A.R. Allison, t/a Double A's Lounge v. PA LCB , 131 A.3d 1075 ( 2016 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Andrew R. Allison, :
t/a Double A’s Lounge :
:
v. : No. 70 C.D. 2015
: Argued: November 17, 2015
Pennsylvania Liquor Control Board, :
Appellant :
BEFORE: HONORABLE MARY HANNAH LEAVITT, Judge1
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE ANNE E. COVEY, Judge
OPINION
BY JUDGE LEAVITT FILED: January 12, 2016
The Pennsylvania Liquor Control Board appeals an order of the Court
of Common Pleas of Mercer County (trial court) directing the Board to renew the
liquor license of Andrew R. Allison, who owns “Double A’s Lounge” in
Sharpsville, Pennsylvania. The Liquor Control Board refused to renew Allison’s
liquor license because of his record of four citations for violations of the Liquor
Code2 and because of criminal disturbances that took place at or near the licensed
premises. The trial court reached a different conclusion on the evidence. First, it
found no connection between the small number of criminal disturbances and
Allison’s management of the licensed premises and no pattern to these
disturbances. Second, it found Allison responded with meaningful corrective
1
This case was assigned to the opinion writer before January 4, 2016, when Judge Leavitt
became President Judge.
2
Act of April 12, 1951, P.L. 90, as amended, 47 P.S. §§1-101 – 10-1001.
measures to the citations. The Board contends that the trial court erred because it
allowed Allison to testify about the operation of Double A’s Lounge after January
14, 2014, the date of the administrative hearing on his license renewal.
Concluding that this evidence was not relevant to the merits of the Liquor Control
Board’s adjudication, we vacate and remand to the trial court.
Background
Andrew R. Allison (Licensee) holds Restaurant Retail Liquor License
No. R-10801 and an attendant amusement permit for “Double A’s Lounge,” which
is located at 512 West Main Street, Sharpsville, Pennsylvania. Licensee filed a
renewal application for the period of August 1, 2013, to July 31, 2015.3 Because
Licensee had been issued three citations in 2013, the Board conditionally renewed
his license pending the outcome of the citations. On October 17, 2013, the
outstanding citations were adjudicated. On December 6, 2013, the Liquor Control
Board’s Bureau of Licensing notified Licensee that it objected to his license
renewal.
On January 28, 2014, a hearing examiner conducted a hearing on the
Bureau’s objections to Licensee’s renewal application. The Bureau’s objections
were based on Licensee’s four citations and failure to prevent criminal
disturbances at or near the licensed premises.
3
An application for a license renewal must be filed 60 days before the expiration of the current
license. Section 470(a) of the Liquor Code, 47 P.S. §4-470(a). Upon a showing of reasonable
cause and the payment of a late filing fee of $100, Section 470(a) permits the submission of a
late license renewal application. See 7101 Frankstown, Inc. v. Pennsylvania Liquor Control
Board, (Pa. Cmwlth., No. 915 C.D. 2012, filed May 20, 2013) (in which the Court termed the
late filed renewal application “a nunc pro tunc” application). Here, Licensee’s renewal
application was filed late but accepted and processed as if timely by the Board, applying the
statutory good cause standard for late license renewal applications.
2
Citation No. 12-1047 was issued on July 18, 2012, and adjudicated
before Licensee submitted the instant renewal application. Licensee was cited for
not posting “no smoking” signs required by the Clean Indoor Air Act4 and
allowing patrons to smoke. He was also cited for the bartender’s service of an
alcoholic beverage to an undercover investigator at 2:15 a.m., after the 2:00 a.m.
closing; not making patrons leave the bar by 2:30 a.m.; and allowing patrons to
remove alcohol from the premises. The hearing examiner suspended Licensee’s
license for seven days and ordered him to display the suspension notice.5
Citation No. 13-0710 was issued on April 12, 2013. Licensee was
cited for not complying with the Clean Indoor Air Act. He was also cited for
selling alcoholic beverages after his liquor license was suspended because of a late
tax filing. Licensee admitted the charges, and the hearing examiner suspended his
license for six days and ordered Licensee to display the suspension notice.
