Cape Resort Hotels, Inc. v. Alcoholic Licensing Bd. of Falmouth

• Citation: 431 N.E.2d 213,385 Mass. 205
• Parties: CAPE RESORT HOTELS, INC. v. ALCOHOLIC LICENSING BOARD OF FALMOUTH et al. 1 (and a companion case 2 ).
• Decision Date: 05 February 1982
• Court: United States State Supreme Judicial Court of Massachusetts

Page 213

431 N.E.2d 213

385 Mass. 205

CAPE RESORT HOTELS, INC. v. ALCOHOLIC LICENSING BOARD OF FALMOUTH et al. ¹ (and a companion case ²).

Supreme Judicial Court of Massachusetts, Barnstable.

Argued Oct. 8, 1981.

Decided Feb. 5, 1982.

Michael D. Kelly, Watertown, for Cape Resort Hotels, Inc.

Edward W. Kirk, Falmouth (Edward W. Farrell, Town Counsel, Falmouth, with him), for Falmouth Heights Maravista Improvement Ass'n and another.

Before HENNESSEY, C. J., and WILKINS, LIACOS and LYNCH, JJ.

LYNCH, Justice.

This appeal involves the legality, as a nonconforming use under the zoning by-law of the town of Falmouth, of the current operation of a resort facility located in that town. The facility is owned by Cape Resort Hotels, Inc. (Cape Resort), and is known as the "Brothers Four." The appeal consists of two actions which were consolidated for trial. In the first action, Cape Resort seeks a declaratory judgment establishing its right to serve liquor without food or with hors d'oeuvres only and to offer live entertainment in a certain section of its main building. In the second action, twelve residents of Falmouth and an association of residential property owners from the Falmouth Heights area of Falmouth where the Brothers Four is located (hereinafter collectively known as "the association") seek to enjoin the present operation of the main building and two related buildings on the ground that the use of these buildings is in violation of relevant sections of the zoning by-law. The plaintiffs in the second action also seek an order directing the building inspector of Falmouth to enforce the zoning by-law with respect to Cape Resort's facility. The building inspector included in his answer a cross-complaint against Cape Resort by which he seeks to enjoin Cape Resort from operating the Brothers Four and its outbuildings in a manner which violates the zoning by-law. ³

A judge of the Superior Court heard oral testimony, reviewed written evidence, and took a view of the hotel premises. He made extensive findings of fact on the past and present operation of the buildings owned by Cape Resort. He then held that (1) the current use of the ground floor facilities of the Brothers Four was an impermissible extension or change of a prior nonconforming use, (2) the use made of that portion of the ground floor known as the "frolic room" was nevertheless protected by the provisions of G.L. c. 40A, § 7, (3) the use of a building called the "lodge" was a lawful prior nonconforming use, and (4) a building known as the "annex" could lawfully be used to house employees of the hotel but not to lodge hotel guests. The judge found both mandamus and injunctive relief to be appropriate. Both Cape Resort and the association have appealed. We find no error in the judge's rulings but remand for reconsideration of the scope of the injunctive relief granted.

We review the facts concerning the main building of Cape Resort's facility (hereinafter "the hotel") as found by the judge. Facts relative to the buildings known as the "lodge" and the "annex" will be outlined in our discussion of the legal issues raised by their use.

The hotel was built before the turn of the century and was known, until relatively recently, as the "Terrace Gables." It is located in the Falmouth Heights section of Falmouth. Falmouth Heights was originally a neighborhood of mostly single-family summer homes with a smattering of summer hotels. While there are still many private homes, the area now includes a significant number of guest houses and rental properties, some of which have been rented in recent years to groups of unrelated persons. From 1926, when zoning was adopted in Falmouth, until the mid-1950's the Terrace Gables functioned as a traditional, full-service summer resort hotel for a mostly middle-aged and older clientele. Guests were met at the train or bus station by hotel personnel and stayed at the hotel for periods ranging from a week to the entire season. The ground-floor layout included a dining room, kitchen, lobby and reading area, sitting and television room, and porch. There were also a few guest rooms behind the lobby. The hotel offered three meals a day on an American or European plan. The dining room was also open to the public. A wide variety of food was cooked and served on the premises. Guests were required to "dress" for dinner. There were no separate bars or cocktail lounges, although drinks were available in the dining room ⁴ at tables and at a small bar on one side of the dining room. A piano player or trio occasionally provided music during the dinner hour. A range of entertainment was provided in the evenings. These activities, including cards, bingo, and movies, were generally concluded by 10 P.M. After the dinner hour most of the people on the hotel property were hotel guests. The hotel occasionally sponsored dances and concerts which would run until 1 A.M. Cocktails were available at these functions and the public was welcome. The hotel served as "a center of social life on the Heights."

