NOTICE: NOT FOR OFFICIAL PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL

AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

REVIVE CONSTRUCTION AND CLEANING, LLC, Plaintiff/Appellant, 

v.

SHEA-CONNELLY DEVELOPMENT, LLC, Defendant/Appellee. 

No. 1 CA-CV 21-0133 

Appeal from the Superior Court in Maricopa County

No. CV2018-093863 

The Honorable Daniel G. Martin, Judge

AFFIRMED

COUNSEL

Zazueta Law PLLC, Scottsdale

By Fabian Zazueta, Garrett Respondek 

Co-Counsel for Plaintiff/Appellant

Degnan Law PLLC, Phoenix

By Mark W. Horne, David Degnan 

Co-Counsel for Plaintiff/Appellant

DKL Law PLLC, Tempe

By David W. Lunn, Kathryn A. Lunn

Counsel for Defendant/Appellee

FILED 12-28-2021
REVIVE v. SHEA-CONNELLY

Decision of the Court

2 

MEMORANDUM DECISION

Presiding Judge Cynthia J. Bailey delivered the decision of the Court, in 

which Judge Jennifer M. Perkins and Judge Maria Elena Cruz joined.

B A I L E Y, Judge:

¶1 Revive Construction and Cleaning, LLC (“Revive”) appeals 

the judgment the superior court entered in favor of Shea-Connelly 

Development (“SCD”) for breach of contract. For the following reasons, we 

affirm.

FACTS AND PROCEDURAL HISTORY

¶2 SCD contracted with Revive to perform work on two 

construction projects, the Morningstar building in Glendale (“Glendale 

Project”) and the Park Place apartment complex in Fountain Hills (“Park 

Place Project”). After SCD became dissatisfied with Revive’s work on the

Park Place Project, it withheld payment on four invoices and terminated 

both contracts. 

¶3 Revive filed a complaint with the Registrar of Contractors 

(“ROC”) seeking payment of the four invoices. After a hearing, an 

Administrative Law Judge (“ALJ”) found that SCD violated the Arizona 

Prompt Pay Act, see Ariz. Rev. Stat. (“A.R.S.”) §§ 32-1181 to -1188; see also

A.R.S. § 32-1154(A)(10), (12), by failing to pay the four invoices, which

totaled $68,783.25. The ALJ made no findings on SCD’s allegations of faulty 

work. The ALJ recommended the ROC suspend SCD’s license unless SCD

provided documentation that it paid Revive on the four invoices. The ROC 

adopted the ALJ’s recommendation, and the superior court and the court

of appeals affirmed the ROC order. See Shea Connelly Dev. LLC v. Ariz. 

Registrar of Contractors (“Shea Connelly”), 1 CA-CV 19-0718, 2020 WL 

6503616 (Ariz. App. Nov. 3, 2020) (mem. decision).

¶4 Revive then sued SCD seeking further payment on the 

Glendale Project. SCD counterclaimed to recover the amounts it paid on

the Glendale Project and for damages it incurred in repairing Revive’s 

faulty work on the Park Place Project. 

¶5 Revive moved to dismiss SCD’s counterclaim, arguing the 

ROC’s decision precluded SCD from litigating whether Revive performed
REVIVE v. SHEA-CONNELLY

Decision of the Court

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faulty work on the Park Place Project. The superior court denied the 

motion, reasoning the ROC did not decide that issue. At a bench trial, the 

court denied Revive’s motion for a directed verdict and then found for SCD 

on its breach of contract claim related to the Park Place Project, awarding

$57,400 in damages for the amounts SCD paid to repair Revive’s defective 

work. The court denied both parties’ claims related to the Glendale Project. 

The court awarded SCD its attorneys’ fees and costs as the prevailing party

and denied Revive’s motions for new trial and reconsideration. 

¶6 We have jurisdiction over Revive’s timely appeal under 

Article 6, Section 9, of the Arizona Constitution and A.R.S. §§ 12-

120.21(A)(1) and 12-2101(A)(1).

DISCUSSION

¶7 Revive argues the superior court erred in (1) denying its 

motion to dismiss the counterclaim on the Park Place Project based on the 

preclusive effect of the ROC’s order; (2) denying its motion for a directed 

verdict on SCD’s counterclaim on the Park Place Project; (3) denying its 

motions for new trial and reconsideration seeking to reduce the judgment 

by setoff or recoupment; and (4) awarding attorneys’ fees to SCD. 

I. Issue Preclusion

¶8 Revive argues the ROC found Revive did not perform faulty 

work and thus the ROC order precludes SCD’s counterclaim on the Park 

Place Project. 

