Opinion
C.A. No. 02A-08-015 JRS (consolidated with C.A. No. 02A-08-019 FSS).
Date Submitted: April 21, 2003.
Date Decided: June 20, 2003.
On Appeal from the Delaware Alcoholic Beverage Control Appeals Commission.
AFFIRMED.
ORDER
This 20th day of June, 2003, upon consideration of the Alcoholic Beverage Control Appeals Commission's Final Decision and Order of August 1, 2002, it appears to the Court that:
1. Appellee, Kreston Liquor Mart, Inc. ("Kreston"), filed an application for license as a package store to be located at a shopping center in Middletown, Delaware. Several protestors representing various constituencies voiced opposition to the application at a hearing on July 19, 2001 before an Alcoholic Beverage Control Commissioner. The Commissioner orally denied the license at the conclusion of the hearing and submitted a written decision to the same effect on August 8, 2001.
2. Kreston appealed that decision to the Alcoholic Beverage Control Appeals Commission ("Appeals Commission") which held a hearing on December 13, 2001. The Appeals Commission reversed the Commissioner's decision on January 14, 2002 and remanded the application for further findings of fact and conclusions of law. The Commissioner issued his decision on remand on March 28, 2002, denying the application a second time. Kreston appealed the second decision and the Appeals Commission again reversed the Commissioner's denial of the license. Appellants, Joanne Christian, Paul Christian, Annie Burton, Joshua Mercandante, Edna Young, Helen Kimmy, Andrew Tice, Chris Tice, Darren Blackstone, George Tishma, and Daisy Rowley and Appellant, Sanjay Patel (collectively "Appellants") timely filed in this Court separate notices of appeal of the Appeals Commission's second decision. The appeals have been consolidated and are now ripe for decision.
3. An appeal from the Delaware Alcoholic Beverage Control Commission ("DABCC") is governed by the Administrative Procedures Act ("APA"). Under the APA, this Court's role on appeal is limited to determining whether the Appeals Commission's decision reflects a proper application of the law and is supported by substantial evidence in the record.
DEL. CODE ANN. tit. 29 Del. C. § 10161(a)(1).
Newsome v. DABCC, CA. No. 94A-1O-003, Ridgely, P.J., (Del.Super. July 27, 1995) at 5, (citing Del. Code Ann. tit. 29 Del. C. § 10142(d) (1997)), rev'd on other grounds, 670 A.2d 906 (Del. 1996); Bellevue Management Assoc. v. DABCC, C.A. No. 80A-MY-10, Bifferato, J. (Del.Super. Aug. 5, 1981) at 1.
4. Appellants argue that the Appeals Commission ignored the appropriate standard of review when it gave no deference to the Commissioner's findings and made its own independent findings based on the evidence of record. Appellants also contend that the Commissioner properly denied the license as a matter of law based on the proposed site's proximity to a school. Finally, Appellants assert that the Commissioner's opinion was based on substantial evidence and, consequently, the Appeals Commission was without a basis in law to reverse the decision.
5. Kreston refutes Appellants' contentions and also asks the Court to dismiss the appeal for lack of standing. According to Kreston, the APA provides that a valid protest may be made only when ten people who live within one mile of the disputed premises appear at the hearing to contest the application for license. Kreston contends that this same requirement should be applied to determine whether Appellants have standing to take an appeal from the DABCC.
I. STANDING
6. The Court must first settle the question of standing. Without standing, the appeal is improper and the Court need not address the merits. A protest to an application for license is only valid if signed by at least ten people who reside within one mile of the premises where the license will operate. The decision of the Appeals Commission shall be final unless, within thirty days after notice thereof has been mailed by the Appeals Commission, a party to such hearing files an appeal in the Superior Court.
DEL. CODE ANN. tit. 4 Del. C. § 541(b) (2001) ("Section 541").
Section 541(c) (emphasis added).
7. The time to raise the validity of the protest or the standing of the protestors was at the time of the first appeal before the Appeals Commission, not here before this Court. In any event, the record reflects that five hundred supporting signatures accompanied the formal protest and that most of those signatures were from residents of Middletown, more than ten of whom lived within the requisite one mile to the site. Moreover, Section 541(c) merely requires that one party to the underlying proceeding file the appeal. By Kreston's own admission, Ms. Burton, an appellant, lives within one mile of the proposed package store and was a party to the proceeding below.
See Wallace v. Mountaire Farms, 2002 Del. Super. LEXIS 375, at *4 ("The Court will not consider evidence or issues not properly raised below.").
8. Kreston also questions the validity of Sanjay Patel's ("Patel") standing to file an appeal. It is well-established that each person "protesting, who contested the issuance of the license at the Commission hearing, has the right to appeal." Patel protested below and may appeal the Appeals Commission's adverse decision.
