Promlite installed LED lights that 1) did not qualify under Energy Star nor Design Lights Consortium programs; 2) were not eligible for an energy incentive rebate; 3) did not meet minimum requirements or the specifications of approving authorities; 4) were installed in a manner that violated both the electrical standards and practices of the Page 7 of 14 Electronically Filed 2/12/2018 10:01 AM Defendant's Third Amended Answer, Counterclaims, and Third-party Claims Hidalgo County District Clerks Reviewed By: Kim Hinojosa National Electrical Code or NFPA70 (NEC) and the standards, practices, lighting levels and measurements of the Illumination Engineering Society of North America.! Moreover, Enviro-Lite and Promlite breached the agreement to obtain all governmental permits, consents, and authorizations and that all electrical work would be performed by certified personnel. 33. Enviro-Lite and Promlite’s material breach caused immediate danger at six elementary school campuses in ECISD’s district; and resulted in fires in one of the schools. Asa result, ECISD was required by local and state officials to immediately correct the damage caused by the breach in order to ensure the safety of its students. To repair the damage caused by the breach, ECISD was required to rewire each school. Consequently, ECISD suffered significant monetary damages as a result of the material breach. 34, ECISD is entitled to recover reasonable and necessary attorneys’ fees under Texas Civil Practice & Remedies Code chapter 38 because this suit is for breach of a written contract. ECISD retained counsel, who presented ECISD’s claim to Enviro-lite and Promlite. Neither defendant tendered the amount owed within 30 days of when the claim was presented. CounT 2 — BREACH OF EXPRESS WARRANTY AS TO PROMLITE AND ENVIRO-LITE 35. By reason of the foregoing, ECISD is entitled to recovery of damages from Promlite and Enviro-Lite because they breached their express warranties. 36. Enviro-Lite and Promlite sold the LED lights to ECISD. When the LED lights were sold to ECISD, Enviro-Lite and Promlite represented to ECISD by affirmation of fact, by description, and/or promise that the lights had the quality and/or characteristics necessary for the contemplated work and would meet specifications. These representations became part of the basis of thebargain. | 7d 4 3Gi) and (iii). Page8 of 14 Electronically Filed 2/12/2018 10:01 AM Defendant's Third Amended Answer, Counterclaims, and Third-party Claims Hidalgo County District Clerks Reviewed By: Kim Hinojosa 37. The LED lights did not comply with the representations, and ECISD suffered damages as a proximate result of the lighting failures. 38. ECISD gave notice of the failures within a reasonable time, but the breach of these express warranties caused damage to ECISD. CounT 3 — BREACH OF IMPLIED WARRANTY OF MERCHANTABILITY AS TO ALL DEFENDANTS 39. By reason of the foregoing, ECISD is entitled to recovery of damages from Defendants because they breached the implied warranty of merchantability. 40. Defendants sold the LED lights to ECISD. The lights were unmerchantable. The lights would not pass without objection in the trade, were not of fair, average quality, were not fit for ordinary purposes, and were not of the quality represented. The lights did not conform to the promises on the description of goods. 41. ECISD has given notice of the unmerchantable goods within a reasonable time, but the breach of this implied warranty proximately caused damage to ECISD. Count 4— BREACH OF IMPLIED WARRANTY OF FITNESS AS TO ALL DEFENDANTS 42. By reason of the foregoing, ECISD is entitled to recovery of damages from Defendants because they breached the implied warranty of merchantability. 43. Defendants sold the LED lights to ECISD. The lights were unmerchantable. The lights would not pass without objection in the trade, were not of fair, average quality, were not fit for ordinary purposes, and were not of the quality represented. The lights did not conform to the promises on the description of goods. 44. ECISD has given notice of the unmerchantable goods within a reasonable time, but the breach of this implied warranty proximately caused damage to ECISD. Page 9 of 14 Electronically Filed 2/12/2018 10:01 AM Defendant's Third Amended Answer, Counterclaims, and Third-party Claims Hidalgo County District Clerks Reviewed By: Kim Hinojosa CounT 5— NEGLIGENCE AS TO ALL DEFENDANTS General Negligence 45. By reason of the foregoing, ECISD is entitled to recover its damages caused by Defendants’ general negligence in designing, marketing, installing, assembling, and manufacturing the LED lights. 46. Defendants owed a duty to ECISD and breached that duty by supplying defective LED lights and negligently installing the lights. Defendants’ breach caused damage to ECISD. Negligent Failure to Warn or Instruct 47. By reason of the foregoing, ECISD is entitled to recover its damages caused by Defendants’ negligent failure to warn or instruct ECISD of any dangers associated with the intended or foreseeable use of the LED lights, 48. Defendants owed a duty to ECISD and breached that duty by supplying defective LED lights and negligently installing the lights. Defendants’ breach caused damage to ECISD. Negligent Failure to Recall 49. By reason of the foregoing, ECISD is entitled to recover its damages caused by Defendants’ negligent failure to timely recall the LED lights or adequately warn ECISD about known defects. 