¶9 We review de novo the superior court’s application of issue 

preclusion. Crosby-Garbotz v. Fell, 246 Ariz. 54, 56-57, ¶ 9 (2019) (citation 

omitted). Issue preclusion applies when a fact “was actually litigated in a 

previous suit, a final judgment was entered, and the party against whom 

the doctrine is to be invoked had a full opportunity to litigate the matter 

and actually did litigate it, provided such issue or fact was essential to the 

prior judgment.” Chaney Bldg. Co. v. City of Tucson, 148 Ariz. 571, 573 (1986)

(citations omitted). Courts may apply issue preclusion to a decision of an 

administrative agency when the agency is acting in a judicial capacity and 

that decision resolves issues of fact “which the parties have had an adequate 

opportunity to litigate.” Campbell v. Superior Court, 18 Ariz. App. 287, 290 

(1972) (quoting United States v. Utah Constr. & Mining Co., 384 U.S. 394, 422 

(1966), superseded by statute on other grounds as recognized in Essex Electro 

Eng’rs, Inc. v. United States, 702 F.2d 998, 1002 n.7 (Fed. Cir. 1983)); see also 

J.W. Hancock Enters., Inc. v. Ariz. State Registrar of Contractors, 142 Ariz. 400, 

410 (App. 1984) (holding that an ROC finding that the contractor was 
REVIVE v. SHEA-CONNELLY

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4 

required to install insulation precluded the contractor from bringing a 

declaratory judgment action on that question). 

¶10 Here, the ROC did not assess the quality of Revive’s work on 

the Park Place Project. It concluded only that SCD violated the Arizona 

Prompt Pay Act by withholding payment on the four invoices. In that 

proceeding, the ROC did not permit SCD to litigate its allegation that 

Revive’s work was faulty. Moreover, the Prompt Pay Act is designed to 

ensure subcontractors are paid for the work performed, but the general 

contractor “retains all civil remedies for breach of contract and tort claims 

against a [sub]contractor” and prompt payment is not “conclusive that the 

work was properly performed.” Stonecreek Bldg. Co. v. Shure, 216 Ariz. 36, 

40, ¶ 18 (App. 2007) (citation omitted). For this reason, the superior court 

properly declined to apply issue preclusion.

II. Motion for a Directed Verdict

¶11 Revive argues the superior court erred in denying its motion 

for a directed verdict on SCD’s counterclaim related to the Park Place 

Project. 

¶12 A superior court may grant a motion for a directed verdict “if 

the facts produced in support of the claim or defense have so little probative 

value, given the quantum of evidence required, that reasonable people 

could not agree with the conclusion advanced by the proponent of the claim 

or defense.” Orme Sch. v. Reeves, 166 Ariz. 301, 309 (1990). We review the 

court’s ruling on a motion for directed verdict de novo. Warne Invs., Ltd. v. 

Higgins, 219 Ariz. 186, 194, ¶ 33 (App. 2008). We view the evidence and all 

reasonable inferences in the light most favorable to the nonmoving party. 

Id. (citation omitted).

¶13 Through testimony at trial, SCD presented substantial 

evidence to support its claim that Revive’s work on the Park Place Project 

was faulty. Steve Shea, the former construction manager for SCD, testified 

that Revive did not properly supervise its employees on the Park Place 

Project, that SCD had to send in its own supervisors to manage Revive’s 

work, and that Revive’s work was not done according to the contract’s 

specifications. SCD’s owner, Bart Shea, testified that Revive did not follow 

SCD’s instructions for placement of walls and size of cabinets, and that 

Revive’s work did not pass inspections. Based on this testimony, the court 

properly denied Revive’s motion for a directed verdict.
REVIVE v. SHEA-CONNELLY

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III. Setoff or Recoupment

¶14 After the trial, Revive moved for a new trial and for 

reconsideration, arguing for the first time that the judgment against it 

should be reduced by the amount the ROC ordered SCD to pay on the four 

invoices. The superior court denied the motions, reasoning that 

recoupment or setoff did not apply because the ROC order was not relevant 

to the judgment. 

¶15 Revive waived its right to recoupment or setoff by failing to 

raise this argument until its motion for a new trial. See Conant v. Whitney, 

190 Ariz. 290, 293-94 (App. 1997) (holding that arguments raised for the first 

time in a motion for new trial are waived absent extraordinary 

circumstances (citations omitted)); Kent v. Carter-Kent, 235 Ariz. 309, 313, 

¶ 20 (App. 2014) (holding that a party could not raise a new issue in its

motion for a new trial). Although Revive argued our decision in Shea 

Connelly was new evidence that put the recoupment defense at issue, our 

decision simply affirmed the ROC order as it existed at the time of trial. If 

the party knew about the evidence at the time of trial, the evidence is not 

newly discovered. See Black v. Black, 114 Ariz. 282, 285 (1977). Accordingly,

Revive waived its right to seek recoupment or setoff.

IV. The Superior Court’s Award of Attorneys’ Fees

¶16 Revive argues the court should have considered the ROC 

order when it determined the prevailing party and awarded attorneys’ fees. 

We review an award of attorneys’ fees for an abuse of discretion and “will 

not disturb the trial court’s discretionary award of fees if there is any 

reasonable basis for it.” Orfaly v. Tucson Symphony Soc’y, 209 Ariz. 260, 265, 

¶ 18 (App. 2004) (citations omitted). Because the superior court found SCD 

prevailed on its counterclaim and found that Revive was not entitled to 

recover on its Glendale Project claim, the court did not abuse its discretion 

in awarding attorneys’ fees to SCD as the prevailing party. 

V. Attorneys’ Fees on Appeal

¶17 We award SCD its reasonable attorneys’ fees under A.R.S. § 

12-341.01 and taxable costs on appeal upon compliance with Arizona Rule 

of Civil Appellate Procedure 21.
REVIVE v. SHEA-CONNELLY

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CONCLUSION

¶18 For the reasons stated above, we affirm the superior court’s 

judgment.