Appeals Board Hearing To Reconvene June 29 In Unquarked Red Tag Case

IMG_9462On the video of the Los Alamos Appeals Board broadcast by Los Alamos County Thursday are top row from left, County Utility Manager Philo Shelton and Planning & Zoning Commission Chair Terry Priestley. Bottom row, Asst. County Attorney Katie Thwaits, County Councilor Randy Ryti and Prashant Jain, owner or Sirphey LLC/Unquarked. Screenshot/Los Alamos Reporter


The Los Alamos County Board of Appeals convened virtually Thursday morning with Councilor Randy Ryti as chair. The hearing adjourned late in the afternoon without the issue being resolved and has been continued to June 29.

Ryti quickly made a motion to turn the chair’s duties over to Planning & Zoning Commission chair Terry Priestley for the hearing which was to determine if a red tag or stop work order placed at Unquarked Nov. 22 by County Building Official Michael Arellano was lawful.

Ryti was appointed to the board by Council Chair Sara Scott who had recused herself and County Utilities Manager Philo Shelton was appointed by County Manager Harry Burgess to take his place on the board.

Arellano is represented by Assistant County Attorneys Katie Thwaits and Kevin Powers. County Attorney Alvin Leaphart represents the board and Sirphey LLC’s Prashant Jain, the owner of Unquarked is not represented by legal counsel.

When Priestley took over as chair, he explained that the hearing was a quasi-judicial process and not a trial or a court hearing and that as such the rules of civil procedure and rules of evidence were “guiding but not binding” on the board.

“At the conclusion of the hearing the board will render a decision. I expect that one party will be pleased with the decision and one party may be disappointed. Regardless of the decision, the parties will be able to walk away knowing that the decision was impartial and fair. Both parties are able to present relevant evidence and make their case to the best of their ability. Both parties and all participants are treated with respect and as we proceed with the hearing please keep in mind that all participants are honest with high levels of integrity. The board will not tolerate any attacks on a person’s character, or an attempt to denigrate a person’s reputation. Let’s proceed with respect and professionalism,” Priestley said.

From 9 a.m. when the hearing commenced until a lunch recess, the board heard motions from both parties and accepted documents submitted into evidence by Unquarked.  Priestley then announced that the board was moving on to hear the merits of the allegations made by Sirphey against Arellano. He said the allegations in the briefs submitted by both parties are not evidence of the truth of those allegations and that it was time for the parties to support their allegations with the presentation of competent evidence to the board.

Priestley said Sirphey was required to show that the action by Arellano was arbitrary, capricious, or not in accordance with the law. He noted that Arellano’s action would be affirmed unless a majority of the board finds by substantial evidence that it was “arbitrary, capricious or not in accordance with the law”.

Board evoked the rule of sequestration which requires non-party witnesses to refrain from observing any of the proceedings before testifying.

Jain’s colleague Cortni Nucklos in her opening statement for Sirphey said not all work requires a permit.

“Painting, which Mr. Arellamo has attempted to regulate as a matter of record, tiling which Mr. Arellano has attempted to regulate as a matter of record and addressed in the appellee brief, freestanding furniture which Mr. Arellano has attempted to regulate is not under Mr. Arellano’s purview,” Nucklos said. “Simply referring to work as some vague bogeyman – does a disservice to board if it is not clear that that work does in fact require a permit. The way law is applied is an essential consideration. The law cannot apply to one business in a way that it has not been applied to other businesses.”

Nucklos said international, state and county code requires that stop work orders be applied for work being performed, “proposed and certainly not contemplated” as suggested in Arellano’s brief.

She said code requires that the person issuing the stop work order must carry out an inspection and provide written notification to the person against whom the order is issued. She said even the referenced communication from the state’s general construction chief, makes note of this requirement in his communication with Arellano.

“No party has suggested that this notification took place at the time of placement of the red tag that’s currently on Unquarked and according to the official records of Los Alamos County no inspection took place on Nov. 22 or Nov. 12 as referenced in the appellant brief,” Nucklos said.

She said the appeals board has no obligation to defer to Arellano.

“The fact that we are convened here today is evidence that he is not without a check in this system. It is fully the right and obligation of this board to determine if Mr. Arellano’s actions in placing the red tag were lawful. If you find that it was unlawful, capricious or arbitrary, the Board is obliged to act accordingly,” Nucklos said.

