BY MAIRE O’NEILL
Sirphey, LLC and Los Alamos County were back in First Judicial District Judge Jason Lidyard’s court Wednesday afternoon for a virtual hearing on a motion for sanctions against the County filed by Sirphey’s attorney Philip Dabney. Although a 20-page document was issued last week by the Board of Appeals, there remains the case that was filed by Sirphey in District Court a year ago, which needs to be resolved.
Judge Lidyard first upheld a Sirphey supplemental brief presenting new evidence in support of the sanctions saying he believes that the information “is relevant to the issue that is before the Court currently as to the reasons why there was no written findings or conclusions made, the timing in which that decision was made, and the reasons therefore”. He said the information presented appears to the Court, specifically based on the timing of the occurrences to be such that Dabney would not have had the information at the time of drafting his initial motion order to file, so Judge Lidyard admitted the briefing.
On the motion for sanctions itself, Judge Lidyard ended up taking the arguments made by Dabney and the County’s retained attorney Donald DeCandia under advisement and will announce his decision Feb. 9. However, four times during the hearing Judge Lidyard referred to the County’s decision not to have written findings of fact and conclusions of law issued by the Board of Appeals as “questionable”.
Dabney told the Court that the gist of the sanctions motion revolves around Section 10-84 of the Los Alamos County Code and whether and to what extent the law firm retained by the County and the County itself knew of the requirements of that ordinance at the time that the Sirphey is appeal started.
“My client initiated this appeal because he could not get any relief at the County Council level or the (Board of Appeals) level and they still didn’t have written findings… Instead of recognizing that and contacting me, counsel filed a motion to dismiss the appeal on multiple grounds, one of them being that the appeal was filed too late. In the original motion that was filed, the attorney for the County cited Section 10-84 as a legal basis of the motion. The operative language in 10-84 that gives rise to the Rule 11 sanction is that ‘the Board’s findings and decision shall be forwarded in writing to the Council with copies to the appellant and the Building Official’,” Dabney said, adding that that’s the requirement the County placed in its own ordinance.
He said Sirphey and the County spent the next year in District Court at the pleasure of the County arguing about whether or not minutes constitute written findings.
“There’s no legal basis for that argument whatsoever. The minutes of the appeal board contain a conclusion, they do not contain written findings; they never did. The evidence presented in my motion for sanctions, is that the County Attorney drafted a scheduling order that appropriately complied with Section 10-84 but then revised it and took out the language requiring findings of fact and instead added language that only requires admitting a copy of the decision in writing to the County Council instead of a copy of the findings and decision,” Dabney said. “I don’t think that any lawyer who’s practicing law with a license can say they don’t know what a finding is.”
He said findings are elemental and elementary in terms of understanding what a decision is by an administrative decision-making body.
“For whatever reason, the County Attorney in the proceedings below and the County’s lawyer in this proceeding decided that findings were not necessary and instead tried to construct a baseless finding that somehow conclusions in a set of minutes constitute the written findings that satisfies 10-84 and due process. Had the County and the County’s attorney recognized at the outset of the appeal, that the appeal was not right, they would have contacted me and we would have stipulated to remand the case back down to the hearing board for a set of written findings,” he said. “Instead of doing that, the County and its lawyer chose to pursue this ridiculous course of action at the District Court level when they filed a motion to dismiss that defended to the death the County’s right to not submit written findings in the face of their own ordinance.”
Dabney said that when the County got the letter allegedly from Sirphey’s the landlord saying that Sirphey’s lease was terminated, they took the bad faith position that they had just determined that the lease had been terminated when they knew all along that it was in the process of being terminated and they knew from the prior proceedings Sirphey had a set time in which to open for business.
“Instead of recognizing that, sent me a letter threatening sanctions against me and my client because I didn’t tell the Court that the lease had been terminated and therefore the case was moot, and then threatened in their letter to file additional motions which they actually did file – the motion for reconsideration, a motion to challenge the order that we prepared and presented to the Court, and a motion seeking interlocutory appeal of this pretty much cast in stone issue of whether the findings are necessary when the ordinance and due process requires it,” Dabney said.
