Suburban Inn, Inc. v. Ohio Liquor Control Comm. , 2014 Ohio 4355 ( 2014 )

[Cite as Suburban Inn, Inc. v. Ohio Liquor Control Comm., 2014-Ohio-4355.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Suburban Inn, Inc., :
Appellant-Appellant, : No. 13AP-811
(C.P.C. No. 12CVF-12-14936)
v. :
(REGULAR CALENDAR)
Ohio Liquor Control Commission, :
Appellee-Appellee. :
D E C I S I O N
Rendered on September 30, 2014
Maurice A. Thompson, for appellant.
Mike DeWine, Attorney General, and Paul Kulwinski, for
appellee.
APPEAL from the Franklin County Court of Common Pleas.
BROWN, J.
{¶ 1} This is an appeal by appellant, Suburban Inn, Inc. ("Suburban"), from a
judgment of the Franklin County Court of Common Pleas affirming an order of appellee,
Ohio Liquor Control Commission ("commission"), that affirmed an order of the Ohio
Division of Liquor Control ("division") denying Suburban's 2011-2012 renewal application
for a liquor permit.
{¶ 2} Suburban operates a place of business located at 15120 Bagley Road,
Middleburg Heights, Ohio, and holds a Class D-1-2-3-3A-6 liquor permit issued by the
division. Beginning in 2007, the Cuyahoga County Board of Health ("CCBOH"), as
designee of the Ohio Department of Health ("ODH"), cited Suburban for violations of
Ohio's Smoke-Free Workplace Act ("the Smoke-Free Act"). Specifically, CCBOH cited
Suburban for 23 violations of the Smoke-Fee Act between July 9, 2007 and March 16,
2012. By letter mailed September 28, 2011, the division informed Suburban that it was
No. 13AP-811 2
denying the renewal of its 2011-2012 liquor permit on the basis that Suburban "has
operated its liquor permit business in a manner that demonstrates a disregard for the
laws, regulations, or local ordinances of this state [pursuant to] R.C. §4303.292(A)(1)(b),
Chapter 3794, and O.A.C. Chapter 3701-52."
{¶ 3} Suburban filed an appeal with the commission from the order of the
division and the commission conducted a hearing on August 16, 2012. The commission
issued an order November 14, 2012 affirming the division's order rejecting the renewal of
Suburban's permit on the basis that Suburban had "operated its permit business in a
manner that demonstrates a disregard for the laws and regulations of this state pursuant
to R.C. 4303.292(A)(1)(b)."1
{¶ 4} Suburban filed an appeal with the trial court from the order of the
commission and the parties submitted briefs to the court. By decision and entry filed
August 26, 2013, the trial court affirmed the order of the commission affirming the
division's order rejecting Suburban's 2011-2012 renewal application.
{¶ 5} On appeal, Suburban sets forth the following three assignments of error for
this court's review:
[I.] The court of common pleas erred in concluding that the
Ohio Liquor Control Commission, Division of Liquor Control
lawfully denied Suburban Inn's 2011-2012 liquor permit
renewal application based on violations of the Ohio Smoke
Free Workplace Act.
[II.] The court of common pleas erred in concluding that R.C.
4303.292(A)(1)(b) permitted the Ohio Liquor Control
Commission, Division of Liquor Control to consider violations
of the Ohio Smoke Free Workplace Act in determining
whether to approve or deny Suburban Inn's 2011-2012 liquor
license renewal application.
[III.] The court of common pleas erred in concluding the
order of the Liquor Control Commission rejecting Appellant's
2011-2012 liquor permit renewal application was supported
by reliable, probative and substantial evidence and in
accordance with law.
1 At the time of the division's order (September 28, 2011), the record indicates that CCBOH had imposed
fines on Suburban for 20 violations of the Smoke-Free Act. Subsequent to that order, but prior to the
commission's hearing, CCBOH imposed fines on Suburban for three further violations of the Smoke-Free
Act (occurring on October 7, 2011, January 23 and March 16, 2012, respectively).
