Judge Finds Board Of Appeals, And County Council Acted Arbitrarily And Capriciously On Sirphey Stop Work Order Appeal


Note: The following is Part 2 of several Los Alamos Reporter articles on First Judicial District Judge Jason Lidyard’s ruling on certainly one of the biggest lawsuits against the County in recent years. The Reporter believes it is important for the community to read the extensive reasons that influenced the Court’s decision. Part 1 may be viewed here: https://losalamosreporter.com/2023/11/01/district-judge-rules-that-county-violated-sirpheys-due-process-rights-in-every-phase-of-stop-work-order-appeal/

On October 24, First Judicial District Court Judge Jason orally presented the first part of his ruling in the case of Sirphey, LLC against former Los Alamos County Chief Building Inspector Michael Arellano and Los Alamos County Council. Sirphey, LLC owner Prashant Jain had appealed a stop work order placed on the premises where he planned to operate his two businesses, Sirphey and Unquarked. Judge Lidyard found after reading all the transcripts in the case as well as viewing more than 26 hours of video from the appeal hearing, that Los Alamos County violated the due process rights of Sirphey in every phase of the process.

During the hearing Nov. 1 for the second half of Judge Lidyard’s hearing, he found that the Board of Appeals and the Los Alamos County Council acted arbitrarily and capriciously and that based on a whole record review, that their decision is not supported by substantial evidence. He asked Sirphey’s attorney Philip Dabney to prepare an order with his findings.

Below is the second section of transcription of the November 24 ruling hearing, which picks up as Sirphey, LLC owner Prashant Jain questions Mr. Arellano

Mr. Jain:  Did I contact you the very same day and ask what specific work was carried out, which led to the stop work order? And did you ever reply to the appellant with such specific words?

Mr. Arellano: On which date sir?

 Mr. Jain: November 22.

Mr. Arellano: When we placed the red tag.

Chairman Priestley: I’m going to stop right now. Mr. Jain, do you have evidence that you want to refer to where you did contact Mr. Arellano?

Mr. Jain: It is the appeal letter on the file attached to the scheduling order.

Chairman Priestley: Is it part of our evidence?

Mr. Jain: It is part of the document on the basis the Appeal Board was formed. It was a letter addressed to Mr. Arellano.

Chairman Priestley: Okay, and again, is that a piece of, is that an exhibit you the appellant or the appellee has included as an exhibit. I will help you to say yes it is. It is Exhibit #6, I believe is what you’re referring to.

Mr. Jain: Mr. Arellano, could you turn to Exhibit #6 of appellee?

Mr. Arellano: Yes, sir, I’m there.

Mr. Jain: Did you receive this on November 22, 2019?

Mr. Arellano: I believe you dropped it off at the front desk. I don’t know if I received it or not that day or the following day but I received it.

Mr. Jain: You were not at the front desk when I dropped it off and I did not give it to you in your hands on November 22.

Mr. Arellano: No sir, you did not. You handed it to the front desk staff.

Mr. Jain: And the video evidence will not show that I handed it to you?

Chairman Priestley: Okay Mr. Jain.

Mr. Jain: Okay, I’ll take that back.

Chairman Priestley: No, no, no, no. We have evidence that you submitted this letter. It was notarized. We have evidence that it was received. It is part of his evidence file.

Mr. Jain: Mr. Arellano, did you ever reply to this letter.

Mr. Arellano: I don’t know what, I don’t think I did.

Mr. Jain: Why is that? If the general idea is for the appellant to get some info for your general concern, why did you not reply to this?

Mr. Arellano: To me this was an IPRA request is the way I saw it. It was an IPRA request. You gave it to Harry (Burgess).

Mr. Jain: Are you saying that asking for information on why the stop work order was placed had to be done through IPRA and not going directly to you?

Mr. Arellano: No. You had stated previously in your emails that you would work with me directly on all the issues that had but you did not do that. I wanted to help you out as much as I could and try to help too.

Mr. Jain: Objection. I’m talking about Exhibit 6 here – whether you replied to it or not. Not any previous emails. This term, I’m asking specific questions. You placed the stop work order on November 22 for your general concerns on that broad scope of work. On November 22, you were given a letter where you were asked what was the specific work that led to the stop work order and did you reply to that or not?

Mr. Arellano: I did not reply to this email. No.

Mr. Jain: Thank you.

“This indicates that Mr. Jain reached out to Mr. Arellano as he’s indicated he wants people to do when he issues stop work orders and he was provided no such communication. Also, as the Court will discuss later on in its ruling, the fact that Mr. Arellano believed that the letter was an IPRA request is not supported by the letter itself. At no time does it even refer to an IPRA,” Judge Lidyard said.

Again in Volume 4,

Chairman Priestley: Okay. I’m going to stop you again. We’re talking about emails after the red tag was applied. Tell me again why an email in late December or early January had any relevance to the appropriateness to the red tag applied in late November. I don’t see the relevance. I asked you before and I’m asking you for the last time.

Mr. Jain: In late December or early January, the appellant still had no idea what work had been completed.

Chairman Priestley: Okay. That is not a true statement. That is an opinion. That is not a fact. You don’t know what he thought. Alright, so I’m going to stop this line of questions. I understand, believe me, that you were probably frustrated in late December of early January. Why did this happen to me? That’s legitimate I think but that’s not what the hearing is about, whether or not the red tag placed on November 22 was lawful or was it arbitrary or capricious.

“There Chairman Priestley essentially sympathizes with Mr. Jain stating that he can understand why Mr. Jain would have been frustrated in late December or early January wondering ‘Why did this happen to me?’ and believed that would be legitimate in light of the fact that this was a general statement with no legitimate specificity as to why the stop work order was issued,”said Judge Lidyard.

