Pismo Beach officials accused of cheating contractor, jury agrees

June 3, 2024

By KAREN VELIE

A San Luis Obispo Superior Court jury on Friday awarded $350,000 to a contractor who Pismo Beach officials threatened to harm unless he agreed to accept less than the city owed him for his work.

Four years ago, Vince Lopez with V. Lopez Jr. & Sons and city staff argued over who was responsible for delays in the construction of a new sewer lift station. Even though the initial argument was over a $69,000 fine, city taxpayers will likely dole out more than $2 million for legal fees and the court judgement.

After the project took an extra 69 days to complete, then City Manager Jim Lewis and Public Works Director Ben Fine blamed the contractor who they claimed was not always prepared.

On the other side, Lopez said the city’s deficient construction plans and poor coordination with other contractors caused the delays.

“Ben Fine refused to sit down and work it out,” Lopez said. “Now it will cost the citizens millions.”

On Oct. 6, 2020, the city council accepted the project as complete “in accordance with the contract, plans, and specifications,” while also approving a fine of $69,000 against Lopez for the delay.

A month later, city staff informed Lopez of plans to ask the city council to deem his construction company an irresponsible bidder, an action that could seriously harm a 41-year-old family business as Lopez is required to disclose the matter to prospective government clients.

Noting he did not think he was liable for the $69,000 in damages, Lopez agreed to pay the damages, to not bid jobs with the city for five years, and to not sue them for the cost of additional work, in an attempt to protect his company’s reputation, Lopez said.

However, a month later, the city responded to his offer with a demand for an additional $161,250 for costs they related to the delay, or they would proceed with the public disbarment action. City attorney David Fleishman then warned Lopez’s attorney of the losses his client could incur if he failed to agree to their demand.

“While your client may feel he is in the right, from a strictly business standpoint, your client stands to lose a lot more than the $69,000 you have offered here,” Fleishman wrote in an Nov. 12 email to Lopez’s attorney Scott Baker. “The city offer was one of compromise, not ‘extortion,’ as your client put it.”

During the trial, city staff argued they never approved the additional work. However, their emails proved otherwise, Lopez said.

“Jim Lewis and Ben Fine lied to the city council,” Lopez said. “That is why we won. The big bully could not push us around.”

On Friday, the jury found the city had failed to pay Lopez the money it owed him, according to the verdict. The city “unfairly and in bad faith interfered with Lopez’s right to receive the benefits of the contract.”