Lamplighter Lounge, Inc. v. State ex rel. Heitkamp, 930069

• Decision Date: 05 January 1994
• Docket Number: No. 930069,930069
• Citation: 510 N.W.2d 585
• Parties: LAMPLIGHTER LOUNGE, INC., and Rodnie Schmidt, doing business as Frontier Club, Petitioners and Appellees v. STATE of North Dakota ex rel. Heidi HEITKAMP, Attorney General, Respondent and Appellant. Civ.
• Court: North Dakota Supreme Court

Page 585

510 N.W.2d 585

LAMPLIGHTER LOUNGE, INC., and Rodnie Schmidt, doing business as Frontier Club, Petitioners and Appellees v. STATE of North Dakota ex rel. Heidi HEITKAMP, Attorney General, Respondent and Appellant.

Civ. No. 930069.

Supreme Court of North Dakota.

Jan. 5, 1994.

Richard B. Thomas, Thomas Law Firm, Minot, for petitioners and appellees.

Sidney Hertz Fiergola, Asst. Atty. Gen., Atty. Gen.'s Office, Bismarck, for respondent and appellant.

VANDE WALLE, Chief Justice.

The State of North Dakota appealed from a writ of certiorari issued by the district court ordering the Attorney General to grant Lamplighter Lounge, Inc. and Rodnie Schmidt, d/b/a Frontier Club, liquor licenses for 1993. We affirm.

On December 27, 1991, Rodnie Schmidt was charged in Ward County Court with the criminal offense of gambling, in violation of section 12.1-28-02, N.D.C.C. Schmidt is the owner of Frontier Club, a liquor establishment located in Underwood, North Dakota, and is also a manager, stockholder and secretary/treasurer of Lamplighter Lounge, Inc., (Lamplighter) located in Minot, North Dakota. Schmidt entered a plea of not guilty to the criminal charge and is awaiting trial by jury.

On April 27, 1992, an affidavit and complaint alleging gambling violations by Schmidt, as an officer of Lamplighter, were filed with the Attorney General's Office. After granting Lamplighter's request for a delay, a hearing was scheduled for September 30, 1992, regarding revocation or suspension of Lamplighter's license.

At the administrative hearing, the hearing officer found,

"by the greater weight of the evidence, that Rodnie Schmidt was involved with an illegal gambling operation of the type prohibited by N.D.C.C. Sec. 12.1-28-02. The evidence also shows, by the greater weight of the evidence, that the illegal gaming activities and conduct Rodnie Schmidt was engaged in was while acting as manager of Arrowhead Liquor/Lamplighter Lounge, and occurred on the premises owned and operated by Lamplighter Lounge, Inc."

Despite this finding, the hearing officer concluded that, under the relevant statutory provisions, see N.D.C.C. Sec. 5-02-02, N.D.Admin.Code Sec. 10-08-01-01(2), Lamplighter could not be disqualified from retaining its license. Rather, the hearing officer concluded, those statutory provisions require a criminal conviction or entry of a guilty plea by Schmidt prior to license revocation or suspension; mere proof by a preponderance of the evidence at an administrative hearing that Schmidt had violated section 12.1-28-02, N.D.C.C., is not sufficient.

Beyond alleging illegal gaming activity, the affidavit and complaint did not specifically allege that Schmidt was not a person of good moral character. The Attorney General did not argue at the hearing that Schmidt was of poor moral character, and the hearing officer found that there had been "no evidence offered at the hearing in regard to Rodnie Schmidt's moral character." The hearing officer issued a recommended order that the complaint against Lamplighter be dismissed. See N.D.C.C. Sec. 28-32-13(3) ["If the agency head ... is not presiding, then the person presiding shall issue a recommended order which becomes final unless specifically amended or rejected by the agency head...."]. The Attorney General formally dismissed the complaint on November 20, 1992.

On December 14, 1992, Irwin Hunsaid, corporate president of Lamplighter, submitted to the Attorney General an application for renewal of Lamplighter's liquor license. On December 16, 1992, Rodnie Schmidt submitted an application for renewal of Frontier Club's license. In a letter dated December 22, 1992, and postmarked December 23, 1992, the Attorney General wrote Hunsaid:

"This letter serves to inform you that the 1993 state retail alcoholic beverage license application of Lamplighter Lounge, Inc., is hereby denied pursuant to North Dakota Century Code Sec. 5-02-02.

"According to the license application, Rodnie Schmidt is listed as the secretary/treasurer of this corporation. We do not feel Rodnie Schmidt meets the qualification of a person of good moral character as evidenced by his involvement in illegal gambling activities. Therefore, we are unable to issue a license.