No. 13AP-811 3
{¶ 6} Suburban's assignments of error are interrelated and will be considered
together. Under these assignments of error, Suburban asserts the trial court erred in:
(1) determining that the commission and division lawfully denied its liquor permit
renewal application based on violations of the Smoke-Free Act, (2) holding that R.C.
4303.292(A)(1)(b) permitted the division to consider violations of the Smoke-Free Act,
and (3) finding that the order of the commission was supported by reliable, probative, and
substantial evidence and was in accordance with law.
{¶ 7} In an administrative appeal, a trial court may affirm the order of an agency
if the court finds, "upon consideration of the entire record and any additional evidence the
court has admitted, that the order is supported by reliable, probative, and substantial
evidence and is in accordance with law." R.C. 119.12. In Gina, Inc. v. Ohio Liquor Control
Comm., 10th Dist. No. 11AP-107, 2011-Ohio-4927, ¶ 12-13, this court discussed the
applicable standards of review for a court of common pleas and an appellate court in
considering an administrative appeal, stating in part as follows:
The common pleas court's "review of the administrative
record is neither a trial de novo nor an appeal on questions of
law only, but a hybrid review in which the court 'must
appraise all the evidence as to the credibility of the witnesses,
the probative character of the evidence, and the weight
thereof.' " The common pleas court must give due deference
to the administrative agency's resolution of evidentiary
conflicts, but "the findings of the agency are by no means
conclusive." The common pleas court conducts a de novo
review of questions of law, exercising its independent
judgment in determining whether the administrative order is
"in accordance with law."
An appellate court's review of an administrative decision is
more limited than that of a common pleas court. The
appellate court is to determine only whether the common
pleas court abused its discretion. Absent an abuse of
discretion, a court of appeals may not substitute its judgment
for that of an administrative agency or the common pleas
court. An appellate court, however, has plenary review of
purely legal questions.
(Citations omitted.)
{¶ 8} In accordance with R.C. 4303.271, "a permit holder is entitled to renew its
liquor permit unless good cause exists to reject the renewal application." Marciano v.
No. 13AP-811 4
Ohio Liquor Control Comm., 10th Dist. No. 02AP-943, 2003-Ohio-2023, ¶ 19. Pursuant
to R.C. 4303.292(A)(1)(b), the division may refuse to renew a liquor permit if the
applicant "[h]as operated liquor permit businesses in a manner that demonstrates a
disregard for the laws, regulations, or local ordinances of this state or any other state."
{¶ 9} We first address Suburban's assertion that the trial court misapplied the law
in addressing its claim that the division lacked authority to enforce violations of the
Smoke-Free Act on behalf of ODH. According to Suburban, any "disregard for the laws"
in this case is punishable only by ODH, the agency vested with enforcement powers over
smoking-ban violations. Suburban further argues the trial court erred in holding that the
division and commission can consider violations of a specific punishment statute (i.e., the
Smoke-Free Act) to enforce a general punishment statute (R.C. 4303.292).
{¶ 10} While the trial court agreed with Suburban's contention that the division
lacked authority to enforce violations of the Smoke-Free Act, the court held that the
commission's order, affirming the order of the division rejecting the renewal application,
"does not enforce any provision of the [Smoke-Free] Act." Specifically, the trial court
noted that the issue before the commission did not involve a consideration of whether
Suburban violated the Smoke-Free Act, as such finding had been previously made by
CCBOH. Rather, the court held, the commission's order "correctly finds that Suburban's
failure to comply demonstrates a disregard for the laws of this state."
{¶ 11} Upon review, we find no error with the trial court's determination that
neither the division nor the commission has improperly attempted to enforce the Smoke-
Free Act. As recognized by the trial court, "the fact that another agency has enforced the
law against a permit holder" is not dispositive as to whether that same conduct
"demonstrates a disregard for the law as that term is used in R.C. 4303.292(A)(1)(b)."
{¶ 12} Decisions from this court support the trial court's determination on this
issue. In Nasser v. Ohio Liquor Control Comm., 163 Ohio App.3d 234, 2005-Ohio-4638(1oth Dist.), agents of the Ohio Department of Taxation searched the appellant-owner's
liquor store after receiving a complaint that the owner had sold untaxed cigarettes.
