WCT & D, LLC v. City of Kan. City, WD 78207

• Decision Date: 08 December 2015
• Docket Number: WD 78207
• Citation: 476 S.W.3d 336
• Parties: WCT & D, LLC, Respondent, v. City of Kansas City, Missouri, Appellant.
• Court: Missouri Court of Appeals

476 S.W.3d 336

WCT & D, LLC, Respondent,

v.City of Kansas City, Missouri, Appellant.

WD 78207

Missouri Court of Appeals, Western District.

OPINION FILED: December 8, 2015

Grant L. Davis and David M. Harris, Kansas City, MO, for Respondent

Kathy K. Adams, Assistant City Attorney, Kansas City, MO, for Appellant

Before Division Three: Joseph M. Ellis, Presiding Judge, and Karen King Mitchell and Anthony Rex Gabbert, Judges

Karen King Mitchell, Judge

WCT & D, LLC d/b/a Cashew (hereinafter "Cashew") appeals the City of Kansas City's denial of Cashew's request to expand its liquor license. The Circuit Court of Jackson County reversed and ordered City to issue the expanded license. "On appeal, we review the administrative agency's decision rather than the judgment of the circuit court; however, we affirm or reverse the circuit court's judgment based upon our review of the administrative decision." Kelly v. Mo. Dep't of Soc. Servs., 456 S.W.3d 107, 110 (Mo.App.W.D.2015). We reverse the circuit court.

Facts

Cashew is a restaurant and bar operating in Kansas City. Currently, Cashew has a liquor license allowing it to serve alcoholic beverages on the first and second floor of its four-story building. Cashew filed a request with City to expand its license to allow alcohol on the third and fourth floors, as well as its rooftop patio.¹

City's liquor licensing process provides that, once the request was initiated, Cashew had ninety days² to obtain consent for the expansion from a majority of the landowners and tenants within a 250–foot radius of the building ("eligible consenters"). City determined the number and identity of the eligible consenters through a record search, generated a consent form specific to each eligible consenter, and provided the consent forms and instructions for obtaining consents and abstentions to Cashew. In this case, there were twenty eligible consenters, meaning that, if there were no abstentions, Cashew would have to obtain eleven consents.

Eligible consenters express their consent by filling out and signing the consent form. If the eligible consenter is an entity, the individual signing the form must acknowledge that he or she is authorized to sign on behalf of the entity. Eligible consenters may also abstain from the process, by filling out a consent form and checking a box indicating that the property owner wishes to abstain. If the eligible consenter abstains, that eligible consenter is eliminated from the pool of eligible consenters from which the applicant must obtain consents, potentially lowering the number of consents required.

On the last day to obtain consents, Cashew turned in twelve consent forms. Ten of the forms were consents and two were abstentions. The consent forms for the abstentions, which were from Assurant Employee Benefits, did not contain a signature.³ They were accompanied by a purported email exchange between Cashew and John Hall from Assurant. The email from Cashew to Hall stated, "I know you didn't want to sign [the consent forms] because they are ‘consent’ forms[. But] I need to clarify ... that you did fill them out, and Assurant does indeed want to be removed from voting on [abstain from] ... Cashew's liquor license expansion." A reply from Hall states, "That is correct, Assurant wants to be removed from voting. Assurant is abstaining from voting."

City denied Cashew's application. In a letter, City indicated that, while Cashew had "submitted two consent forms to be counted as abstaining from the consent process, neither of the forms had been signed by the property owner as required" by ordinance. Accordingly, the application was denied because Cashew "did not submit consent forms ... that had been signed ... by a majority of eligible consenters."

Cashew appealed to the Liquor Control Review Board. Following a hearing, the Board upheld the denial, determining that Cashew "failed to furnish timely signed consent forms from Assurant indicating the decision to abstain from the consent process."

Cashew appealed the Board's decision to the Circuit Court of Jackson County, which reversed the Board's decision, holding that the email from Hall constituted an electronic signature and that the consent form was unconstitutionally vague. City appealed from that ruling.

