In re Montana License

• Decision Date: 13 May 2008
• Docket Number: No. DA 07-0254.,DA 07-0254.
• Citation: 2008 MT 165,184 P.3d 324
• Court: Montana Supreme Court
• Parties: In the Matter of the Application for Transfer of Location for MONTANA ALL-ALCOHOLIC BEVERAGES RESORT LICENSE NO. 07-999-2667-009, The Mountain Monkey, 3842 Winter Lane, Whitefish, Flathead County, Montana. Applicant: The Stube & Chuckwagon Grill, LLC — Rande Hall, Sole Member (Cause No. 06-116-LQ), Petitioner and Appellant.

184 P.3d 324

2008 MT 165

In the Matter of the Application for Transfer of Location for MONTANA ALL-ALCOHOLIC BEVERAGES RESORT LICENSE NO. 07-999-2667-009, The Mountain Monkey, 3842 Winter Lane, Whitefish, Flathead County, Montana Applicant: The Stube & Chuckwagon Grill, LLC — Rande Hall, Sole Member (Cause No. 06-116-LQ), Petitioner and Appellant.

No. DA 07-0254.

Supreme Court of Montana.

Submitted on Briefs January 29, 2008.

Decided May 13, 2008.

For Appellant: Michael A. Ferrington, Attorney at Law, Whitefish, Montana.

For Appellee: Derek R. Bell, Special Assistant Attorney General, Helena, Montana.

Justice PATRICIA O. COTTER delivered the Opinion of the Court.

¶ 1 Rande Hall (Hall), the owner and sole member of the Stube & Chuckwagon Grill, LLC, appeals an order of the Eleventh Judicial District, Flathead County, affirming Findings of Fact, Conclusions of Law, and Order (Final Decision) as well as Supplementary Findings of Fact and Discussion (Supplemental Findings) issued by the Department of Revenue of the State of Montana (DOR). In its Final Decision and Supplemental Findings a DOR hearing examiner denied a request by Hall to transfer a resort all-beverages license owned by him in conjunction with the Stube & Chuckwagon Grill, LLC, to a new business at a different location to be known as the Mountain Monkey. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 2 In April 1998, resort all-beverages License No. 07-999-2667-009 (License) was transferred to Hall to be used in conjunction with an establishment he owned known as the Bierstube, located in the Big Mountain Ski Resort (BMSR), 3896 Big Mountain Road, Whitefish, Montana. In July 2000, Hall changed the name of the Bierstube to the Stube & Chuckwagon Grill, LLC (Chuckwagon Grill).

¶ 3 Sometime in 2003, Hall applied to the DOR to transfer the License from the Chuckwagon Grill to the proposed location of the Mountain Monkey at 3842 Winter Lane, Whitefish, Montana, in a complex known as the Kristianna Condominiums. The Kristianna Condominiums are located on Lot 24 of the Big Mountain View Subdivision, as that subdivision is recorded in Flathead County. Hall entered into an agreement to lease the facility from its owner, Wayne Womack (Womack). When Hall applied for the transfer of the License, Winter Sports, Inc. (WSI), the corporate entity which owns BMSR, lodged an official protest of the transfer through its attorney Joseph Mazurek (Mazurek).

¶ 4 Under § 16-4-202(11), MCA, "a resort retail all-beverages license may not be sold or transferred for operation at a location outside of the boundaries of the resort area." WSI protested, claiming that the proposed site of the Mountain Monkey in the Big Mountain View Subdivision was not within the boundaries of the BMSR area; thus, the License could not be transferred. In conjunction with its protest letter, WSI submitted several documents which it claimed supported its position. One was a plat of BMSR approved by DOR in 1993. This plat indicates the exterior boundaries of the BMSR area with a bold black line. Within this exterior boundary are seven parcels of property which are shaded. On the right side of the plat are legal descriptions of these shaded parcels, which state that they are "excepted" from the BMSR area. One of these shaded parcels is described as the Big Mountain View Subdivision. In other words, although located within the exterior boundaries of BMSR, the Big Mountain View Subdivision is reflected on the plat as being outside of the BMSR area. Thus, the Kristianna Condominiums located in Lot 24 of this subdivision, are outside of the BMSR area as well. In response to this protest letter, Hall withdrew the transfer application pending further investigation.

