Altshuler v. Pa. Liquor Control Bd.

• Decision Date: 13 May 1999
• Citation: 729 A.2d 1272
• Parties: Morton ALTSHULER and Stephen J. Hopson v. PENNSYLVANIA LIQUOR CONTROL BOARD and J-G Japanese Family Restaurant, Inc. Rector, Wardens and Vestrymen of Christ Church in Philadelphia a/k/a Christ Church v. Pennsylvania Liquor Control Board and J-G Japanese Family Restaurant, Inc. J-G Japanese Family Restaurant, Inc., Appellant.
• Court: Pennsylvania Commonwealth Court

729 A.2d 1272

Morton ALTSHULER and Stephen J. Hopson v. PENNSYLVANIA LIQUOR CONTROL BOARD and J-G Japanese Family Restaurant, Inc.

Rector, Wardens and Vestrymen of Christ Church in Philadelphia a/k/a Christ Church v. Pennsylvania Liquor Control Board and J-G Japanese Family Restaurant, Inc.

J-G Japanese Family Restaurant, Inc., Appellant.

Commonwealth Court of Pennsylvania.

Argued March 9, 1999.

Decided May 13, 1999.

Barry Goldstein, Philadelphia, for appellants.

Neal Goldstein and Thomas J. McGarrigle, Philadelphia, for appellees.

Before KELLEY, J., LEADBETTER, J., and JIULIANTE, Senior Judge.

KELLEY, Judge.

The J-G Japanese Family Restaurant (J-G) appeals from an order of the Court of Common Pleas of Philadelphia County (trial court) reversing a decision by the Pennsylvania Liquor Control Board (Board), which granted J-G's application for the double transfer of a liquor license. We affirm.

On July 15, 1997, J-G filed an application for a person to person and place to place transfer of restaurant liquor license no. R-6837 to J-G's premises located at 223-225 Market Street, Philadelphia. Pursuant to Section 464 of the Liquor Code,¹ a hearing on the application was held on December 15, 1997 before a hearing examiner. Three objectors appeared before the hearing examiner: (1) Reverend Trimble, the pastor of the Christ Church, which is located within 300 feet of the proposed licensed premises; (2) Morton Altshuler, a resident of a condominium building located within 500 feet and in view of the rear of the proposed licensed premises; and (3) Stephen Hopson, who lives and has his business within 500 feet of the proposed licensed premises. Barry Gutin, the manager of the proposed licensed premises appeared on behalf of J-G.

The hearing examiner recommended that the application be denied on the basis that the application would adversely affect the health, welfare, peace and morals of the neighborhood within a 500 foot radius under the standards set by Section 404 of the Liquor Code.² By order dated January 29, 1998, the Board rejected the hearing examiner's recommendation and approved the transfer of the liquor license. The Board found that there was no evidence that visitors to the church would be affected by the intended use of the premises as an upscale restaurant serving alcoholic beverages. The Board also determined that Altshuler's and Hopson's concerns about potential alcohol related conduct, such as public urination, odors, noise, rodents, debris, illegal parking and boisterous patrons were prospective and not necessarily related to the sale of alcoholic beverages. The Board found that the location of the proposed licensed premises was in a growing restaurant district, the use would be consistent with the nature of the surrounding Old City area, and that there was no indication that J-G's proposed operation would adversely impact the quality of life in the neighborhood.

The objectors appealed the Board's decision to the trial court.³ On May 19, 1998, the trial court held a de novo hearing.⁴ Based on recent decisions of this court, the trial court determined that it could only substitute its own findings for those made by the Board when the evidence before the trial court was substantially different from that before the Board. See Manayunk Development Corp. v. Pennsylvania Liquor Control Board, 699 A.2d 1373 (Pa.Cmwlth.1997), petition for allowance of appeal denied, 551 Pa. 706, 712 A.2d 287 (1998).

Before the trial court, Reverend Trimble, Altshuler, and Hopson again testified. In addition, Richard Thorn testified as an expert in the areas of urban planning and architecture and Theodore M. Lieverman, resident of the condominium building, testified in opposition to the application. Mr. Gutin testified again on behalf of J-G.

After the close of the hearing,⁵ the trial court found that substantially different evidence was presented to the trial court. Therefore, based on Manayunk, the trial court concluded that it could substitute its findings for those made by the Board. Applying its findings to the standards set forth in Section 404 of the Liquor Code, the trial court concluded that the granting of a liquor license application to the subject premises would adversely affect the welfare, health, peace and morals of the neighborhood.⁶ The trial court also concluded, based on the standards set forth in Section 404, that the application should not be granted because the subject premises is located within 300 feet of a church. Finally, the trial court concluded, based on the findings of fact made by the Board, that the Board abused its discretion in granting the application.⁷

Accordingly, the trial court granted the appeal and reversed the Board's decision granting J-G's application for the transfer of a liquor license. This appeal by J-G followed.