Newsome v. DABCC, 1993 WL 258712 (Del.Super.) at *2., rev'd on other grounds DABCC v. Newsome, 690 A.2d 906 (Del. 1996).
II. THE APPEALS COMMISSION PROPERLY APPLIED THE LAW
9. Appellants argue that the Appeals Commission, relying upon two Superior Court decisions, improperly required the Commissioner to conduct a balancing analysis on remand to weigh the interests of local churches and schools against the interest of Kreston. Appellants contend that this interpretation of the Superior Court decisions placed a burden on the Commissioner which is more than the law actually requires.
The Appeals Commission relied upon Applications of X-Chequer Inn, Inc., 229 A.2d 22 (Del.Super. 1967), rev'd in part on other grounds, Ahner v. DABCC, 237 A.2d 706 (Del. 1967) and upon Benson v. Gonce Corp., 1989 WL 25826 (Del.Super.).
10. Where the Commissioner's decision is predicated upon a statutory basis for denial, the Commissioner must have reasonable bases "for believing that a statutory ground of refusal exists in order to reject an application on that ground; and such reasonable bases must appear in the record if the rejection is to be sustained on appeal." The record must "clearly show the basis [upon which the Commissioner relied] in order that [his] excerisise of discretion may be properly reviewed." "Whether there was an exercise of sound legal discretion in considering a particular application for a license depends upon what the Commission[er] did to learn of the facts in connection with said application and the existing conditions in the locality."
Lyons v. Del. Liquor Commission, 58 A.2d 889, 892 (Del. Ct. Gen. Sess. 1948).
Applications of X-Chequer Inn. Inc., supra at 26.
Diamond State Liquors, Inc. v. Delaware Liquor Comm'n, 75 A.2d 248, 252 (Del. 1950). See also Park Distrib. Co. v. Delaware Liquor Comm'n, 54 A.2d 551, 558 (Del. 1947) (holding that "[t]he mere statement or finding by the Commission[er] that a statutory ground of refusal exists is insufficient, upon challenge on appeal, unless supported by some reasonable basis of facts appearing in the record.").
11. Appellants argue that X-Chequer was incorrectly decided because the court there improperly relied upon another case, Stewart v. Delaware Liquor Commission, 74 A.2d 472, 474 (Del. Gen. Sessions 1950), to justify the balancing test. Appellants contend that Stewart did not endorse such a balancing test and, therefore, X-Chequer's pronouncement that a balancing test must be employed in every case is misplaced. Appellants' argument is not persuasive. X-Chequer is the law in Delaware. The fact that Stewart does not specifically articulate its holding in terms of a balancing test does not undermine the wisdom or validity of X-Chequer. Indeed, it is axiomatic that, when relying upon the interpretation of a statute to deny a license, an administrative body must first balance the interests implicated by the statute and then clearly memorialize the basis for its decision so that a proper review can be conducted in the event of an appeal. The Commissioner in this case was afforded an opportunity to provide a basis for his decision when the case was remanded to him after the first appeal. He declined to conduct a further hearing or otherwise seek out new evidence. Nor did he provide any further insight into his decision-making process. Instead, he chose to ignore the Appeals Commission's well-founded direction altogether. In doing so, he erred as a matter of law.
III. THE APPEALS COMMISSION'S DECISION WAS SUPPORTED BY SUBSTANTIAL EVIDENCE
12. As previously noted, on appeal from a decision of the ABCC, the reviewing court must examine the record to determine whether or not the Commission's findings are based on substantial evidence. Substantial evidence requires "more than a scintilla but less than a preponderance" to support the finding. More recently, "substantial evidence" has been defined as "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." The appellate court does not weigh the evidence, resolve questions of credibility, or make its own factual findings. It merely determines if the evidence is legally adequate to support the agency's factual findings.
Delaware Alcoholic Beverage Control Commission v. Alfred I. duPont School Dist., 385 A.2d 1123, 1125 (Del. 1978); Down Under, Ltd. v. Delaware Alcoholic Beverage Control Commission, 576 A.2d 675, 681 (Del. 1989); 4 Del. C. § 541(c).
Onley v. Cooch, 425 A.2d 610, 614 (Del. 1981) (quoting Cross v. Califano, 475 F. Supp. 896, 898 (D.Fla. 1979)).
Oceanport Ind., Inc. v. Wilmington Stevedores, Inc., 636 A.2d 892, 899 (Del. 1994).
Johnson, 213 A.2d at 66.
