Bd. of Liquor Commissioners for Balt. City v. Austin

158 A.3d 1025, 232 Md. App. 361, 2017 WL 1494022, 2017 Md. App. LEXIS 414
Court of Special Appeals of Maryland·Decided April 26, 2017·No. 0599/15·Published

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 *363 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 *364 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) “[biased 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 *365 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 [LJicense 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 centering] around estoppel,” the Board concluded “that the only way to avoid the injustice ... is to declare the [Ljicense 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 *366 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 [Bjoard and make their case, if they’re in a hardship situation. And then the Board could then grant them another extension of 180 days.
⅜ ⅜ ⅝ ⅜
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.

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Bd. of Liquor Commissioners for Balt. City v. Austin, 158 A.3d 1025, 232 Md. App. 361, 2017 WL 1494022, 2017 Md. App. LEXIS 414 (Md. Ct. App. 2017).

158 A.3d 1025 (Bd. of Liquor Commissioners for Balt. City v. Austin) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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