Citation No. 13-1146 was issued on June 5, 2013. It cited Licensee
for not posting the notice of suspension, which had resulted from Citation No. 13-
0710, on the front door. Licensee admitted the charge, and the hearing examiner
fined Licensee $400, suspended his liquor license for one day and ordered him to
display the suspension notice.
Citation No. 13-1273 was issued on June 19, 2013. It cited Licensee
for Clean Indoor Air Act violations, i.e., failure to post no-smoking signs and
allowing patrons to smoke. It also cited Licensee for allowing “the sound of music
or other entertainment, or the advertisement thereof” to be heard beyond the
property line in March and April 2013. Reproduced Record at 267a (R.R. ___).
4
Act of June 13, 2008, P.L. 182, 35 P.S. §§637.1-637.11.
5
Licensee served this suspension in April of 2013, before the instant license renewal.
3
Licensee admitted the charges, and the hearing examiner suspended his liquor
license for four days and directed him to display the suspension notice.
In sum, the three 2013 citations resulted in suspensions of six days,
one day and four days and the imposition of a $400 penalty. The hearing examiner
ordered Licensee to serve the suspensions consecutively, beginning December 9,
2013. The adjudication stated that “on Friday, December 13, 2013 at 7:00 a.m.
[Licensee is authorized] to remove the placard of suspension and return the license
to its original wall location.” R.R. 270a.
After submitting documents on the above-listed citations, the Bureau
presented testimony from the Sharpsville Police Department. The officers testified
about the above-listed citations and several criminal disturbances that took place at
or near the licensed premises.
On April 28, 2012, Officer Lawrence Clark was on routine patrol
when he observed two people involved “in a scuffle,” i.e., pushing each other, in
front of Double A’s Lounge. R.R. 118a. Officer Clark issued a citation to one of
the men for public intoxication.
On November 8, 2012, Officer Clark spotted an individual “tugging
on the corner door of the establishment” at 4:00 a.m. and stopped to investigate.
R.R. 123a. While Officer Clark was talking to this person, who smelled of alcohol,
the door to the restaurant opened and James Reynolds, the bartender, appeared.
Officer Clark testified that Reynolds told him that this individual had been at
Double A’s for a birthday party and that he had allowed her, and other partygoers,
to stay after closing to sober up. R.R. 125a. Officer Clark cited the individual for
public intoxication.
4
On November 22, 2012, Officer Brian Johnston was dispatched to
Double A’s at about 1:00 a.m. because of a noise complaint lodged by a neighbor.
Officer Johnston testified that he could hear music from the neighbor’s porch,
approximately 100 feet from Double A’s. Twenty minutes later, another neighbor
called the police to complain about the noise. The police told Licensee to turn
down the music and issued an oral warning for the noise.
On November 24, 2013, Officer Dean Toth received a call from a Mr.
Flynn, reporting that he had been assaulted at Double A’s Lounge the night before
by another patron, Mr. Ferguson. Flynn told Toth that he suffered “cranial
fractures and a brain bleed.” R.R. 154a. Officer Toth called Licensee. Two days
later, because Licensee had not returned his call, Officer Toth went to the bar and
spoke personally to Licensee and his bouncer, Edward Flanigan, who had
witnessed the incident. Licensee told Officer Toth that he had not yet returned
Officer Toth’s call because of his work schedule. Flanigan explained that after an
initial pushing, the men “seemed okay,” and so Flanigan permitted them to stay.
However, approximately 15 minutes later, Ferguson instituted an altercation with
Flynn’s girlfriend, prompting Flanigan to eject Ferguson. Officer Toth filed
aggravated assault charges against Ferguson. Flanigan was surprised to learn of
Flynn’s injuries because he stayed for some time listening to music after Ferguson
was ejected.
On January 1, 2014, Officer Johnston, while on patrol, came upon
several people arguing loudly in a parking lot across the street from Double A’s
Lounge. One participant was arrested and charged with public intoxication,
resisting arrest, and disorderly conduct. The others were given an oral warning and
5
allowed to leave. Officer Johnston testified that the argument began inside the
licensed premises when one threw a drink at the other.