She said she was shocked at the number of demonstrably false statements made in Arellano’s brief with no attempt at any citation or evidence that Unquarked was required to submit a permit when written communications stated it could be a permit or a document.

“I was amazed to be informed that an email in which we stated that we painted and ordered door knobs was somehow an admission to some kind of wrongdoing. Again paint is not under the purview of Mr. Arellano per the (Construction Industries Division) explicitly published information on the matter. And he provided explicit permission to us to change door knobs without permit with several individuals present. This is not wrongdoing,” Nucklos said.

She said the suggestion made in Arellano’s brief that he Arellano has the ability to establish valuation “endows him with the ability to alter official filings from (Unquarked) with absolutely no notation or record of that alteration is unconscionable as is the suggestion that what the appellant recognizes as a permit for minor concrete work has a valuation of $8,000,” she said. “In case there were any doubts, we attached our contract with our contractor for $800 to our brief. This alteration of an official filing is an abuse of power by the appellee. The valuation of $8,000 was a clear abuse of Mr. Arellano’s discretionary ability.”

Nucklos said Arellano’s alleged action only enhances Unquarked’s concern that the placement of the red tag was “malicious and retaliatory in nature” and followed her interaction with County Community Development Manager Paul Andrus where she provided Andrus with “evidence of Mr. Arellano’s sanctioning illegal work at a number of locations”.

She said that evidence was provided to Andrus 36 hours before the placement of this red tag.

Nucklos said the claims Arellano puts forward to justify his red tag do not hold water.

“He claims he issued a stop work order because of free-standing, non-structural furniture, despite we volunteered its presence in May 2019 and were never asked to remove it. He says he issued it because of sinks that existed and were documented prior to our leasing the space, that he issued it because of unattached wall tile when tiles are explicitly not under his purview, that he issued it due to the presence of construction materials at a time when we had an active permit for work and no evidence that such materials had been used for illegal work was presented, and that he issued it because of pass-through between the kitchen and serving area that does not even exist,” she said. “Truly we’re scratching our heads about this imaginary pass-through to the kitchen. We’ve never encountered it and we’re quite familiar with the space.”

Nucklos said Arellano’s brief states over and over again that he gave Unquarked a stop work order for work that they “contemplated, not performed”. She said the code requires that it be for work being performed not contemplated and that Section 10 of the code prevents Arellano from “inventing new standards”.  She said Arellano can only enforce existing code, not create new code.

“If this board finds in favor of Mr. Arellano’s contemplation standard, it would truly be a dark day for this County. The board will have overruled international, state and local building codes and it would put Los Alamos as a community under a shocking level of control scenario where the thoughts and contemplation of residents falls under the purview of a local official with no basis in law. We certainly hope this isn’t the case and we certainly hope that standard is not created today,” Nucklos said.

Representing Arellano, Powers said he wanted to point out that it’s the board’s decision what the law is in consultation with County Attorney Alvin Leaphart.

“Only you and he are able to say actually what the law is. You may make assertions to it but it is your choice to actually determine what the law is and how it is applied to the facts and evidence presented today,” Powers said.

Began with a biblical proverb that points out that a person who tells one side of a story seems right until someone else comes and asks questions.

“As will be shown through the testimony and evidence, Sirphey has made numerous claims, accusations and assertions against the County both in this proceeding and in the public, which we will show to be inaccurate, untrue and in some cases simply false. This whole proceeding is to get to the truth of the matter – whether that red tag was properly issued on Nov. 22 for failure to obtain necessary permits and building permits and submission of plans,” Powers said.

He said there were two sets of laws that would be dealt with at the hearing – the County Code Chapter 10 and state law. He said the County Code pretty much guides most of what Arellano does on a day to day basis.

“However, he has a dual role under state law. As a certified building official, he is required, and for us to have certain permitting activities within the County, he has been delegated by the state to enforce other parts of the state’s CID statutes and regulations and those are provided in our exhibits,” Powers said. “ What I want to make sure you’re clear about is we have dual sets of laws competing at the same time. There may be some duties required for Mr. Arellano that are related to the state CID regulations and those outline certain things, behaviors and requirements that he must follow. However he is primarily an employee of the County as the chief or the certified building official, and has those duties provided under Chapter 10 and other parts of the County Code.”

