Texas Alcoholic Beverage Commission v. Twenty Wings, Ltd. and TWI XXV, Inc., Judy Hall, Director, as Partners D/B/A Hooters

112 S.W.3d 647, 2003 Tex. App. LEXIS 5464
Court of Appeals of Texas·Decided June 26, 2003·No. 02-02-00102-CV·Published·Cited by 4 cases

Opinion

OPINION

ANNE GARDNER, Justice.

I. INTRODUCTION

This case concerns an application for a beer retail dealer’s on-premise license and a retail dealer’s on-premise late hours license with food and beverage certificate (“alcoholic beverage license”) by Appellee Twenty Wings Ltd., and TWI XXV, Inc., Judy Hall Director as Partners d/b/a Hooters (“Hooters”). The Texas Alcoholic Beverage Commission (“TABC”) appeals the district court’s order overruling the Tar-rant County judge’s administrative ruling denying Hooters’ application. TABC contends that the county judge’s order was supported by substantial evidence and should have been affirmed. We reverse and render.

II. FACTUAL AND PROCEDURAL BACKGROUND

Hooters applied for an alcoholic beverage license in conjunction with its decision to build and open a new restaurant at 5821 IH-20 West in Arlington, Texas. In response, Decency for Arlington, a group formed for the purpose of opposing Hooters’ application for an alcoholic beverage license, filed a letter of protest with Tar-rant County Judge Tom Vandergriff. On October 4, 2001 the county judge sat in his administrative capacity as a hearing officer for the TABC to determine whether Hooters’ application should be granted. 1 At the hearing, Hooters presented one witness in support of its application. The protestors presented six witnesses and a variety of Hooters’ paraphernalia to demonstrate that the place or manner in which Hooters may conduct its business warranted a refusal of the alcoholic beverage license based on the general welfare, health, peace, morals, safety, and sense of decency of the people. See Tex. Alco. Bev.Code Ann. § 61.42(a)(3) (Vernon 1995).

After taking the matter under advisement, the county judge denied Hooters’ application by issuing an order that stated,

On October 4, 2001, a hearing was held with regard to the above styled and numbered application. After hearing all *649 evidence presented and reviewing the application, the court orders the application refused based on Sections 61.42(a)(3) of the Texas Alcoholic Beverage Code, the place or manner in which the applicant for a retail dealer’s license may conduct their business warrants a refusal of a license based on the general welfare, morals, safety, and sense of decency of the people. [Emphasis supplied.]

Hooters appealed this order under section 11.67 of the alcoholic beverage code to the 48th District Court. 2

After an initial hearing conducted on December 28, 2001, the trial court, with Judge Bob McCoy presiding, remanded the case to the county judge to amend his order either to conform to the findings of fact and conclusions of law or to amend the findings of fact and conclusions of law to conform to the order. The order on remand further instructed the county judge to provide greater specificity as to finding of fact number two, which concerned the proximity of the proposed licensee’s location to schools, churches, and residences. The order allowed the county court to receive additional evidence if necessary.

The county judge complied and subsequently issued amended findings of fact and conclusions of law, as well as an amended order stating the following:

On October 4, 2001, a hearing was held with regard to the above styled and numbered application. After hearing all of the evidence presented and reviewing the application, the court orders the application refused based on Sections 61.42(a)(3) of the Texas Alcoholic Beverage Code. The place where the Applicant intends to conduct business in combination with the manner in which the applicant for a retail dealer’s license may conduct their business warrants a refusal of a license based on the general welfare, morals, safety, and sense of decency of the people. [Emphases supplied.]

Hooters filed a motion for rehearing, which the county judge denied. Hooters then filed its first amended original petition in the 48th District Court. 3 On February 28, 2002, visiting Judge George Crowley conducted a hearing and rendered a final judgment reversing the county judge’s order, holding that the order was not supported by substantial evidence. 4

III. DISCUSSION

In one issue, the TABC argues in its appeal that the district court erred as a matter of law in holding that the county judge’s administrative ruling denying Hooters’ application was not supported by substantial evidence. 5 Rather, the TABC *650 contends that substantial evidence supported the county judge’s conclusion that a special circumstance existed warranting a denial of Hooters’ application. Hooters responds that the district court properly found that no substantial evidence justified the denial of an alcoholic beverage license as ordered by the county judge. We agree with the TABC.

A. Governing Statute

As one of the mandatory grounds for refusal of an alcoholic beverages permit or license, the alcoholic beverage code lists the following:

The county judge shall refuse to approve an application for a license as a distributor or retailer if he has reasonable grounds to believe and finds that ... the place or manner in which the applicant for a retail dealer’s license may conduct his business warrants a refusal of a license based on the general welfare, health, peace, morals, safety, and sense of decency of the people.

Tex. Alco. Bev.Code Ann. § 61.42(a)(3). Additionally, “in order to deny a permit to a fully qualified applicant who proposes to operate a lawful business in a wet area and in compliance with the zoning ordinances of the city, some unusual condition or situation must be shown so as to justify a finding that the place or manner in which the applicant may conduct his business warrants a refusal of a permit.” Tex. Alcoholic Beverage Comm’n v. Mikulenka, 510 S.W.2d 616, 619 (Tex.Civ.App.-San Antonio 1974, no writ) (footnote omitted); see Bavarian Props., Inc. v. Tex. Alcoholic Beverage Comm’n, 870 S.W.2d 686, 689-90 (Tex.App.-Fort Worth 1994, writ denied).

B. Standard of Review

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Texas Alcoholic Beverage Commission v. Twenty Wings, Ltd. and TWI XXV, Inc., Judy Hall, Director, as Partners D/B/A Hooters, 112 S.W.3d 647, 2003 Tex. App. LEXIS 5464 (Tex. Ct. App. 2003).

112 S.W.3d 647 (Texas Alcoholic Beverage Commission v. Twenty Wings, Ltd. and TWI XXV, Inc., Judy Hall, Director, as Partners D/B/A Hooters) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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