The 1950's and 1960's were a period of transition for the hotel. There was a change in management and more advertising to encourage nonguests to patronize the hotel for dining, dancing, cocktails, and entertainment. The effort to attract the public was also reflected in changes made in the physical layout. In the early 1950's, a small cocktail lounge was built from a part of the dining room. In 1954, the outside porch was enclosed to create additional interior space. The former reading area became a coffee shop in 1960 and lunch was no longer served in the dining room. The hotel moved to a modified American plan for food. A cocktail lounge called "club 46" was opened. It offered a "happy hour" and music and dancing on weekends until midnight. In 1962, the ground-floor guest rooms were removed, the coffee shop was converted into a cocktail lounge, club 46 was closed, and a new "frolic room" was created and later enlarged. The judge found that the frolic room became "the principal focus of entertainment for guests and the public."

Large numbers of young people came to the frolic room for a late afternoon "happy hour" and for dancing and entertainment in the evening. Traffic and parking problems developed and there was a significant amount of noise at closing time. A variance was granted in 1969 for the creation of a parking lot. A fee was charged to all except guests of the hotel. In 1970, there was another change in management. The clientele attracted to the hotel became increasingly younger and control problems increased.

The current management, Cape Resort, bought the hotel in 1971. With very few structural changes, Cape Resort has developed the hotel's entertainment offerings to such an extent that it describes the hotel in its advertising as "the largest entertainment complex on Cape Cod" and "Three Clubs under One Roof." The "three clubs" are the "pub," the "show lounge," and the "disco." The pub (in what was once the reading area) has a bar, jukebox, games, and live music in the evenings. It can accommodate 89 people and is open until 1 A.M. The show lounge is the former frolic room. In 1979-1980, it was only open on weekends. It has two bars, a dance floor, and a stage and can hold 382 people. The show lounge features entertainment, musical groups, and dancing. The disco is what was once the dining room. It has a dance floor and three bars and features complex light displays and sound equipment controlled by a "disc jockey." Three hundred and sixty-four people can be accommodated for dancing and drinking. Under the name "club car" the disco is open in the morning for breakfast and in the evening for light food. The ground floor also contains a "game room" with electronic games, drinks, and room for forty-eight people. In addition to the regular schedule of entertainment, the management advertises a variety of special events including, for example, summer Halloween and New Year's Eve parties, "beat the clock" nights during which drinks become progressively more expensive, and audience participation shows such as a "gong show," "creative goldfish eating" and pie eating contests, and talent shows, for which the winners are awarded prizes. Tickets for these special events are distributed at closing time and on the beaches during the day.

The judge made factual findings on parking facilities, number of employees, and the income generated by the hotel. These figures show that there are an estimated 104 to 175 parking spaces available for over 100 guests, 40 to 60 employees, and a potential holiday weekend crowd of over 800 people. As very little parking is allowed on neighborhood streets, there have been some problems with patrons parking on private land. Information on the distribution of hotel employees suggests that the bulk of them are employed as waiters, waitresses, and bartenders. Only four or five are employed to prepare food. The income figures for the years 1971-1977 show steadily increasing revenues overall but steadily decreasing revenues from room rentals. ⁵ In each year from 1971 to 1977 for which appropriate figures are available, charges for liquor and admission accounted for sixty to eighty percent of the overall revenues generated by the hotel. Prices for food, drinks, and admission have increased much faster than charges for rooms, although the judge took note of the fact that the rooms are old-fashioned, and low rates may be necessary to achieve an acceptable occupancy rate.

Finally, the judge found that complaints generated by the operation of the Brothers Four related primarily to noise at closing time, especially on weekends, and parking problems. Although management has made efforts to control the crowds, closing time is frequently marked by loud talk, laughing, some fights, and considerable traffic noise. Thus, even though control problems are less severe than they were in the 1960's, neighbors are...