District Judge, Sirphey Attorney Voice Concern During Hearing About County’s Handling Of Red Tag Appeal


Many members of the community will be surprised to find out that the Los Alamos County and Sirphey, LLC are still involved in a District Court battle over a red tag placed September 9, 2019, on the Mari Mac Village Shopping Center property where Sirphey owner Prashant Jain planned to reopen his popular wine bar, Unquarked.

Following two lengthy proceedings in six months, the case filed by Sirphey against Los Alamos County Council and former County building Michael Arellano has still not reached its conclusion; however, it appears from what First Judicial District Judge Jason Lidyard has said in Court that that he does not like how Los Alamos County has handled the administrative process of the Sirphey red tag hearings before the County’s Board of Appeals. The County is represented by attorneys Donald A. DeCandia and Terra Hittson. Sirphey is represented by local attorney Phillip J. Dabney. 

Judge Lidyard seems to be consistently concerned that Sirphey has never received a final written decision or order from the County outlining the findings of the County’s Board of Appeals. The attorney retained by the County, Terra Hittson, maintains that final decision was put into written format in the form of minutes that she said were publicly available on the County’s website or by request. 

Judge Lidyard noted that he had listened to the entire 25 hours of the Appeals Board hearings.

“A great deal of what I heard from the County Council after the Board of Appeals had made a decision was Ms (Cortni) Nucklos saying, ‘How are we supposed to appeal something that we don’t even know what we’re appealing. There was no written order that was provided. It doesn’t tell us what was decided. How are we supposed to argue on an appeal without such an order?’” he said.

He also asked Hittson if because a non-lawyer erroneously cited to a statutory provision for authority to support their position regarding the need for a written order with findings, Sirphey did not properly preserve the issue in a procedural due process claim not supported by a statutory provision. 

“Listening to the proceedings for as long as I did, it was a bit disheartening to see our government at work and to see how that process was actually provided to Sirphey in the way that they were able to present things and raise questions and the way the three individuals that I assume, based on the way I observed them conduct themselves, are not lawyers and have no understanding of the law, decided to act as judges in some fashion and put up a lot of roadblocks in many places for a whole development of the evidence,” Judge Lidyard said.

He noted that Sirphey may have been allowed to sit and listen to the Board of Appeals deliberate.

“I also had the opportunity to listen to this Board of Appeals deliberate and each of them, I guess was given, I guess, an opportunity to talk about what they thought was important, but at no time did they actually say, ‘And these are the reasons why we make this conclusion’. Not even one of them individually said, ‘This is the reason why I believe that the decision should be this’. They just sort of talked,  ‘It would have been helpful to hear this,’ or ‘It was interesting to hear that’.   And the other one would go and talk for a few minutes and then the third one talk for a few minutes and then the end was, ‘Any motions? Oh yeah, I make a motion to find that this was not arbitrary and capricious and supported by law. Any second?  Second.  Alright. Thank you. Case closed’. There wasn’t any type of discussion about, ‘We all agree that these are the reasons for which blank decision should be made’. It was three different people giving their own sort of discussion without actually laying down what their reasoning was, and then making a general motion, and then getting a second and then finding that was sufficient to make their ruling, and thereafter providing no follow-up with the specific reasons which they all agreed upon,” Judge Lidyard said. 

He also responded to Hittson’s assertion that there were no findings to be made by the Appeals Board.

“’Here it is, judge, here’s the whole thing. Figure it out. We decided that it was approved or disapproved. You go figure out what it is we based our conclusion on, and then you determine whether or not there is any substantial evidence to support it,’” he said.  “So, it’s the Los Alamos position that all you have to do is make a decision and not specify the reasons why. And then, it’s the District Court’s obligation to figure it out based on the record, which could be any number of thousands or hundreds of pages.”

Lidyard was also concerned that a statement in minutes of the Board of Appeals hearing, that a motion was made, seconded and passed to deny Sirphey’s appeal and that a statement was made that Sirphey failed to show that the issuance of the red tag was unlawful, arbitrary and capricious. 

“Just saying that he didn’t present evidence doesn’t give us an understanding of what the basis of the ruling was . . . This is why we need facts they can focus on, and we can determine in looking in the record, was “Was this supported or unsupported, or is this not supported at all and that the Board of Appeals just came up out of thin air with this idea?’” he said.

Later in the hearing, while the issue of whether or not the Sirphey appeal involved substantial public interest was being discussed, Lidyard said he believed all the citizens of the County have a great interest in knowing that the Board of Appeals that they take the decisions of County officials before to determine that County officials are acting within their lawful authority will be decided pursuant to the ordinances that govern their existence.

“Especially Ordinance 10-84 which specifically requires that the Board make findings and a decision, and it be forwarded in writing to the Council, and that thereafter the Council shall review the Board’s findings and decisions to determine whether or not they affirm or reverse the decision of the Board of Appeals. When ordinances are written to direct government bodies to perform their acts of their official capacity in a certain fashion, we as citizens of the community which are governed by those boards, demand that they follow the dictates of the ordinances which control their authority,” he said. “This particular one requires that the Board make findings and a decision, and as the Court has thoroughly discussed with the parties, the decision that’s contained in the minutes does not contain any findings of fact that this Court can identify.”

