MAW Enters., L.L.C. v. City of Marksville

• Decision Date: 03 September 2014
• Docket Number: No. 2014–C–0090.,2014–C–0090.
• Citation: 149 So.3d 210
• Court: Louisiana Supreme Court
• Parties: MAW ENTERPRISES, L.L.C., et al. v. CITY OF MARKSVILLE, et al.

149 So.3d 210

MAW ENTERPRISES, L.L.C., et al.

v.CITY OF MARKSVILLE, et al.

No. 2014–C–0090.

Supreme Court of Louisiana.

Sept. 3, 2014.

The Whittington Law Firm, LLC, Derrick Matthew Whittington, Marksville, LA, for Applicant.

Rodney Marchive Rabalais, Marksville, LA, for Respondent.

Opinion

WEIMER, Justice.¹

A property owner/lessor filed suit against the City of Marksville seeking to recover damages for the City's denial of a retail alcoholic beverage permit to the lessee of its property. We granted certiorari to review the correctness of the judgment finding liability on the part of the City and awarding damages. In particular, we consider the City's contention that an error occurred in denying its peremptory exception of no cause of action. Finding merit in the City's claim that the plaintiff property owner failed to state a cause of action for interference with a contractual relation caused by the denial of a liquor permit to its lessee, we reverse and render judgment in favor of the City.

FACTS AND PROCEDURAL HISTORY

On November 30, 2009, MAW Enterprises, L.L.C. (“MAW”) entered into an agreement with Couvillon's Payless, Inc. (“Couvillon”) for the lease of premises located at 333 E. Mark Street in Marksville, Louisiana. The property houses a convenience store that has been operated by various parties since 1978. In conjunction with the convenience store operations, a retail alcoholic beverage permit had been issued at that location continuously from 1978 to the effective date of the lease.

According to the terms of the lease, the first ninety days were to be rent free. At the expiration of that period, the parties were to re-evaluate the monthly rent, with a possible increase not to exceed $.05 per gallon of gasoline sold at the fuel pumps located on the premises. Once “any and all legal and/or monetary issues regarding the license to sell liquor/beer on the premises” were resolved, the lease was to “transfer” to a new lease with rental payments of $4,000 per month.

MAW, the lessee, applied for and was granted an occupational license by the City of Marksville (“the City”) in December 2009 and commenced operations at that time. An “Application for Retail Alcoholic Beverage Permit” was eventually submitted on March 29, 2010. On April 14, 2010, the City denied the requested permit at a council meeting.

On April 22, 2010, MAW and Couvillon jointly filed a “Petition Seeking Writ of Mandamus and Damages, and Alternatively a Declaratory Judgment” against the City. The petitioners sought a writ of mandamus ordering the City to issue a permit to sell alcoholic beverages to MAW or, in the alternative, a declaratory judgment declaring the municipal ordinance on which the City allegedly based its denial of the permit to be without effect, together with damages and attorney's fees.

In June 2010, while the lawsuit against it was pending, the City granted MAW the requested retail alcoholic beverage permit. Thereafter, on July 2, 2010, MAW dismissed its claims against the City with prejudice, and the matter proceeded with Couvillon as the sole plaintiff.

The City filed peremptory exceptions of no cause of action and no right of action to Couvillon's claims. Basically, the City argued that Couvillon, with interests arising solely through a lease with MAW which is tied to sales of gasoline and not alcohol, does not have a cause of action against the City for economic losses sustained as a result of the denial of the retail alcoholic beverage permit to MAW. Additionally, because the lease agreement is not tied to sales of alcohol and Couvillon did not apply for the permit itself, the City argued that Couvillon lacks a right of action against the City for the alleged wrongful denial of the permit. After a hearing, the district court denied both exceptions, and the case immediately proceeded to trial on the merits. Upon the close of evidence, the district court took the matter under advisement and allowed the parties to submit post-trial memoranda.

In written reasons, the district court concluded that the City's denial of a retail alcoholic beverage permit to MAW was unjustified. More particularly, the district court found that the City had relied on a municipal ordinance to deny the permit that was more restrictive than state law and, thus, without effect. Additionally, the court found that the reason advanced at trial for the denial of the permit was arbitrary and capricious.² The court determined that although MAW was subsequently granted a retail alcoholic beverage permit, the business never recovered and MAW ultimately abandoned its lease with Couvillon. The court found that, as a result of the City's conduct, Couvillon sustained damages in the form of lost rentals which amounted to $72,000, less a $15,000 credit for rents paid by MAW after it obtained the permit. At Couvillon's request, the court awarded attorney's fees in the amount of $7,500. A judgment consistent with the district court's written reasons was signed on August 21, 2012. Following the denial of a motion for new trial, the City appealed the adverse judgment.

