Houston We Have a Problem…
Houston We Have a Problem…
2013-07-31 at 7:42:13 am #2586
Houston sues ambulance billing contractor Xerox for breach of contract and fraud
On Friday, July 26, Mayor Parker announced that City Attorney Dave Feldman had filed a lawsuit in Harris County District Court against ambulance billing contractor Xerox State and Local Solutions, Inc, alleging multiple errors failures to perform according to contract terms, failure or refusal to disclose necessary information, and fraud.
The City has been submitted many requests to Xerox State and Local Solutions for information, databases, and other matters related to the contract, but the company has not been cooperative. The City suspended payments to Xerox in May. A “There is no reason to continue contracting with a service that has this many accounting discrepancies, which is why we have terminated the contract with ACS/Xerox,” said Mayor Annise Parker. "Houston taxpayers deserve transparency and fair dealing from its vendors, and those who pay for EMS and ambulance service deserve nothing less.”
The 21-page complaint includes 15 counts for separate legal theories, and seeks, an accounting, actual damages, exemplary damages, reasonable attorney's fees, and a declaratory judgment.
According to the complaint, the City first contracted with ACS State and Local Solutions in 2002, and the contract has been amended twice, in 2007 and 2011. ACS is a wholly owned subsidiary of Xerox Corporation. The business has used both names in dealing with the City of Houston, but now uses the name Xerox State and Local Solutions.
In the summary of the case, Attorney Feldman states that “the City contracted with and paid millions of dollars to Xerox, which holds itself out as an expert in such processes, to handle billing and collctions for EMS services provided by the City.” Xerox has not done the things it was obligated to do, made many misrepresentations, wrongfully withhold information the City owns and engaged in misconduct that goes to the very core of the services it was engaged to perform. The City seeks remedies for Xerox's many wrongful acts, concealments and failures o act that have caused, and will continue to cause, substantial harm to the City.”
Mr. Feldman's statement of the facts asserts that under its contract, Xerox was to be paid a percentage of the fees collected. Information supporting the fees is included in a database owned by the City, but managed by Xerox. The City alleges that Xerox has withheld information contained in the database. Further, including data needed to determine whether fees paid have been accurate, and that some of the funds paid to Xerox should be returned.
As of this writing, the defendant had not yet received the subpoena. The complaint states that the defendant (Xerox Corporation) is a New York corporation, but information states that it's headquarters is in Fairfax, Virginia. ACS has offices in Dallas and Houston and its registered agent is Corporation Service Company, 211 E. 7th St., Suite 620, Austin, TX 78701-3218. The Harris County Civil Clerk's website was down temporarily, so a docket number for the case was not yet available. Once the court assigns a judge and case number, it will issue a summons and subpoena to the defendant. The defendant will file an answer and the parties will engage in pretrial discovery, which is likely to take several months.