Honeywell International Inc. will pay $15 million to a Texas school district that sued the company for alleged fraud over a mold problem, ending a complicated legal dispute.

Honeywell will pay the San Benito Independent School District in southern Texas for all claims related to the district's 13 schools and denies any wrongdoing, company spokesman Steve Goodyear said Friday. The settlement, reached Tuesday, ends both a court case that began Aug. 26 in Texas, and a related arbitration hearing slated for November in Minneapolis.

"There is no basis for the allegations of fraud and other claims made by the district, and we believe that we would have prevailed at trial," Goodyear said in an e-mail. "No mold related to any Honeywell work has been found in any of these schools."

Anthony Constant, attorney for the school district, said the school board is happy with the agreement.
"The district got what the district needed," Constant said. The district, among the state's poorest, has spent about $4 million with Honeywell on heating, ventilation and air conditioning, known as HVAC systems, and $7 million to remediate two of the schools with the most-severe moisture problems, he said.

Honeywell is a $23 billion company headquartered in New Jersey, but its $7.5 billion Automation and Control Solutions segment, home of the Building Solutions arm that sells HVAC systems and services, is based in the Twin Cities.

"It's very difficult for a school district to look at $15 million and say 'No, let's go roll the dice (in court),' " Constant said.

The school district sued Honeywell in 2001, accusing it of installing and then mismanaging HVAC systems there so that in two of the 13 schools chalkboards fell off the walls and mushrooms sprouted on the floors. Those two schools had to be remediated. The lawsuit was asking for $120 million in damages.

HVAC companies are often targeted in mold litigation because moisture can accumulate in the systems and promote mold growth, attorneys say. Honeywell said it has dealt with very few such cases.
 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Pure Air Control Services
800-422-7873