Standard of Review

"On appeal from a circuit court's review of an [administrative] decision, this [c]ourt reviews the [Board]'s decision, not the judgment of the circuit court." Prescott v. Mo. Dep't of Soc. Servs., 464 S.W.3d 560, 565 (Mo.App.W.D.2015).⁴ " ‘In reviewing the [Board]'s decision, the [c]ourt may not determine the weight of the evidence or substitute its discretion for that of the administrative body; the [c]ourt's function is to determine primarily whether competent and substantial evidence upon the whole record supports the decision, whether the decision is arbitrary, capricious, or unreasonable, and whether the [Board] abused its discretion.’ " Id. (quoting Psychcare Mgmt., Inc. v. Dep't of Soc. Servs., 980 S.W.2d 311, 312 (Mo. banc 1998) ). Questions of law are reviewed de novo. Albanna v. State Bd. of Registration for Healing Arts, 293 S.W.3d 423, 428 (Mo. banc 2009).

If there is an issue regarding the constitutional validity of an ordinance, which the Board does not review, we review the decision of the circuit court on the constitutional issue, and our standard of review "is the same as in any other court-tried case." Psychiatric Healthcare Corp. of Mo. v. Dep't of Soc. Servs., 100 S.W.3d 891, 899 (Mo.App.W.D.2003). The circuit court will be affirmed unless it " ‘erroneously declares the law, or ... erroneously applies the law.’ " Id. (quoting State ex rel. Robinson v. Office of Attorney Gen., 87 S.W.3d 335, 338 n.4 (Mo.App.W.D.2002) ). Questions of law are reviewed de novo. Id.

Analysis

Cashew asserts two points of reversible error by the Board: (1) its finding that the abstentions from Assurant were not signed, because the email from John Hall was a sufficient digital signature; and (2) its determination that the abstention required a signature because the ordinance, through the form that City provided to obtain consents and abstentions, was impermissibly vague in not making it clear that a signature was required.

I. The email was not an electronic signature.

Cashew points out that "[t]he email from John Hall ... included a signature line for Mr. Hall" and, thus, concludes that this was "a digital signature," which "constitutes a valid signature" for all purposes under Missouri law. The evidence does not support this claim.

Missouri has adopted the Uniform Electronic Transactions Act ("UETA"). § 432.200⁵ ("Sections 432.200 to 432.295 shall be known and may be cited as the ‘Uniform Electronic Transactions Act’."). The UETA provides that "[a] record or signature shall not be denied legal effect or enforceability solely because it is in electronic form." § 432.230.1.

What Cashew fails to acknowledge is that the UETA does not apply to this transaction. The UETA "appl[ies] only to transactions between parties each of which has agreed to conduct transactions by electronic means." § 432.220.2. The UETA "requires the [tribunal] to examine the ‘context and surrounding circumstances, including the parties' conduct’ in determining whether the parties agreed to conduct transactions by electronic means." Crestwood Shops, L.L.C. v. Hilkene, 197 S.W.3d 641, 653 (Mo.App.W.D.2006) (quoting § 432.220.2).

Here, the parties engaged in the relevant transaction are Assurant and City. There was sufficient evidence for the Board to conclude that City had not agreed to communicate by electronic means. City provided Cashew with hard-copy forms to use in obtaining consent from Assurant and other eligible consenters. The manager of the division responsible for City's liquor licensing testified that, in the ten years he had been with the division, City had never accepted a consent form without a signature directly on the form. Cashew offered no evidence that City had ever expressed a willingness to conduct these transactions electronically or that City had previously accepted electronic signatures. The evidence supports the Board's finding that City accepts only physically "signed consent forms." Accordingly, City has not "agreed to conduct transactions by electronic means," as required by § 432.220.2, rendering the UETA inapplicable. See, e.g., Crestwood, 197 S.W.3d at 652–53 (Where one party "makes her offer [in an email] and states that she is available only through email" and the other party accepts the offer by responding to the email, "[t]his is substantial evidence that the parties agreed to transact business via email.").

Even if City had agreed to accept electronic filings in the liquor licensing process, the evidence does not support Cashew's contention that Hall's name appearing at the bottom of his email unequivocally qualifies as an electronic signature sufficient to satisfy the UETA. Under § 432.240.1, "[a]n electronic record or electronic signature is attributable to a person if it was the act of the person." "The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable." Id.

The "person" at issue here is Assurant, which provided no witness or testimony. There was no evidence at the hearing regarding Assurant's security procedures, that Hall was authorized to bind Assurant in this matter, or that Hall intended the name at the bottom of his email to serve as a signature (as opposed to his name simply appearing at the bottom of every email he sends). Indeed, the evidence here is in stark contrast to Cashew's lone cited authority, where there was "overwhelming evidence that ... [the] e-mails are authentic and that the information contained in them was intended by each to accurately reflect their communications with the other." Int'l Casings Grp., Inc. v. Premium Standard...