Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Board of Liquor License Commissioner for Baltimore City v. Austin

Court of Special Appeals of Maryland

April 26, 2017

BOARD OF LIQUOR LICENSE COMMISSIONER FOR BALTIMORE CITY, ET AL.
v.
BRETT AUSTIN ET AL.

          Krauser, C.J., Arthur, Kenney, James. A., III (Senior Judge, Specially Assigned), JJ.

          OPINION

          Kenney, J.

         The transfer of a liquor license in Baltimore City often involves issues of life and death, and in some instances, zombies and phantoms.[1] 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[2] (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 Purchasers").

         The 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?

         We hold that it did and reverse the decision of the circuit court.

         FACTUAL AND PROCEDURAL BACKGROUND

         Notwithstanding 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, [3] 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."[4] 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.

         On February 25, 2013, a second Application for Transfer and Expansion was filed.[5] 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."

         The 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.

         The 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 today."[6]

         The 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."

         The second remand hearing was held on September 25, 2014.[7] 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.

         As to 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.

         The 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 knew it.

         Counsel 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 licenses."

         In 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] the law."

         The 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."

         On 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.

         The Board filed its timely appeal on May 29, 2015.

         STANDARD OF REVIEW

         "On 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).

         When, 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).

         Contentions of the Parties

         The 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.[8] (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."

         As to 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 organization).

         The 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 completed."

         The 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 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.