Judge Lidyard said to deprive a leaseholder of use of the property they have leased requires due process, and the Court believes that due process requires that reasons for the determination are supported by evidence.

Sirphey’s attorney Philip Dabney noted that in an April hearing on the case, Hittson had admitted on the record that there was no written decision from the County and that Judge Lidyard had granted Sirphey’s motion to remand the case back to the Board of Appeals because of that. 

“So it’s perplexing to me how counsel could suddenly come up with a decision after the Court has already ruled on the prior motion and cites to minutes that my client tells me were never uploaded into the County Council’s system for a year after that meeting and were never provided to Sirphey at any point in time. So this written decision which basically says nothing was created out of whole cloth maybe after the last hearing. I don’t know. This is coming from the lawyer who is not licensed to practice law here and is here on special permission and who has accused me of violating Rule 11, so I’m really concerned about that,” Dabney said.

He said he would like to go back to the record Judge Lidyard had reviewed and point out a few things from it.

“One of the issues in this case, is mootness, and I think that mootness was the planned course of action by the County that started with Michael Arellano, at the very beginning of the case. You don’t have all the exhibits because counsel didn’t provide them to you. Apparently you didn’t ask for them so she didn’t give them to you. We asked for them, and they gave them to us. Those exhibits include emails from my client to Michael Arellano, the County Building Official, that advised Michael Arellano that during the beginning of this project, before it was ever started, that they had a deadline to get open,” Dabney said. 

He said Sirphey was leasing out an existing restaurant that already had all of the functional components for a restaurant in it, so they wouldn’t have to get a building permit so they could open the place quickly and start doing business. 

“Their lease gave them a specific deadline by which they were to open. Michael Arellano knew this. Michael Arellano had previous communications with the manager of the prior space where Sirphey’s wine bar called Unquarked leased some space. That was a guy by the name of Terry Salazar. Terry Salazar wrote a secret email to Michael Arellano saying, “Hey, I just want you to know that these guys from Sirphey are going to try to open up a place over at Mari Mac really soon, and I don’t trust them, so don’t tell anybody I’m sending you this email, but keep an eye on them”. It made it clear, the email traffic between those two, that they were buddies, they were good friends, and they were going to help each other out to keep this restaurant from ever opening,” Dabney said.

He said that evidence was never presented to the County because the Board of Appeals refused to consider it. 

“If you go through the beginning of the hearing, one of the first things you hear from the chairman of the Hearing Board is that he’s going to determine, and the Board is going to determine, that everybody who testifies is telling the truth. The primary witness in this case for the County was Michael Arellano, so he was given the blessing of truth without ever having heard his testimony,” he said.

Dabney said his client informs him that 75 percent of the evidence that Sirphey tried to present at the hearing was shot down.

“A significant portion of the evidence they wanted to present, was evidence of disparate treatment. In other words, other businesses doing similar things at about the same time in Los Alamos County were being allowed to do those things without a building permit, but Sirphey was not allowed to do anything and was shut down with a red tag notice, even though they weren’t doing any building, by this building official who had a friend who wanted him to do that,” he said.

Dabney said the other thing the Court probably heard in the recording of the hearing, is that “the building official of Los Alamos County was given substantial deference for everything that he did”.

“The County left him alone to do what he wanted and boy, did he take advantage of that, in this case and in other cases, particularly in this case. He kept this place from being open, knowing that by doing so, my client would eventually lose his lease. He did that for a particular reason. But the other thing he did is going to be the subject of a motion to open the record at the Hearing Board below when you send it back, is he got himself a driving under the influence with a vehicular accident in Rio Arriba County, months before this hearing took place. Either he hid that from the County or the County officials hid it from the County Councilors because they didn’t know about it. And of course, what comes along with a DUI is a one-year revocation of your driver’s license, especially if you refuse to submit to the blood alcohol test, which he did,” Dabney said.

He said that happened months before Arellano red tagged the property and that it’s likely under the law that Arellano he was operating without legal authority because he didn’t have a driver’s license and he had a “terminable offense in the eyes of the County”.

“But for some reason he kept working there until he was convicted at the District Court level in a DUI trial earlier this year. Then finally the County terminated him and he no longer works for the County. But those were the kinds of things they just let him get away with for years and years. That’s what happens when you give too much deference for a public official. This person had too much deference, and this is what gives rise to the likelihood that this kind of thing will happen again in this County, because they’re going to continue to give deference to whoever the new building official is. And that building official may act in the same capricious way that Michael Arellano did,” Dabney said.

Dabney said Sirphey had tried to present evidence about Boese Brothers Brewery, the business that took over the former Unquarked space that was managed by Terry Salazar. 

“That space did not have a commercial kitchen in it. My client learned that the County was letting Boese Brothers build a commercial kitchen in that space without a building permit. Yet my client was trying to build a piece of furniture and he got red tagged without really any explanation as to why he got red-tagged and the explanation, as you saw, changed multiple times during the course of that hearing. Nothing in writing was ever provided by Michael Arellano saying, ‘This is why I red-tagged you, and these are the things that you need to do to get that red-tag removed’”, Dabney said.

