Phillips' Bar & Restaurant, Inc. v. City of New Orleans

116 So. 3d 92, 2002 La.App. 4 Cir. 1396, 2013 WL 1774779, 2013 La. App. LEXIS 809
CourtLouisiana Court of Appeal
DecidedApril 24, 2013
DocketNo. 2012-CA-1396
StatusPublished
Cited by14 cases

This text of 116 So. 3d 92 (Phillips' Bar & Restaurant, Inc. v. City of New Orleans) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Phillips' Bar & Restaurant, Inc. v. City of New Orleans, 116 So. 3d 92, 2002 La.App. 4 Cir. 1396, 2013 WL 1774779, 2013 La. App. LEXIS 809 (La. Ct. App. 2013).

Opinion

PAUL A. BONIN, Judge.

1 tPhillips’ Bar and Restaurant has operated at the same location in the University section of Uptown New Orleans for more than seventy years. The alcohol beverage outlet, or ABO, licenses are held by the corporation Phillips’ Bar & Restaurant, Inc. The property on which Phillips’ operates, that is the licensed premises, is owned by 733 Cherokee, L.L.C., as is an adjoining vacant lot, which Phillips’ used as a patio for about seven years. There is overlap between the corporation’s shareholders and the limited liability company’s members. Phillips’s connections filed a petition for declaratory judgment against the City of New Orleans concerning its non-conforming use of the adjoining vacant lot.

The City reconvened and a sought in-junctive relief to prohibit any use of the vacant lot by Phillips’ as a part of its business operations. A neighborhood as[96]*96sociation, the Maple Area Residents, Inc., intervened on the side of the City and against the Phillips’s connections and sought to enforce a restrictive covenant through a request for injunctive relief. Following the earlier issuance of a preliminary injunction, the district court denied the declaratory relief Phillips’s ^connections sought and granted the City and MARI declaratory relief and a permanent injunction prohibiting any business use of the patio lot by Phillips’. The Phillips’ connections alone have appealed the judgment.

Upon our review, we conclude that the district court was not clearly wrong in finding that Phillips’s connections had not established that any non-conforming use enjoyed by the licensed premises extended to the adjoining vacant lot or somehow incorporated that property into the licensed property. And, on that account, we also conclude that the injunctive relief granted, such that it prohibits the selling or serving of alcohol or food by Phillips’ or anyone else on the adjoining vacant lot, is proper, but that its reach to prohibiting selling or serving of alcohol or food by Phillips’ for its patrons’ consumption off of its licensed premises, including on the adjoining lot, is not supported by the law and the evidence. Accordingly, we amend the permanent injunction and affirm the judgment as amended.

We explain our decision in greater detail in the following Parts.

I

In this Part we describe the history of the ownership and use of the properties as well as provide the specific legal description for the properties involved, then generally describe the particulars of the ensuing litigation among the parties, and finally summarize the evidence at the trial of this matter and the resulting judgments.

JjA

Paul and JoAnn Ippolito purchased both municipal lots that are the subject of the present controversy from Rose Stipelco-vich Phillips. The Ippolitos purchased Lot 1-A, which bears the municipal address 733 Cherokee Street, New Orleans, on October 23, 1986. This is the lot on which Phillips’ is licensed to operate as an ABO. Later, they acquired Lot 2-A, which bears the municipal address 727 Cherokee Street, on March 9, 1990. This was an unimproved residential lot that was never used by Mrs. Phillips in connection with the operation of Phillips’. The Ippolitos subsequently transferred their interests in the lots, and the improvements thereon, to 733 Cherokee, L.L.C. in November 2009. The Ippolitos are the only members of the limited liability company.

As we noted, Phillips’ is owned by the Louisiana corporation, Phillips’ Bar & Restaurant, Inc. Paul F. Ippolito, who is its president, and his wife, JoAnn Ippolito, own two-thirds of its common stock. Their son, Joseph Ippolito, owns the remaining one-third, is also a corporate officer, and is the bar’s day-to-day manager. The Ippolitos purchased the business, Phillips’ Bar and Restaurant, from Mrs. Phillips in 1986 and incorporated it in 1988.

Phillips’ currently operates the bar on Lot 1-A and holds a Class-A general Alcoholic Beverage Outlet license for use on Lot 1-A only. Importantly, an ABO permit has never been issued for Lot 2-A. Both lots are zoned RD-2, two family presidential, though Lot 1-A acquired a legal non-conforming status by virtue of the many decades that a bar and restaurant have been operated on the premises.1

[97]*97The record suggests that the neighborhood association, MARI, has had, at times, a contentious relationship with Phillips’. Several years prior to the Ippolitos’ purchase of the two lots and the bar and restaurant, Mrs. Phillips entered into an agreement with the association wherein she agreed to enter into a restrictive covenant with MARI in exchange for MARI’s cessation of opposition to Mrs. Phillips’s building renovation plans. Specifically, the restrictive covenant provides that Mrs. Phillips agrees to comply with the requirements of New Orleans’ Comprehensive Zoning Ordinance, that the bar and restaurant, which she was then rebuilding to replace the one that had occupied 733 Cherokee Street, would not be larger in size than that which had previously existed on the site, and that she would not offer a greater scope or degree of service than that offered by her prior restaurant at that location.

After the acquisitions by the Ippolitos, the neighborhood residents and MARI members complained to the City about operation and use of Lots 1-A and 2-A by Phillips’. The complaints intensified in 1996 after the Ippolitos began improving Lot 2-A to serve as an accessory patio bar connected to the bar and restaurant occupying Lot 1-A. For example, after having received complaints about unpermitted construction activities on Lot 2-A, Inspector Mike Savage of the City’s Department of Public Safety and Permits Building Inspection Bureau | ¿conducted a field inspection of both Lot 2-A and the bar and restaurant occupying Lot 1-A on October 23, 1996. Inspector Savage subsequently prepared a written report wherein he noted the construction of a fence, the placement of concrete planters and an air conditioning unit on Lot 2-A. Further, a City investigator again inspected Phillip’s and Lot 2-A on August 1, 1997. This inspection resulted in a September 19, 1997, notice of hearing from the City’s Administrative Adjudication Bureau, though the hearing was subsequently continued by the City, and later abandoned. Moreover, Mr. Savage, the City inspector, examined the property on September 9, 1999, resulting in a September 10, 1999 Notice from the City ordering Paul Ippolito to either remove the improvements on Lot 2-A or secure a building permit. The record also contains a September 17, 1999 memorandum from Paul May, the Director of the City’s Department of Safety and Permits, to a deputy city attorney. In the memorandum, Mr. May notes that he had “received complaints from neighbors of the above alcoholic beverage outlet [at 733 Cherokee Street] that it is operating a patio bar next door to the establishment on a lot at 727 Cherokee Street which I understand the bar owns.” A City inspector again visited Lot 2-A on September 21, 1999, and took photographs of the improvements made to Lot 2-A. These photographs were later forwarded to Paul May. Subsequently, the City issued a municipal citation to Joseph Ippolito, d/b/a Phillips’ Bar and Restaurant, alleging various violations in connection with Lot 2-A. Mr. Ippolito pled not guilty and filed a motion to quash. The court later dismissed the citation.

IfiOn April 20, 2000, MARI’s president wrote a letter on MARI letterhead to Mr. May concerning Phillips’ use of Lot 2-A as a patio bar.

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116 So. 3d 92, 2002 La.App. 4 Cir. 1396, 2013 WL 1774779, 2013 La. App. LEXIS 809, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phillips-bar-restaurant-inc-v-city-of-new-orleans-lactapp-2013.