78R12241 SKB-F
By: Ritter H.C.R. No. 209
CONCURRENT RESOLUTION
WHEREAS, Commercial Indemnity Insurance Company alleges
that:
(1) on or about September 29, 1995, the General
Services Commission, on behalf of the Texas Natural Resource
Conservation Commission, entered into an agreement with Cinnibar
Properties to lease a building, which was to be constructed by
Cinnibar Properties and located at 1101 Arkansas Lane, Arlington,
Texas, and the lease was designated State License Contract No.
582-8948-E3B-ARLINGTON;
(2) the initial term of the lease was from October 1,
1996, through September 30, 2006, but the term of the lease was
later amended to run from March 1, 1997, through November 30, 2006;
(3) at or shortly after the commencement of the lease,
the Texas Natural Resource Conservation Commission took occupancy
of the building;
(4) in early 2001, the Texas Natural Resource
Conservation Commission began complaining to Cinnibar Properties
about certain conditions of the building that the Texas Natural
Resource Conservation Commission alleged rendered the indoor air
quality of the building to be in violation of Occupational Safety
and Health Administration standards;
(5) following those complaints, an extensive
investigation was undertaken and a number of air quality tests were
conducted in the building that revealed that there were minor
deficiencies in the building with water infiltration and some mold
growth but that the indoor air quality was not in violation of
Occupational Safety and Health Administration standards;
(6) on or about May 8, 2001, Commercial Indemnity
Insurance Company became the owner of the building and promptly
undertook steps to address the water infiltration problems and
other conditions of the building about which the Texas Natural
Resource Conservation Commission complained;
(7) Commercial Indemnity Insurance Company advised
the Texas Natural Resource Conservation Commission of all remedial
actions it was taking;
(8) notwithstanding the minor nature of the problems
and Commercial Indemnity Insurance Company's prompt remedial
efforts, on or about June 12, 2001, the General Services Commission
gave notice that the owner had 30 days to correct deficiencies in
the building or the General Services Commission would terminate the
lease;
(9) on July 19, 2001, the General Services Commission
gave Commercial Indemnity Insurance Company formal notice that the
General Services Commission had cancelled the lease;
(10) the Texas Natural Resource Conservation
Commission vacated the building by the end of July 2001, and the
last rental payment was for the month of July 2001;
(11) at the time of the cancellation of the lease, the
building did not pose a health hazard to the occupants of the
building, and all material problems with the condition of the
building had been remedied;
(12) the true reason for the cancellation of the lease
was a decision by the Texas Natural Resource Conservation
Commission to relocate its offices to a more convenient location;
(13) even if the air quality of the building did
constitute grounds for termination of the lease, which Commercial
Indemnity Insurance Company denies, the Texas Natural Resource
Conservation Commission caused or significantly contributed to
these conditions by its operation of the heating, ventilating, and
air-conditioning system at excessively low temperatures and by
adjusting fresh air dampers so as to reduce the amount of outside
fresh air flowing into the system, promoting condensation on the
interior walls and potential mold growth;
(14) the General Services Commission's cancellation of
the lease and the Texas Natural Resource Conservation Commission's
abandonment of the lease and refusal to make further rental
payments constitute a breach of the lease;
(15) in the process of removing its furnishings from
the building, the Texas Natural Resource Conservation Commission
caused significant damage to the building;
(16) to date, despite its reasonable efforts,
Commercial Indemnity Insurance Company has not been able to lease
the building;
(17) for each month that Commercial Indemnity
Insurance Company is unable to lease the building, it incurs
damages of approximately $19,774 in lost rental income;
(18) Commercial Indemnity Insurance Company incurred
approximately $57,800 in repairing the damage to the building
caused by the Texas Natural Resource Conservation Commission during
its move out of the building;
(19) Commercial Indemnity Insurance Company has
attempted to negotiate a fair resolution of the breach of the lease
with the Texas Natural Resource Conservation Commission and has
filed a formal claim with the successor to the General Services
Commission, the Texas Building and Procurement Commission; and
(20) to date, both the Texas Natural Resource
Conservation Commission and the Texas Building and Procurement
Commission have failed and refused to make a good faith effort to
resolve this dispute; now, therefore, be it
RESOLVED by the Legislature of the State of Texas, That
Commercial Indemnity Insurance Company is granted permission to sue
the State of Texas and the Texas Building and Procurement
Commission subject to Chapter 107, Civil Practice and Remedies
Code, for breach of the lease and to recover for the damages caused
by the Texas Natural Resource Conservation Commission during its
move from the building, together with reasonable attorney's fees
necessarily incurred in such litigation, interest on any amounts
due as may be authorized by law, and costs of court; and, be it
further
RESOLVED, That the executive director of the Texas Building
and Procurement Commission be served process as provided by Section
107.002(a)(3), Civil Practice and Remedies Code.