City of Evanston v. Whirl Inn, Inc.

• Decision Date: 16 July 1982
• Docket Number: No. 5660,5660
• Citation: 647 P.2d 1378
• Parties: CITY OF EVANSTON, Wyoming, a municipal corporation, Appellant (Defendant), v. WHIRL INN, INC., a Wyoming corporation, Appellee (Plaintiff).
• Court: Wyoming Supreme Court

Page 1378

647 P.2d 1378

CITY OF EVANSTON, Wyoming, a municipal corporation, Appellant (Defendant), v. WHIRL INN, INC., a Wyoming corporation, Appellee (Plaintiff).

No. 5660.

Supreme Court of Wyoming.

July 16, 1982.

Dennis W. Lancaster and John A. Thomas of Phillips & Lancaster, P. C., Evanston, signed the brief and appeared in oral argument on behalf of appellant.

Jerome F. Statkus of Bagley, Hickey, Evans & Statkus, Cheyenne, signed the brief and appeared in oral argument on behalf of appellee.

Before ROSE, C. J., and RAPER, THOMAS, ROONEY and BROWN, JJ.

RAPER, Justice.

Appellant City of Evanston, while considering whether to renew appellee Whirl Inn, Inc.'s retail liquor license, decided that the license should be restricted such that the sale of alcoholic beverages would be allowed only at appellee's drive-up window. Because Evanston's decision effectively shut down appellee's lounge and disco, Whirl Inn appealed to the district court under § 12-4-104(e), W.S.1977. ¹ The district court heard the appeal as a "trial de novo" as provided by § 12-4-104(f), W.S.1977 ² and decided in Whirl Inn's favor. The City of Evanston was then ordered to renew Whirl Inn's liquor license without the limitations and thus allow appellee to continue to operate its lounge and disco.

The appellant has appealed and set out as issues:

1. "Whether the decision and proceedings leading up to the decision of the city council of the City of Evanston, Wyoming, to grant Whirl Inn, Inc., a retail liquor license to dispense liquor from the liquor store and drive-in window only were so arbitrary and capricious and a violation of fundamental fairness as to justify overruling the council's decision."

2. "Whether the court below abused its discretion and exceeded the applicable scope and standard of review of the actions of a separate branch of government, namely the governing body of the City of Evanston which is the licensing authority for all retail liquor licenses within its jurisdiction, in reversing the decision of the city council of the City of Evanston."

3. "Whether the court below erred in holding that the holder of a retail liquor license has a constitutionally protected property or liberty interest which the City of Evanston violated."

4. "Whether the court below erred in holding that the City of Evanston has sole responsibility for the conduct of the patrons of the Whirl Inn."

5. "Whether the court below erred in overruling the City of Evanston's motion in limine regarding the testimony of Whirl Inn's witness, Dr. Miracle."

6. "Whether the court below erred in allowing over defendant, City of Evanston's objection, the plaintiff's instruction prohibiting the jury from considering the fact that the City of Evanston had placed the Whirl Inn liquor license on probation for the license year from October 15, 1980, to October 14, 1981."

We will affirm the district court.

Whirl Inn was originally only a restaurant. It was purchased by Jae Dee Kindler and his mother in 1964. They are currently the sole stockholders of Whirl Inn. In 1964, they purchased a liquor license. The license was first used to operate a drive-through at the mother's house. In 1965, the license was reissued for use at the Whirl Inn. Later in 1965, a liquor store, drive-through, and an eight-stool bar was added to the restaurant. In 1972 a second story was built and used for restaurant and band entertainment purposes. In 1974 the second floor became a disco, and the Hideout Lounge became an addition to the liquor store, while the restaurant was discontinued. Evanston, in 1975, issued a liquor license covering all facilities of Whirl Inn, including an additional dispensing room license authorized by § 12-5-201, W.S.1977. That license was renewed in October of each year until 1981.

In 1981, the usual notice was published for the annual renewal hearing set for September 3. At the hearing, two married couples and an elderly woman, homeowners in the neighborhood, appeared and testified under oath about the noise and lack of parking for Whirl Inn customers. According to the testimony, customers were forced to park in adjacent streets in front of neighborhood residences. After the taking of that evidence, the hearing before the city council was continued to October 8 in order to allow Whirl Inn to produce its own evidence refuting the charges made against it. This was allowed since opposition to the renewal had not been expected nor was Whirl Inn prepared at that time to meet it. ³

At the October 8 hearing, Kindler, testifying for Whirl Inn, disclosed that between the first and second hearings three-fourths of an acre of adjacent land had been purchased to provide additional parking in order to alleviate the complaint that there was inadequate parking for the entire complex.

