MCJS, Inc. v. Kan. Dep't of Revenue
| Decision Date | 25 October 2013 |
| Docket Number | No. 108,788.,108,788. |
| Citation | 49 Kan.App. 549,311 P.3d 1147 |
| Parties | MCJS, INC., dba Reed's Ringside Sports Bar and Grill, Appellant, v. KANSAS DEPARTMENT OF REVENUE, Appellee. |
| Court | Kansas Court of Appeals |
OPINION TEXT STARTS HERE
Syllabus by the Court
1. When courts are called upon to interpret statutes, the fundamental rule governing our interpretation is that the intent of the legislature governs if that intent can be ascertained. The legislature is presumed to have expressed its intent through the language of the statutory scheme it enacted. When the language of a statute is plain and unambiguous, an appellate court is bound to implement the expressed intent and need not resort to rules of statutory construction.
2. K.S.A. 2012 Supp. 41–2615 prohibits a licensee from knowingly or unknowingly permitting the possession or consumption of alcoholic liquor or cereal malt beverage by a minor on the licensee's premises. Under the plain language of the statute, and in the context of a civil regulatory proceeding, a licensee may be found to have unknowingly permitted a minor to consume alcohol on the premises merely by allowing the minor to enter the premises and by serving alcohol in an area within the minor's reach.
3. K.S.A. 2012 Supp. 77–621(c)(7) provides that a court shall grant relief from an agency action if it determines that the agency action is based on a determination of fact, made or implied by the agency, that is not supported to the appropriate standard of proof by evidence that is substantial when viewed in light of the record as a whole.
4. Under the facts of this case, there was sufficient evidence, when viewed in light of the record as a whole, to support the agency's finding that the licensee violated K.S.A. 2012 Supp. 41–2615 by permitting a minor to possess or consume alcohol on the licensee's premises.
William K. Rork and Jacob Conard, legal intern, of Rork Law Office, of Topeka, for appellant.
Sarah Byrne, assistant attorney general, Alcoholic Beverage Control, Kansas Department of Revenue, for appellee.
Before MALONE, C.J., PIERRON and HILL, JJ.
This is a civil regulatory proceeding in which the Kansas Department of Revenue Division of Alcoholic Beverage Control (ABC) fined MCJS, Inc., dba Reed's Ringside Sports Bar and Grill (Reed's) $500 for violating K.S.A. 41–2615 by permitting a minor to possess or consume alcohol on its premises. The Director of the ABC (Director) found that Reed's is responsible for ensuring that minors do not possess or consume alcoholic beverages on its premises and that K.S.A. 41–2615 creates absolute civil liability on a licensee for any violation of the statute. Reed's appealed without success to the Secretary of the Department of Revenue (Secretary) and then to the district court.
Reed's now appeals to this court, claiming that the agency and the district court erred in finding that K.S.A. 41–2615 imposes strict liability on a licensee and in finding that the minor possessed or consumed alcohol on its premises. In the context of a civil regulatory proceeding, we conclude that the agency and the district court did not err in finding that K.S.A. 41–2615 imposes strict liability on a licensee such that the statute is violated whenever a minor possesses or consumes alcohol on its premises. We also conclude that the evidence was sufficient to support a finding that the minor possessed or consumed alcohol on Reed's premises. Thus, we affirm the district court's judgment.
On July 3, 2010, Potawatomi Tribe Police Officer Darrel Chapman was involved in a high-speed pursuit of Kipp Shupe, who was 17 years old at the time. After Chapman took Shupe into custody, he learned that Shupe had been with his friend, Jonathan Bourdon, earlier that night drinking beer at Reed's. Bourdon confirmed this information.
On July 28, 2010, the ABC issued an administrative citation to Reed's, asserting that Reed's violated K.S.A. 41–2615 by permitting an underage person to possess or consume alcohol on its premises. Reed's timely requested an evidentiary hearing before the Director. At the evidentiary hearing, the ABC called Chapman who testified about Shupe's arrest on July 3, 2010, and Shupe's statement that he had been drinking beer at Reed's earlier that night. Next, Bourdon testified that on the night in question, he was at Reed's with Shupe. Bourdon testified that he and Shupe played games and drank beer together. Bourdon further testified that Shupe purchased some of the beer that night. However, Bourdon later clarified that he did not see Shupe purchase the beer; rather, he saw Shupe come back from the general direction of the bar with a pitcher of beer in his hand. Bourdon also stated that Reed's employees would come around periodically to clear their table. Bourdon testified that no employee asked him for identification when he purchased the beer or asked Shupe for identification while he was drinking at the table.