He told Judge Lidyard that Mr. DeCandia sent the Court a copy of the letter he sent Dabney but that “he blocked off a portion of it and put in there that it was settlement negotiations”.
“I contend that it was not settlement negotiations. Part of the threat was that if my client would dismiss the appeal and release all claims against the County, they would pursue that course of action against my client. So that’s part of the sanctionable conduct. Its abusive conduct intended to bully my client into submission under circumstances where they’ve already negatively impacted his due process rights by failing to timely make a decision and timely put it into writing during the hearing process below,” Dabney said. “Instead of doing all their best to correct that failure, they instead rested on that failure and continued a process in District Court that was intended to cause my client to spend thousands of dollars in attorneys’ fees and spend months and months in Court battling against behemoth Los Alamos County and their lawyers under circumstances where none of it should have happened in the first place. That’s the primary argument of why sanctions are appropriate.”
Dabney said his contention is that both the County and their lawyer are responsible for the Rule 11 violation because they both knew of the existence of 10-84.
“Certainly the County knew because they passed it and they put language in their procedural order that references the chapter in which this order exists and the County Attorney wrote up a procedural order that required the written findings and conclusions and then never had the Board of Appeals sign it. Then we find out on (January 19) that the County Board of Appeals didn’t sign written findings because the County Attorney told them they didn’t have to so they relied on his advice,” he said. “And then he went over to the County Council and apparently made recommendations to them to affirm the decision of the Board of Appeals even though there was no written findings. Then the case is appealed and the first motion by the County references the same ordinance that requires written findings and they make all these crazy arguments why they don’t’ have to issue written findings. None of which constitutes any legal basis, any factual basis or any rational argument for the extension of existing law.”
Dabney said that’s the conduct that started the sanction process and continued it through the end of the case up through the remand by the Court and resulted in the case taking about a year to be decided.
“My client suffered harm at the hands of the County before this case ever went up on appeal, but in order for my client to get any kind of redress, my client has to exhaust his administrative rights or administrative appeals and that requires that the County issue written findings so that they can then challenge them at the County Council which is what is going to happen next. The failure to issue written findings at the (Board of Appeals) level isn’t something that you can sanction the County or the attorneys for, it’s the failure to recognize that error and instead embark on a course of action that cost my client nearly $30,000 in attorneys’ fees at to deal with it at the District Court level – that constitutes the sanctionable conduct.”
Dabney asked the Court to award sanctions and set a scheduling order for the submission of evidence of the attorneys’ fees that were incurred by Sirphey defending the alleged Rule 11 violation course of action over the last year. He said would submit the oral attorney fee details to the Court in camera and a redacted copy to opposing counsel because his bills are usually detailed and include attorney-client privileged information.
“I guess the bottom line is this appellate process should never have been required and once it was initiated the County had an obligation and the County’s lawyers had an obligation to recommend to them that the case be immediately back to the (Board of Appeals) for findings instead of dragging it out for an additional year and causing my client to incur another $30,000 in attorney fees,” Dabney said.
DeCandia told the Court the issue is whether the County’s motions to dismiss was baseless.
“What that means is not well-grounded in fact, not warranted by existing law or an argument for its extension,” he said. He said the burden is on Sirphey to establish all of this by evidence in the record and that Sirphey does not come close to meeting this standard.
“All of our filings were well-supported in law and fact. They were all filed for proper purpose and they certainly were not filed to delay this case; these were motions to dismiss in order to terminate the proceedings,” DeCandia said.
He went on the give an overview of the filings in the case and said the idea that the County knew that Siphey had abandoned its possessory interest in the property is false and illogical. He said Sirphey tried to prevent anyone from finding out and tried to convince the Court that they still had a possessory interest at the April 2021 hearing where (Dabney) told the Court that the stop work order prevents Sirphey from doing any kind of work on his tenant improvements.
