M Armando Monarrez, PE 019652

Case Number: 20210011

Violation of NAC 625.530(1) and NAC 625.545

In 2017, Mr Monarrez’s current client was contracted with the then President of CVL, to provide civil engineering services for a project in Henderson, Nevada. This project was a master improvement plan that included services such as hydraulic and hydrologic calculations, precise grading and wall plan, sewer plans, and technical drainage study. The contract for this project provided, “[i]f the site plan should change after CVL has commenced work, any revision required will be considered extra to the contract, subject to renegotiation of our fees.”

In 2018, when the engineering work was well underway, the President of CVL passed away. CVL was then purchased by Mr Monarrez.

On or about February 12, 2019, Mr Monarrez sent an email to the client stating that part of the original design for the Hills project would no longer work and that he (Mr Monarrez) had revised the design plan.

On or about February 13, 2019, Mr Monarrez sent an email to the client, informing them that his designs could save a significant amount of money. In addition, this email stated, among other things, that “Typically Value Engineering is rewarded at 50/50 between owner and engineer of all cost savings.”

On or about May 17, 2019, Mr Monarrez sent a letter to the client titled, “The Hills Value Engineering Agreement” (hereinafter “The Change Order”). The Change Order included a term that stated, “CVL will be compensated with 30% of all construction costs savings from Cut, Blasting, Fill, Over-excavation, Import, Export, and Rock wall construction.” The Change Order also included a term that stated, “Growth Construction shall make payments of $50,000 / month until the full compensation (30% of savings) has been paid, or prior to the recordation of the Final Map.” The Change Order stated that compensation would be based on the differences between a contractor’s bid price on the original design and the revised design.

On or about May 18, 2019, the client sent Mr Monarrez an email that rejected Mr Monarrez’s proposed Change Order, stating, “we are NOT in agreement regarding the attached change order.”

In the following months, despite the client’s rejection, CVL sent invoices pursuant to the requested but rejected Change Order.

Violations and Disciplinary Actions

Pursuant to NAC 625.545, it is a violation for a licensee to perform work for a client before the licensee enters into a written contract with the client. Here, no written contract existed between Mr Monarrez and the client with regard to Mr Monarrez receiving a certain percentage of the costs saved, and no written contract existed for CVL to invoice the client $50,000 per month. Even if Mr Monarrez believed a verbal agreement existed between him and the client, NAC 625.545 is clear that a written contract must exist before a licensee performs work for a client. Thus, Mr Monarrez’s actions were in violation of NAC 625.545, as he performed work without a written contract and sent invoices pursuant to his proposed Change Order that was not accepted by the client.

Further, pursuant to NAC 625.530, it is a violation for a professional engineer to fail to act as a faithful agent or trustee for each client in the professional engineer’s relations with his or her clients. As noted previously, the client had rejected Mr Monarrez’s proposal for the Change Order, but Mr Monarrez continued to submit invoices pursuant to the Change Order over several months. Such behavior is not acting as a faithful agent for a client in the professional engineer’s relationship. Accordingly, Mr Monarrez’s actions violated NAC 625.530.

Based on the foregoing, Mr Monarrez stipulates that he violated NAC 625.545 and NAC 625.530(1).

Pursuant to NAC 625.640, a disciplinary matter may be resolved without a formal hearing by a Stipulated Agreement. To that end, to resolve the complaint, Mr Monarrez and the State Board resolve this matter on the following basis:

1. Mr Monarrez’s Nevada license shall be suspended for twenty-four (24) months following entry of this Agreement, but with the suspension stayed and probation imposed for the duration of that time period. The stay of Mr Monarrez’s suspension may be lifted by the State Board, upon notice and the opportunity to be heard, should Mr Monarrez fail to abide by the terms hereof. Mr Monarrez’s successful completion of probation is expressly conditioned upon his full compliance with the following conditions of probation:
   
   1. Mr Monarrez shall submit detailed bi-monthly probation reports to the Executive Director of the State Board, which shall report any work completed in Nevada during the previous two (2) month period. A report shall be filed even if no work is performed in Nevada during the previous two (2) month period. The first report shall be due within two (2) months of the effective date of this Stipulated Agreement. Each report shall include client contact information and a copy of the contract executed for any work in Nevada, including the scope of work detail.
   2. Mr Monarrez shall pay an administrative fine of Two Thousand and No/100 Dollars ($2,000.00) within six (6) months of acceptance and execution of this Agreement by the State Board.
   3. Mr Monarrez shall pay the State Board Three Thousand Sixteen and No/100 Dollars ($3,016.00) as reimbursement of legal expenses expended by the State Board in this matter, within six (6) months of acceptance and execution of this Agreement by the State Board.
   4. Mr Monarrez shall, within one (1) year of the effective date of this Stipulated Agreement, successfully complete an intermediate level ethics course with Texas Tech University, Murdough Center for Engineering Professionalism, and submit proof of completion to the Board within sixty (60) days of completion of the course.
   5. Within thirty (30) days of license renewal, Mr Monarrez shall provide proof of completion of thirty (30) professional development hours that are required on a biennial basis for license renewal, pursuant to NAC 625.430, NAC 625.470 and NAC 625.480.