On appeal, a divided panel of the appellate court affirmed the district court judgment. MAW Enterprises, L.L.C. v. City of Marksville, 13–456 (La.App. 3 Cir. 11/13/13), 128 So.3d 575. The majority found that, in denying MAW the requested permit, the City relied on a municipal ordinance which makes it “unlawful for any person to sell any alcoholic beverage within a distance of 300 feet of a parish or municipal playground or of a building used exclusively as a regular church or synagogue, public library or school,” and which exempts from its prohibition only “those persons licensed by the Town of Marksville to deal in beverages of low alcoholic content continuously and without interruption from August, 1978 or before, ... and only for the particular premises which those persons have so licensed.” Code 1972, § 11–19.1 (emphasis added). Finding the ordinance conflicts with and is preempted by state law, which authorizes municipalities to enact ordinances limiting the location of businesses which deal in alcoholic beverages but which exempts from the location limitation “any premises which have been licensed to deal in alcoholic beverages for a period of one year or longer prior to the adoption of the [municipal or parish] ordinance,” [La. R.S. 26:81(E) (emphasis added) ], the majority held that the City's denial of the requested permit on basis of the preempted ordinance was wrongful. MAW Enterprises, 13–456 at 5, 128 So.3d at 579. In reaching this conclusion, the majority rejected the City's argument that Couvillon does not have a cause of action for economic loss sustained as the result of the City's denial of the retail alcoholic beverage permit to its lessee, MAW, reasoning that as the owner of premises entitled to issuance of a permit under state law, La. R.S. 26:81(E), Couvillon stands in the same position as the property owners in Louisiana Crawfish Producers Ass'n–West v. Amerada Hess Corp., 05–1156 (La.App. 3 Cir. 7/12/06), 935 So.2d 380, writ denied, 06–2301 (La.12/8/06), 943 So.2d 1094 ; PPG Industries, Inc. v. Bean Dredging, 447 So.2d 1058 (La.1984) ; and Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290 (1927). The majority found that the district court properly overruled the City's exception of no cause of action and affirmed the decision below. MAW Enterprises, 13–456 at 5, 128 So.3d at 579.

Judge Peters dissented, disagreeing with the majority's conclusion that La. R.S. 26:81 affords Couvillon a cause of action against the City for damages sustained when MAW was unable to meet its rent obligations after being denied a retail alcoholic beverage permit for the convenience store. MAW Enterprises, 13–456 at 1, 128 So.3d at 580 (Peters, J., dissents). Judge Peters noted that the majority's narrow focus on the reference to “premises” in La. R.S. 26:81, “without taking into consideration the other provisions” of the Louisiana Alcohol Beverage Control Law, La. R.S. 26:1, et seq., is erroneous. Id. Because a reading of the law in its entirety clearly evidences that a retail alcoholic beverage permit is issued to persons, and not premises, Judge Peters reasoned that Couvillon, as owner of the premises, has no cause of action against the City for economic damages sustained when a third party (its lessee, MAW) was denied a retail alcoholic beverage permit. Id., 13–456 at 3, 128 So.3d at 581.

Following the denial of its application for rehearing, the City applied for review in this court. We granted certiorari to review the judgments of the lower courts and, in particular, to examine the correctness of the lower courts' determinations that Couvillon's petition states a cause of action. MAW Enterprises, L.L.C. v. City of Marksville, 14–0090 (La.3/21/14), 135 So.3d 625.

LAW AND ANALYSIS

Because we find it dispositive, we address, at the outset, the City's claim that Couvillon's petition failed to state a cause of action and that the lower courts erred in overruling the City's peremptory exception.

As we have explained, as used in the context of the peremptory exception, a “cause of action” refers to the operative facts which give rise to the plaintiff's right to judicially assert an action against the defendant. Scheffler v. Adams and Reese, LLP, 06–1774, p. 4 (La.2/22/07), 950 So.2d 641, 646, citing Ramey v. DeCaire, 03–1299, p. 7 (La.3/19/04), 869 So.2d 114, 118 ; Everything on Wheels Subaru, Inc. v. Subaru South, Inc., 616 So.2d 1234, 1238 (La.1993). The purpose of the peremptory exception of no cause of action is to test the legal sufficiency of the plaintiff's petition by determining whether the law affords a remedy on the facts alleged in the petition. Id. The exception is triable on the face of the pleadings and, for purposes of resolving the issues raised by the exception, the court must presume that all well-pleaded facts in the petition are true. See Id., 06–1774 at 5, 950...