During the search, agents discovered a variety of untaxed tobacco products, and the
search also revealed that the store did not have a current cigarette license. The owner was
charged with various offenses as a result of that agency's investigation, and the division
No. 13AP-811 5
subsequently relied on those findings to reject, pursuant to R.C. 4303.292(A)(1)(b), the
appellant-owner's application to transfer ownership of a liquor permit. On appeal, this
court held that such evidence constituted "reliable, probative, and substantial evidence to
support the division's finding that the appellant and her husband operated their liquor
permit business in a manner that demonstrated a disregard for the laws, regulations, or
local ordinances of Ohio." Id. at ¶ 15.
{¶ 13} In Douglas v. Ohio Liquor Control Comm., 10th Dist. No. 11AP-133, 2012-
Ohio-2218, the commission denied a renewal application for a liquor permit where the
evidence indicated the public health department had found health and safety violations at
the permit holder's establishment. This court, in affirming the trial court's decision
upholding the order of the commission, rejected the permit holder's challenge to the
commission's finding he had shown a disregard for laws, regulations or local ordinances
based on those health code violations.
{¶ 14} In a similar vein, this court has noted that "[t]he fact that the Commission is
without authority to arrest or charge a permit holder for a violation of R.C. Chapter 2915
[criminalizing gambling activities] has no bearing on the Commission's authority to
sanction the individual's liquor permit for the same violation." Convenient Food Mart,
Inc., No. 392 v. Ohio Liquor Control Comm., 10th Dist. No. 10AP-248, 2010-Ohio-4612,
¶ 17. In Convenient Food Mart, this court further observed that "[b]ecause possessing a
liquor permit is a privilege, which also carries with it great responsibility, the General
Assembly has vested the Liquor Control Commission with broad authority to regulate that
practice in this State." Id. at ¶ 14.
{¶ 15} In the instant case, we agree with the trial court that the proper legal entity
(CCBOH) enforced the law against Suburban with respect to violations of the Smoke-Free
Act, and the division and commission did not act contrary to law in considering, for
purposes of R.C. 4303.292, whether such violations supported a finding that the permit
holder had operated its business in a manner demonstrating a disregard for the laws or
regulations of this state. Further, Suburban's contention that the trial court erred in
holding that violations of a specific statute can be used to enforce a general punishment
statute is not persuasive. Such argument is premised upon Suburban's claim, which we
No. 13AP-811 6
have rejected above, that the division and commission improperly seek to enforce
provisions of the Smoke-Free Act.
{¶ 16} Suburban also contends that, even if the division is permitted to deny
renewal based upon violations of the Smoke-Free Act, there was a lack of reliable,
probative, and substantial evidence to support a finding of repeated violations. More
specifically, Suburban maintains it was improper for the trial court to consider all of the
violations submitted as part of the administrative record. According to Suburban, the
only relevant citations regarding the 2011-2012 renewal period involved three violations
of the Smoke-Free Act covering a period between October 2010 and September 2011.
Suburban further asserts that the number of violations at issue precluded a finding of
good cause to deny renewal of the liquor permit.
{¶ 17} The commission's order, finding that the division presented ample evidence
to demonstrate good cause to support the non-renewal of Suburban's permit, states in
part:
[T]he evidence shows that appellant committed 20 violations
of the Smoke Free Act on various dates between July 9, 2007
and June 6, 2011. * * * Appellant argues that only three of
those violations occurred since appellant's last successful
renewal in October 2010, and that all of the other violations
that occurred prior to the last renewal cannot now serve as a
basis for non-renewal. * * *
However, a close review of the evidence shows that the three
violations * * * involved conduct that was found "deemed to
be intentional" under R.C. 3794.07(B) * * *. When viewed in
their context, the evidence shows that the three violations
were indeed part of a pervasive, ongoing pattern of unlawful
conduct concerning an intentional disregard for the Smoke
Free Act.
Nevertheless, the Division also presented further evidence
that shows that appellant committed three additional
violations, all deemed intentional as well, after the Division
refused to renew appellant's permit in October 2011. * * * The
Commission finds that, notwithstanding all of the other prior
violations, the evidence demonstrating six intentional
violations since appellant's last renewal is more than sufficient
to constitute good cause.
