Harrison v. Ocean View Fishing Pier, LLC, Record No. 2311-06-1.

• Decision Date: 23 October 2007
• Docket Number: Record No. 2311-06-1.
• Citation: 50 Va. App. 556,651 S.E.2d 421
• Parties: Sarah HARRISON v. OCEAN VIEW FISHING PIER, LLC and Virginia Alcoholic Beverage Control Board.
• Court: Virginia Court of Appeals

651 S.E.2d 421

50 Va. App. 556

Sarah HARRISON v. OCEAN VIEW FISHING PIER, LLC and Virginia Alcoholic Beverage Control Board.

Record No. 2311-06-1.

Court of Appeals of Virginia, Chesapeake.

October 23, 2007.

Thomas S. Carnes (Colgan & Carnes, on brief), for appellant.

Martin A. Thomas (Decker, Cardon, Thomas, Weintraub & Neskis, P.C., on brief), Norfolk, for appellee Ocean View Fishing Pier, LLC.

K. Michelle Welch, Assistant Attorney General (Robert F. McDonnell, Attorney General; Frank S. Ferguson, Deputy Attorney General, on brief), for appellee Virginia Alcoholic Beverage Control Board.

Present: ELDER and HUMPHREYS, JJ, and WILLIS, S.J.

ELDER, Judge.

Sarah Harrison appeals from a decision of the Circuit Court of Norfolk, issued pursuant to the Administrative Process Act, Code §§ 2.2-4000 to -4031 (the APA), and ordering the Alcoholic Beverage Control Board (the Board) to grant to the Ocean View Fishing Pier, LLC (the Pier), two licenses permitting the sale of alcoholic beverages on its premises until 2:00 a.m. On appeal, Harrison contends the circuit court erred in finding the Board's original decision to issue the licenses with a 12:00 a.m. restriction to be arbitrary and capricious. She also contends that, in ordering the Board to grant licenses with a 2:00 a.m. restriction dictated by the court, the court erroneously assumed a duty committed by the basic law to the Board. In assignments of cross-error, the Pier contends Harrison lacked standing to appeal the circuit court's ruling and that her appeal is moot. The Board joins in the Pier's argument on these issues, but it agrees with Harrison's argument that the circuit court erred in ruling its issuance of the restricted licenses was arbitrary and capricious.

We hold Harrison has standing to appeal and that, on the record before us, her appeal is not moot. We further hold that the Board's imposition of restrictions on the licenses was not arbitrary and capricious and that the circuit court erred in ruling to the contrary. However, because the Board's opinion granting the restricted licenses makes no findings of fact or conclusions of law to support imposition of the restrictions, we reverse the decision of the circuit court and remand to it for remand to the Board with instructions to make findings and conclusions in compliance with the APA. Because we reverse and remand on this ground, we need not consider Harrison's claim that the form of the circuit court's ruling constituted an improper usurpation of the Board's authority to grant ABC licenses.

I. PROCEDURAL HISTORY

In September 2003, a fishing pier located in the Ocean View section of Norfolk was destroyed by a hurricane. The pier "did not have an ABC license on it" and, thus, had not been monitored by the ABC Board. After the pier was destroyed, Ronald W. Boone, Sr., a real estate developer and long-time area resident, formed the Ocean View Fishing Pier, LLC, and constructed a new pier on the same site. The new pier included a restaurant with indoor, rooftop, and patio areas. The company submitted applications for a "wine and beer on-and off-premises license and mixed beverage restaurant" license, and when area residents complained about the request for licensure, an agent from the ABC Board's Bureau of Law Enforcement Operations filed an application for a hearing on the licenses.

At an administrative hearing on October 21, 2005, the hearing officer received testimony and other evidence for and against issuance of the requested ABC licenses. Sarah Harrison, a resident and owner of property in the neighborhood, appeared "as the spokesperson for the objectors." Harrison and several other area residents offered letters stating their opposition to the granting of an ABC license to the Pier, and some also offered testimony in keeping with their letters. Those letters and testimony included concern that noise emanating from the Pier and disturbances caused by alcohol consumption would disrupt the peace and tranquility of the surrounding neighborhood, negatively affecting property values and the lives of adults and children who lived near or visited the Pier. Additional witnesses testified in support of the Pier's request for an ABC license, indicating they favored having an "upscale" restaurant in the neighborhood.

