Jameson's Liquors, Inc. v. District of Columbia, Etc.

• Decision Date: 01 March 1978
• Docket Number: No. 11176.,11176.
• Citation: 384 A.2d 412
• Parties: JAMESON'S LIQUORS, INCORPORATED, Petitioner, v. DISTRICT OF COLUMBIA ALCOHOLIC BEVERAGE CONTROL BOARD, Respondent.
• Court: D.C. Court of Appeals

384 A.2d 412

JAMESON'S LIQUORS, INCORPORATED, Petitioner, v. DISTRICT OF COLUMBIA ALCOHOLIC BEVERAGE CONTROL BOARD, Respondent.

No. 11176.

District of Columbia Court of Appeals.

Argued October 11, 1977.

Decided March 1, 1978.

COPYRIGHT MATERIAL OMITTED

Murray A. Kivitz, Washington, D. C., for petitioner.

Edward E. Schwab, Asst. Corp. Counsel, Washington, D. C., with whom John R. Risher, Jr., Corp. Counsel, Louis P. Robbins, Principal Deputy Corp. Counsel, Richard W. Barton, Deputy Corp. Counsel, and E. Calvin Golumbic, Asst. Corp. Counsel, Washington, D. C., were on brief, for respondent.

Before NEWMAN, Chief Judge, and NEBEKER and FERREN, Associate Judges.

FERREN, Associate Judge:

Petitioner Jameson's Liquors, Incorporated, seeks reversal of the Alcoholic Beverage Control Board's order denying petitioner's application to transfer its Retailer's Class "A" liquor license from 2818-14th Street, N.W. to premises located at 2600-14th Street, N.W. Because the Board's Supplementary Conclusions of Law are "unsupported by substantial evidence in the record of the proceedings before the court," D.C. Code 1977 Supp., § 1-1510(3)(E), we set aside the Board's order. In addition, because this court has twice remanded this matter to the Board, we hold that considerations of equity compel us to remand the case with an order to show cause why petitioner's application should not be granted forthwith.

I.

On January 31, 1976, petitioner ceased operating its retail liquor store, license Class "A", at 2818-14th Street, N.W., where petitioner had operated for 24 years. One month later, on February 26, 1976, petitioner applied to the Board for a transfer of its license to premises located at 2600-14th Street, N.W., a block and a half away.¹

Petitioner's only shareholders, Sidney and Bernice Drazin, had leased the new premises, where a gasoline service station was located, from Amoco Oil Company. The Drazins also had entered into a contract to purchase the property, contingent upon their agreement to sell Amoco gasoline there for a period of fifteen years. The Drazins then entered into an agreement to lease approximately half the property to petitioner for ten years, contingent upon the Drazins' completing the purchase and upon petitioner's obtaining the requested transfer of the Class "A" license to the new location.

In furtherance of their plan, the Drazins engaged an architect to prepare drawings indicating how the property — which measured approximately 145 feet by 112 feet — was to be divided, including a substantial buffer of shrubbery between the liquor store and the gasoline station. As part of the arrangement, petitioner was to take over and remodel the service station for use as the liquor store. The Drazins planned to build a new structure on the other half of the property to serve as a "gas-and-go" operation, open twenty-four hours a day, in keeping with their obligation to Amoco. (In doing so they would eliminate the existing auto-repair service.) Finally, the Drazins planned to lease the "gas-and-go" facility to a separate corporation operated by their son and daughter, ages nineteen and twenty-two, respectively, who were to assume full responsibility for that business (although they lived at home with their parents).

A number of residents and groups in the surrounding community protested the application for transfer. The Board's hearing, originally scheduled for March 25, 1976, was accordingly rescheduled; it took place on April 5, 1976. The Board issued an order on July 22, 1976, denying petitioner's application on the ground that "[t]he premises do not qualify as appropriate" pursuant to D.C.Code 1973, § 25-115(a)6. In support of this determination, the Board issued findings of fact which, to the extent relevant here, (1) recited the proposed arrangement involving Amoco, the Drazins, their children, and petitioner, but found no evidence that Amoco had yet agreed to sell the property or that the Amoco lease would permit the sale of liquor; (2) stated the number, and in some cases the names, of witnesses pro and con; and (3) reported the opposition's arguments that the proposed transfer would have a "deteriorating effect on the neighborhood" because it would "create a `drink and drive' atmosphere that would be detrimental to the driving student from Cardozo [High School]," would "adversely affect the Seventh Day Pentacostal Church and the proposed Tot Center," and would impact on an area "already over saturated with retail establishments."

