424 Assocs., Inc. v. Bd. of License Comm'rs for Anne Arundel Cnty.

• Decision Date: 17 September 2019
• Docket Number: No. 685,685
• Parties: 424 ASSOCIATES, INC., ET AL., v. BOARD OF LICENSE COMMISSIONERS FOR ANNE ARUNDEL COUNTY, ET AL.
• Court: Court of Special Appeals of Maryland

424 ASSOCIATES, INC., ET AL., v. BOARD OF LICENSE COMMISSIONERSFOR ANNE ARUNDEL COUNTY, ET AL.

No. 685

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2018

September 17, 2019

Circuit Court for Anne Arundel County

Case No.: C-02-CV-17-003691

UNREPORTED

Meredith, Graeff, Battaglia, Lynne, A. (Senior Judge, Specially Assigned), JJ.

Opinion by Battaglia, J.

*This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104.

Nelson Sabatini, an appellee in the instant case, applied for an alcoholic beverage license¹ on behalf of A&A Wine & Spirits, LLC ("A&A"), in order to operate a package goods store in Waugh Chapel Towne Centre in Gambrills, Maryland, adjacent to a Wegmans Food Market. The Board of License Commissioners for Anne Arundel County (the "Board"), also an appellee in the instant matter, held a hearing on the application, during which five individuals, all holders of other alcoholic beverage licenses, and the business entities on whose behalf they held such licenses, collectively Appellants, participated either in person or by counsel in opposition to the license application.² The Board approved the issuance of the beer, wine and liquor license to Mr. Sabatini, after which Appellants filed a Petition for Judicial Review in the Circuit Court for Anne Arundel County, which affirmed the decision of the Board. Before us, in seeking further judicial review of the Board's decision, the Appellants present the following question for our review:

Did the Circuit Court commit reversible error when it affirmed the decision of the Board of License Commissioners for Anne Arundel County to approve a liquor license for use "in conjunction with" or "on the premises of" a supermarket or chain store in violation of the express prohibitions set forth in Ann. Code of Maryland, Alcoholic Beverages Article, Section 4-205?

For the reasons that follow, we shall hold that substantial evidence supported the decision of the Board to issue the liquor license and, thus, shall affirm.

STANDARD OF REVIEW

Section 4-905 of the Alcoholic Beverages Article provides the scope of review in our evaluation of a decision of a local licensing board, and, in pertinent part, provides:

(a) Presumption. - On the hearing of a petition under this subtitle, the court shall presume that the action of the local licensing board was proper and best served the public interest.

(b) Burden of proof. - A petitioner has the burden of proof to show that the decision of the local licensing board being reviewed was:

(1) against the public interest; and

(2)(i) not honestly and fairly arrived at;

(ii) arbitrary;

(iii) procured by fraud;

(iv) unsupported by substantial evidence;

(v) unreasonable;

(vi) beyond the powers of the board; or

(vii) illegal.

Maryland Code (2016).

"Judicial review of a decision by a liquor board 'is similar to review of decisions by most other administrative agencies.'" Dakrish, LLC v. Raich, 209 Md. App. 119, 141 (2012) (quoting Blackburn v. Bd. of Liquor License Comm'rs for Baltimore City, 130 Md. App. 614, 623 (2000)). The Court of Appeals recently, in Commissioner of Labor and Industry v. Whiting-Turner Contracting Company, 462 Md. 479 (2019), summarized appellate review of an administrative agency's decision:

"We review an administrative agency's decision under the same statutory standards as the [c]ircuit [c]ourt. Therefore, we reevaluate the decision ofthe agency, not the decision of the lower court." Gigeous v. E. Corr. Inst., 363 Md. 481, 495-96, 769 A.2d 912, 921 (2001) (footnote omitted). We, however, "may always determine whether the administrative agency made an error of law. Therefore, ordinarily, the court reviewing a final decision of an administrative agency shall determine (1) the legality of the decision and (2) whether there was substantial evidence from the record as a whole to support the decision." Baltimore Lutheran High Sch., v. Employment Sec. Admin., 302 Md. 649, 662, 490 A.2d 701, 708 (1985). Substantial evidence is defined as "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion[.]" Bulluck v. Pelham Wood Apartments, 283 Md. 505, 512, 390 A.2d 1119, 1123 (1978). Additionally, purely legal questions are reviewed de novo with considerable "weight [afforded] to an agency's experience in interpretation of a statute that it administers[.]" Schwartz v. Md. Dep't of Nat. Res., 385 Md. 534, 554, 870 A.2d 168, 180 (2005).

