Haugland v. Spaeth, 910117

• Decision Date: 12 November 1991
• Docket Number: No. 910117,910117
• Citation: 476 N.W.2d 692
• Parties: Darlene and Erling HAUGLAND, Petitioners and Appellants, v. Nicholas J. SPAETH, Attorney General, State of North Dakota, Respondent and Appellee. Civ.
• Court: North Dakota Supreme Court

Page 692

476 N.W.2d 692

Darlene and Erling HAUGLAND, Petitioners and Appellants, v. Nicholas J. SPAETH, Attorney General, State of North Dakota Respondent and Appellee.

Civ. No. 910117.

Supreme Court of North Dakota.

Nov. 12, 1991.

Kenneth S. Rau, Moench Law Firm, Bismarck, for petitioners and appellants.

Richard R. Tessier, Asst. Atty. Gen., Bismarck, for respondent and appellee.

LEVINE, Justice.

The Hauglands appeal from a district court judgment affirming the Attorney General's decision to suspend their liquor license. We affirm.

Darlene and Erling Haugland are owners of The South Forty, an eating establishment in Lincoln. While the South Forty was under construction, the North Dakota Department of Health inspected it and issued the Hauglands a restaurant license. That same month, the Hauglands applied for and received, from the Attorney General, a license to sell retail alcoholic beverages.

Because a fire safety inspection of the restaurant was not conducted after the completion of construction, the Attorney General requested a Deputy State Fire Marshal to perform one. The inspector noted several "fire corrections to be made." After receiving the results of the inspection, the Attorney General informed the Hauglands that they must correct the deficiencies within thirty days. The corrections included the installation of an additional upper floor remote exit, lighted exit signs, and a solid-core kitchen door.

Ms. Haugland wrote to inform the Attorney General that the required corrections were nearing completion. The Attorney General relied on Ms. Haugland's letter and did not revoke the South Forty's liquor license.

In June of 1990, the Deputy Fire Marshal performed a second inspection that showed there were still uncorrected deficiencies. The Attorney General held an administrative hearing and determined that the South Forty did not meet state fire safety requirements. The Attorney General ordered that the South Forty's liquor license be suspended until the building complied with all fire safety requirements as determined by the State Fire Marshal. The Hauglands appealed from the suspension order. The district court affirmed and this appeal followed.

The Hauglands assert that the Attorney General did not follow the proper statutory procedure and that the decision to suspend their liquor license is therefore not in accordance with the law. NDCC Sec. 28-32-19(1). They contend that several statutes prohibit the Attorney General from conducting independent safety inspections to determine an establishment's eligibility for a liquor license. We disagree.

Section 28-32-19, NDCC, governs this Court's review of administrative agency decisions. Although the district court's analysis is entitled to respect, we review the decision of the agency, rather than that of the district court. E.g, Holmgren v. N.D. Workers Comp. Bur., 455 N.W.2d 200 (N.D.1990). This Court normally defers to a reasonable interpretation of a statute by the agency enforcing it when that interpretation does not clearly contradict statutory language. Schaefer v. Job Service North Dakota, 463 N.W.2d 665 (N.D.1990).

The interpretation of a statute is a question of law fully reviewable by this Court. Christianson v. City of Bismarck, 476 N.W.2d 688 (N.D.1991). A statute must be interpreted reasonably and consistently with the intent of the legislature. Boehler v. Backes, 461 N.W.2d 103 (N.D.1990). When construing a statutory provision, this Court considers the entire chapter in which it is contained and, to the extent possible, interprets the provision consistent with the intent and purpose of the entire act. Production Credit Ass'n of Minot v. Lund, 389 N.W.2d 585 (N.D.1986).

The Hauglands rely upon section 23-09-02, NDCC, which directs that only the Health Department enforce health, safety and sanitation requirements for hotels, lodginghouses, restaurants and boardinghouses. They argue that the South Forty is a restaurant, ¹ that section 23-09-02, NDCC, gives the Health Department exclusive authority to determine if a restaurant meets health and safety requirements and that, therefore, only the Health Department, and not the Attorney General, may regulate the South Forty. Section 23-09-02, NDCC, says:

"The state department of health and consolidated laboratories shall enforce the provisions of this chapter. Under no circumstances may any other state agency enforce the provisions of this chapter or adopt rules which relate in any way to the provisions of this chapter nor may any other state agency expend any moneys, including salaries, which would involve the agency or its employees to work related to the provisions of this chapter."

However, section 23-09-02, NDCC, is contained in the chapter which establishes health and safety requirements for restaurants, hotels, lodginghouses and boardinghouses. Nowhere does chapter 23-09, NDCC, refer to retail liquor licensing or retail liquor establishments. Section 23-09-02, NDCC, neither addresses retail liquor licensing nor prohibits the Attorney General from enforcing mandatory qualifications for retail liquor licenses. Instead, section 23-09-02, NDCC, prohibits agencies other than the Health Department from enforcing the health and safety provisions contained in chapter 23-09, NDCC.

On the other hand, chapter 5-02, NDCC, contains retail licensing requirements and empowers the Attorney General to issue state retail liquor licenses. Section 5-02-01, NDCC, vests the Attorney General with the ultimate responsibility to ensure retail license applicants meet the requisite qualifications. Section 5-02-01, NDCC, says:

"Except as otherwise provided in section 5-02-01.1, any person engaging in the sale of alcoholic beverages at retail without first securing an appropriate license from the attorney general and the governing body of any city, or board of county commissioners if said business is located outside the corporate limits of a city, is guilty of a class A misdemeanor. This section does not apply to public carriers engaged in interstate commerce."

Section 5-02-02, NDCC, includes a requirement that an applicant must comply with state and local safety regulations and authorizes the Attorney General to require that the license applicant provide additional information as necessary for determining license eligibility. Section 5-02-02, NDCC, says, in part:

"No retail license may be issued to any person unless the applicant files a sworn application, accompanied by the required fee, showing the following qualifications:

"4. The building in which business is to be conducted must meet local and state requirements regarding the sanitation and safety.

"6. The attorney general, or local governing body, may require the applicant to set forth such other information in the application as necessary to enable them to determine if a license should be granted."

Under our statutory scheme, the Attorney General is the retail liquor licensing authority. NDCC Sec. 5-02-01; NDCC Sec. 5-02-02. The Health Department is the restaurant licensing authority. NDCC Sec. 23- 09-02; NDCC Sec. 23-09-16. ² These licensing responsibilities are distinct. Construing sections 5-02-01 and 5-02-02, NDCC, together with sections 23-09-02 and 23-09-16, NDCC, and considering the chapters in which they are contained, we conclude that the Attorney General's authority to issue retail...