Crews & Associates, Inc. as an Authorized Representative and for the Benefit of the Owners of the City of Crystal City, Texas Combination Tax and Revenue Certificates of Obligation, Series 2014 v. The City of Crystal City, Texas v. Crews & Associates, Inc.
Partners Jaime A. Saenz and Alison D. Kennamer represented Crews & Associates, Inc. both in its representative capacity as Plaintiff and individually as Third-Party Defendant. As the representative Plaintiff, Crews & Associates sued the City of Crystal City for non-payment on the Series 2014 Certificates of Obligation (a type of bond program). A prior City administration had members convicted of federal corruption charges, and the current administration claimed that the funds supporting the Certificates of Obligation program had disappeared. The City filed third party claims against Crews & Associates individually claiming that it should not have served as underwriter for the program, because it knew or should have known that the City’s determination to enter into the Certificates of Obligation program was not financially viable. The City initially filed claims for intentional torts as well as negligence, but only the negligence claim was submitted to the jury. Trial began on July 29, and the case went to the jury on July 31, 2019. The jury returned a verdict in favor of Crews & Associates as Representative for non-payment of the Certificates against the City in the amount of $285,000.000 (the principal amount overdue) and found both the City of Crystal City and Crews & Associates, Inc. negligent, but found the City of Crystal City 70% responsible compared to Crews & Associates’ 30% responsibility, so no damages were assessed against Crews & Associates, Inc. pursuant to Texas law.