Kennedy Liquor & Deli Shoppe Inc v. Liquor Control Commission ( 2016 )

STATE OF MICHIGAN
COURT OF APPEALS
KENNEDY LIQUOR & DELI SHOPPE, INC., UNPUBLISHED
d/b/a BIG DADDY’S LIQUOR & PARTY March 24, 2016
STORE,
Plaintiff-Appellee,
v No. 325387
Oakland Circuit Court
LIQUOR CONTROL COMMISSION, LC No. 2014-140734-AS
Defendant,
and
BALDWIN EXPRESS, INC.,
Intervening Defendant-Appellant.
Before: K. F. KELLY, P.J., and FORT HOOD and BORRELLO, JJ.
PER CURIAM.
Defendant, Baldwin Express, Inc., appeals as of right the trial court’s order granting
summary disposition pursuant to MCR 2.116(C)(10) to plaintiff, Kennedy Liquor and Deli
Shoppe, Inc., in this action from a decision of the Liquor Control Commission (“LCC”)1 granting
defendant’s request for a transfer of a liquor license. For the reasons set forth in this opinion, we
reverse and remand for entry of summary disposition in favor of defendant.
I. BACKGROUND
In May of 2014, the LCC granted defendant’s application for transfer of a specially
designated distributor’s (“SDD”) liquor license to its store in Pontiac, Michigan. Plaintiff has a
license to sell liquor and operates its store within one-half mile of defendant’s store. The
regulatory code relative to liquor licenses prohibited the LCC from granting defendant’s
1
Although the LCC was also a party to the underlying action, it is not a party to the appeal, and
therefore, it is not designated as “defendant” in this opinion.
-1-
application if there was an existing location with a license within one-half mile of the new
location absent an applicable waiver. The LCC found that a waiver applied because the
businesses were separated by a thoroughfare of not less than four lanes of traffic. Accordingly, it
approved the liquor license transfer to defendant.
Plaintiff brought the instant action in circuit court requesting superintending control over
the LCC’s issuance of the license to defendant and relevant declaratory relief. Plaintiff alleged
that the exception did not apply because the roadway separating the businesses was not four
connected lanes. According to plaintiff, the intersection at issue consisted of two distinct two-
lane roads, namely West Kennett Road and Parkdale Avenue, along with a turn lane, which met
in a “Y” shaped intersection at Baldwin Avenue. In contrast, the LCC asserted that West
Kennett and Parkdale merged before the intersection at Baldwin Avenue to create one
thoroughfare having the requisite lanes of traffic for an exception to the half-mile rule.
Both defendant and plaintiff moved for summary disposition. The trial court granted
plaintiff’s motion for summary disposition after finding that plaintiff was entitled to a writ of
superintending control and for declaratory relief. The court reasoned the LCC failed to perform
a clear legal duty and that plaintiff was without an adequate legal remedy in this matter. The
trial court ordered the LCC to immediately withdraw its approval of defendant’s application.
This appeal ensued.
II. STANDARD OF REVIEW
We review a trial court’s decision on a motion for summary disposition de novo.
Johnson v Recca, 492 Mich. 169, 173; 821 NW2d 520 (2012). Summary disposition under MCR
2.116(C)(10) is proper if the evidence fails to establish a genuine issue of material fact, and the
moving party is entitled to judgment as a matter of law. Dextrom v Wexford Co, 287 Mich. App.
406, 415; 789 NW2d 211 (2010). Furthermore, we review a trial court’s decision to grant or
deny an order of superintending control for an abuse of discretion. In re Goehring, 184 Mich
App 360, 366; 457 NW2d 375 (1990). “A court by definition abuses its discretion when it
makes an error of law.” In re Waters Drainage Dist, 296 Mich. App. 214, 220; 818 NW2d 478
(2012).
III. ANALYSIS
At the outset, plaintiff contends that defendant challenged plaintiff’s request for a writ of
superintending control, but failed to challenge plaintiff’s request for declaratory relief.
Accordingly, plaintiff argues, defendant has waived the right to challenge the court’s order to the
extent the order grants declaratory relief. Despite this contention, it is clear from the lower court
record that the two remedies plaintiff sought were inextricably linked and concerned the same
underlying transaction, which is at issue in this appeal. Moreover, consideration of the issue is
necessary to a proper determination of the case; therefore, we have discretion to review the issue.
