BOARD OF LIQUOR LICENSE COMMISSIONER FOR BALTIMORE CITY, ET AL.
BRETT AUSTIN ET AL.
Krauser, C.J., Arthur, Kenney, James. A., III (Senior Judge,
Specially Assigned), JJ.
transfer of a liquor license in Baltimore City often involves
issues of life and death, and in some instances, zombies and
phantoms. In this case, the Circuit
Court for Baltimore City reversed the September 25, 2014,
two-to-one decision of the Board of Liquor Commissioners for
Baltimore City (the "Board") that the license to
sell liquor at an establishment previously known as
Turner's in Federal Hill, (the "License"), had
"expired." Appellants are the Federal Hill
Neighborhood Association in addition to a number of
individuals (collectively referred to in
this opinion as the "Association") and the Board.
The appellees, Brett Austin and Joshua Foti, are the contract
purchasers of the License (the "Contract
question presented, slightly rephrased, is:
Did the circuit court err in its determination that the
License had not expired by operation of law when the transfer
of the License to the Contract Purchasers was not completed
within 180 days after the Board approved the transfer?
that it did and reverse the decision of the circuit court.
AND PROCEDURAL BACKGROUND
the extended procedural history of this case, the dispositive
facts are not in dispute. Turner's closed for business on
or about July 11, 2009,  during the license year ending April 30,
2010. The first application to the Board to transfer the
License to the Contract Purchasers was filed on June 19,
2009. That application was approved by the Board on July 23,
2009. On January 19, 2010, Samuel Daniels (the then-Executive
Secretary of the Board) signed a memorandum recommending that
the deadline to complete the transfer be extended 180 days
(to July 5, 2010) "[b]ased on discussion w/ Mr. Austin
and receipt of projected completion
schedule." The Board granted
three additional sixty-day extensions to complete the
transfer, all of which were granted after the prior extension
period had ended. The last extension was granted on November
15, 2012. In the meantime, the License was renewed in the
name of the Contract Purchasers for the license years ending
on April 30 in 2011, 2012, and 2013.
February 25, 2013, a second Application for Transfer and
Expansion was filed. The validity of
the License itself was raised when, "despite having
prevailed in their case in chief, " the Association
sought judicial review on that issue. On December 13, 2013, a
hearing was held, and on December 23, the circuit court
remanded the case to the Board to create a record on the
validity issue. On February 20, 2014, the Board held the
remand hearing "to determine the status of the license
under the provisions of [Maryland Code (1957, 2011 Repl.
Vol.) Article 2B, § 10-504(d) ("Article 2B §
10-504(d)")]" related to liquor license transfers
and the expiration of a license 180 days after a license
holder has closed the business or ceased actual alcoholic
beverages business operations in Baltimore City. At that
hearing, the Association argued that the License had
"sat dormant since July 2009, " and even though the
"Board approved the application for a transfer of
ownership to a new location and repeatedly extended [the]
approval, no transfer was ever completed."
Contract Purchasers argued that the annual renewal of the
License without protest "can certainly be construed as a
tolling of the period under Article 2B." Moreover, the
"validity" of their License for May 1, 2013-April
30, 2014, "was ruled upon, " and because they had
relied on the renewals and the direction they received from
the Board, "principles of collateral estoppel" and
res judicata precluded revisiting the validity issue.
Board, in the "decision phase" of the February 20,
2014 hearing, concluded that "even with an extension,
legal or otherwise, the [L]icense would have been considered
dormant" as of October 17, 2011, notwithstanding
extensions or "a transfer of ownership hearing after
that time." Characterizing the Contract Purchasers'
arguments as "generally center[ing] around estoppel,
" the Board concluded "that the only way to avoid
the injustice . . . is to declare the [L]icense viable as of
Association again sought judicial review of the Board's
decision. On August 13, 2014, a Stipulation of Dismissal and
Agreement for Remand to the Board was entered at the request
of the Board and the Association and, on September 17, 2014,
the circuit court issued an order remanding to the Board and
dismissing the case. The stated purpose of the remand was
"so the [Board] can conduct further proceedings on this
matter within sixty (60) days after the date of the dismissal
of this appeal."
second remand hearing was held on September 25,
2014. The Contract Purchasers moved to
dismiss the proceeding on the grounds that the Board had
failed to inform them of the judicial review proceedings
challenging the Board's February 20, 2014 decision that
the License was "viable." In response, the Chair
noted that the Contract Purchasers had actual notice of the
judicial review proceedings because their counsel, by
"letter dated April 9, 2014, " wrote the
then-Chairman of the Board acknowledging that the Association
"had filed an appeal in the Circuit Court."
