Jain v. Andrus, Civ. 22-0465 RB/LF

CourtUnited States District Courts. 10th Circuit. District of New Mexico
PartiesPRASHANT JAIN, an individual & Managing Director of Sirphey L.L.C., et al., Plaintiffs, v. PAUL ANDRUS, Director of Community Development in the incorporated County of Los Alamos, et al., Defendants.
Docket NumberCiv. 22-0465 RB/LF
Decision Date11 January 2023

PRASHANT JAIN, an individual & Managing Director of Sirphey L.L.C., et al., Plaintiffs,

PAUL ANDRUS, Director of Community Development in the incorporated County of Los Alamos, et al., Defendants.

Civ. No. 22-0465 RB/LF

United States District Court, D. New Mexico

January 11, 2023



Plaintiffs operated a wine bar (UnQuarked) in Los Alamos, New Mexico. Plaintiffs took advantage of an opportunity to move UnQuarked to another space in Los Alamos. The space needed some work before UnQuarked could reopen. Plaintiffs allege that they lawfully began the work but were stymied by a county official who issued an unwarranted Stop Work Order. Plaintiffs appealed the Stop Work Order to the Los Alamos Board of Appeals (Board of Appeals), which held hearings on the matter and denied the appeal. Plaintiffs appealed the denial to the Los Alamos County Council (Council), which upheld the Board of Appeals' decision. Plaintiffs filed an administrative appeal with a New Mexico state court. The state court remanded on the basis that the appeal was not ripe because the Board of Appeals failed to issue written findings.

On remand, the Board of Appeals held a second set of hearings and issued written findings. The Council could not reach unanimity on the appeal, which resulted in the decision being upheld. Plaintiffs' appeal is now pending at the state court. In the interim, Plaintiffs lost their lease because they did not open UnQuarked by an agreed-upon date. Plaintiffs assert that there were numerous irregularities in the entire process, which resulted in violations of their rights. Plaintiffs filed suit


against 24 defendants in this Court alleging 37 state and federal claims. Two groups of defendants, the “County Defendants” and the “Central Park Defendants,” move to dismiss. The Court will grant the Central Park Defendants' motion, grant in part the County Defendants' motion, and stay this matter pending a final decision by the state court in the parallel proceeding.

I. Statement of Facts[1]

A. The parties relevant to the motions under advisement.

Plaintiffs[2] Sirphey L.L.C., Prashant Jain, and Cortni Nucklos operated UnQuarked, a wine bar originally located in the Central Park Square Shopping Center in Los Alamos, New Mexico. (Doc. 1 (Compl.) ¶¶ 13, 19, 32, 48, 53.) Defendant Philip Kunsberg co-owns and manages Defendant Central Park Square L.L.C. (CPS), which operates the shopping center. (Id. ¶¶ 13, 21.) Defendant Terry Salazar is an agent of Kunsberg and CPS. (Id. ¶ 43.) Kunsberg, CPS, and Salazar refer to themselves collectively as the Central Park Defendants. (Doc. 43 at 3.)

Defendant County of Los Alamos (the County) is governed by Defendant Council, an elected body. (Compl. ¶¶ 11-12.) Defendant Harry Burgess was Manager of the County and served as a member of Defendant Board of Appeals. (Id. ¶ 7.) The Board of Appeals “is an administrative board of the [County] before which appeals of actions taken by Los Alamos County building officials were heard.” (Id. ¶ 5.) Defendant Randal Ryti was a member of the Council and of the Board of Appeals. (Id. ¶ 54.) Defendant Sara Scott was Chairperson of the Council and the original Chair of the Board of Appeals. (Id. ¶¶ 5, 46.) Defendant Terry Priestley replaced Scott as Chair of the Board of Appeals during Plaintiffs' appeal. (Id. ¶¶ 5, 34.) Defendant Philo Shelton is a County


employee and was a member of the Board of Appeals. (Id. ¶ 52.)

Defendant Michael Arellano was the Chief Building Official for the County. (Id. ¶ 2.) Defendant Denise Cassel was Human Resources Manager for the County. (Id. ¶ 8.) Defendant J. Alvin Leaphart “is County Attorney for the Council, the County Manager, the County Departments, and the Board[ of Appeals] ” (Id. ¶ 23.)

Defendant Community Development Department (CDD) is a county department charged with performing building inspections in the County of Los Alamos. (Id. ¶ 10.) Defendant Paul Andrus is the Director of the CDD. (Id. ¶¶ 1, 10.) Defendant Adrienne Lovato is employed by the CDD. (Id. ¶ 25.) Defendant Larry Valdez is an official in the CDD. (Id. ¶ 55.) The Records Information Management Office (RIM) manages information for the County. (Id. ¶ 41.) Defendant Barbara Ricci manages the RIM. (Id.) Together, the County, its employees, its departments, and the Board of Appeals refer to themselves as the County Defendants. (Doc. 27 at 3.)

