That $40-Million Breach of Contract Suit Against Dallas ISD Sure Did Heat Up Quickly

On Friday we brought you the news that the Dallas Independent School District has been hit with a $40-million breach of contract suit filed by Delcom Group. Long story short: The Lewisville-based tech company was initially awarded a mammoth deal to convert schoolrooms into digital classrooms. But the district tossed the contract based, says Delcom, on an unknown tipster's call to a trustee concerning a Delcom employee's long-ago felony conviction. The contract has since been awarded to Houston-based Prime Systems, which was also sued. Delcom also wanted the court to his the "pause" button on the deal and asked for a temporary restraining order.

Since then, in a very short time, much has happened: The district and Prime both filed docs hoping to get the court to toss Delcom's request for a TRO, and only yesterday Prime Systems delivered to the court a response in which it says, sorry, but it denies, denies, denies everything in Delcom's complaint, which alleges the district spilled trade secrets to Prime after the DISD re-awarded the job in late June without a warning. That response follows.

But on Friday afternoon, Judge Martin Hoffman gave Delcom its TRO separating Prime and the district; in doing so, he wrote that "Delcom has demonstrated a probable right to relief." Those orders also follow. Hoffman then appointed Ray Green as mediator. To which Prime responded in court docs that mediation at this point is just "impractical" and "unlikely," and complained it didn't have enough time to take five depositions between now and the scheduled August 19 TRO hearing. That also follows.

Then, yesterday, the district asked Judge Craig Smith to reconsider Hoffman's order for a TRO, insisting, among other things, it has governmental immunity from such a suit. That was heard this morning, and Smith held up most of Hoffman's order and asked Delcom to limit discovery: Says Michael Hurst, the attorney repping Delcom, Delcom can't get, for now, "all communications between Prime and DISD from January 1 till now. We can only get the communications regarding the digital classrooms." Also, he says, Smith ruled that Delcom can depose Gary Kerbow, the district's director of purchasing, and DISD program manager Gary Shuman before the August 19 hearing. That hearing, incidentally, could also be pushed back Smith, who's now handling the case, extend the TRO, which could happen as soon as today.

Prime Systems Response to DISD LawsuitDelcomTRODISDTROPrime Response to Mediation OrderDISDAsksJudgetoReconsiderTRO

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Robert Wilonsky
Contact: Robert Wilonsky