Observing that the Contract Purchasers had not appealed the
circuit court decision, the Board denied the motion to
dismiss and the hearing proceeded.
the Board's right to reconsider the viability of the
License, the Association argued that the issue was not one of
fact, but one of law that the Board was entitled to review.
It pointed out that the Board's prior decision had been
based on a theory of estoppel resulting from the Board's
acceptance of renewal fees after the License had expired.
But, it argued, "the government cannot be estopped under
the same terms as other litigants, " and the Contract
Purchasers could not rely on the "unauthorized
acts" of the Board's agents.
Association called as a witness former Senator George Della,
who had sponsored the 2000 legislation creating Article 2B
§ 10-504(d), which is commonly referred to as the
"180 day rule." According to Senator Della:
It basically says [a] license can remain dormant for 180
days. And then if there's a hardship, then that licensee
can come back to the [B]oard and make their case, if
they're in a hardship situation. And then the Board could
then grant them another extension of 180 days.
Beyond that, if they don't activate that license, that
license is dead. That's what the legislative intent is
behind the 180 day rule. And the Board knew it. The Board
for the Contract Purchasers stated that they were not arguing
estoppel or a mistake by the Board or its agents. Nor were
they relying on the hardship extension provisions of the
statute. Rather, they were contending, citing Yim, LLC v.
Tuzeer, 211 Md.App. 1 (2013), that, notwithstanding
cessation of the business itself, the successive renewals of
the License "tolls the 180 period." In addition,
the Contract Purchasers advanced a policy argument that the
Board's adoption of the Association's position would
thwart redevelopment efforts in the city because these
projects can "take years" to complete. The better
policy, in their view, was to permit a developer to
"preserve" an existing license by renewals rather
than issuing a new license. That, they argued, would satisfy
the legislative "goal [of] reduc[ing] the number of
response, counsel for the Association asserted that the
Contract Purchasers' policy argument "is essentially
something to be taken up with the legislature, " but it
did not reflect the intent of the current legislation, and
thus, its adoption by the Board would be a "rewrite [of]
Board expressly ruled on the validity of the License and, by
implication, on the Contract Purchasers' recently filed
hardship extension request, which would fail in the absence
of a viable License to transfer. The Chairman concluded that
"the license has expired." He based his decision on
the "clear command of the law, " and which had been
"ignored" by the Board in granting the earlier
purported extensions and license renewals "outside the
scope of its authority." Commissioner Petersen Moore
"agree[d]" with the Chairman "for all the
reasons stated." Although Commissioner Jones also agreed
that "the license is dead, " he voted
"no" because, under the circumstances, he thought
that a "second chance is needed."
October 7, 2014, the Contract Purchasers filed a Petition for
Judicial Review. A hearing was held on May 1, 2015, and on
May 5, 2015, the circuit court reversed the Board, stating
that its decision "was not supported by substantial
evidence and was clearly erroneous as a matter of law."
The court explained that:
failure to complete a transfer of a license within 180 days
pursuant to Art. 2B § 10-503(d)(4) does not carry a
sanction of expiration of the license. To hold that such a
sanction applies is illogical in the face of Art. 2B §
10-504(d)(2)(i), which provides an exception to the
10-504(d)(2) 180 day expiration provision when a transfer
"has been approved or is pending." Furthermore, in
the instant case the Board approved the transfer on July 23,
2009, and the record contains several references to the
approval and the fact that the transfer "remains
pending." Thus, the 2B § 10-504(d)(2)(i) exception
for approved or pending transfers would apply.
Board filed its timely appeal on May 29, 2015.
appellate review of the decision of an administrative agency,
this Court reviews the agency's decision, not the circuit
court's decision." Long Green Valley Ass'n
v. Prigel Family Creamery, 206 Md.App. 264, 273 (2012)
(quoting Halici v. City of Gaithersburg, 180 Md.App.
238, 248 (2008)). We "determine whether the agency's
decision is in accordance with the law or whether it is
arbitrary, illegal, and capricious." Prigel Family
Creamery, 206 Md.App. at 274 (quoting Md. Dep't
of the Env't v. Ives, 136 Md.App. 581, 585 (2001)).
