Tokumoto v. Department of Revenue

869 P.2d 782, 264 Mont. 56, 51 State Rptr. 144, 1994 Mont. LEXIS 38
CourtMontana Supreme Court
DecidedFebruary 24, 1994
Docket93-340
StatusPublished
Cited by3 cases

This text of 869 P.2d 782 (Tokumoto v. Department of Revenue) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tokumoto v. Department of Revenue, 869 P.2d 782, 264 Mont. 56, 51 State Rptr. 144, 1994 Mont. LEXIS 38 (Mo. 1994).

Opinions

JUSTICE HUNT

delivered the Opinion of the Court.

Petitioner/Appellant, Nancy C. Tokumoto, d/b/aKadena’s Gourmet Take-Away (Tokumoto), appeals from an order of the Fourth Judicial District Court, Missoula County, affirming the decision of the Department of Revenue which awarded a beer/wine license in the City of Missoula to respondent, Greenleaf Restaurant (Greenleaf).

We affirm.

The dispositive issue is whether the District Court erred when it affirmed the Department of Revenue’s findings that Greenleaf was qualified to receive an on-premises consumption beer/wine license.

In early 1991, the City of Missoula annexed adjoining property increasing the city’s population. The Department of Revenue (DOR) found that this increase justified issuance of four new beer/wine licenses to Missoula businesses, pursuant to §§ 16-4-203 and -502, MCA. Twenty-one Missoula businesses applied for the licenses. DOR held a hearing on October 22, 1991, for purposes of considering the applications, pursuant to § 16-4-207(3), MCA. Seventeen applicants appeared, including Greenleaf’s sole proprietor and stockholder, Mr. Merhi, who testified that he was not a United States citizen. Many other applicants objected to his application based on this admission because, they argued, residency and state voter registration requirements were conditions precedent to DOR’s consideration of a licensee application.

On December 24,1991, the hearing officer sent notice of a proposed decision to all interested parties which stated that Greenleaf was to be one of the successful applicants. The hearing examiner found that the citizenship requirement under § 16-4-40 l(2)(a)(iii), MCA, could be satisfied at any time prior to DOR’s order for the issuance of the new licenses, and that Mr. Merhi’s citizenship was not a condition precedent for consideration of qualification or fitness for a license. In addition, the hearing examiner found that Tokumoto would be an alternate recipient in the event any one of the four successful applicants did not receive a license.

[58]*58In January 1992, Tokumoto submitted written objections to the hearing examiner’s proposed decision. On July 24, 1992, DOR adopted the proposed findings of the hearing examiner that awarded Greenleaf a license.

Tokumoto sought judicial review, pursuant to § 16-4-411, MCA, in the Fourth Judicial District, Missoula County. She contested DOR’s acceptance of Greenleaf’s application on the basis that at the time of Greenleaf’s application, § 16-4-405(3)(c), MCA, required Mr. Merhi to be a state registered voter, which first required him to be a United States citizen. DOR contended that § 16-4-401(2), MCA, requires the applicant to be a registered voter only by the time DOR orders the issuance of a license, and that Mr. Merhi could meet that requirement. Further, DOR expressed that it routinely grants liquor licenses for facilities not yet built, allowing businesses to bring premises up to a standard of suitability prior to issuing a license. In a similar manner, DOR argued that eligibility requirements for beer/wine licensee applicants could be cured prior to issuance of the license.

The District Court, giving deference to DOR’s interpretation of its own regulations, found that DOR correctly interpreted §§ 16-4-401 and -405, MCA, when it issued its approval of the license to Greenleaf. On April 19, 1993, Tokumoto filed a motion requesting the District Court to reconsider its order of April 9,1993, which the court denied. On June 8, 1993, Tokumoto filed this appeal.

Did the District Court err when it affirmed the Department of Revenue’s findings that Greenleaf was qualified to receive an on-premises consumption beer/wine license?

The administration of liquor licenses is governed by the Montana Alcoholic Beverage Code, which includes licensing criteria set forth in §§ 16-4-401 through -405, MCA. Section 16-4-401(2)(a)(iii), MCA, provides:

In the case of a license that permits on-premises consumption, the department must find in every case in which it makes an order for the issuance of a new license or for the approval of the transfer of a license that:
(iii) the applicant is a resident of the state and is qualified to vote in a state election .... [Emphasis added].

Section 16-4-401(2)(b)(i), MCA, requires:

(b) in the case of a corporate applicant:
[59]*59(i) the owners of at least 51% of the outstanding stock meet the requirements of subsection (2)(a)(iii) ....

Section 16-4-405(3)(c), MCA, provides:

(3) A license under this code may not be issued if the department finds from the evidence at the hearing held pursuant to 16-4-207(3) that:
(c) the applicant or the premises proposed for licensing fail to meet the eligibility or suitability criteria established by this code .... [Emphasis added].

We have held that the standard for reviewing an administrative agency’s conclusions of law is whether the agency’s interpretation of law is correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603.

Tokumoto claims that DOR’s award of the beer/wine license to Greenleaf resulted in substantial prejudice to her. She emphasizes that the parties do not dispute that at the time of application, at the hearing, and at the issuance of the preliminary findings and proposed order, Greenleaf’s owner, Mr. Merhi, was not a United States citizen.

Tokumoto argues that § 16-4-401(2)(a)(iii), MCA, clearly sets forth the criteria that must be met in every case in which DOR makes an order, but that the statute is silent as to when the evidence of qualifications must be presented. Tokumoto asserts that DOR’s interpretation of the statute, that an applicant could qualify any time before DOR makes a final order for the issuance of a new license, is incorrect because it requires insertion of language not in the statute. Tokumoto contends that, on the contrary, the plain language of § 16-4-405(3)(c), MCA, clearly and unambiguously dictates that an applicant be eligible as determined by evidence produced at the hearing.

The hearing examiner found:

It has been long-standing, past practice of the Department to permit applicants to cure defects in an application prior to actual issuance of a license, the specific and unequivocal term used in the statute. Therefore, citizenship is not used as a criteria in looking to the applicants before this hearing.

DOR asserted that Tokumoto’s interpretation of the statutes employed too narrow a reading. It reasoned:

Just as the Department allows the premises to be brought to a standard of suitability after submission of the [liquor license] application, so should an [beer/wine licensee] applicant be permit[60]*60ted to complete attainable eligibility criteria after submission of the application.

The District Court gave deference to DOR’s interpretation of its own regulations. The court found that from the plain language of §§ 16-4-401 and -405, MCA, “DOR cannot issue a license if the evidence at the hearing reveals that the applicant failed to meet the eligibility criteria.... [and] DOR cannot issue

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Related

Kiser v. Department of Revenue
1999 MT 228 (Montana Supreme Court, 1999)
Weitz v. Montana Department of Natural Resources
943 P.2d 990 (Montana Supreme Court, 1997)
Tokumoto v. Department of Revenue
869 P.2d 782 (Montana Supreme Court, 1994)

Cite This Page — Counsel Stack

Bluebook (online)
869 P.2d 782, 264 Mont. 56, 51 State Rptr. 144, 1994 Mont. LEXIS 38, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tokumoto-v-department-of-revenue-mont-1994.