The evidence also included copies of several ordinances relating to operation of the Pier passed by the Norfolk City Council. Those ordinances "granted a Special Exception to permit the operation of an entertainment establishment on the property," subject to the condition that alcoholic beverages could be sold in the indoor and outdoor portions of the restaurant from 8:00 a.m. to 2:00 a.m. and that "entertainment" in the indoor portion of the restaurant could occur during those same hours but that "[t]he hours of operation for entertainment on the outdoor portion of the restaurant shall be from 12:00 p.m. to 8:00 p.m." only.¹

The hearing officer issued a written decision, finding (1) pursuant to Code § 4.1-222(A)(2)(b), that the Pier was not "so located that granting a license and operation thereunder by the applicant would result in violations of this title, Board regulations, or violation of the laws of the Commonwealth or local ordinances relating to peace and good order" and (2) pursuant to Code § 4.1-222(A)(2)(d), that the Pier was not "so located with respect to any residence or residential area that the operation of such place under such license will adversely affect real property values or substantially interfere with the usual quietude and tranquility of such residence or residential area." The hearing officer also indicated that, "[a]lthough th[ese] objection[s][are] not substantiated, certain restrictions/conditions shall be imposed upon the licenses issued," including hours restrictions for entertainment and the serving of alcoholic beverages that matched those in the city ordinance.

Harrison requested an appeal before the ABC Board on the same issues that had been considered by the hearing officer. In argument, Harrison requested that the Board deny the ABC licenses based on those objections or, in the alternative, "restrict the hours [for those licenses] to [those] appropriate for fine dining," which she asserted would be "10:00 or 11:00 at night."

The ABC Board, in its subsequent written decision, adopted the hearing officer's findings "that the objections are not substantiated by the evidence and should be dismissed" and that the ABC licenses should be granted, but it imposed additional restrictions on the licenses. It provided that the sale of alcoholic beverages both inside and outside the restaurant must terminate nightly at 12:00 a.m., instead of 2:00 a.m. as previously set out by the hearing officer. It provided that entertainment for the indoor portion of the restaurant must also terminate nightly at 12:00 a.m., instead of at 2:00 a.m. as previously set out by the hearing officer.

The Pier filed a timely notice and petition appealing the ABC Board's decision to the Norfolk Circuit Court.² Harrison then filed a notice of appeal, in which she challenged the issuance of the licenses, but her appeal was not timely. In the proceedings before the Board, the Pier set out six assignments of error challenging the modification of its hours for serving alcohol, requiring that sales of alcohol terminate at 12:00 a.m. rather than 2:00 a.m.³ Both Harrison and the Board, via counsel, filed answers to the petition.

Sometime thereafter, the Pier and the Board reached an agreement by which the Pier sought to withdraw its appeal to the circuit court to permit "remand to the [ABC] Board for rehearing of certain matters relevant to this case with preservation of the appellee's objection and appellate rights respecting the currently existing record and any additional objections and appellate rights which may arise from the anticipated rehearing on remand." The Pier and the ABC Board filed a joint motion to that effect. Appellee/respondent Harrison objected to a remand. The Board and the Pier argued that Harrison lacked standing to object to entry of the order allowing the Pier to withdraw its appeal. The circuit court denied the Pier's motion to withdraw its appeal in order to permit a remand to the ABC Board for additional proceedings.

After a hearing at which all parties presented argument, the circuit court granted the Pier's petition and remanded the matter to the ABC Board, ordering it to issue the licenses with 2:00 a.m. restrictions for indoor and outdoor alcohol sales and indoor entertainment. The circuit court concluded that all the Pier's assignments of error except one lacked merit but that the meritorious assignment required reversal of the Board's decision.

II. ANALYSIS

A. PRELIMINARY PROCEDURAL ISSUES

1. Harrison's Standing in the Circuit Court and this Court

The Board contends Harrison lacked standing to participate in the circuit court proceedings and to object to the joint motion of the Pier and the Board to dismiss the Pier's appeal and remand to the Board. As a result, the Board argues the circuit court erred in denying the joint motion to dismiss and remand.⁴ Further, the Pier and the Board contend, because Harrison lacked standing to participate in the proceedings before the circuit court, she also lacked standing to appeal the circuit court's decision to this Court. Based on the procedural posture of this case, viewed in light of the applicable statutes and regulations, we reject these arguments.

The Alcoholic Beverage Control Act (the ABC Act) establishes the Alcoholic Beverage Control Board (the Board) and gives it the authority, inter alia, to grant and revoke licenses for the sale of alcohol. Code §§ 4.1-103, 4.1-229. The Board may conduct hearings as necessary to perform its duties, Code § 4.1-103(11), and promulgate reasonable regulations to carry out the ABC Act's provisions, Code § 4.1-111(A). The ABC Act directs "[t]he Board [to]...