In doing so, we will uphold factual decisions and
discretionary judgments that are "supported reasonably
by substantial evidence." HNS Dev., LLC v.
People's Counsel, 425 Md. 436, 449 (2012) (citations
omitted). Our review of the agency's legal conclusions is
less deferential, but, we respect the agency's expertise
in its field and give considerable weight to its
interpretation and application of any statutes or regulations
it is charged with administering. Thanner Enters., LLC v.
Balt. Cty., 414 Md. 265, 275 (2010).
as here, the issue centers on statutory construction, and
thus, legislative intent, we look first at "the
statute's plain language as ordinarily understood"
because that is "[t]he most reliable indicator of the
[legislative] intent." Id. at 277. And, when
the language is "clear and unambiguous, we ordinarily
'need not look beyond [its] provisions and our analysis
ends.'" Opert v. Criminal Injuries Comp.
Bd., 403 Md. 587, 593 (2008) (alteration added) (quoting
Barbre v. Pope, 402 Md. 157, 173 (2007)).
"[W]here a statute is plainly susceptible of more than
one meaning and thus contains an ambiguity, courts consider
not only the literal or usual meaning of the words, but their
meaning and effect in light of the setting, the objectives
and purpose of the enactment." Tucker v.
Fireman's Fund Ins. Co., 308 Md. 69, 75 (1986). In
other words, a provision within an integrated statutory
scheme must be understood in its broader context and, to the
extent possible, harmonized with the other provisions.
Balt. Gas & Elec. Co. v. Pub. Serv. Comm'n of
Md., 305 Md. 145, 157 (1986).
of the Parties
Association contends that under Article 2B, § 10-504(d),
a liquor license in Baltimore City expires 180 days after the
licensee "has closed the business or ceased active
alcoholic beverage business operations." If an
application to transfer the license is filed and approved by
the Board, the Association asserts that the approved transfer
"must be completed-by operating an alcoholic
beverage business-within 180 days, " unless, under
Article 2B § 10-504(d)(4), the Board finds that undue
hardship exists. (Emphasis in
original). Therefore, it argues, the grant of any extensions
in this case was contrary to the "plain language"
of the statute, and any Board practice or course of conduct
"inconsistent with the statutory scheme" is
entitled to "no weight."
the applicability of the doctrine of equitable estoppel, the
Association contends that the Board, "as a government
agency, " cannot be "estopped from applying the
express direction it has been given by the Legislature merely
because an employee of the agency accepted [a renewal]
payment for an expired license." In support, it cites
Marzullo v. Kahl, 366 Md. 158, 195 (2001) (Baltimore
County Board of Appeals not estopped from enforcing zoning
regulation that prevented appellant, who had substantially
constructed a reptile barn and obtained a permit approval to
do so from the Baltimore County Department of Permits and
Licenses, from using his property to breed reptiles); ARA
Health Servs., Inc. v. Dep't of Pub. Safety and Corr.
Servs., 344 Md. 85, 95 (1996) (Department of Corrections
not estopped from seeking reimbursement for overpayment of a
contract provider to which the Department had remitted the
excessive payments without objection); and Heckler v.
Cmty. Health Servs. of Crawford Cty. Inc., 467 U.S. 51,
60 (1984) (Department of Health and Human Services not
estopped from recouping overpayments made to a non-profit
Board contends that "under the appropriate
interpretation of the applicable statutory provisions, the
License had expired as a matter of law." The transfer
application was approved by the Board on July 23, 2009, and
under Article 2B § 10-503(d), the transfer had to be
completed by January 19, 2010. Once the 180 day expiration
period provided for in the statute was "no longer
suspended, " the License "which had already been
inactive for well over 180 days-expired as a matter of
law." Therefore, according to the Board, any
"purported" extensions were invalid because they
are not authorized by the statute. And, "[t]he same
analysis applies" to the Board's acceptance of
renewal fees "for the inactive License, " because
the renewal of the License does not "reset" or
"extend" the "180 day rule." The Board
recognizes, however, that there may be a situation where the
transfer deadline "overlap[s] two licensing
periods." When that happens, the license would have to
be renewed "before the transfer has been
Contract Purchasers mount a two pronged attack on the denial
of their motion to dismiss the remand proceedings. The first
is the failure of the Board to notify them of the judicial
review proceeding initiated by the Association and the
subsequent remand ...