¶ 5 On April 13, 2004, in a wholly separate proceeding, another entity called Big Mountain Club Refreshments, LLC, filed an application with the DOR for a combined alcoholic beverage/gambling operator license at a proposed establishment to be known as the Big Mountain Club, located at 3893 Big Mountain Road, Commercial Unit 4A, in the Morning Eagle Building. Big Mountain Club Refreshments, LLC, received protest letters from several individuals, including Hall and Womack. A hearing on the matter was held on October 21, 2004, with Howard R. Heffelfinger, hearing examiner for DOR, presiding. At the hearing, Womack protested the issuance of the license to WSI in part on the grounds that the proposed site of the Big Mountain Club in the Morning Eagle Building was outside the BMSR area. Heffelfinger rejected Womack's protest and recommended that the application be approved in a decision issued on November 29, 2004, entitled "In the Matter of the Protests to the Issuance of One Original (new) Montana All-Alcoholic Resort License, Big Mountain Club, 3893 Big Mountain Road, Whitefish, Flathead County, Montana, No. 04-044-LQ" (Big Mountain Club Decision).

¶ 6 After the Big Mountain Club license was approved on July 7, 2005, Hall submitted another application to transfer his License to the Mountain Monkey. In his briefs before this Court, Hall claims that two facts which arose in conjunction with the application for the Big Mountain Club prompted him to re-file his application. First, Heffelfinger had approved the license for the Big Mountain Club in the Morning Eagle Building, which was located in one of the shaded portions of BMSR plat, just like the proposed site of the Mountain Monkey in Kristianna Condominiums on Lot 24 of the Big Mountain View Subdivision. In other words, because Heffelfinger approved a resort liquor license for a building which appeared to be located outside of the BMSR area, the site of the Mountain Monkey should be approved as well. Second, Big Mountain Club Refreshments, LLC, had submitted documents in conjunction with its application showing that it had considered the Kristianna Condominiums to be part of the BMSR lodging facilities when WSI had submitted a resort re-determination application with the DOR in 1995. In that 1995 application, WSI represented that that Kristianna Condominiums were a part of the BMSR based on a contract between WSI and the condominium's owner to provide lodging services. Believing these two facts would support his transfer application for the Mountain Monkey, Hall reapplied.

¶ 7 DOR received four protest letters after notice of the License transfer re-application was published in a local newspaper. A hearing was scheduled for December 6, 2005, with Heffelfinger presiding as the hearing examiner. One of the protest letters was from Anne Moran (Moran), a local resident who lived near the proposed site of the Mountain Monkey. Moran appeared and gave testimony concerning the site suitability and security issues. Another letter was from Mazurek, representing WSI. Mazurek also appeared at the hearing to present evidence in support of WSI's protest. Because only Moran and Mazurek appeared at the hearing in protest, only their testimony was considered, and the other two letters were disregarded as inadmissible hearsay.

¶ 8 At the hearing, Heffelfinger heard testimony from a number of individuals concerning whether the proposed site of the Mountain Monkey was within the BMSR area. Jason Wood (Wood), supervisor of the liquor licensing unit for DOR, testified concerning the process for approving a resort under § 16-4-202, MCA, and specifically concerning the history of the BMSR itself. Under § 16-4-202, MCA, a resort developer files an application with DOR for a resort determination. A resort area must meet the following criteria:

(4) (a) In addition to the other requirements of this code, a resort area, for the purposes of qualification for the issuance of a resort retail all-beverages license, must:

(i) have a current actual valuation of resort or recreational facilities, including land and improvements, of not less than $500,000, at least half of which valuation must be for a structure or structures within the resort area;

(ii) be under the sole ownership or control of one person or entity at the time of the filing of the resort area plat referred to in subsection (5);

(iii) contain a minimum of 50 acres of land;

(iv) contain a minimum of 100 overnight guest accommodation units, each unit capable of being separately locked by the occupants and containing sleeping, bath, and toilet facilities; and

(v) provide on the grounds of the resort the recreational facilities that warrant the resort designation being granted.

(b) For the purposes of this section, "control" means land or improvements that are owned or that are held under contract, lease, option, or permit.

(5) The resort area must be determined by the resort area developer or landowner by a plat setting forth the resort area boundaries and designating the ownership of the lands within the resort area. The plat must be verified by the resort area developer or landowner and must be filed with the department prior to the filing of any applications for resort retail all-beverages licenses within the resort area. The plat must show the location and general design of the buildings and other improvements existing or to be built in the resort area. A master plan for the development of the resort area may be filed by the resort area developer in satisfaction of this section.

Sections 16-4-202(4) and (5), MCA.

¶ 9 Wood testified that DOR records related to the BMSR indicated that it was originally established in 1981, although DOR was currently unable to locate the original file. Wood testified that WSI applied for resort re-determinations in 1985 to add 1,000 acres to BMSR, in 1993 to add land for a golf course, and in 1995 to include in the BMSR area two lots housing a building known as the Kandahar Lodge. The Kandahar Lodge is located in Lots 16 and 17 of the Big Mountain View Subdivision, and unlike the rest of that subdivision, those lots are not shaded on the most recent BMSR plat. Wood testified that in the 1995 resort...