Id. at 490.

FACTS AND PROCEDURAL HISTORY

The Board of License Commissioners for Anne Arundel County heard testimony and received evidence regarding a Class A, Beer/Wine Tasting and Sunday license application Nelson Sabatini, owner of A&A Wine & Spirits, LLC ("A&A"), submitted for the purpose of opening and operating a liquor store at a 8,000 square-foot space located at 1415 South Main Chapel Way, Gambrills, Maryland, which he intended to sublease from Wegmans Food Markets, LLC.³ Prior to the hearing, Appellants filed a protest to the license application and offered opposing testimony and evidence at its hearing.

At the hearing, Mr. Sabatini presented two expert witnesses and a petition signed by approximately 684 individuals to demonstrate that the public need would be served bythe approval of his application. Dr. Gerald Patnode, Jr., relying on a statistical analysis of the retail market's growth in the area, testified that the demand for liquor stores in the community exceeded the current supply, necessitating the issuance of additional licenses. The protesting-license holders, in turn, offered expert testimony which noted contradictions and inconsistencies in the testimony of Mr. Sabatini's experts, which the Board later found to be inconsequential.⁴

Matt Mittenthal, the Vice President of asset management at Greenberg Gibbons Commercial ("Greenberg"), the corporation that owned and managed Waugh Chapel Towne Centre at the time, also testified regarding the growth in residential developments in the area, thereby increasing the public need for additional liquor stores within the community. He testified further that it had always been the intent of Greenberg that a liquor store be located next to the Wegmans grocery store.

Mr. Sabatini also testified, and was subject to cross examination, stating that he filed the application on behalf of A&A, a limited liability company that he formed in 2013. He testified regarding how he planned to utilize the space to be subleased from Wegmans, explaining that 5,700 square feet would be used for retail space and that the remaining 2,300 square feet would be used for storage, so that he "can take advantage of any large bulk purchasing that might become available that will allow [him] to pass on the best value possible to [his] customers." He noted that there would be no physical interconnection, nodoorway, between Wegmans and A&A patrons would have to leave one store to enter the other, an assertion further supported by the introduction into evidence of the blueprints of the space.

Mr. Sabatini also stated that, although he spends about three and a half months of the year in Hawaii, and the other months at his home in Anne Arundel County, he planned to remotely manage the liquor store's operations, after the initial set up, as he had successfully done in his role as the Chairman of the Maryland Health Services Cost Review Commission for the past two years.⁵ Mr. Sabatini explained, however, that he would return from Hawaii "at a moment's notice" if the operation of the liquor store necessitated that response. He further testified that any design regarding the build-out of the store's interior, under the terms of the letter of intent he had entered with Wegmans, would require agreement between himself and the grocery store, the construction of which would be funded by Wegmans. Mr. Sabatini informed the Board that consummation of the sublease would follow upon issuance of the license, but when asked what he would do if no lease with Wegmans ensued, he testified that he would seek transfer of the liquor license to a different location.

At the Board hearing, when asked how he developed the idea to open and operate a liquor store, Mr. Sabatini replied:

Now, I have for some time been looking for a retail enterprise. The idea of a liquor store I found very, very appealing because I have a longstanding interest in fine wines, especially looking for high-quality moderately priced wines. And I wanted to prove that I could manage and run an[] enterprise that would be value to a community as well as provided high-quality courteous service. I had heard that Wegmans was interested in having a liquor store at this location. I talked to someone I know had done some legal work for Wegmans in the past and they suggested that I get in touch with them and talk to them about the possibility. I did so and, you know, we went from there.

Mr. Sabatini explained that he jumped at the opportunity to sublease space from Wegmans, because he has "a great deal of confidence and trust in Wegmans. It is a store with impeccable corporate ethics." When asked why he had not yet entered a formal lease with Wegmans, he stated that he had not because he "was not going to get a lease and obligate [himself] to a lease when [he] didn't have a license," as he was concerned about the cost of a lease "that would not yield anything" in return. In addressing concerns raised about A&A's relationship with Wegmans, he concluded his testimony by stating that no financial partnership existed between him and Wegmans as he "will be holding all the risk of that business . . . I will be financing it and it will be my store."

Counsel for the protestants, of consequence to this appeal, averred that Mr. Sabatini's application ran afoul of Section 4-205(b) of the Alcoholic Beverages Article, which provides:

Issuance

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