Blackburn v. LIQUOR LICENSE COMM.

• Decision Date: 06 March 2000
• Docket Number: No. 6749,6749
• Citation: 747 A.2d 725,130 Md. App. 614
• Parties: Robert L. BLACKBURN, et al. v. BOARD OF LIQUOR LICENSE COMMISSIONERS FOR BALTIMORE CITY.
• Court: Court of Special Appeals of Maryland

747 A.2d 725

130 Md. App. 614

Robert L. BLACKBURN, et al. v. BOARD OF LIQUOR LICENSE COMMISSIONERS FOR BALTIMORE CITY.

No. 6749, Sept. Term, 1998.

Court of Special Appeals of Maryland.

March 6, 2000.

Peter A. Prevas (Prevas & Prevas, on the brief), Baltimore, for appellants.

Brian L. Oliner, Assistant Attorney General (J. Joseph Curran, Jr., Attorney General, Baltimore, Gerald Langbaum and John K. Barry, Assistant Attorneys General, on the brief), Annapolis, for appellee.

Argued before EYLER, KENNEY and MARVIN H. SMITH (Retired, Specially Assigned), JJ. MARVIN H. SMITH, Judge, Retired, Specially Assigned.

In this appeal, appellants Robert L. Blackburn and Holmes & Churchill, Ltd., t/a Windsor Club (hereinafter collectively referred to as "the licensees") challenge a decision of the Circuit Court for Baltimore City, which affirmed a finding by the Board of Liquor License Commissioners for Baltimore City ("the Board") that the licensees violated the Board's rules. Because we conclude that the Board failed to set forth sufficient findings of fact to support its decision, we shall direct the court below to remand the case to the Board for further proceedings.

FACTS

Blackburn and Holmes & Churchill, Ltd. hold the liquor license for the Windsor Club. Holmes & Churchill, Ltd. owns the establishment. The Windsor Club's liquor license is a Class B-D-7 license which was transferred from another establishment. At the time of the transfer, the licensees believed that smoking would soon be banned in places of public accommodation. In order to avoid the smoking ban, they requested that the Board specify on the license that the Windsor Club was a "private membership club." The Board granted the request, noting on the face of the license: "PREMISES MUST OPERATE AS A PRIVATE MEMBERSHIP CLUB ONLY." The Windsor Club apparently is the only establishment with a Class B-D-7 license that operates under such a restriction. Members of the Windsor Club pay $500.00 to join, then $250.00 each year to renew their memberships.

At 3:15 a.m. on May 24, 1998, an inspector for the Board of Liquor License Commissioners for Baltimore City entered the premises with several police officers. The inspector thereafter cited the licensees for selling and allowing the consumption of alcohol on the premises after hours. By notice dated July 7, 1998, the Board informed the licensees that they were accused of violating Rule 4.05(a) and (b) of the Rules and Regulations for the Board of Liquor License Commissioners for Baltimore City. Rule 4.05(a) provides: "No licensee shall permit any person to consume alcoholic beverages on the licensed premises during hours when such sales are prohibited by law." Rule 4.05(b) states: "No alcoholic beverages shall be served, dispensed, furnished or given away in any part of the premises during the hours when such sales are prohibited by law." The Board instructed the licensees to appear for a hearing on July 23, 1998 "to show cause why your Alcoholic Beverage License ... should not be suspended or revoked...."

The inspector and a police officer testified against the licensees at the hearing. Blackburn testified on behalf of the licensees. Counsel for the licensees then pointed out that there was no evidence that anyone had actually seen alcohol being served after 2:00 a.m. Counsel concluded that therefore there was insufficient evidence of a violation of Rule 4.05(b). Counsel acknowledged that there was evidence that persons were consuming alcohol on the premises after hours. He argued, however, that Rule 4.05(a), which purports to prohibit such consumption, can not lawfully be applied to private membership clubs. The Board took counsel's arguments under advisement. Subsequently, by letter dated August 12, 1998, it informed counsel that it had rejected the arguments. The Board stated:

Because a previous violation of this Rule was dismissed on a technicality, this is actually a first conviction for Mr. Blackburn. He is, therefore, found guilty and a $500 fine or 5 day suspension is imposed. Because this is a first finding of guilt, the penalty will be suspended. Please note that if your client appears before the Board on a similar violation and [is] found guilty, the now suspended fine will be re-imposed.