Licensee testified at both the administrative hearing and the trial court
hearing. Licensee is the Board-approved manager for the establishment. He works
there between 30 and 35 hours per week, generally from 4:00 p.m. until 8:30 p.m.,
six days a week. In addition, he works Saturday evenings from 10:00 p.m. until
1:30 a.m. “[i]f the situation dictates.” R.R. 193a. Licensee also works 40 hours
per week at Pittsburgh Glass Works. Licensee has been training an employee,
Heather Pyle, to serve as his assistant manager to “check up on the employees”
when he is not present “to make sure that these things are taken care of in the
manner that they’re supposed to be taken care of.” R.R. 209a. Pyle was not
certified as the Board-approved manager; Licensee does not believe “an informal
manager” requires Board approval. R.R. 209a, 227a.
Licensee testified that he did not witness the physical altercation that
took place on November 24, 2013. Licensee explained that Double A’s has a zero
tolerance policy on fighting and police must be contacted whenever any “physical
altercation” occurs. R.R. 233a-235a. By the time Licensee arrived on the scene,
Flynn was leaving. He did not know Flynn was injured until he spoke with Officer
Toth two days later. He explained that he did not
return Patrolman Toth’s call because he was working the
midnight shift at his job and did not receive the message until
10:00 p.m. the following day. He then proceeded to his job
after receiving the message and went to sleep after arriving
home at 8:00 a.m. the following morning. He then went to
sleep and woke up at approximately 4:00 p.m. or 5:00 p.m.,
which would have been two (2) days after Patrolman Toth had
left his message.
6
Board Adjudication, Finding of Fact, ¶63. As noted by the Board, Licensee now
checks his messages daily and responds immediately. Licensee employs a bouncer
for evenings when live music entertainment is offered, i.e., 10:00 p.m. to 1:30 a.m.
on Thursdays and Saturdays.
Licensee testified that he satisfied the Board’s Responsible Alcohol
Management Program (RAMP) in January 2011; his RAMP certification expired
in January 2013. Licensee explained that he did not realize that this program had
to be repeated every two years.
Regarding the citation for operating without a liquor license, Licensee
stated that he took “full responsibility.” R.R. 176a. Licensee explained that the
suspension occurred automatically as a result of a late quarterly tax filing. He
thought once he received a clearance from the Department of Revenue, the
suspension automatically lifted. Licensee did not realize that he had to request a
license renewal application upon receiving the tax clearance.
Licensee testified that he was not at the licensed premises on June 2,
2012, when alcohol was served at 2:15 a.m. and did not learn about the incident
until he received Citation No. 12-1047. Licensee stated that he does not serve
alcohol after 2:00 a.m. and patrons must leave by 2:30 a.m.; he fired the bartender
after he received the citation. Licensee was not present during the November 8,
2012, incident when the intoxicated individual attempted to enter Double A’s at
4:00 a.m. to retrieve a cellphone. The bartender present that evening is no longer
employed at the bar.
As to the citations issued for violations of the Clean Indoor Air Act,
Licensee testified that he had requested an exemption for Double A’s on each of
his quarterly sales tax filings. He did not realize that he also needed the
7
Department of Health’s approval. By the time of the administrative hearing,
Licensee had made the filing to obtain this exemption. Licensee explained that
there has always been smoking at Double A’s, which serves little food; smoking
predated his purchase of the establishment.
Regarding the complaints about the music, Licensee testified at the
administrative hearing that he recalled only one complaint, i.e., when police
appeared in November 2012, to which he immediately responded by reducing the
band’s sound level. Licensee initially thought the problem was with a particular
band. When he discovered a disc jockey was causing the problem, he dismissed
her. In addition, Licensee moved the new disc jockey and the bands to the back
room, soundproofed its windows, began performing random perimeter checks to
make sure no noise is escaping the licensed premises, and has largely discontinued
live band performances.
The Board ordered the license non-renewed. It found that Licensee
did not “implement substantial timely corrective measures to address its ongoing
problems occurring at or immediately adjacent to the licensed premises.” Board
Adjudication at 38. It faulted Licensee for not installing security cameras, inside
and outside the licensed premises, and not using a “barred patrons list.” Id. at 39.
The Board found Licensee’s citation history to demonstrate poor management.
Although the Board commended Licensee’s becoming RAMP-certified, it faulted
him for not having his employees so certified. Licensee appealed to the trial court.