No. 13AP-811 7
Finally, the evidence shows that appellant has accumulated
$76,500 in debt certified to the Ohio Attorney General's
Office, combined with interest and costs for a total of
$89,891.14 due and owing as of August 15, 2012 * * *.
(Emphasis sic.)
{¶ 18} This court has previously held that "in determining whether 'good cause'
exists for its refusal to renew a permit, the department is permitted to consider the
cumulative effect of continuing violations." Tiger Invests. of Columbus, Inc. v. Ohio
Liquor Control. Comm., 8 Ohio App.3d 316, 317 (10th Dist.1982) (rejecting appellant's
claim that only the years 1980 and 1981 should have been considered; rather, police
reports from 1978, 1979, and part of 1980, as well as citations from January 1979 to April
1980, constituted reliable, probative, and substantial evidence supporting department's
decision). Thus, "past acts may be reviewed in combination with recent violations to show
a course or pattern of conduct which was of a continuing nature, and could be considered
in its totality by the director and the commission in rejecting an application for renewal of
a permit." Patrick v. Ohio Liquor Control Comm., 10th Dist. No. 77AP-246 (July 28,
1977).
{¶ 19} In the instant case, the trial court noted that the county department of
health had fined Suburban for violations of the Smoke-Free Act beginning in 2008, and
that the permit holder was "subsequently repeatedly cited for such conduct in the ensuing
years." Specifically, the evidence indicated Suburban had committed 20 violations at the
time it submitted its 2011-2012 renewal application, and three of those violations "had
occurred in the time period since Suburban's most recent permit renewal." Further, at the
time Suburban applied for its renewal, it had been assessed fines in the amount of
$71,600, and had paid only $100 of such assessment. The court also noted that "at least
twelve of the violations occurring before September 8, 2011 were deemed intentional and
all three violations occurring in the period immediately prior to the renewal application
were deemed intentional."
{¶ 20} Here, notwithstanding the fact that the division could have rejected
Suburban's renewal application based solely upon the three violations during the renewal
period, we find no error by the trial court in finding that the commission could have
considered the cumulative effect of past violations "in combination with recent violations
No. 13AP-811 8
to show a course or pattern of conduct which was of a continuing nature." Patrick. In its
brief submitted to the trial court, Suburban relied upon two decisions, In re Mendlowitz,
9 Ohio App.2d 83 (10th Dist.1967), and Marwan, Inc. v. Ohio Liquor Control Comm., 93
Ohio App.3d 229 (8th Dist.1994), for the proposition that a successful renewal of a permit
in prior years constitutes "forgiveness" of transgressions. The trial court, however,
properly distinguished those cases, noting that in neither Mendlowitz nor Marwan did
the permit holder have "a single violation of law in the period immediately prior to their
renewal application." See also Keydon Mgt. Co., Inc. v. Ohio Liquor Control Comm., 10th
Dist. No. 08AP-965, 2009-Ohio-1809, ¶ 11 (distinguishing holding in Marwan on basis
that, in contrast to facts of Marwan, "the testimony concerned a substantial number of
legal infractions * * * that occurred over the preceding two years").
{¶ 21} In the instant case, the record before the commission contained evidence
that CCBOH had fined Suburban for 23 violations of the Smoke-Free Act during the
period between 2008 and 2012. In its order, the commission noted that the most recent
six violations, all occurring subsequent to Suburban's last renewal, were each deemed to
be "intentional." Based on the evidence presented, the commission found that the three
violations during the renewal period "were indeed part of a pervasive, ongoing pattern of
unlawful conduct concerning an intentional disregard" for the law. Upon review, we
conclude that the trial court did not abuse its discretion in finding that reliable, probative,
and substantial evidence supported the order of the commission affirming the denial of
the renewal application, and that such order was in accordance with law.
{¶ 22} Based upon the foregoing, Suburban's first, second, and third assignments
of error are without merit and are overruled, and the judgment of the Franklin County
Court of Common Pleas, affirming the order of the commission that affirmed the order of
the division denying Suburban's renewal application, is hereby affirmed.
Judgment affirmed.
SADLER, P.J., and TYACK, J., concur.
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