B. Arellano identified minor repair work necessary for UnQuarked to open in the Mari Mac Village Shopping Center.

Plaintiffs wanted to relocate UnQuarked from the CPS shopping center to a new location in the Mari Mac Village Shopping Center (the Mari Mac), which was owned by Defendant Smith's Food and Drug (Smith's). (Compl. ¶¶ 49, 53, 60.) They planned to open UnQuarked as a wine bar and restaurant, and they considered Mari Mac the “ideal” location for this venture because it had previously housed a restaurant in the space and contained the necessary “code-compliant electrical, fire, plumbing[,] and building infrastructure.” (Id. ¶¶ 60-61.) Plaintiffs learned that Smith's “had plans to upgrade [Mari Mac] and relied upon this representation in making their decision to move into the new location.” (See id. ¶ 62.)

On March 6, 2019, prior to signing the lease, Jain inspected the Mari Mac space with Chief Building Official Arellano “to identify items and areas” that would require a permit for


improvements or repairs before UnQuarked could open. (See id. ¶¶ 91, 93.) According to the Complaint, Arellano represented to Jain that Plaintiffs would need to do “minimal work” to ready the space for opening and needed only one permit for work to cut a drainage canal. (Id. ¶¶ 72, 9396.1.) Sirphey signed a lease for the Mari Mac space on April 18, 2019. (Id. ¶ 24.) The lease contained an “open by” provision: if Plaintiffs failed to open UnQuarked by August 1, 2019,[3] the lease was subject to termination. (See id. ¶¶ 66, 394.)

Sirphey filed a permit for the drainage canal on September 30, 2019; the permit issued on October 4, 2019; and the work was completed and approved. (Id. ¶ 94(i).) During the March 2019 inspection, Arellano also identified necessary minor concrete flatwork repairs, and “[b]uilding officials . . . represented that concrete flatwork required no permit.” (See id. ¶¶ 91, 95.) Despite these representations, “the CDD [later] adopted the position that” Plaintiffs were required to apply for a permit for the concrete flatwork. (See id. ¶¶ 95-96.) Plaintiffs filed the second permit application for the concrete work on November 15, 2019. (Id. ¶¶ 94(ii), 96.1.) The application reflected a proposed improvement value of $800.00. (Id. ¶ 98.) In the meantime, Jain performed other work in the space that required no permit, such as procuring appliances and materials, “changing light bulbs, painting[,] and building an unattached wine bar.” (Id. ¶¶ 99-101.)

C. Plaintiffs allege that Arellano's misconduct began in May and July 2019.

In May 2019, the local newspaper published an article about the upcoming opening of UnQuarked in its new location. (Id. ¶ 102.) Shortly thereafter, Arellano “confronted Jain” and told “him that UnQuarked would not be opening anytime soon.” (Id. ¶ 103 (quotation marks omitted).) On July 12, 2019, Jain met with “Arellano's superiors, Andrus and Burgess[,]” to complain about


“Arellano's threat and unprofessional conduct ....” (Id. ¶ 104.) After this meeting and in the presence of Andrus and Lovato, “Arellano falsely accused [Plaintiffs] of installing an illegal cooking hood in” the UnQuarked space. (Id. ¶¶ 106, 108.) “Arellano threatened to have [a Mari Mac custodian] perjure himself by swearing a (false) affidavit” regarding the cooking hood, despite date-stamped photos taken during the March 2019 walk-through that showed the hood was already on site. (Id. ¶¶ 56, 109-10.) “Arellano later admitted under oath during [an appeals hearing on this matter] that the hood was pre-existing.” (Id. ¶ 112.)

D. Arellano issued a Stop Work Order in November 2019.

On November 10, 2019, CDD employee Lovato took photographs of UnQuarked's interior through the front window without giving notice to Plaintiffs or obtaining a warrant. (Id. ¶¶ 25, 126-27, 131.) Lovato did not have access to the interior of the space and had no view of the kitchen area through the front window. (Id. ¶ 131.)

On November 12, 2019,[4] Arellano visited the space and saw “that no un-permitted construction had occurred ....” (Id. ¶¶ 113-17.) On November 22, 2019, Arellano issued a Stop Work Order (also referred to as a Red Tag). (Id. ¶ 120.) Arellano later testified before the Board of Appeals “that he had pre-drafted the [Stop Work] Order in his office on November 12, 2019[,]” before he visited the space on that same date and despite not having visited since March 2019. (Id. ¶¶ 119, 155.) He testified that he issued the Red Tag “as a result of [Lovato's] November 10, 2019 inspection.” (Id. ¶ 149.) “The Red Tag cited no specific violation” but read: “No Permit for Work, Bldg, Plumb, Elect, Mech. + Fire.” (Id. ¶¶ 121, 146 (emphasis omitted).) Arellano testified, however, “that he saw nothing in [Lovato's] November 10, 2019 photos . . . that would require


plumbing, mechanical, or fire permits ” (Id. ¶ 150.) Plaintiffs assert that Arellano failed to take several required steps before issuing the Red Tag, including an inspection of the site, a finding of “a violation tied to an applicable code[,]” and written notice to the site owner of the reasons for the Red Tag. (See id. ¶¶ 151-56 (discussing Los Alamos County Code of Ordinances (LACCO) § 10; N.M. Admin. Code §

Plaintiffs lodge a number of other allegations against Arellano that the Court need not examine in detail for purposes of this Opinion. For example, Plaintiffs assert that Arellano “reversed the previously...

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