In the de novo appeal, the trial court adopted the Board’s findings of
fact. It then made its own findings of fact on the basis of Licensee’s testimony:
(1) Petitioner has had no noise complaints since the June,
2013, citation.
8
(2) Since the June, 2013 citation for noise (Citation No. 13-
1273), Petitioner has hired a new DJ, and Petitioner no longer
has live bands on the premises.
(3) Petitioner testified he is now present on the premises from
3:00 p.m. to 9:00 p.m., Mondays through Fridays, in his
capacity as Manager.
(4) Petitioner has obtained the necessary license from the
Department of Health to allow for smoking.
(5) As for Citation No. 13-1146, the Court finds Petitioner’s
testimony to be credible with respect [to] the fact he displayed
the Notice of Suspension on the premises, albeit in the wrong
place, i.e., facing the back parking lot and not on the front door.
(6) Petition[er] passed an inspection of the premises
performed by a field officer of the Liquor Control Board on
September 29, 2014.
(7) At no time has the Board offered to enter into an
agreement with the Petitioner pursuant to 47 P.S. §4-470
concerning additional restrictions on the Petitioner’s license as
a condition for renewal.
Trial court op., 12/17/14 at 2. The trial court reversed the Board’s decision to non-
renew Licensee’s restaurant liquor license.
The trial court began with the criminal disturbances cited by the
Board. Criminal activity will support a license revocation where the activity can
be attributed to the manner by which the licensed premises is operated. The trial
court held that the only serious crime, the assault inside the tavern, was an isolated
occurrence that could not be correlated to the management of the licensed tavern.
With respect to citations for violations of the Liquor Code, the trial court found
that Licensee had responded with corrective measures, particularly with respect to
noise, noting that the measures must have been effective because there have been
no complaints since the June 2013 citation. The trial court found the citation for
failing to post the suspension notice on the front door to be picayune since
9
Licensee had posted the notice in a visible location. Licensee served the
suspension and paid the fines. The trial court observed that if the Board wanted
more, such as additional RAMP certifications or the installation of security
cameras, then the Board should have entered into a conditional license agreement
with Licensee. The trial court concluded that the sanction chosen by the Board,
non-renewal of license, was not warranted by the citations, the minor scuffles and
single assault inside the licensed premises. Accordingly, it ordered the Board to
renew Licensee’s license.
Issues on Appeal
The Board appealed to this Court. It contends that the trial court
erred. First, it contends that because it can refuse to renew a liquor license for a
single violation of the Liquor Code, it was well within its authority to non-renew
on the basis of four citations. Those citations together with the criminal
disturbances justified the Board’s refusal to renew the license, and the trial court
erred in reversing the Board. Second, it contends that the trial court erred in
allowing Licensee to testify about anything that took place after the administrative
hearing, including the clean bill of health Licensee received from the Board in
September 2013. Third, it contends that the trial court erred in, sua sponte,
bringing up the matter of a conditional licensing agreement and, in any case, the
Board cannot be required to offer such an agreement to a licensee.
Applicable Law
The Liquor Code sets forth the standards and procedures for liquor
license renewals and non-renewals. Section 470(a.1) states as follows:
(a.1) The Director of the Bureau of Licensing may object to and
the board may refuse a properly filed license application:
10
(1) if the licensee, its shareholders, directors,
officers, association members, servants, agents or
employes have violated any of the laws of this
Commonwealth or any of the regulations of the
board;
(2) if the licensee, its shareholders, directors,
officers, association members, servants, agents or
employes have one or more adjudicated citations
under this or any other license issued by the board
or were involved in a license whose renewal was
objected to by the Bureau of Licensing under this
section;
(3) if the licensed premises no longer meets the
requirements of this act or the board’s regulations;
or
(4) due to the manner in which this or another
licensed premises was operated while the licensee,
its shareholders, directors, officers, association
members, servants, agents or employes were
involved with that license. When considering the
manner in which this or another licensed premises
was being operated, the board may consider
activity that occurred on or about the licensed
premises or in areas under the licensee’s control if
the activity occurred when the premises was open
for operation and if there was a relationship
between the activity outside the premises and the
manner in which the licensed premises was
operated. The board may take into consideration
whether any substantial steps were taken to
address the activity occurring on or about the
premises.