When Shupe testified, he admitted being at Reed's with Bourdon on the night in question and that, while driving to Reed's, he had drunk four beers in his vehicle. Once at Reed's, Shupe stated that he bought two pitchers of beer, one from the bartender and one from a waitress, and he was not asked for identification either time. Further, Shupe testified that there were always employees walking around the bar and, although he was clearly drinking beer, no one asked him for identification. On cross-examination, Shupe admitted that his first written statement to the police said nothing about him purchasing beer, although his second written statement mentioned purchasing one pitcher of beer. On redirect, Shupe stated that he believed the difference in the statements stemmed from the fact that he was still intoxicated when he wrote the first statement.
Damon Reed, half-owner of MCJS, Inc., which did business as Reed's, testified that the first he knew of the allegation that Reed's had violated the statute regarding alcohol consumption by a minor was when he received something in the mail. Damon stated that there was video footage of the inside of the bar taken by multiple cameras, but the footage was only stored for 14 days. Damon testified that it was Reed's policy that everyone purchasing beer should be asked for identification. Derrick Reed, the other half-owner of Reed's, testified that there was no longer video of the night in question because he did not become aware of the incident until over 30 days later.
After the hearing, both parties filed written closing comments. In its closing, Reed's emphasized the inconsistencies in Shupe's and Bourdon's stories and the unfairness of the delayed notification of Reed's, stating that if Reed's had known of the allegation sooner, it could have preserved the videotapes of the night in question. Reed's also argued that there was insufficient evidence to prove the violation, claiming that Reed's had no criminal intent and that K.S.A. 41–2615 does not create a strict liability offense. Finally, Reed's contended that none of its employees had “permitted” Shupe to consume alcohol. The ABC's written closing arguments, on the other hand, asserted that K.S.A. 41–2615(a) imposes absolute liability on the licensee. The ABC contended that the evidence clearly established that Shupe consumed alcohol at Reed's on the night in question and the evidence was sufficient to justify a civil penalty.
The Director issued written findings and an order dated August 9, 2011. The Director found that The Director noted that K.S.A. 41–2615 provides that a licensee may not knowingly or unknowingly permit possession or consumption of alcohol by a minor on the licensed premises. The Director stated that “[i]f knowledge or intent were a required element for an administrative violation, compliance with underage laws would deteriorate because the motivation to proactively check IDs would disappear.” The Director determined that “Reed's is responsible for ensuring that minors do not possess or consume alcoholic beverages [on the premises] and that K.S.A. 41–2615 creates absolute civil liability on a licensee for any violation of the statute.” Accordingly, the Director concluded that Reed's had violated the statute and imposed a $500 fine as a civil penalty for the violation.
Reed's appealed to the Secretary, and both parties submitted their appellate arguments in writing. Reed's again claimed that the inconsistent nature of Shupe's and Bourdon's statements meant that there was insufficient evidence to find Reed's violated the statute. Reed's also argued that it did not “permit” Shupe to possess or consume alcohol on its premises. Reed's argued that its ability to control Shupe's drinking was limited because it was impossible to continuously monitor every patron and, if Shupe was drinking, he was likely trying to hide it. Reed's also argued that its exemplary record of enforcing alcohol control laws, as evidenced by multiple letters of commendation from the ABC, showed it did not acquiesce in Shupe's drinking. Finally, Reed's argued that public policy went against imposing absolute liability for violations of K.S.A. 41–2615.
The ABC reasserted its argument that the Director's finding that Shupe possessed and consumed alcohol at Reed's was based on substantial competent evidence, regardless of the inconsistencies in some of the details of Bourdon's and Shupe's testimony. The ABC also contended that the department can impose either civil or criminal sanctions for a violation of K.S.A. 41–2615 and that in the context of a civil regulatory proceeding, the statute imposes strict liability on a licensee any time that a minor possesses or consumes alcohol on its premises. The ABC asked the Secretary to uphold the $500 civil...
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