“A stop work order wasn’t posing any issue for doing work because Sirphey had abandoned that property,” DeCandia said. “…Had we known of the termination, we would have filed our motion to dismiss right off the bat if Sirphey or its counsel would have shared that termination agreement with us or advised the Court that it no longer had any right to occupy the premises.”
With regard to Sirphey ‘s argument that the County should have immediately volunteered to remand the case, DeCandia said this argument essentially imposes on the County an after the fact duty to know precisely how the Court was going to rule ultimately in the case, and to not present any of the arguments it had and to offer remand at the outset of the case. He said this is not the standard for a Rule 11 motion. He said the County had asked how it could possibly be held to the standard of volunteering remand when Sirphey itself never requested that relief, but that there was no answer forthcoming in the reply brief.
“On the issue of requirements of Ordinance 10-84, certainly our position that the Board of Appeals complied with the requirement of ‘findings’ in the decision and that it did so in the written minutes of their proceedings. What the minutes read is that the appeal of the appellant is denied, the appellant failed to show that the issuance of a red tag on November 22, 2019, was unlawful, arbitrary or capricious, DeCandia said. “We hear Mr. Dabney’s argument about how a lawyer should know what findings are, well we see them every day when courts deny motions. They say, ‘This Court finds that the motion is not well taken and should be denied or the motion is well taken and should be granted and that’s exacted what the Board of Appeals did and they deliberated in open session – all of that was available.”
DeCandia said what Sirphey was appealing was not the Board of Appeals decision but the Council’s decision. He said that was the argument Sirphey raised in opposition to the motion to dismiss – that Council had to create findings and issue a written decision.
“That is not in the ordinance. It does not say Council has to issue a written decision. When we talk about the ordinance and this board’s ultimate decision that the County Board of Appeals needed to issue more detailed findings and conclusions, just because the Court disagreed with the scope of the Board’s findings and conclusions doesn’t make our arguments baseless,” he said. “Just because the Court decides to remand the case, doesn’t mean that we could have predicted that result, especially when Sirphey never requested that relief in its briefing”.
When DeCandia began to discuss Sirphey’s first District Court case, mentioning that it was dismissed because Sirphey had filed it pro se, that’s then Judge Lidyard stepped in.
“I understand that’s the way it got dismissed because Sirphey didn’t have counsel but when you look at the statement that Prashant Jain made attached to his notice of appeal, the entirety discusses a fact that there’s a lack of written findings and conclusions, that he doesn’t know what to do at this point in time because there hasn’t been a written decision made and he is filing this because he feels that there may be a potential that he be deprived of his ability to appeal if he doesn’t file something,” Judge Lidyard said, adding that Jain says multiple times throughout his statement that he is concerned that the failure of Los Alamos County to provide a written decision within the norms of New Mexico law, will impact his rights to due process, but still asks the Court to hear the appeal.
“The whole issue underlying the appeal in this matter revolves around this inability for anyone to know if a written decision has been made. Even when I spent hours upon hours upon hours listening to the Board of Appeals go through an arduous process of hearing evidence and to make the decision at the end to not prepare an announcement of what the decision was at that time and then to hear that the Council then grappled with the difficulty that they were facing of trying to affirm or reverse the decision of the Board of Appeals because they didn’t know what the findings and conclusions were,” Judge Lidyard said.
He said after one member of Council questioned whether Council had been able to whether or not Council knew the reasons the Board of Appeals decision was made, Council opted to affirm it anyway. He noted that Council may not be obligated to have issued written decisions under 10-84, but that the Board of Appeals was obligated to do so.
“We are failing in the Board of Appeals, we have a failing to correct the issue at the Council level, and then Prashant Jain, attempting to do whatever he can to salvage the appeal, filing something when he hasn’t gotten a written decision yet,” Judge Lidyard said.
He said he guessed what Dabney was saying was that all along the underlying issue in the case has been the lack of written findings and conclusions.
“When the matter then comes to the District Court for appeal, and the County Council through its attorneys makes these arguments for dismissal based on the need to follow rules, failure to cite the actual rule, really the reality of the issue is the failure of a local government to follow their own rule. So the attempts are to dismiss based on failure to follow the rules but it’s the local government that failed to follow the rules in the first place, which then set this case off on a trajectory that many people were able to figure out until I guess just the other day when a 20-page written findings and conclusions was made,” Judge Lidyard said.