47 P.S. §4-470(a.1) (emphasis added).6 Although a citation for a single violation
of the Liquor Code can authorize the non-renewal of a license, the typical non-
6
Section 470(a.1) was added by the Act of December 21, 1998, P.L. 1202.
11
renewal involves multiple violations of the Liquor Code and a string of violent
disturbances inside or near the licensed premises. See, e.g., St. Nicholas Greek
Catholic Russian Aid Society v. Pennsylvania Liquor Control Board, 41 A.3d 953
(Pa. Cmwlth. 2012) (non-renewal for extensive citation history, multiple assaults,
including a stabbing, taking place in the club or in the parking lot and failure to
address the violence with adequate security).
Licensees are “not required to do everything possible to prevent
criminal activity on the premises, act as their own police force, or close their
business.” Rosing, Inc. v. Pennsylvania Liquor Control Board, 690 A.2d 758, 762
(Pa. Cmwlth. 1997). In Rosing, the Board non-renewed a liquor license because of
criminal activity that had taken place at or near the licensed premises. The trial
court reversed the Board because the criminal activity in question related to the
licensee’s location in a high-crime area, not to the actions of the licensee. The
Board appealed, and this Court affirmed the trial court.
Licensing decisions of the Board, whether to grant, transfer or refuse
to renew, are appealable to the court of common pleas. Section 464 of the Liquor
Code states, in relevant part, as follows:
The said appeal shall act as a supersedeas unless upon sufficient
cause shown the court shall determine otherwise. The court
shall hear the application de novo on questions of fact,
administrative discretion and such other matters as are
involved, at such time as it shall fix, of which notice shall be
given to the board. The court shall either sustain or over-rule
the action of the board and either order or deny the issuance of
a new license or the renewal or transfer of the license or the
renewal of an amusement permit to the applicant.
47 P.S. §4-464 (emphasis added).
12
Whether a trial court adopts the Board’s findings of fact or makes its
own factual findings, it may reach its own conclusions on the evidence. See
I.B.P.O.E. of West Mount Vernon Lodge 151 v. Pennsylvania Liquor Control
Board, 969 A.2d 642, 647-48 (Pa. Cmwlth. 2009) (holding that Section 464 of the
Liquor Code authorizes the trial court to reach its own conclusions “even when the
evidence it hears is substantially the same as the evidence presented to the
Board.”).
Abuse of Licensing Privilege
In its first issue, the Board argues that Licensee abused his licensing
privilege and that the trial court erred in holding otherwise. The Board contends
that Licensee’s citation history, which resulted in a fine of $400 and suspensions
totaling 18 days, demonstrates the abuse. The Board emphasizes the loud music
complaints that were the subject of the most recent citation, Citation No. 13-1273,
and argues that the trial court’s “finding” that there was not a pattern to the
unlawful activity is not supported by substantial evidence. The Board emphasizes
the criminal assault on November 24, 2013, that resulted in a patron’s cranial bleed
as evidence of mismanagement.
Licensee responds that the trial court had the discretion to reach a
different conclusion than did the Board on whether to approve or refuse Licensee’s
application for license renewal. Licensee was sanctioned for each citation. The
trial court simply concluded, as was its prerogative, that it was not necessary to
supplement those sanctions with a license non-renewal. I.B.P.O.E., 969 A.2d 642.
Licensee notes that the criminal disturbances were minor, with the exception of the
assault, and not in any way related to the manner of operation of the licensed
premises.
13
Licensee makes several points about his citation history. The Bureau
charged Double A’s Lounge with not informing the public of the license
suspension. In fact, Licensee posted the suspension notice where bar patrons were
most likely to see it: on the wall facing the parking lot. To non-renew Licensee for
this violation “is akin to punishing someone who habitually enters their house
through the garage instead of the front door.” Licensee Brief at 8. The important
point is that Licensee honored the suspension and kept the bar closed during its
busiest season. With respect to Citation No. 12-1047, Licensee notes that an
enforcement officer redeemed a chip for a bottle of beer at 2:15 a.m. and then
departed at 2:56 a.m., when only three patrons were still in the premises. Licensee
acknowledges that this violated the Liquor Code. However, he had trained the
bartender correctly and set the clocks to read 2:00 a.m. when, in fact, it was 1:50
a.m., to ensure the 2:00 a.m. shutdown of alcohol sales. Licensee was not present
when the bartender disregarded his instructions, and he promptly fired her when he
learned of this disregard. Licensee served a seven day suspension. The Bureau did
not point out what else Licensee could have done, which is not relevant to a
citation but is relevant to a non-renewal where the issue is mismanagement.