Additional witnesses were also called. They gave unsworn statements for and against renewal.

The city council minutes of the meeting state only "Mrs. Wall made a motion to approve the application of Whirl Inn Inc. for a retail liquor license. Second, Mr. Morgan. A lengthy discussion took place.

"Mr. Albrecht made an amendment to the motion to allow the dispensing of liquor sales from the area of the present liquor store and drive-in window only. Second, Mr. Bills, 3 (no) votes, 4 yes votes, motion passed. Vote on the main motion as amended, 4 yes votes, 3 no votes, motion carried as amended." ⁴

There appears nowhere in the city's records any reasons for denying the liquor license in full. There are no findings of fact or conclusions of law.

An appeal was taken to the district court and a motion for a stay of Evanston's denial of appellee's liquor license in full during pendency of the appeal was made. The district court granted the motion. Then, following a trial de novo, it reversed the city's decision limiting the license, thus authorizing Whirl Inn to continue in business as it had under the 1980 liquor license.

I

Before answering the specific questions appellant has listed as issues, an understanding of the law regarding judicial review of a city's liquor-licensing decisions is in order. Section 12-4-101(a), W.S.1977 states, "Incorporated cities, towns and counties within Wyoming shall license and regulate or prohibit the retail sale of alcoholic and malt beverages under this title." In § 12-4-104, W.S.1977, the procedure a licensing authority must follow in considering an application for a license, permit, renewal or transfer is outlined. Of particular import for this case is subsection (b) which provides:

"Any license or permit authorized under this title shall not be issued, renewed or transferred until on or after the date set in the notice for hearing protests. If a renewal or transfer hearing, the hearing shall be held no later than thirty (30) days preceding the expiration date of the license or permit. A license or permit shall not be issued, renewed or transferred if the licensing authority finds from evidence presented at the hearing:

"(i) The welfare of the people residing in the vicinity of the proposed license or permit premises shall be adversely and seriously affected;

"(ii) The purpose of this title shall not be carried out by the issuance, renewal or transfer of the license or permit;

"(iii) The number, type and location of existing licenses or permits meet the needs of the vicinity under consideration;

"(iv) The desires of the residents of the county, city or town will not be met or satisfied by the issuance, renewal or transfer of the license or permit; or

"(v) Any other reasonable restrictions or standards which may be imposed by the licensing authority shall not be carried out by the issuance, renewal or transfer of the license or permit." (Emphasis added.)

Subsection (c), supra fn. 1, authorizes an applicant for a renewal to appeal an adverse decision by the licensing authority. Subsection (f), supra fn. 2, states that "(t)he appeal shall be heard as a trial de novo."

Prior to the adoption in 1965 of the Wyoming Administrative Procedure Act, § 9-4-101 et seq., W.S.1977, appeals from administrative agencies were frequently subject to a trial de novo in the district court. However the hearings were not conducted as trials de novo in the pure sense of that term. Early on this court ruled that administrative agencies had been delegated considerable discretion by the legislature which courts were not free to usurp through the "trial de novo" provisions. In Art. 2, § 1, Wyoming Constitution, the separation of the powers of the three branches of government was ordered preserved. ⁵ Accordingly, this court substantially limited the issues which could be heard in a trial de novo. In Howard v. Lindmier, 67 Wyo. 78, 214 P.2d 737, 739-740 (1950), it was said:

" * * * Some of the courts have considered the question of trial de novo of a case originating with an administrative board from a constitutional standpoint, holding that administrative powers may not be delegated to the court. Thus we find it stated in 42 Am.Juris. 563 as follows: 'It is a well-settled general principle that nonjudicial functions cannot be exercised by or imposed upon courts, and statutes which attempt to make a court play a part in the administrative process by conferring upon it administrative or legislative, as distinguished from judicial, functions may contravene the principle of separation of powers among the different branches of our government.' The question of trial de novo was considered in California Co. v. State Oil and Gas Board et al., 200 Miss. 824, 27 So.2d 542, 546, 28 So.2d 120. In that case the statute provided that the matter should be tried de novo by the circuit court and that the circuit court should have full authority to approve or disapprove the action of the Board. The court, upholding the constitutionality of the statute insofar as possible held: 'we are of the opinion that an appeal to the Circuit Court with authority "to approve or disapprove the action of the...