On appeal, J-G raises the following issues:

1. Whether the trial court's substitution of its fact findings for those of the Board was an abuse of discretion and contrary to established case law in the absence of substantially different and relevant facts adduced at trial;

2. Whether the trial court's reversal of the Board and its holding that the grant of a liquor license to J-G would have an adverse effect on the surrounding community was unsupported by substantial competent evidence and constituted legal error and an abuse of the trial court's discretion; and

3. Whether the trial court abused its discretion by speculating that J-G could at some undetermined time in the future change its business operation to something more potentially detrimental, and by adopting such speculation in its findings of fact and conclusions of law.

Initially, we note that our scope of review of a trial court's ruling on a licensing decision of the Board is limited to a determination of whether the trial court committed an error of law, abuse of discretion, or made findings of fact that were unsupported by the record. Arrington v. Pennsylvania Liquor Control Board, 667 A.2d 439 (Pa.Cmwlth.1995).

In support of the first issue, J-G, relying on Application of Barone, 43 Pa.Cmwlth. 446, 403 A.2d 148 (1979) and Rosing, Inc. v. Pennsylvania Liquor Control Board, 690 A.2d 758 (Pa.Cmwlth.1997), argues that the evidence presented to the trial court at the hearing de novo was substantially the same as that presented to the Board. Therefore, J-G contends that the trial court abused its discretion by substituting its findings for those of the Board.

In response, objectors contend that our Supreme Court now permits trial courts to substitute their discretion for that of Board even if the evidence is identical to that before the Board. We agree.

Our Supreme Court recently clarified that in appeals under Section 464 of the Liquor Code, involving the Board's grant or denial of liquor licenses or the renewal or transfer of such license, the trial court may make its own findings and reach its own conclusions based on those findings even when the evidence it hears is substantially the same as the evidence presented to the Board. Pennsylvania Liquor Control Board v. Richard E. Craft American Legion Home Corporation, 553 Pa. 99, 718 A.2d 276, 278 (Pa.1998).⁸ In Craft, the Supreme Court stated as follows:

In Pennsylvania Liquor Control Enforcement v. Cantina Gloria's Lounge, Inc., 536 Pa. 254, 259, 639 A.2d 14, 16 (1994), we set forth the correct standard for the trial court's review of a [Board] refusal to grant a liquor license:

We have held that an appeal from a decision of the Board pursuant to this language required the court of common pleas to conduct a de novo review, and in the exercise of its statutory discretion, to make findings and conclusions. We also held that this language permitted a court of common pleas, based upon its de novo review, to sustain, alter, change or modify a penalty imposed by the [Board] whether or not it makes findings which are materially different from those found by the Board. Adair v. Liquor Control Board, 519 Pa. 103, 546 A.2d 19 (1988).

Here, the Commonwealth Court reversed the trial court based on its finding that the trial court's findings of fact were not substantially different from those found by [the Board]. Clearly, pursuant to our holding in Cantina Gloria's Lounge, the trial court may alter the decision of the [Board] even if its findings of fact are identical to those made by the [Board]. Thus, the trial court here correctly conducted a de novo hearing, made its own findings of fact, and reached its own conclusions based upon those findings, and the Commonwealth Court applied an incorrect standard of review to the trial court's decision.

Craft, 553 Pa. at 103, 718 A.2d at 278.

We note that the Supreme Court in Craft, makes no distinction between licensing cases and enforcement cases when it cites to Cantina Gloria's Lounge, which was an enforcement case. Thus, the Supreme Court has now ruled that its holding in Cantina Gloria's Lounge is to be applied without limitation in all licensing appeals under Section 464 of the Liquor Code, as well as in citation/enforcement appeals under Section 471, 47 P.S. § 4-471.⁹ Accordingly, pursuant to our Supreme Court's decision in Craft, a trial court is now permitted to substitute its findings for those of the Board in appeals from licensing decisions made by the Board, whether or not the evidence before the trial court is substantially different than that presented before the Board. Accordingly, it is irrelevant as to whether the evidence before the trial court in this case was different from that before the Board. Pursuant to Craft, the trial court was clearly permitted to make new findings of fact, and based on those new findings, to reverse the decision of the Board.

We will address the remaining two issues raised by J-G simultaneously. In support of the second issue, J-G argues that the trial court's decision is unsupported by substantial evidence and an abuse of the trial court's discretion....