As to the noise citations, Licensee knew of the noise complaint when
the police showed up during a live band performance on November 22, 2012. He
responded immediately, and he did not learn of other noise complaints until he
received the 2013 citation. Over time, Licensee has taken numerous steps to
reduce the noise, as he outlined in his testimony at the administrative hearing.
Further, as observed by the trial court, there have been no complaints about noise
since the issuance of the June 2013 citation.
14
The trial court relied upon Becker’s Café, Inc. v. Pennsylvania Liquor
Control Board, 67 A.3d 885 (Pa. Cmwlth. 2013). In that case, the trial court
reversed the Board’s decision to non-renew a liquor license and ordered the
licensee to close at 11:00 p.m. Both the Board and the licensee appealed to this
Court.
Becker’s Café had been the location of numerous incidents of
violence, including a shooting, as well as significant drug activity involving
marijuana and crack cocaine. In addition, the licensee had been cited five times for
violations of the Liquor Code over a 10-year period. The owner, who had been
involved with the bar for 40 years, took a number of remedial measures in response
to a rise in criminal activity, which Licensee attributed to changes in the
neighborhood, not the bar. The hearing examiner recommended that the license be
renewed but on condition of an 11:00 p.m. closing. The Board rejected the
recommendation and refused to renew the license.
The trial court heard testimony from the licensee and reviewed the
administrative hearing record. The trial court adopted the majority of the Board’s
findings of fact. However,
the trial court came to a different conclusion than the Board and
found that the incidents were neither the result of, nor related
to, the manner in which the establishment was operated and that
Licensee had taken substantial steps to remedy and address the
activity occurring on or about the premises.
Becker’s Café, 67 A.3d at 888. This Court affirmed the trial court’s decision to
renew the license as within its prerogative.7
7
However, this Court reversed the trial court’s condition that the bar must close at 11:00 p.m. as
beyond the trial court’s authority under the Liquor Code.
15
Likewise, here, the trial court came to “a different conclusion.” Id. It
concluded that Licensee’s manner of operation did not bear a causal relation to the
criminal disturbances and that the Board did not establish any pattern to these
disturbances. The Board argues that substantial evidence does not support these
conclusions. The Board misapprehends the trial court’s role on appeal. The trial
court did not make a finding of fact but, rather, reached the conclusion that the
Board did not meet its burden of showing a pattern of illegal activity and relating it
to Licensee’s manner of operating Double A’s. Indeed, the Board has not
illuminated to this Court any pattern to the scuffle across the street, a couple
instances of public intoxication and the single criminal assault.
The Board disagrees with the trial court’s conclusion of law, but this
does not demonstrate error. The trial court has the authority to reach a conclusion
on the evidence that was different from that reached by the Board. As pointed out
by Licensee, none of the citations related to serious violations of the Liquor Code,
such as serving alcoholic beverages to underage persons. We reject the Board’s
first assignment of error.
Testimony on Events after the Administrative Hearing
Licensee testified before the trial court about Double A’s operations
post-hearing. He testified, for example, about the clean bill of health he received
from the Board, which did a thorough inspection in September of 2014. The Board
argues that Licensee should not have been permitted to introduce evidence of
anything that occurred after the January 28, 2014, administrative hearing.
The trial court overruled the Board’s objection to Licensee’s
testimony about improvements to Double A’s made after January 28, 2014. In
doing so, the trial court reasoned as follows:
16
Although there is no case directly on point with respect to this
issue, this Court finds that the Commonwealth Court in First
Ward Republican Club [of Philadelphia v. Pennsylvania Liquor
Control Board, 11 A.3d 38 (Pa. Cmwlth. 2010)] based the
decision not to allow the trial court to consider post-hearing
adjudication violations on procedural due process grounds.
Therefore, this Court will consider the post-hearing corrective
or remedial measures taken by Petitioner to determine whether
they warrant renewal of the liquor license.