(Emphasis omitted.)¹

The licensees appealed to the Circuit Court for Baltimore City. A hearing was held at which counsel for the licensees and the Board presented argument. Counsel for the licensees posited that the Board had not determined that the licensees were guilty of serving alcohol after hours but only that they were guilty of allowing consumption after hours. He urged the court to determine that Rule 4.05(a) does not prohibit such consumption at private membership clubs. Counsel for the Board countered that the Board had found the licensees guilty of violating both part (b) and part (a) of Rule 4.05, and that both findings were proper.

The court agreed with counsel for the Board that the guilty finding referred to both parts (a) and (b) of the Rule. It further determined that the evidence was sufficient to support the Board's finding that the licensees had engaged in after-hours sales. The court opined that, because the guilty finding could be affirmed on the basis of the violation of Rule 4.05(b), it was not necessary for the court to determine the validity of the Board's finding that a violation of Rule 4.05(a) had occurred.

ISSUES

On appeal to this Court, the licensees argue, in essence, that:

I. The trial court erred in affirming the guilty finding where the Board failed to specify whether it found a violation of Rule 4.05(a), Rule 4.05(b), or both, and where the Board otherwise failed to set forth sufficient findings of fact to support its decision,

II. The trial court erred in refusing to review the Board's apparent finding that the appellants violated Rule 4.05(a), and in therefore failing to determine that the Rule does not apply to private membership clubs, and

III. The trial court erred in affirming the guilty finding on the basis of a violation of Rule 4.05(b) where, if in fact the Board found such a violation, the finding was not supported by substantial evidence.

Because we find merit in the licensees' first argument, we shall vacate the judgment of the trial court and remand the case to that court with instructions to remand to the Board for specific findings of fact and conclusions of law. We shall address the licensees' second and third arguments for guidance purposes.

DISCUSSION

I Specificity of Board's Decision

The Board's August 12, 1998 letter to counsel for the licensees stated, in its entirety:

At the conclusion of the public hearing concerning the violation of Board Rule 4.05(a) and 4.05(b) (sale and consumption after legal hours), the Board held the decision concerning the Windsor Club sub curia. In reviewing our files and Rules & Regulations, the Board is taking the position that although Mr. Blackburn has elected to operate as a private membership club, his alcoholic beverage license remains a Class "BD7" Beer, Wine & Liquor license which is not a club license. You have indicated that Article 2B, Section 11-305(b) refers to premises open to the public and have argued that since Mr. Blackburn is operating a private club he is not covered under the provisions of this section. It is our position that the sale and consumption of alcohol at this location must cease at 2:00 a.m.

Because a previous violation of this Rule was dismissed on a technicality, this is actually a first conviction for Mr. Blackburn. He is, therefore, found guilty and a $500 fine or 5 day suspension is imposed. Because this is a first finding of guilt, the penalty will be suspended. Please note that if your client appears before the Board on a similar violation and [is] found guilty, the now suspended fine will be re-imposed.

(Emphasis omitted.)

The licensees argue that the Board failed to make clear in the letter whether it found them guilty of violating Rule 4.05(a) or (b) or both. The licensees further contend that the Board failed to set forth the facts on which it based its finding or findings. The Board responds that, by stating in its letter that "the sale and consumption of alcohol" at the Windsor Club "must cease at 2:00 a.m.," the Board made clear that it found the licensees guilty of violating both parts (a) and (b) of Rule 4.05.

Judicial review of the Board's decision is authorized by Md.Code (1957, 1998 Repl. Vol., 1999 Cum.Supp.), § 16-101(a) of art. 2B. Section 16-101(e)(1)(i) provides:

Upon the hearing of such appeal, the action of the local licensing board shall be presumed by the court to be proper and to best serve the public interest. The burden of proof shall be upon the petitioner to show that the decision complained of was against the public interest and that the local licensing board's discretion in rendering its decision was not honestly and fairly exercised, or that such decision was arbitrary, or procured by fraud, or unsupported by any substantial evidence, or was unreasonable, or that such decision was beyond the powers of the local licensing board, and was illegal. The case shall be heard by the court without the intervention of a jury. If, in the opinion of the court it is impracticable to determine the question presented to the court, in the case on appeal, without hearing of additional evidence, or if in the opinion of the court any qualified litigant has been deprived of the opportunity to offer evidence, or if the interests of justice otherwise require that further evidence should be taken, the court may hear such additional testimony to such extent and in such manner as may be necessary.

Id. The court may also remand to the Board for further proceedings. See id., § 16-101(e)(4)(ii).

While the last sentence of § 16-101(e)(1)(i) expressly permits the trial court, under certain circumstances, to hear additional evidence, the court may hear such evidence...