He said perhaps the crux is why there was a decision to stop making findings and conclusions in writing as was typically done because by doing that, then everyone was left being confused, everyone was left to guess, including Jain and later on the Council, as to what to do.
“I understand that you might not have the obligation to roll over and say we’ll remand this and try and get this back on track with findings and conclusions, but to continue to argue legal technicalities as to improper rule citation, to get this matter in front of a District Court for review when the underlying issue is a product of a decision by I guess a County Attorney to tell the Board of Appeals not to issue written findings,” Judge Lidyard said.
He said that’s what leads the Court to be concerned about the fact that an individual from the community, a business owner, would have to endure months and months and months of administrative proceedings, hours and hours of hearings, to only not be told why it is they’re being denied relief, to continue to complain of the lack of findings and conclusions to the Council, for them to say they have issues themselves but will just affirm what was decided.
“And then to continue the argument all the way up to here in the District Court, saying we have no obligation to do this, even though you all used to do this all the time, I guess, but decided to recently change the procedure, and then to argue for dismissal based on technicalities, when the issue the entire time is why is it that Mr. Jain was denied the relief he requested. He just needed to know why. That’s what we’re doing Mr. DeCandia and that’s what I’d like to hear from you. Why did it have to go on the way it did,” Judge Lidyard said.
DeCandia responded that Jain was there for all of the administrative proceedings and knew exactly what happened.
“The decision by the Board of Appeals that the appellant failed to show that the issuance of the red tag was unlawful, arbitrary or capricious, justified denying the appeal. The second issue is that I respectfully disagree with the Court that all we’ve relied on is technicalities. We made motions based on untimeliness of this appeal, the procedural defects, case law, and then a motion based on mootness because we find out months into the case that Sirphey no longer has an interest in the property. Why is he litigating this. So I acknowledge that the Court determined that more detailed findings and conclusions are necessary and we are not here to second guess the Court on that, but I do think that the Court needs to look at the briefing that was grounded in fact, DeCandia said.
Judge Lidyard asked DeCandia if he knew why the normal procedure of issuing findings and conclusions was contemplated in 10-84 and is also contained in the first version of the scheduling order for the appeal was removed. DeCandia said his understanding is that the first version was taken from a proceeding that does require findings of fact and conclusions of law.
“The fact that that provision was removed shows an understanding that it was not required by 10-84. This was not a statutory proceeding. It was governed by 10-84 –D,” DeCandia responded.
Judge Lidyard said his recollection was that 10-84 says specifically that a written decision shall be made outlining findings and conclusions. De Candia said it reads, “The Board’s findings and decision shall be forwarded in writing to the Council with copies to the appellant and the building inspector – findings and decision. It does not require findings of fact and conclusions of law.
Judge Lidyard asked why the original procedural and original scheduling order Provision 16 say, “The chair shall file a written ruling which shall include findings of fact and conclusions of law in support of the ruling with the County Council by filing the written ruling along with the final record and any audio and video transcription of the public hearing with the County Council”.
“I assume that’s based on a reading of 10-84 and then thereafter a new procedural and scheduling order is issued that removes that idea entirely. Was there a shift in belief as to what 10-84 meant at that point in time?” Judge Lidyard asked. DeCandia responded that his understanding is that that the first scheduling order form was from a previous proceeding from the Building Ordinance and therefore a different order was appropriate. He went on to insist that Sirphey caused the delays in the case and not the County.
Judge Lidyard responded that DeCandia is “missing the mark”.
“The real issue is the County creates this highly questionable circumstance by reading the idea of what findings in a decision are by saying that the legal conclusion that someone has not met their burden and therefore their request is denied is sufficient in the way of findings and a decision in writing. And instead of acknowledging this highly questionable take on what findings and a decision are underneath an ordinance or any other idea of law, then when Mr. Jain files a pro se motion or notice of appeal and doesn’t cite the proper rule, you move to dismiss for failure to cite the proper rule and then file a supplemental motion to dismiss for failure to comply with the requirement that one who is a corporation or limited liability company be represented by counsel in the District Court and the Court grants it and it goes away,” he said.