See Steward v Panek, 251 Mich. App. 546, 554; 652 NW2d 232 (2002). Finally, to the extent that
plaintiff argues that defendant waived its argument with respect to standing, as discussed below,
the standing issue is moot given that defendant was entitled to summary disposition on other
grounds.
-2-
Defendant additionally argues that plaintiff was not a proper party with authority to seek
a writ of superintending control. However, irrespective of whether plaintiff was entitled to seek
superintending control, the trial court erred as a matter of law in finding that the LCC violated
the regulatory code and therefore abused its discretion in granting plaintiff’s request for
superintending control and declaratory relief. Accordingly, there is no reason for this Court to
consider this particular argument.
Defendant also asserts that the trial court erred in applying incorrect standards of review.
We find this argument persuasive. When an evidentiary hearing is not required by statute in
connection with a license transfer request, such a proceeding is not a contested case and therefore
is not covered by the appeals procedure of the Administrative Procedures Act (APA). J & P
Market, Inc v Liquor Control Comm, 199 Mich. App. 646, 650; 502 NW2d 374 (1993). Rather,
the scope of review provided by Const 1963, art 6, § 28, applies in such cases and limits review
to a determination of whether the action of the agency was authorized by law. Id. An
administrative decision is unauthorized by law if it is: (1) in violation of a statute or the
constitution, (2) in excess of the statutory authority or jurisdiction of the agency, (3) made upon
unlawful procedures resulting in material prejudice, or (4) arbitrary and capricious. English v
Blue Cross Blue Shield of Michigan, 263 Mich. App. 449, 455; 688 NW2d 523 (2004). It is not
proper for the circuit court or this Court to review the evidentiary support of an administrative
agency’s decision where no hearing was required. Northwestern Nat’l Casualty Co v Comm’r of
Ins, 231 Mich. App. 483, 488; 586 NW2d 563 (1998).
In this case, under the plain language of the applicable administrative rule, the LCC is
required to deny an application for an SDD liquor license where the applicant is located within
one half-mile of another such licensee. Mich Admin Code, R 436.1133. The Code contains an
exception to this rule where the two businesses are separated by “a major thoroughfare of not
less than 4 lanes of traffic.” Mich Admin Code, R 436.1133(c). We have held that the decision
whether to grant an exemption based on Rule 33 is within the discretion of the commission. J &
P Market, Inc, 199 Mich. App. at 651.
Here, the trial court was required to determine whether the LCC’s decision was
unauthorized by law by determining whether: the LCC violated a statute or the constitution,
acted outside the scope of its authority, rendered a decision based on unlawful procedure, or
made an arbitrary and capricious decision. English, 263 Mich. App. at 455. The LCC reviewed
the matter and determined that the merger of the lanes just before the intersection with Baldwin
was sufficient to satisfy the definition of “a major thoroughfare of not less than 4 lanes of
traffic.” In doing so, the LCC was exercising its lawful discretion to interpret and apply the
relevant regulatory rule. See J & P Market, Inc, 199 Mich. App. at 651. Although plaintiff
submitted evidence to support a different interpretation of the exception, the trial court erred as a
matter of law in reviewing evidence de novo when there was no hearing required. Northwestern
Nat’l Casualty Co, 231 Mich. App. at 488. Because the LCC’s decision was not arbitrary or
capricious, did not violate a statute or the constitution, and was not based on improper procedure,
the decision was authorized by law. See English, 263 Mich. App. at 455. Once these conditions
were met, the trial court was devoid of discretion to delve into the facts behind the decision
reached by the LCC. Accordingly, the trial court abused its discretion in granting plaintiff’s
request for superintending control and related declaratory relief under the circumstances.
-3-
Reversed and remanded for entry of an order granting summary disposition in favor of
defendant. Having prevailed in full, defendant may tax costs. MCR 7.219(A). We do not retain
jurisdiction.
/s/ Kirsten Frank Kelly
/s/ Karen M. Fort Hood
/s/ Stephen L. Borrello
-4-