PAC Club of Western PA v. PLCB

CourtCommonwealth Court of Pennsylvania
DecidedJanuary 3, 2018
Docket255 C.D. 2017
StatusUnpublished

This text of PAC Club of Western PA v. PLCB (PAC Club of Western PA v. PLCB) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
PAC Club of Western PA v. PLCB, (Pa. Ct. App. 2018).

Opinion

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

PAC Club of Western PA : : v. : No. 255 C.D. 2017 : Argued: November 13, 2017 Pennsylvania Liquor Control Board, : Appellant :

BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY JUDGE COHN JUBELIRER FILED: January 3, 2018

The Pennsylvania Liquor Control Board (Board) appeals from the Order of the Court of Common Pleas of Allegheny County (common pleas), which overturned the Board’s denial of the double transfer application (Application) of PAC Club of Western PA (Club) for Catering Club License CC-2293 (License) and directed that the Application be approved. On appeal, the Board argues that common pleas erred because, inter alia, the transfer would violate Section 404(a) of the Liquor Code1 by giving Mr. Sparrow an unlawful pecuniary interest in the License. Because Club bore the burden of proving that it satisfied the requirements of the Liquor Code for a double transfer, and it did not establish that Mr. Sparrow would not have an unlawful pecuniary interest, we reverse.

1 Act of April 12, 1951, P.L. 90, as amended, 47 P.S. § 4-404(a). Founded in 1998, Club exists “[t]o engage in social activities for the purpose of promoting community goals and good fellowship among the members and in accordance therewith to acquire a clubhouse with the future goal of acquiring a club liquor license.” (Reproduced Record (R.R.) at 13a.) In the past, Club has made multiple attempts to acquire a liquor license. Finally, in 2010, the Board approved Club for a club liquor license for a location in the Southside area of the City of Pittsburgh (City) for a term of December 8, 2010, through April 1, 2014. However, Club never opened at that location because it could not obtain an occupancy permit and the license expired due to non-activity. On August 30, 2014, Club entered into a purchase and escrow agreement with the Southside Caravan Club (SCC) to purchase the License at issue here. The License would be transferred from SCC’s location at 1113-15 East Carson Street, Pittsburgh, to Club’s location at 522 Rosedale Street, Pittsburgh (Premises). Club filed its Application with the Board on November 18, 2014. The Bureau of Licensing (Licensing) notified Club that a hearing would be held to take testimony and evidence regarding 12 objections to the Application.2 (R.R. at 269a-71a.) Numerous residents from within 500 feet of Club’s Premises filed protests to the Application. The following evidence was adduced at the hearing.

2 The objections were: whether Club met the definition of “club” under the Liquor Code (Objection 1); whether Club had a primary interest or activity to which the sale of liquor and malt beverages would be secondary (Objection 2); whether the operation of Club’s business would inure to the benefits of the entire membership, rather than to benefit individual members or officers (Objection 3); whether Mr. Sparrow would have an unlawful pecuniary interest in the License (Objection 4); Club’s failure to submit certain required documents and information with the Application (Objections 5-9); whether certain entities and individuals would be directly aggrieved such that they could intervene on the Application (Objection 10); whether certain individuals reside within 500 feet of the proposed premises such that they would be valid protestants to the Application or would be directly aggrieved such that they could be intervenors (Objection 11); and whether the approval of the License would affect the health, welfare, peace and morals of the inhabitants of the neighborhood within 500 feet of the proposed licensed premises (Objection 12).

2 A Board Licensing Analyst (Analyst) testified regarding the results of the investigation on the Application. (R.R. at 6a-57a.) The area surrounding the Premises is 90% residential and 10% commercial. There is no off-street parking, so Club would have to rely on on-street parking. Club would be open from 4:00 p.m. to 3:00 a.m., seven days a week, and would provide DJ entertainment on the weekends. Club submitted its bylaws, articles of incorporation, meeting minutes for between October 2013 and January 2015, a roster of its membership, a real estate sales agreement, a lease, and a purchase agreement for a prior license (Prior Purchase Agreement).3 Club has a board of directors and a membership of 33, and annually charges dues of $25 and $50, respectively, for its active members (voting) and social members (non-voting). The Prior Purchase Agreement between Club and Mr. Sparrow related to one of Club’s prior attempts to acquire a different liquor license. According to the terms, Club would sell its charter and liquor license to Mr. Sparrow for $35,000, $17,500 at the signing of the agreement and $17,500 in monthly installments of $1,000 beginning 30 days after final approval of the transfer of the license to Club. (Id. at 284a.) To purchase this License, Club is borrowing $18,000 from Mr. Sparrow. Mr. Sparrow, who owns the Premises and is Club’s landlord, was not a Club member at the beginning of the application process, but became a member in October 2014 and Club’s President in January 2015. As of January 2015, Club’s officers were: Mr. Sparrow, President; Karen Sparrow, Secretary; Charles Sparrow, Treasurer; Andrew Lamboley, Executive Director; and Thomas Barnes, Manager Steward. (R.R. at 38a.) Club’s Manager Steward, Mr. Barnes, testified on Club’s behalf. (Id. at 227a- 60a.) Club hoped to get a couple of hundred members once it opens, but anticipated

3 Club objected to the admission of the Prior Purchase Agreement on relevance grounds, but the objection was overruled.

3 having an occupancy permit for 50 or 60 persons. The DJ would play on Friday and Saturday nights from 8:00 p.m. to 1:30 a.m. Mr. Barnes, who has worked in licensed establishments for 40 years, has been involved in Club’s prior 3 or 4 attempts to obtain a license since 2009. He has never been involved in an establishment that had drug activity problems and would take steps to avoid, as much as possible, additional noise and litter. Mr. Barnes drafted the Prior Purchase Agreement between Club and Mr. Sparrow, which never went into effect because no license was granted. No similar agreement has been made for the purchase of this License. Because Club was unable to obtain funding from a bank, Mr. Sparrow was loaning Club $18,000 to acquire the License. Club will pay Mr. Sparrow back, but the terms of repayment would not be agreed upon unless the License was approved. (Id. at 231a-33a.) Club will provide Mr. Sparrow a security interest in the License in exchange for the loan. Club has a lease with Mr. Sparrow for $500 to $750 a month, but Mr. Barnes was unsure of the exact amount of rent or the length of the lease. Mr. Barnes stated that no individuals will profit from Club’s business. (Id. at 237a-38a.) The City’s Police Department (Bureau of Police) sought to intervene.4 Detective Brian Radocaj, the coordinator of the Nuisance Bar Taskforce, testified about the impact liquor licensed establishments bring to a neighborhood and that adding a licensed entity that provides live entertainment on the weekends would strain police resources. (Id. at 93a-99a.) Detective Radocaj acknowledged that his testimony “would assume that there were issues with the operator.” (Id. at 98a.) Rosedale Block Cluster, Inc. (Rosedale), a community organization that owns

4 A representative of the area’s City Councilman, who sought to intervene, testified on the Councilman’s behalf, describing, in relevant part, the efforts made and money spent by the City to redevelop the area. (R.R. at 67a-90a.) Similarly, a representative for the area’s state representative stated that the representative supported the opposition to Club’s Application. (Id.

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Bluebook (online)
PAC Club of Western PA v. PLCB, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pac-club-of-western-pa-v-plcb-pacommwct-2018.