Trial court op., 12/17/14 at 5 (internal citation omitted). The Board argues that the
trial court has missed the mark.
In First Ward, the trial court affirmed the Board’s non-renewal of a
license. On appeal, First Ward argued that the trial court erred by considering two
citations that were issued after the administrative hearing. We agreed, explaining:
[I]n determining whether the Board properly denied renewal of
a license, the trial court may examine all circumstances that the
Board considered when it issued its decision not to renew a
license, including past adjudicated Liquor Code violations.
While subsequently adjudicated citations may, in and of
themselves, support a separate, future action by the Board, they
cannot be used to buttress a preceding determination of the
Board.
First Ward, 11 A.3d at 47 (emphasis added). Stated otherwise, the trial court
considers the evidence “that the Board considered.” Necessarily, this evidence
may not relate to post-hearing circumstances. In this respect, the trial court erred.
The Board argues that Licensee’s remedial measures were untimely.
Board Brief at 33. It contends that when Licensee received a loud music complaint
on November 22, 2012, he should have responded then, not six months later after
he was cited. It is not clear why the Board believes Licensee waited six months.
At the administrative hearing, Licensee testified that he began to address noise in
17
March of 2013, well before the noise citation and the administrative hearing of
January 28, 2014. R.R. 163a-164a, 217a.
Licensee argues that his remedial measures were all timely.8
Licensee purchased the bar in 2010 and received no complaints about the music
until November 2012. Licensee believed that the person complaining to the police
was new to the neighborhood. Further, the police did not notify Licensee of the
noise complaints about which they testified. Licensee testified that he took steps to
remediate noise before the January 28, 2014, administrative hearing. R.R. 217a.
Live bands no longer perform; he hired a new disc jockey in October 2013, before
the administrative hearing; two employees walk the premises to monitor noise
from the building; and he installed foam insulation in the windows. Licensee notes
that after the administrative hearing, while awaiting a decision, he did not sit by
but continued to take steps to improve the responsible operation of his licensed
premises.9
Since the June 2013 citation for noise was issued, there have been no
noise complaints, up to the date of the trial court hearing. The trial court should
not have permitted Licensee’s testimony about events that took place after the
January 28, 2014, hearing. Because it cannot be discerned how this evidence
affected the trial court’s conclusion, a remand is needed. It is for the trial court to
8
As to the assault, Licensee instituted a policy to call police immediately if there is any sort of
physical altercation, as was acknowledged by the Board.
9
Notably, a licensee’s appeal to the trial court stays the Board’s non-renewal order. This is why
Licensee’s establishment was inspected in September of 2014 (and given a clean bill of health).
18
decide whether to reach the same conclusion without the consideration of evidence
that related to events that took place after January 28, 2014.10
“Progressive Discipline”
The trial court explained that the Board should have offered Licensee
a conditional licensing agreement. It observed that “the Board’s failure to utilize
such an agreement with the Petitioner is a factor this Court will consider in
determining whether to reverse the Board.” Trial court op. at 7. The Board claims
that this constitutes reversible error.
Section 470(a) of the Liquor Code authorizes the Board to enter into a
conditional licensing agreement with a licensee. It states, in relevant part, as
follows:
The board may enter into an agreement with the applicant
concerning additional restrictions on the license in question. If
the board and the applicant enter into such an agreement, such
agreement shall be binding on the applicant. Failure by the
applicant to adhere to the agreement will be sufficient cause to
form the basis for a citation under section 471 [of the Liquor
Code] and for the nonrenewal of the license under this section.
47 P.S. §4-470(a) (emphasis added). The Board argues that nothing in the Liquor
Code requires the Board to offer a conditional licensing agreement before it refuses
the renewal of a liquor license. Accordingly, Section 470 uses the term “may” and
does not use the words “must” or “shall.”
10
The Board asserts that Licensee took steps to reduce noise after the administrative hearing, but
this assumption is incorrect. Licensee responded to the November 2012 complaint before the
citation was issued, i.e., in March 2013.