He continued, “That filing of an appeal would have been timely at that point in time as it was within 30 days. But then when they come back in front of the Court and file it under another provision that is actually correct, then there’s another motion to dismiss for failure to cite the proper provision for appeal. Then there’s a motion to dismiss for untimeliness because no we’re outside the 30 day period and then later on down the road there’s a mootness argument. It’s not saying that it wasn’t untimely if you read the date of the finding and decision to be the date that the Council has made their decision. There isn’t an argument that it was citing the right rule”.
“The issue is this highly questionable decision to not issue, except for in minutes, to rely on meeting minutes and a legal conclusion without any basis in fact as complying with the ordinance. Then it sets everything off on this chain of events and this trajectory which is destined to fail and all the time the local government is saying nothing about the underlying substance but merely trying to get the matter dismissed for procedural defects. I understand the mootness thing. Maybe outside of a procedural defect but when you set a chain of events in motion because of a highly questionable decision to not issue written findings of fact and conclusions of law and then people get completely confused as a result, and don’t know if there’s a decision against them yet, and the sole proprietorship of this LLC files a motion trying to preserve his rights, and then it gets dismissed simply because he wasn’t represented by counsel and the government is trying to dismiss it for that point along with not citing the proper rule, and then when it finally comes before the Court represented by counsel, then trying to dismiss it for failure now to be timely or to cite the proper rule, when all the while there’s this issue of substance. That’s what is being argued here. Not that you were improper in arguing timeliness or improper in arguing that the wrong rule was cited, that the government created this issue, this problem that created all these difficulties to navigate what should be done, and instead of trying to do the right thing in correcting it, it was attempt after attempt to dismiss for these technical issues in the appeal outside of the mootness. So unless you want to address that idea, I understand what your point is,” Judge Lidyard said.
DeCandia said it sounded like the Court finds a fault with what the Board of Appeals did and how its decision ultimately looked. He said for the Court to jump from that to sanctioning the County under Rule 11 in this proceeding is improper.
“The Court cannot sanction the County in this proceeding for something that happened in a different proceeding. The County can’t be sanctioned for what an administrative tribunal did two steps before Sirphey even gets to this Court. The Court is viewing it as well that setting in motion a chain of events that was inevitable- I do take issue with that. I don’t think it was inevitable. We had good grounds and the Court has all but told me we had good grounds for those motions. …. Every step we believe we had proper grounds to litigate it before this Court, to defend the County and its taxpayers in this proceeding. Improper to issue sanctions.” DeCandia said.
Dabney told the Court that the Council rubberstamped their failed endeavor which created an unripe appeal from the appeal board to the County Council and the County Council to the District Court.
“My appeal may not have been under the right rule and I may not have articulated the basis of the appeal or the thoughts to the motion in the best way possible. I actually based on what you said, what my client said in his appeal articulated it better than we did,” he said. “….We may not have requested remand but we identified the issue and the Court ordered remand and after the remand we went through months and months of fighting the motion that was filed by the County to have an interlocutory appeal, which they eventually abandoned after we had to respond to it. A year later we end up back in front of the Board of Appeals with a closed session where written findings were actually completed,” Dabney said.
He told the Court that DeCandia refuses to acknowledge that the County had an obligation that it failed to accomplish, which was to issue written findings.
“Mr. DeCandia said you just wanted more details, findings than what was provided; there were no written findings issued by the Board of Appeals ever,” Dabney said. “No findings were ever issued. Saying, ‘I move that we deny the appeal on the grounds that the appellant failed to meet its burden of proof’ is not a finding. Everybody knows that. All these lawyers that are on this call know that and to make an argument that it’s something different is specious and violates Rule 11 and this law firm has been making this same argument for over a year. You didn’t buy it the first time they made it, but they’re still making it. That’s why sanctions are in order in this case.”