"The current state retail alcoholic beverage license of Lamplighter Lounge, Inc., expires at 12:00 midnight on December 31, 1992, at which time any sale or consumption of alcoholic beverages on the Lamplighter Lounge premises must cease.

"Your check number 16956 in the amount of $200 is enclosed with this letter."

In a letter dated and postmarked December 23, 1992, Schmidt was likewise informed that the application submitted on behalf of Frontier Club was denied and that a refund of his application fee would be forthcoming. This letter similarly provided that all alcohol sales and consumption at Frontier Club must cease at midnight on December 31, 1992.

Counsel for Lamplighter and Schmidt, contending that the denial of the liquor license applications violated due process, informed the Attorney General that they might pursue a writ of certiorari. The Attorney General responded, by letter dated December 28, 1992, that review by certiorari would be inappropriate, because "there has been no final agency decision made in this matter" and because Mr. Schmidt "has the right to appeal our preliminary agency decision to the independent hearing office." Significantly, however, Lamplighter and Schmidt were not informed that liquor sales at Frontier Club or Lamplighter would be permitted to continue pending a final administrative determination.

On December 30, 1992, Lamplighter and Schmidt petitioned the District Court of Ward County for a Writ of Certiorari, pursuant to section 32-33-01, N.D.C.C., for an expedited review of the denial of their 1993 liquor license applications. The district court granted the writ of certiorari and ordered that the current licenses would remain in full force and effect pending renewal of the licenses or pending further review by the district court. The court ordered the Attorney General to appear before the court on January 11, 1993, to certify its records concerning the license applications.

On December 31, 1992, the Attorney General notified various law enforcement officials that, in light of pending litigation concerning the liquor licenses, no adverse action should be taken against Lamplighter or Frontier Club regarding the absence of 1993 liquor licenses. A copy of this notice was sent to counsel of Lamplighter and Schmidt.

Due to an apparent misunderstanding, the Attorney General failed to appear at the January 11, 1993, district court hearing. On January 27, 1993, however, the Attorney General scheduled an administrative hearing to be held on February 19, 1993, on the issue of whether the Attorney General had properly denied the applications for 1993 liquor licenses.

Subsequently, the district court issued an order to show cause why the Attorney General should not be held in contempt of court for failing to appear at the January 11, 1993, hearing and ordered the administrative hearing cancelled pending further action by the court. The Attorney General moved the court to reconsider and stay the writ of certiorari pending appeal. The district court heard oral argument on this motion, and, by memorandum opinion, denied the motion and directed the issuance of 1993 licenses to Lamplighter and Schmidt. An appropriate order was filed and this appeal followed.

The Attorney General contends that, under this Court's holding in Manikowske v. N.D. Workmen's Comp. Bureau, 373 N.W.2d 884 (N.D.1985), the district court erred by issuing the writ of certiorari and by ordering the issuance of 1993 licenses. First, the Attorney General argues, review by certiorari was improper because administrative review was available, and Lamplighter and Schmidt could not properly bypass the administrative procedures via certiorari. Second, the Attorney General asserts, the decision whether to grant or deny a liquor license application falls squarely within the discretion of the Attorney General and, in light of the evidence of illegal activity on the part of Schmidt, her predecessor acted within his jurisdiction when he denied the liquor license applications. The argument follows that the court not only erred in granting the writ of certiorari but also erred by requiring the Attorney General to perform the discretionary act of issuing liquor licenses.

I

A writ of certiorari will be granted where an agency has exceeded its jurisdiction and where there is no appeal or another plain, speedy, and adequate remedy available, or when granting the writ is deemed necessary to prevent a miscarriage of justice. N.D.C.C. Sec. 32-33-01. The district court thus faced two issues: whether the Attorney General exceeded its jurisdiction, and whether there were adequate and speedy alternative remedies available. As to the second issue, the district court concluded that, despite the availability of an administrative hearing, the administrative process would not be sufficiently timely or adequate. The determination of whether alternative remedies would be adequate and timely is left to the judgment of the court. N.D.C.C. Sec. 32-33-01.

The Attorney General cites Manikowske, supra, for the proposition that the availability of administrative review precludes review by certiorari. In Manikowske, a petitioner's claim for Worker's Compensation benefits was denied following an informal hearing. Following a motion for rehearing and after exchanging additional evidence and correspondence, the Bureau issued an order affirming the initial order to deny Manikowske's benefits. Manikowske did not appeal from either order.

Over the next two and one-half years, Manikowske made several applications to the Bureau, requesting that his claim be reopened and that he be afforded a full evidentiary hearing. These requests were denied. Finally, Manikowske petitioned the...