“Contrary to what Sirphey claims, this case is not about any code of conduct violation, IPRA response, prior permits for Blue Window or even the Boese Brothers location or the County’s entry of property by the Fire Department to respond to a faulty alarm. It is only about the facts and evidence leading to Mr. Arellano’s decision to issue the red tag on Nov. 22. That is the sole purpose here today,” he said.

Powers asked that the board keep that in mind and suggested that it is Sirphey‘s duty to meet their burden by showing substantial evidence that Arellano’s decision was arbitrary capricious and not in accordance with the County Code or state law.

“It is their burden alone to show and prove by substantial evidence that his decision was unwarranted at that one moment in time. As a state and nationally certified building inspector, Mr. Arellano has worked in this industry for over 30 years. He holds a GB98 contractor license himself which is suspended during the tenure he holds as a certified building official. What that means is because he is an administrative professional in this industry charged with enforcing these laws, certain deference by this board must be given to his decision,” Powers said.

He said the reason behind the stop work order issuance is that “Arellano decided that work that had been done and commenced at that time, over a period of time, led him to the conclusion that a permit was necessary”. He said Sirphey even recognized that a permit was required as would be shown in the evidence in their submission of a permit application and that there’s a set of standards on how and what is to be included in that permit application.

“There’s a standard template that’s given to each applicant for a commercial remodeling of what information is required. Here the facts will show that Sirphey did understood what those were. It did understand that this was a commercial remodeling and that certain things such as new kitchen equipment, new accessories had been moved into the facility and we will show that by the evidence,” Powers said. “All of that led to Mr. Arellano’s decision to issue the red tag on Nov. 22.”

He said the County employs certified, professional individuals to make those decisions and that Arellano has worked numerous years in the industry holding the position with the County and other jurisdictions and that Arellano has been a licensed contractor himself.

Powers said that even on Nov. 12, Arellano was ready to issue a red tag because of what he had observed at the Unquarked location.

“That was one of the reasons we had asked for a site visit so that all of us could see what was going on at that moment in time and what helped make his decision to issue that red tag,” he said.

He said as could be seen in the briefs, Arellano worked effortlessly to try to get Jain and Nucklos to understand that a permit was required.

“There is evidence that will be presented that shows clearly what was required. I believe it’s still in the emails from David Martinez on Nov. 18 and Nov. 20 outlined the items that are required. If those items are provided the red tag will be removed and Siphey can continue with their construction so long as those plans and specifications meet the requirements for a commercial remodel, especially a kitchen where fires are easily present and public health is at risk,” Powers said.

He said it is important to understand why these rules, codes and national standards apply to buildings such as restaurants.

“Without adequate information, Mr. Arelllano can’t tell what was going to be installed, when it was going to be installed, how it was going to be installed and by whom it was going to be installed. We will develop these facts in the case and we hope that you will keep in mind the one real issue in this case. Even though Mr. Jain and Miss Nucklos claim that the law does not require that, they are not licensed individuals qualified to make that call. Only if they hired an engineer or architect to make those decisions could they then enter into a discussion with Mr. Arellano to say why not. What we have before us today is the claim by lay witnesses that no activity occurred,” Powers said.

Following opening statements, Unquarked entered multiple exhibits into the record and after a great deal of discussion on how things should proceed, Jain began to present his testimony. Although as Leaphart explained many times, the rules of civil court procedure were guiding and not binding for the board, many difficulties ensued with Unquarked being pro se and Arellano having a team of two attorneys. Leaphart graciously assisted Jain by explaining certain procedures and commenting that he didn’t see the need to be so stringent as to follow to the letter of the law the rules of civil procedure.

At one point Arellano’s team pointed out that Jain and Nucklos should not be allowed to testify because they had not included themselves on the list of witnesses they submitted prior to the hearing. Leaphart said the thought the board wanted to get to the bottom of the situation and that it would be appropriate for Jain and Nucklos to testify under oath and be subject to cross examination.

The remainder of the day was taken up with Jain’s testimony followed by Thwaits’ cross examination. As may be observed in the County’s video of the proceedings, the tone became contentious and argumentative.

View videos from the hearing here.