F & T, Inc. v. Nebraska Liquor Control Commission

587 N.W.2d 700, 7 Neb. Ct. App. 973, 1998 Neb. App. LEXIS 241
CourtNebraska Court of Appeals
DecidedDecember 22, 1998
DocketNo. A-97-826
StatusPublished
Cited by29 cases

This text of 587 N.W.2d 700 (F & T, Inc. v. Nebraska Liquor Control Commission) is published on Counsel Stack Legal Research, covering Nebraska Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
F & T, Inc. v. Nebraska Liquor Control Commission, 587 N.W.2d 700, 7 Neb. Ct. App. 973, 1998 Neb. App. LEXIS 241 (Neb. Ct. App. 1998).

Opinion

Mues, Judge.

INTRODUCTION

F & T, Inc., doing business as Comer Bar (F & T), filed a petition in error in Lancaster County District Court against the [975]*975Nebraska Liquor Control Commission (Commission). F & T sought review of the Commission’s decision which conditioned its liquor license on employing a full-time manager and prohibiting Randall Trahan from working on the premises. The district court upheld the condition prohibiting Trahan from working at the bar and struck down the other condition as arbitrary and unreasonable. F & T appeals. For the reasons set forth below, we affirm.

BACKGROUND

Prior to 1987, Trahan owned 50 percent of F & T. In 1987, he was convicted of felony possession of a controlled substance and gambling. As a liquor establishment is not eligible for a liquor license if a convicted felon owns more than 25 percent of the business, Trahan transferred 75 percent of his stock to his mother and sister. However, Trahan continued to operate the bar on a daily basis. In 1993, F & T redeemed all outstanding stock other than that owned by Trahan, his mother, and his sister. At that point, the only shareholders were Trahan, who owned 25 percent; his mother, who owned 50 percent; and his sister, who owned 25 percent. The bar continued to be run by Trahan.

After a number of disturbance calls to the police in May or June 1996, F & T’s liquor license was canceled by the Commission. This cancellation continued throughout the remainder of 1996 and into 1997. We have no records of the cancellation proceeding before us. However, the record does show that in October 1996, Robert Rayl took over the daily operation and management of the bar from Trahan. With permission from the Commission, F & T filed an application for a new liquor license on January 21, 1997. It also filed a formal application for Rayl to be its new corporate manager. At some point after these applications were filed, Trahan and his mother transferred their remaining stock to his sister, Theola Lundholm, who then became the sole shareholder.

On January 22, 1997, the Commission sent the city of Fremont a form seeking its recommendation regarding F & T being granted a liquor license. The record does not show when the city actually received this form, but it did have legal notice of a hearing concerning the license published on February 4. [976]*976The form was returned with the city’s approval and received by the Commission on February 13.

On March 12, 1997, the Commission received a report from State Trooper Donald Littrell, the background investigator assigned to the Commission’s request for an investigation. The report stated: “I strongly feel that should the Liquor Commission approve F & T Inc’s current application for a liquor license that they should restrict Randy Trahan from working in the establishment due to his past problems with drugs and alcohol.” On March 24, the Commission issued an order to show cause, stating, inter alia, that F & T was “to show cause as to whether or not there has been a change in ownership or if Randy Trahan is still involved, and if so, whether or not the application should be denied.” A hearing was set for April 3, and the cancellation of the original license was extended to May 22.

At the hearing, Littrell testified that he prepared an investigative report which raised concerns about the involvement of Trahan in the operation of the bar. Littrell opined that “the past problems at the Comer Bar, I feel, fell back on the — Randy Trahan working in the establishment, running the establishment at that time.” He determined that Trahan was still working in the bar and was still a part owner of the building even though all of his stock in the corporation had been transferred to Lundholm in late 1996 or early 1997. He did not see “a whole lot of difference” between the current operation of the bar and how it was operated before the ownership interests had changed. Littrell explained that the local police department had been called to only one or two disturbances at the bar since Rayl took over managing in October 1996.

Trahan did not testify. However, Lundholm testified about the stock transfer. She stated that Trahan gave her his stock and received nothing in return. F & T’s attorney explained that when the stock was transferred, the old stock certificates were simply endorsed over to Lundholm. Notwithstanding her 100-percent ownership of F & T and the bar, Lundholm does not work at the bar as she is employed elsewhere full time.

Rayl, the new manager of the bar, testified that he works between 45 and 50 hours at a local restaurant and 20 to 30 hours at the bar. He testified that the bartender is in charge when he is [977]*977not at the bar and that he has a full-time day bartender who has been there for 12 years and is familiar with any problems that may arise. It is apparent from the Commission members’ questions to Rayl that they were concerned over his ability to perform both jobs for any extended period of time. Rayl is paid $400 per week to manage the bar. His duties include supervising the employees and banking transactions, controlling the inventory, writing checks, and signing contracts.

Trahan is no longer authorized to sign checks for the bar, but works there three nights and two days a week, approximately 35 hours, and is paid a salary of $300 per week. Trahan successfully completed alcohol treatment at Valley Hope in October 1996 and continues to go to A A meetings. His wife also completed the program and no longer works at the bar. Trahan successfully completed probation for the 1987 felony conviction.

The Commission entered an order approving the license subject to two conditions: (1) The applicant gets an approved full-time manager, and (2) Trahan does not work in the licensed premises. F & T filed a petition in error in district court alleging that the evidence presented to the Commission established that the Comer Bar has a qualified full-time manager; that the order directing that Trahan not be allowed to work in the premises is contrary to the evidence and the law, and exceeds the Commission’s authority; and that the Commission’s decision was arbitrary and unreasonable. It asked the district court to reverse these two conditions to its license issuance.

The district court’s hearing on the petition in error was held June 9,1997. The bill of exceptions from the Commission hearing was admitted into evidence as exhibit 1, and the transcript was admitted as exhibit 2. The Commission’s rules were also offered but were refused, the district court reasoning that it was without jurisdiction to receive evidence not offered at the Commission hearing. This ruling is not challenged on appeal.

On June 17, 1997, the district court entered its order. Noting the Commission’s concerns that the manager arrangement was a “ ‘sham’ ” because Rayl also worked 45 to 50 hours as a manager at a local restaurant, the district court determined that the record did not support the finding that Rayl was not a “ ‘full time’ ” manager. It concluded that basing such a determination [978]*978upon a set number of hours was arbitrary and unreasonable. Thus, it ordered the condition of employing a “full time” manager deleted from the license requirements.

The district court further reasoned that Trahan was a convicted felon and that he had a past problem with alcohol, but had completed an inpatient treatment program in 1996 with his discharge.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Abay, L.L.C. v. Nebraska Liquor Control Comm.
303 Neb. 214 (Nebraska Supreme Court, 2019)
Abay, L. L.C. v. Neb. Liquor Control Comm'n
927 N.W.2d 780 (Nebraska Supreme Court, 2019)
City of Omaha v. C.A. Howell, Inc.
832 N.W.2d 30 (Nebraska Court of Appeals, 2013)
Opinion No. (2003)
Nebraska Attorney General Reports, 2003
Opinion No. (2001)
Nebraska Attorney General Reports, 2001

Cite This Page — Counsel Stack

Bluebook (online)
587 N.W.2d 700, 7 Neb. Ct. App. 973, 1998 Neb. App. LEXIS 241, Counsel Stack Legal Research, https://law.counselstack.com/opinion/f-t-inc-v-nebraska-liquor-control-commission-nebctapp-1998.