19
It follows, according to the Board, that the trial court may not consider
whether the Board has offered a conditional licensing agreement before non-
renewing a license. The trial court responded to this argument as follows:
Although this Court is certainly aware that the Board cannot be
forced to use such agreements prior to refusing renewal of a
license, see [Becker’s Café, 67 A.3d] at 893-894, this Court
finds that the Board should use such agreements in a case such
as Petitioner’s because Section 471 of the Liquor Code
specifically authorizes the Board to do so. Therefore, the
Board’s failure to utilize such an agreement with the Petitioner
is a factor this Court will consider in determining whether to
reverse the Board.
Trial court op., 12/17/14 at 6-7 (emphasis in original). The Board contends that the
trial court invented an extra-statutory legal hurdle to non-renewal. Further, there
was no evidence or testimony about a conditional licensing agreement in the
record, and the Pennsylvania Rules of Evidence prohibit the admission of evidence
and testimony related to settlement offers. PA. R.E. 408.11
11
It states:
Rule 408. Compromise Offers and Negotiations
(a) Prohibited Uses. Evidence of the following is not admissible –
on behalf of any party – either to prove or disprove the validity or
amount of a disputed claim or to impeach by a prior inconsistent
statement or a contradiction:
(1) furnishing, promising, or offering – or
accepting, promising to accept, or offering to accept
– a valuable consideration in compromising or
attempting to compromise the claim; and
(2) conduct or a statement made during
compromise negotiations about the claim.
(b) Exceptions. The court may admit this evidence for another
purpose, such as proving a witness’s bias or prejudice, negating a
contention of undue delay, or proving an effort to obstruct a
criminal investigation or prosecution.
(Footnote continued on the next page . . . )
20
The trial court acknowledged that the language in Section 470(a) of
the Liquor Code authorizes the Board to issue conditional licensing agreements but
does not require them. The trial court merely advised the Board of its belief that
this particular case may have been an appropriate case for a conditional licensing
agreement, explaining:
The fact Petitioner has already been disciplined for the citations
with suspensions and fines is the initial form of discipline.
With an agreement, the Board now has the opportunity to
address those remaining issues the Petitioner has
acknowledged, but not corrected. For example: (1) Petitioner’s
apparent inability to have security measures acceptable to the
Board, (2) Petitioner’s failure to properly manage the licensed
premises due to his full time employment elsewhere; and, (3)
the RAMP certification. Finally, the Board can impose a
deadline for correcting these issues, the most obvious one being
July 31, 2015, the end of Petitioner’s permit period.
Trial court op., 12/17/14 at 6.
The trial court’s discussion on the conditional licensing agreement
was obiter dicta. In effect, the trial court offered advice to the Board on how to
achieve its objectives for having a licensee, for example, install security cameras.
It appears this discussion was not essential to the trial court’s conclusion.
However, the trial court did state that it was a factor in its deliberation. To the
extent not considering this factor could have caused the trial court to reach a
different conclusion, a remand is warranted.
The Board complains that the trial court imposed an extra-statutory
hurdle to non-renewal. The Board also is bound by the terms of the Liquor Code,
(continued . . . )
PA. R.E. 408. This Court is not persuaded that a conditional licensing agreement is a “settlement
agreement” within the meaning of Pennsylvania Rule of Evidence 408.
21
and it does not mandate security cameras, RAMP-certification or full-time
bouncers. Nevertheless, the Board based its non-renewal decision, in part, on the
absence of security cameras. Notably, the Board did not explain in its adjudication
how the presence of cameras would have prevented the single criminal assault
inside Double A’s or the disorderly conduct that occurred across the street. Nor is
it clear that a “banned” patrons list is warranted for a single incident where those
involved in the incident are known, by name, to Licensee.
Conclusion
For the above-stated reasons, we vacate and remand for further
proceedings consistent with this opinion.
______________________________
MARY HANNAH LEAVITT, Judge
22
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Andrew R. Allison, :
t/a Double A’s Lounge :
:
v. : No. 70 C.D. 2015
:
Pennsylvania Liquor Control Board, :
Appellant :
ORDER
AND NOW, this 12th day of January, 2016, the order of the Court of
Common Pleas of Mercer County dated December 17, 2014, is VACATED and the
matter is REMANDED for further proceedings consistent with the attached
opinion.
Jurisdiction relinquished.
______________________________
MARY HANNAH LEAVITT, Judge