A five-year-long battle between a Santa Maria-based construction company and Pismo Beach government ended in the company’s debarment, but legal unrest between the two is ongoing.
“We agree with city of Pismo Beach Councilmember Stacy Inman. Based upon the applicable legal standards and facts at issue in this matter, debarment is not applicable and not warranted,” attorney Patricia Wolfe wrote in a statement to the Sun. “We intend to address this matter in the applicable court order.”
Wolfe works for Hunt Ortmann, a law firm that specializes in construction and labor issues. The firm represents Santa Maria’s V. Lopez Jr. & Sons Inc.
Pismo Beach hired Lopez in 2017 to replace the Five Cities Lift Station, perform maintenance on six lift stations, and repair elements of the wastewater collection system. Lopez worked on the project in conjunction with Water Systems Consulting (WSC), a project designer appointed by the city. But the city alleged that Lopez caused delays to the project due to poor planning and a lack of understanding about municipal systems and public works.
In a 4-1 vote on March 21, the Pismo Beach City Council declared Lopez “non-responsible” and debarred the company from working on city projects for the next five years.
Councilmember Inman was the sole dissenter.
“I don’t think there was any evidence of untrustworthiness, but there were definitely problems with quality at the Spyglass Park … at the Five Cities Lift Station,” Inman said at the meeting. “Those are my concerns, but I’m not sure they rise to the level of debarment.”
This is the second time that Pismo Beach has debarred Lopez for the same set of issues dating back to 2018. In 2020, the City Council unanimously voted to debar the company—a move that City Manager Jim Lewis called “very rare.”
Scott Baker, the attorney who represented Lopez at the time, filed a petition contesting the city’s decision.
Wolfe told the Sun that the San Luis Obispo County Superior Court “ruled there were due process violations” and threw out the debarment. Hunt Ortmann attorney John Darling, who also represents Lopez, called the first debarment “unconstitutional” during the defense hearing at Pismo Beach City Hall on March 7.
With the help of a 130-slide presentation, Darling alleged that city staff unfairly placed the blame on Lopez while refusing to study the actions and responsibilities of project designer WSC. He further stated that city Public Works Director Ben Fine and city engineer Chad Stoehr “concocted” a debarment story with WSC and colluded with Fine’s Grover Beach counterpart Greg Ray to punish Lopez.
Grover Beach hired Lopez in 2017 for a $6.3 million city project that also faced delays.
“Lopez, as any other public works contractor would do, alerts Grover Beach that the project is going to cost more and take longer because of the problems with their plans and specifications,” Darling’s presentation read.
Despite background check conversations with Ray in 2017, Fine hired Lopez. Darling told City Council that Fine was predisposed to dislike the construction company based on Ray’s experience with them. He presented excerpts from a 2017 deposition transcript detailing Fine’s recollection of his conversation with Ray.
“I was told the end product you will get will be satisfactory; the road to getting there will be miserable; if you can find a way out of the contract, I highly recommend you do so,” the transcript read.
At the March 21 meeting, council members flexed their discretion about the debarment decision, as previously suggested by Pismo Beach City Attorney David Fleishman.
“What kept coming back to me is the definition of ‘satisfactorily perform,’” Councilmember Scott Newton said. “To me, that doesn’t mean, ‘What does the finished project look like?’ It’s the path to getting there. To me, that path to completion was where all the issues rose.”
Newton added that the “path” wasn’t satisfactory, prompting agreement from Mayor Ed Waage.
Pismo Beach spokesperson Jorge Garcia told the Sun that the city has no comments on the issue.