50. Defendants owed a duty to ECISD and breached that duty by supplying defective LED lights and negligently installing the lights. Defendants’ breach caused damage to ECISD. Negligent Misrepresentation and Fraud Sl. By reason of the foregoing, ECISD is entitled to recover its damages caused by Defendants’ negligent misrepresentations. 52. Defendants made one or more negligent misrepresentations and/or fraudulent statements to ECISD during Defendants’ course of business. Page 10 of 14 Electronically Filed 2/12/2018 10:01 AM Defendant's Third Amended Answer, Counterclaims, and Third-party Claims Hidalgo County District Clerks Reviewed By: Kim Hinojosa 53. Defendants supplied ECISD with false information that the LED lights had the quality and/or characteristic necessary for the contemplated use and would meet specifications. 54. ECISD relied on these false statements. 55. Defendants did not exercise reasonable care or competence in obtaining or communicating the information or, in the alternative, knowingly made the false statements. 56. If the LED lights had been of the quality and/or characteristics as represented, ECISD would not have suffered the same degree of harm. 57. Defendants owed a duty to ECISD, and their breach of that duty proximately caused damage to ECISD. Negligent Retention, Supervision, and Training 58. By reason of the foregoing, ECISD is entitled to recover its damages caused by Defendants’ negligent retention, training, and supervision. 59. Defendants breached their duty to ECISD by failing to exercise reasonable care or competence in selecting the individuals to install the LED lights. 60. Defendants’ breach proximately caused damage to ECISD. COUNT 6— PRODUCT LIABILITY AS TO ALL DEFENDANTS 61. By reason of the foregoing, ECISD is entitled to recovery of damages under applicable Texas law of product liability against all Defendants. 62. Defendants placed the LED lights into the stream of commerce even though the lights were in a defective and/or unreasonably dangerous condition, which proximately caused ECISD’s damages, at the time they left Defendants’ possession. 63. The LED lights were defective and/or unreasonably dangerous because they did not function properly and caused fires. Page 11 of 14 Electronically Filed 2/12/2018 10:01 AM Defendant's Third Amended Answer, Counterclaims, and Third-party Claims Hidalgo County District Clerks Reviewed By: Kim Hinojosa 64. Defendants knew or should have known of the potential risk of harm caused by the LED lights, but they did not provide an adequate warning regarding the LED lights. 65. One or more alternative feasible designs exist, which are technologically and economically feasible and would have prevented the failures at issue. 66. The defects in the LED lights and the resulting failures were a producing and/or contributing cause of ECISD’s damages. Count 7— GROSS NEGLIGENCE AS TO ALL DEFENDANTS 67. The conduct of Defendants, when viewed objectively from Defendants’ standpoint at the time of the conduct, involved an extreme degree of risk, considering the probability and magnitude of the potential harm to others, and Defendants were actually, subjectively aware of the risk involved, but nevertheless proceeded with conscious indifference to the rights, safety, or welfare of others. Therefore, ECISD is entitled to exemplary damages. CONDITIONS PRECEDENT 68. Pursuant to Texas Rule of Civil Procedure 54, all conditions precedent to the filing of this lawsuit have occurred. CLAIM FOR RELIEF 69. Defendant seeks monetary relief over $1,000,000.00. JURY DEMAND 69. ECISD demands a jury trial and has tendered the appropriate fee. Page 12 of 14 Electronically Filed 2/12/2018 10:01 AM Defendant's Third Amended Answer, Counterclaims, and Third-party Claims Hidalgo County District Clerks Reviewed By: Kim Hinojosa PRAYER 70. For these reasons, ECISD asks the Court to dismiss Enviro-Lite’s claims (or, in the alternative, enter a take-nothing judgment as to those claims) and upon final trial, enter judgment for damages in an amount in excess of the minimum jurisdictional limits of this Court for actual and exemplary damages; reasonable and necessary attorneys’ fees; pre- and post-judgment interest; court costs assess costs; and all other relief to which ECISD is justly entitled. Respectfully submitted, O’ HANLON, DEMERATH & CASTILLO, PC. Us/l Sharesa Y, Alexander Sharesa Y. Alexander Texas Bar No. 24064197 Email: syalexander@808west.com Kevin O’Hanlon State Bar No. 15235500 Email: kohanlon@808west.com David J. Campbell State Bar No. 24057033 Email: dcampbell@808west.com ATTORNEYS FOR EDINBURG CONSOLIDATED INDEPENDENT SCHOOL DISTRICT Page 13 of 14 Electronically Filed 2/12/2018 10:01 AM Defendant's Third Amended Answer, Counterclaims, and Third-party Claims Hidalgo County District Clerks Reviewed By: Kim Hinojosa CERTIFICATE OF SERVICE Thereby certify that a true and correct copy of the foregoing document has been sent to the following counsel of record on February 12, 2018 to: Bryan Nichols via e-filing Barry Barnes via e-filing Hodge & James 440 Louisiana Street, 1617 E. Tyler Avenue, Suite A 1880 Lyric Centre Harlingen, Texas 78550 Houston, Texas 77002 bnichols@hodgejames.com bbarnes@barnespllc.com ATTORNEYS FOR PLAINTIFF THIRD PARTY DEFENDANT AND COUNTER-DEFENDANT USA PROMLITE TECHNOLOGY ENVIRO-LITE SOLUTIONS John K. (Ken) Woodard via e-filing Bush & Ramirez, PLLC Daniel G. Gurwitz via e-filing 5615 Kirby Drive, Suite 900 Atlas, Hall & Rodriguez, LLP Houston, Texas 77005 818 West Pecan Boulevard kwoodard.atty@bushramirez.com McAllen, Texas 78501 dgurwitz@atlashall.com ATTORNEY FOR THIRD PARTY DEFENDANT FIRST CLASS ATTORNEY FOR THIRD PARTY ELECTRICAL SERVICES, LLC DEFENDANT E-CON GROUP, LLC /s/ Sharesa Y. Alexander Sharesa Y. Alexander Page 14 of 14