Mr. Jain: You mentioned in your email that the equipment was intended to be installed. Is it your understanding that equipment wasn’t installed. Was that correct?

Mr. Arellano: No. When I did the site visit the equipment wasn’t installed. It was in place.

Mr. Jain: Was the gas and electrical hooked up?

Mr. Arellano: I don’t know. I hope it wasn’t.

Mr. Jain: You mentioned materials for constructing walls. Were you provided dated information from my colleagues that shows metal studs being discussed as an option for a free-standing bar on November 19?

Chairman Priestley: Okay. I’m going to stop the questioning here. Earlier when we resumed from our break, I said that we were not going to go into the specifics of each activity that was going on inside that structure. Mr. Arellano talked about why he presented it in a generic sense and I told you that we weren’t going to go into the details one at a time. So I’m not going to allow further questions to go along that route.

Mr. Jain: So, just to clarify, I will stop because you ruled it. I am going to stop the questions on that but just to clarify that Mr. Arellano claimed that was one reason why he placed the stop work order.


Chairman Priestley: You need to ask questions of your cross examination or cross examine your witness. You will have your opportunity in your closing statement to tell your story – to tell the rationale. This is not the time. I have said this three or four times.

“So this again shows that the red tag was issued in a generic sense. In this portion that was just read, again Chairman Priestley was preventing a cross examination into the specific reason why the stop work order was issued and prohibits and him from proceeding with such line of question, which the Court later on in its line of questioning will discuss this limitation of the right to cross examine a witness. Those are all the bases for which the Court concludes that the stop work order was violative of due process and that it did not provide the specific reasons for its issuance, so that Mr. Jain could determine whether or not he wanted to contest what he was encountering with the stop work order or adjust and comply with what needed to be done in order to have it removed.  As a result, an appeal was necessary to address this generic or general statement as Chairman Priestley stated throughout the quotes that I just read and it resulted in protracted litigation which has taken to determine the specific reasons why the stop work order was issued. As the Court will discuss later, on why the burden of proof allowing for a generic stop work order allows for greater violations of due process in the way of allowing for Mr. Arellano to develop reasons for the stop work order after the fact to allow for cross examination of Mr. Jain to fish and look for violations that may or may not have been considered, but it was unable to be determined what was considered as the statement on the stop work order was too general and not specific,” Judge Lidyard said.

He continued, “Due process also requires according to the state of New Mexico…… that there be the opportunity to be heard in a meaningful time and in a meaningful manner. The Court will discuss at this time the requirement that the matter must be heard at a meaningful time. The appeal in this case was delayed significantly. The County cites two opportunity reasons for that delay: The failure of Sirphey, LLC to use a form for the appeal and the introduction of the COVID-19 virus in March of 2020. Los Alamos Ordinances govern the right of appeal and nowhere in this section does it state that in order to effectuate an appeal an individual must use a prescribed form. It reads as follows 0 Section 10-84.1: ‘Any person aggrieved by an action by of the Building Official in the administration of this article may within 15 calendar days of the date of the action appeal such action to the Council by filing a written complaint with the manager’. It states a written complaint. It does not state a specific form to be required. And a review of the local ordinances demonstrates that when the ordinance requires a specific form to be used, it will specifically state so. Referring to Section 10-73, Building Permit Application and Deposit, ‘The application for the building permit shall be submitted in a form prescribed by the Building Official.’ This language clearly states a form prescribed by the Building Official is to be used when applying for a building permit. No such language appears in Section 10-84. As 10-73 shows, when the County wants a form to be used, they know full well how they indicate they want that form used by using language such as that in 10-73 – that a form prescribed by the Building Official – but no such language was used.”

Judge Lidyard then went on to discuss the issue the County attorneys had with the owner affidavit submitted by Jain with his permit application.

 “While we’re here at 10-73, I think it’s important to discuss the idea of this owner affidavit that much discussion was held about and much time and effort was used in attempting to establish that Mr. Jain falsified a document. This also goes in forms, but the owner affidavit is to effectuate Section 10-73 b, which reads as follows: ‘The application for the building permit shall be submitted by the owner or lessee, or agent of either, the architect, engineer or builder employed in connection with proposed work and where such application is made by a person other than the owner in fee it shall be accompanied by a duly verified affidavit of the owner in fee or the person making the application that the proposed work is authorized by the owner in fee and the person making the application is authorized to make such application,” Judge Lidyard said.

“Great efforts and time were expended in trying to establish that Mr. Jain fraudulently represented that he was the owner of 813 Central Avenue and that only the owner could submit an affidavit. But this language clearly demonstrates that someone other than the owner can submit such an affidavit. When it says it shall be accompanied by a duly sworn affidavit of the owner in fee or the person making the application, when the person making the application does it as opposed to the owner, that person must comply with two requirements – that the proposed work is authorized by the owner in fee and that the person making the application is authorized to make the application. This provision does not require that only the owner can submit such an affidavit. The problem existed because the forms available at the Chief Building Official’s office do not contain an affidavit for the person making the application. They only have a form for the owner affidavit, so the form provided by the Chief Building Official does not comport with Section 10-73 b2 and allows only one of the two individuals who can make such affidavit to provide such affidavit, which caused Mr. Jain because there was only one available form to use to use the one available form, and as a result to then be accused of making a false document and committing fraudulent representations,” Judge Lidyard said.

Part 3 of this series of articles will pick up with Prashant Jain’s questioning of Paul Andrus, Community Development Department Manager who was Chief Building Inspector Michael Arellano’s boss.