Odette v. Liquor Control Com'n

• Decision Date: 21 November 1988
• Docket Number: Docket No. 92720
• Parties: Michael ODETTE, Plaintiff-Appellee, v. LIQUOR CONTROL COMMISSION, Defendant-Appellant. 171 Mich.App. 137, 429 N.W.2d 814
• Court: Court of Appeal of Michigan — District of US

Page 814

429 N.W.2d 814

Michael ODETTE, Plaintiff-Appellee, v. LIQUOR CONTROL COMMISSION, Defendant-Appellant.

Docket No. 92720.

171 Mich.App. 137, 429 N.W.2d 814

Court of Appeals of Michigan.

Submitted Dec. 10, 1986.

Decided May 25, 1988.

Released for Publication Oct. 12, 1988.

Leave to Appeal Denied Nov. 21, 1988.

[171 MICHAPP 139] Michael Odette, Holly, in pro per.

Frank J. Kelley, Atty. Gen., Louis J. Caruso, Sol. Gen., and Frank J. Pipp and Richard I. Rubin, Asst. Attys. Gen., for defendant-appellant.

Before WAHLS, P.J., and MAHER and SHIPMAN, ^* JJ.

MAHER, Judge.

Defendant, Michigan Liquor Control Commission (MLCC), appeals as of right from the trial court's opinion and order of May 1, 1986, granting declaratory relief in favor of plaintiff. The opinion and order also permanently enjoined MLCC from denying or revoking a transfer to plaintiff's premises of the liquor license belonging to plaintiff's tenant, Sunshine Food Corporation. The sole issue concerns whether MLCC may lawfully condition a transfer to plaintiff's premises of Sunshine's liquor license upon plaintiff's resignation from employment at the Oakland County Sheriff's Department or upon the selling of his premises.

The material facts are not in dispute. In the latter part of 1984, plaintiff began construction of a building in Oakland County to be used as a commercial retail outlet. Plaintiff also entered into a ten-year lease agreement with Sunshine, under the terms of which Sunshine would have a right to conduct any lawful business on the premises. Sunshine, which was in the business of operating party stores, applied to MLCC for a transfer of its liquor license from its current store location to plaintiff's premises. MLCC's decision to condition its approval of the transfer request on plaintiff's resignation from his employment with the sheriff's department or the sale of his rental property was [171 MICHAPP 140] based on Sec. 18 of the Michigan Liquor Control Act, M.C.L. Sec. 436.18(1); M.S.A. Sec. 18.989(1), which states:

"A person who holds or whose spouse holds, either by appointment or election, a public office which involves the duty to enforce any of the penal laws of the United States, or the penal laws of this state, or a penal ordinance or resolution of any municipal subdivision of the state, except civil defense volunteer policemen, mayors or council members of cities, or village presidents, or mayors of home rule cities whose law enforcement authority under the city charter is restricted to emergency situations, shall not be issued a license, or have an interest, directly or indirectly, in a license. However, a nonprofit fraternal organization incorporated under the laws of this state, whose membership is not totally composed of law enforcement personnel or public officeholders charged with the duty of enforcing any penal laws or ordinances of a governmental body, may be issued a club liquor license if the organization is otherwise qualified."

Plaintiff responded to MLCC's decision by resigning from his position as a county deputy and by filing suit. Plaintiff regained employment, however, after the trial court entered a temporary restraining order preventing MLCC from interfering with Sunshine's liquor license or plaintiff. The subject matter of this appeal is plaintiff's motion for declaratory relief made in the lower court. The motion was decided based on the parties' briefs and oral arguments and the undisputed facts contained therein.

On appeal, our first concern is the appropriate standard of review. A declaratory judgment is a flexible remedy. It is available to a party when necessary to guide the party's future conduct in order to preserve his or her legal rights. Shavers v. [171 MICHAPP 141] Attorney General, 402 Mich. 554, 588, 267 N.W.2d 72 (1978), cert. den. sub nom Allstate Ins. Co. v. Kelley, 442 U.S. 934, 99 S.Ct. 2869, 61 L.Ed.2d 303 (1979). Our review is de novo on the record. Smith v. Lumbermen's Mutual Ins. Co., 101 Mich.App. 78, 86, 300 N.W.2d 457 (1980), lv. den. 411 Mich. 873 (1981). Here, the focus of plaintiff's motion was whether a law enforcement officer who leases property to an owner of a liquor license, without more, violates Sec. 18's mandate that law enforcement officers not have an interest--directly or indirectly--in such a license. Under a provision in this state's constitution, Const. 1963, art. 4, Sec. 40, MLCC is vested with complete authority to regulate alcoholic beverage traffic subject only to limitations imposed by the Legislature. Bundo v. Walled Lake, 395 Mich. 679, 699, 238 N.W.2d 154 (1976). For this reason and because the underlying facts were not disputed, we limit our review to determining whether MLCC's application to plaintiff of Sec. 18 is authorized by law and supported by competent, material, and substantial evidence. ¹