Petitioner applied to the Board for reconsideration and/or rehearing. On July 26, 1916, the Board denied the petition on the ground that it was defective as to form. The Board would not consent to petitioner's offer to correct the defect, whereupon petitioner sought review in this court on September 27, 1976. D.C.Code 1977 Supp., § 1-1510; D.C.App.R. 15.

A month later, on October 27, 1976, the Board itself filed a motion to remand the proceeding; the Board had decided that it would permit the filing of a petition for reconsideration and/or rehearing. On November 1, 1976, we granted the motion. Petitioner then filed the anticipated petition, but on December 15, 1976, the Board denied it, thereby reactivating the petition for review by this court. The Board sought and received several extensions of time to file its brief in opposition. Then, on February 3, 1977, the Board filed another motion to remand the proceeding to the Board, this time "so that respondent may make supplemental findings of fact and conclusions of law." In support of its motion, the Board admitted that

1. . . . respondent's findings of fact are conclusory in nature and do not conform to the requirements of the District of Columbia Administrative Procedure Act. . . .

2. There is a substantial question as to whether respondent's findings of fact and conclusions of law are adequate to permit meaningful judicial review in regard to petitioner's other arguments. Hill v. District Unemployment Compensation Board, D.C.App., 279 A.2d 501 (1971).

Our court granted the motion on April 4, 1977. A month later, on May 4, 1977, the Board entered Supplemental Findings of Fact, Conclusions of Law, and Order — again denying petitioner's application for transfer.

In its brief, the Board acknowledges that "[t]he Findings and Conclusions which now support the order are very much different from" the original ones. More particularly, the Board found that "[t]he lease agreement between Sidney and Bernice Drazin and the Amoco Oil Company is no longer a basis for denying the transfer application"; but the Board denied petitioner's application by virtue of the following Supplementary Conclusions:

2. The premises do not qualify as appropriate for issuance of a retailer license Class "A" under Section 14(a)(6) of the Act (D.C.Code, 1973, § 25-115(a)(6)). The liquor business would be directly adjacent to a gasoline retail outlet, that would be a continuation of the business now being operated from the building the applicant would use for its retail liquor sales if the transfer application were granted. There would be a close relationship, both business and personal, between the operators of the liquor business (Sidney and Bernice Drazin) and the operators of the gasoline business (their son and daughter). The son and daughter would continue a business now run by their parents; they would lease from their parents; and they would have to operate the business in accordance with a contract entered between Amoco Oil Company and their parents.

The close physical proximity of the businesses, the close business and personal relationships between operators of the two businesses, and the undoubted identification in the minds of existing customers of the gasoline service station business with the structure that would house the liquor business are all very likely to combine in creating the `drink and drive' atmosphere complained of by several protestants. Violations of D.C.Code, 1973, § 25-138, which prohibits consumption of alcoholic beverages in an automobile, would be encouraged under those circumstances. It is well known that purchasers of gasoline, who many times have no thought of buying soft drinks when they enter a service station, often do so merely because of the presence of a soft drink machine at the service station. A presence of alcoholic beverages near a gasoline station, in the circumstances of this case, is likely to create a similar phenomenon in regard to those beverages. The premises are therefore deemed inappropriate.

II.

Both petitioner and the Board agree that the statutory provision at issue is D.C.Code 1973, § 25-115(a)6, which provides:

(a) . . . Before a license is issued the Board shall satisfy itself:

* * * * * *

6. That the place for which the license is to be issued is an appropriate one considering the character of the premises, its surroundings, and the wishes of the persons residing or owning property in the neighborhood of the premises for which the license is desired.²

Unlike some of the other, quite specific criteria prescribed by regulations governing issuance of a liquor license,³ the criteria in § 25-115(a)6 require application of the Board's expert judgment based on facts adduced at the hearing. Petitioner does not challenge the validity of the criteria set forth in § 25-115(a)6 or the Board's expertise and authority to apply them. Nor does petitioner question that the Board lawfully could conclude (under circumstances not present here) that a retail liquor license on premises connected with a gasoline station would create a "drink-and-drive" atmosphere that is not "appropriate" for a liquor license within the meaning of § 25-115(a)6. Petitioner, in other words, does not argue for per se invalidity of the "drink-and-drive" criterion.

Petitioner accordingly limits its challenge to three, essentially factual contentions. First, petitioner claims that the Board did not serve notice that...