He said the reason for the motion by the County to dismiss is that Sirphey signed an agreement to terminate the lease with Kroeger to avoid a second litigation and paying a lawyer for months and years when the lease was clear that they had “until a certain date to get the place open and it was already a year past that date, and they had given him lots of time”. Dabney said the County had known long before that, that Sirphey was going to lose their lease and had done everything they could to drag out the process as long as possible to make sure that happened.

“While that was going on, the County was entering into some three-party transaction with a buyer of the Mari Mac property, and Sara Scott, the chairwoman  of the County Council publicly stated before this lease was terminated that the buyer that the County helped facilitate for the Mari Mac property intended on demolishing the buildings and replacing them with a mixed use project, much to the chagrin of my client who was still trying to salvage his lease, and much to the chagrin of the remaining tenants,” Dabney said. “The bottom line is the County was involved in that process that created an extra incentive for them to create a process that wasn’t fair to my client.”

He said the County wanted to back whatever Arellano was doing so they “let him run this show and he ran it right into the ground” and caused substantial harm to Sirphey.

Dabney later stated that he thinks what the Court has to do is send the case back, as was previously ordered, because “it’s not moot when the County gets involved in causing the mootness”.

“It’s clear that their conduct is the kind of conduct that causes harm to the public, is likely to happen again, and is also capable of evading review, even though I don’t think that’s a requirement under New Mexico law. It also affects substantial public interest. Counsel says that this ordinance isn’t a substantial public interest because it’s just an ordinance, but that ordinance was written to protect the due process rights of the citizens of this County, and she wants to throw water on it. Well, it’s due process, basic due process. My client did not get it in this hearing, did not get it from Michael Arellano, it’s going to happen again,” he said.

Dabney said his client is still looking for a place, but that there’s very little commercial space available in Los Alamos County to do the kind of thing that he wanted to do.

“That’s why he took the space that he took because it had all of the kitchen equipment there, ready to use. There was just a few things to be done. He walked through the building with Michael Arellano, got a list of the things that needed to be done, got the one building permit that he believed he needed to get that stuff done, got it done, and then he got a red-tag. I believe that this case is very clearly a due process violation for my client by the County. It needs to go back with some specific instructions by the Court. I think you should instruct them to reconvene a new hearing with objective officers to hear the case and start over,” Dabney said.

Judge Lidyard later went back to the ordinance requiring the Board of Appeals to forward its findings and decisions in writing to the County Council, Sirphey as the appellant, and Arellano.

“The Board is the fact-finding body, and then, they appeal to the Council. Council either affirms or denies the Board decision. So, if the Board doesn’t make findings and just makes some conclusionary decision; and then, it goes up to the Council and they don’t have anything to review in the way of findings except the conclusionary decision; and then, they just affirm something that, you know, doesn’t I guess, meet the requirements of 10-84(B), then it doesn’t really matter who you’re talking about – the The Board of Appeals decision or the County Council decision. A failure of the Board to follow the ordinances and then submit something to the County, which doesn’t satisfy their obligations, and then the County then just merely affirms it without holding the Board to their obligation. You know, aren’t both in error? Isn’t the issue resting on the County Council, but then, also in turn, on the Board of Appeals?” asked Judge Lidyard.

In denying the County’s mootness motion, Judge Lidyard said after reviewing the record, the Court believes that there is an issue of substantial public interest.

“I believe that all citizens of the county have a great interest in knowing that the Boards of Appeals that they take the decisions of County officials before to determine that our County officials are acting within their lawful authority will be decided pursuant to the ordinances that govern their existence – Specifically, Ordinance 10-84, which specifically requires that the Board makes findings and a decision, and that it be forwarded in writing to the Council, and that, thereafter, the County Council shall review the Board’s findings and decisions to determine whether or not they affirm or reverse the decision of the Board of Appeals ,” he said. “When the ordinances are written to direct governing bodies to perform their acts of an official capacity in a certain fashion, we, as citizens of the community which are governed by those boards, demand that they follow the dictates of the ordinances which control their authority. And this particular one requires that the Board make findings and a decision. And as the Court has thoroughly discussed with the parties, the decision that’s contained in the minutes does not contain any findings of fact that this Court can identify.”

He said this is also, in the Court’s mind, an issue of procedural due process of a constitutional nature. 

“We are talking about the deprivation of a lessee to make use of the property he is leasing in conducting business. And to deprive a leaseholder of the ability to use the property which he or she has entered into a lease agreement to utilize is a deprivation of one’s property, and in order to do that, one is obligated to provide that individual due process,” Judge Lidyard said. “And this Court believes that due process requires that the reasons for the determination be supported by evidence. And without stating what the reasons for one’s determination are, then the individual who’s being deprived of the property interests is not able to know that the reasons are supported by evidence.”

The hearing was continued to Tuesday, Nov. 9 when Judge Lidyard will listen to the County’s objections to an order proposed by Sirphey. Watch the Los Alamos Reporter for more coverage of the case.