In applying Sec. 18, we are guided by the following rules of statutory construction:

"This Court's guiding principle of statutory interpretation is to determine and effectuate the intent of the Legislature. Charpentier v. Canteen Corp, 105 Mich App 700, 704; 307 NW2d 704 (1981). To ascertain this intent, the Court must first review the specific language of the disputed provision, giving all terms their plain and ordinary meaning absent a contrary legislative intent. Lamphere Schools v. Lamphere Federation of Teachers, 400 [171 MICHAPP 142] Mich 104, 110; 252 NW2d 818 (1977). When an ambiguity is found, resulting in alternative interpretations being possible, this Court may refer to any factors which may advance the most probable and reasonable legislative intention. Charpentier, supra [105 Mich.App. at] pp 704-705 ." Couture v. General Motors Corp, 125 Mich.App. 174, 177-178, 335 N.W.2d 668 (1983), lv. den. 418 Mich. 884 (1983).

We recognize that an act must be read in its entirety, with meaning being given to one section only after due consideration of other sections, so as to produce, if possible, a harmonious and consistent enactment as a whole. Stratton-Cheeseman Management Co. v. Dep't of Treasury, 159 Mich.App. 719, 724, 407 N.W.2d 398 (1987). We are also mindful that administrative interpretations of a statute by the agency responsible for that statute's administration are accorded deference by the courts and must be reviewed with respectful consideration. Berrien County v. Michigan, 136 Mich.App. 772, 782, 357 N.W.2d 764 (1984); Bd. of Ed. of Oakland Schools v. Superintendent of Public Instruction, 401 Mich. 37, 41, 257 N.W.2d 73 (1977).

The controversy in this case involves whether plaintiff had an "indirect" interest in Sunshine's liquor license. The term "indirect" has been defined in The American Heritage Dictionary of the English Language (1978), New College Edition, p 670, as follows:

"1. Not taking a direct course; roundabout. 2. Not descending in a straight line of succession. Said of an inheritance or title. 3. a. Not straight to the point; circumlocutory. b. Evasive; devious. 4. Not directly planned for; secondary: indirect benefits. 5. Relating to or characteristic of indirect discourse. In this sense, also 'oblique.' "

In Michigan case law, we find some guidance [171 MICHAPP 143] regarding the factors which should be considered in deciding whether a party has an interest in a liquor license. In reviewing whether a party has a property interest in a liquor license requiring rudimentary due process protections, this Court has looked to the nature of the transaction and the agreement involved. See Bunn v. Liquor Control Comm, 125 Mich.App. 84, 90-91, 335 N.W.2d 913 (1983), lv. den. 418 Mich. 852 (1983). In reviewing whether a public official has a direct or indirect interest in a liquor license for purposes of Sec. 18 of the Liquor Control Act, the Supreme Court has considered the financial benefits derived from, and the public official's participation in, the business owning the liquor license. See In re Lawrence, 417 Mich. 248, 258-259, 335 N.W.2d 456 (1983).

Under the facts in this case, we cannot conclude that MLCC's application of Sec. 18 is not authorized by law or is not supported by competent, material, and substantial evidence. We reach this decision based on the deference courts acknowledge for interpretations of a statute by an agency charged with the statute's enforcement, Berrien County, supra, the legislative intent undergirding Sec. 18, and the meaning derived from a logical reading of the statute itself.

The legislative intent behind Sec. 18 is, in part, to avoid a situation in which a law enforcement officer is faced with a conflict of interest such that he or she is called upon to enforce a provision of the Liquor Control Act at a licensed premises in which he or she possesses even an indirect interest. We do not believe that that intent would be furthered where, as in the instant case, a law enforcement officer, functioning as a landlord, derives financial benefits in the form of rent from a licensee. The receipt of rent from a licensee in such a situation inherently establishes a link between[171 MICHAPP 144] the law enforcement officer and the licensed tenant, creating a pecuniary relationship in which the officer's financial gain in the form of rental payments is related to the licensee's ability to maintain its license to continue...