Pennsylvania State Police Bureau of Liquor Control Enforcement v. D'Angio, Inc.

666 A.2d 1114, 1995 Pa. Commw. LEXIS 454

• Court: Commonwealth Court of Pennsylvania
• Decided: October 13, 1995
• Status: Published

Opinions

PELLEGRINI,¹ Judge.

This is an appeal from a decision of the Court of Common Pleas of Luzerne County (trial court) that when a licensee’s liquor license was in safekeeping with the Liquor Control Board (Board) and not physically displayed at the licensed premises, it was not a licensed premises subject to Section 493(10) of the Liquor Code’s² prohibition against lewd, immoral or improper entertainment on licensed premises.

D’Angio, Incorporated (Operator) had a liquor license to serve liquor at its restaurant at 935 East 3rd Street, Nescopeck, Pennsylvania (Premises). On February 15, 1993, Operator returned its liquor license to the Board for safekeeping. While Operator no longer sold liquor on the premises, it operated a “bring your own bottle” club (BYOB). There is no dispute that BYOB establishments are not subject to any regulation by the Board.³

On February 20, 1993 and March 6, 1993, enforcement officers visited the premises and found entertainment being provided consisting of totally nude dancers. Even though the license was in safekeeping, enforcement agents issued a citation for violating Section 493(10) of Liquor Code, Act of April 12,1951, P.L. 90, as amended, 47 P.S. § 4-493(10), making it unlawful for a licensee to permit lewd entertainment at a licensed liquor establishment. The Operator moved to quash, alleging that because his license was in safekeeping, he was not operating as a licensee and could not be charged with violating this provision.

Both the Administrative Law Judge and the Board agreed, holding that because the license was in safekeeping, the Operator was not subject to being charged with violations of the Liquor Code that did not deal with the dispensing of liquor. Their decisions were based in part that Section 467 of the Liquor Code, 47 P.S. § 4-467, provides that “[e]very license issued under this article shall be constantly and conspicuously exposed under transparent substance on the licensed premises and no license shall authorize sales until this section has been complied with.” Without being able to post a license because it is in safekeeping, an operator could no longer sell liquor under license and could not be charged with violations for ancillary activity, such as lewd conduct, under the Liquor Code.⁴ The Pennsylvania State Police, Bureau of Liquor Enforcement (Bureau) appealed to the trial court which affirmed. This appeal followed.

The Bureau contends that the trial court erred in holding that a licensee can become unlicensed and shield itself from applicability of the Code simply by virtue of returning its license for safekeeping. The Bureau contends that the inability to post the license and operate the liquor establishment is not controlling because the license itself remains valid awaiting reactivation by licensee under 40 Pa.Code § 7.31.⁵ Because the license is valid while it is in safekeeping, the Bureau then argues that means a licensee has the same privileges and is subject to the same restrictions as when a licensee was operating a liquor establishment, including being able to be cited for violating the Liquor Code.

However, while 40 Pa.Code § 7.31 does provide that a liquor license is valid while in safekeeping, it ignores the fact that it then goes on to provide that once that occurs, operations under the license have ceased. By providing that the license “will be held in safekeeping for the benefit of the licensee and he available for his use when operations are resumed at the licensed premises, or for transfer,” (emphasis added) shows that under this regulation, a license is not subject to being cited under the Liquor Code. By stating that the license is only available for use when operations are resumed, that language conversely indicates that when the license is held in safekeeping, the operations for which a liquor license is issued have, for all intents and purposes, ceased. Because it only is available for use and not in use, Operator is not subject to being charged with any violation of the Liquor Code.

Consistently, we have also interpreted Section 467 of the Liquor Code, the provision that requires a license to be posted, to mean that when there is no license to post because it is in safekeeping, no right continues to exist in licensee to continue to operate a liquor establishment. In Commonwealth v. Berresford, 139 Pa.Cmwlth. 556, 590 A.2d 1379 (1991), the license of a beer distributor was seized pursuant to a writ of execution on a money judgment and physically removed from the licensed premises. The Sheriff delivered the license to the Pennsylvania Liquor Control Board for safekeeping. Enforcement agents discovered that licensee continued to sell beer and citations were issued. Licensee argued that the citations could not be maintained because, even though in safekeeping, he had a beer distributor’s license to sell the beer for which the citations were issued. Rejecting that argument, we held that:

When read together, the obvious intent of both of these sections is that, in order to operate a beer distributorship, (a place where sales are made), the distributor must have a license. Section 467 of the Code further requires that ‘every license issued under this article shall be constantly and conspicuously exposed under transparent substance on the licensed premises and no license shall authorize sales until this section has been complied with.’ Id. Hence, the Code makes it clear that a licensee must physically possess and display his or her license. See also Griffin Liquor License Case, 38 Pa.Cmwlth. 596, 394 A.2d 676 (1978).

Id. at 560, 590 A.2d at 1381 (footnote omitted). Again, because no right is conferred on one that has a license in safekeeping, conversely, there is no ability to cite for violations of the Liquor Code when the license is in the same status.

Accordingly, we agree with the Board and the trial court that if you do not have a license to display, you have neither the privileges nor restrictions as a licensee who is operating under a liquor license. If you have neither the restrictions nor privileges, you cannot be charged with a violation. The decision of the trial court is affirmed.

ORDER

AND NOW, this 13th day of October, 1995, the order of the Court of Common Pleas of Luzerne County dated July 1,1994, is hereby affirmed.

1 . The opinion in the above-captioned matter was reassigned to the author on September 12, 1995.

2 . It shall be unlawful for any licensee ... to permit in any licensed premises any lewd, immoral or improper entertainment ... any violation of this clause shall ... subject the licensee to suspension or revocation of his permit and his license. Act of April 12, 1951, P.L. 90, as amended, 47 P.S. § 4-493(10).

3 .See: Dean v. City of Harrisburg, 128 Pa. Cmwlth. 431, 563 A.2d 965 (1989), petition for allowance of appeal denied, 526 Pa. 640, 584 A.2d 322 (1990).

4 . An agency’s interpretation of a statute through regulations is entitled to great judicial deference and will not be disregarded by this Court unless clearly inconsistent with the statute. See Smith-Kline Beckman Corp. v. Commonwealth, 85 Pa. Cmwlth. 437, 482 A.2d 1344 (1984), aff'd, 508 Pa. 359, 498 A.2d 374 (1985).

5 . 40 Pa.Code § 7.31, entitled "Surrender of licenses in certain cases,” provides, in pertinent part:

(a) A licensee whose licensed establishment is not in operation for a period of 15 consecutive days shall return his license ... to the Board not later than the expiration of the 15 day period. The return of the license ... will not invalidate the license, which will be held in safekeeping for the benefit of the licensee and be available for his use when operations are resumed at the licensed premises, or for transfer.

(b) If the license is returned because the licensee no longer has a lease for the licensed premises, or removes therefrom, or is dispossessed by legal process, the license will be invalidated as to the premises for which issued but will not be invalidated generally nor can-celled, and will be held in safekeeping for the benefit of the licensee for transfer only. 40 Pa.Code § 7.31(a) and (b).