As stated, the Commission's proceedings and any appeals therefrom are governed by the APA. The APA specifies that this Court's role is limited to determining whether the Commission's decision was supported by substantial evidence on the record. DEL. CODE ANN. tit. 29 Del. C. § 10142(d) (1997). See also DEL. CODE ANN. tit. 4 Del. C. § 541(c) (d) (adopting a "substantial evidence" standard of review).
13. The Appeals Commission found that the Commissioner did not have substantial evidence to support his denial of Kreston's liquor license. The issue for this Court, then, is whether a "reasonable mind" (in this case the Appeals Commission) could conclude that the Commissioner erred when he determined that Kreston's license would adversely affect the interests of the community of Middletown as enumerated by statute or otherwise.
DEL. CODE ANN. tit. 4 Del. C. § 543 (2001).
14. The Commissioner received evidence which supported Kreston's application for license. Kreston has been a successful merchant in Wilmington since 1956. Mr. Kreston testified that his liquor store was a family-run business which had never been cited for selling to minors and which had last been the victim of a robbery nearly twenty years ago. Mr. Kreston's testimony was augmented by Stephen Alagretto, a customer of Kreston, who described Mr. Kreston as a professional, family-oriented businessman, and by Christine Whaley, a Middletown resident, who wished to refute any claims that Kreston's store would contribute to the sale of alcohol to minors.
15. On the opposing side, the Commissioner apparently had to deal with a large group of protestors, some of whom were Middletown residents, and many of whom were bussed to the hearing by, or with the assistance of, a local package store owner. Many of the protestors who voiced opposition at the hearing were either opposed to the sale of alcohol in general or were operators of competing liquor establishments. Some of the protestors asked irrelevant and/or inscrutable questions or made immaterial comments.
Appellant Sanjay Patel argues that he did not "bus" any protestors to the hearing, but only partially financed the bus. The exact circumstances surrounding the arrangements for the bus are not relevant to the Court's decision here.
Some examples:
MR. PATEL: . . . A liquor store in that plaza is not a convenience intention and not a convenience to the public convenience. That's what I want to know. Is that correct?
MR. KRESTON: I don't know what you're getting at, to tell you the truth.
MR. PATEL: Another liquor store right in front of one liquor store anywhere is a subservient to the public convenience and public need, not servient where people need that liquor store that will meet the convenience. Hg. Tr. at 70 (July 19, 2001).
MR. HAASE: . . . In the last couple of years has your policy on selling to the public from France burgundy, has your policy changed in the last two or three years?
MR. KRESTON: In what respect?
MR. HAASE: In what you stock and sell?
MR. KRESTON: I don't know what you're —
MR. HAASE: The point is, I stopped being a customer of yours when you cut back on your French burgundies. (At which point, Mr. Haase concluded his questioning of Mr. Kreston.) Id. at 78.
MS. BURTON: Do you think everybody in Middletown — you say you have wine tasting. A lot of people in Middletown don't like wine. We don't drink wine. We like liquor. I'm going point blank —
MR. KRESTON: We have that, too.
MS. BURTON: Have a nice day.
MR. KRESTON: Thank you.
Id. at 60.
16. The Court must determine whether the Commissioner's hearing yielded enough evidence for him to make an appropriate ruling. The Commissioner asked no questions of the license applicant. Instead, he permitted angry citizens to question the applicant or simply voice a multitude of unstructured concerns. The atmosphere was charged with a myriad of emotions ranging from fear of a big-city businessman changing the small-town nature of Middletown, to fear of competition by a well-run establishment, to potentially legitimate fears that the liquor store's proximity would negatively affect schools and churches in the community, and the possible adverse effects upon traffic and public safety.
17. The Appeals Commission held that the mere presence of a school or church in the vicinity of the proposed package store is not dispositive and that the Commissioner must have substantial evidence of particular adverse consequences to support a denial of the license based on proximity to a school or church. Indeed, this Court has held that "the legislature has not endowed the Commission[er] with authority to refuse to grant a license solely due to the location of the business next to a school." There was no evidence in the record before the Commissioner that Kreston's store would adversely affect the students at Middletown High School, the members of any nearby church, or, for that matter, any of the citizens of Middletown.
Benson, supra at 1.
18. The Commissioner based his decision, in part, upon DEL. CODE ANN. tit 4 § 543(b) (11), which provides:
(b) The Commissioner may refuse to license an applicant if the Commissioner has substantial evidence that would reasonably support a belief that:
(11) A substantial objection to the granting of the license has been presented by the community within which the license is to operate, or that the granting of such license is otherwise not in the public interest. For the purpose of this subsection, the term "substantial objection" shall include:
b. Any objection, or group of objections, presented to the Commissioner either individually or as a group, the content of which gives the Commissioner reason to believe the quality of life of the community within which the license is to operate will be adversely affected by the granting of the license.
19. The Commissioner's conclusion that the community would be adversely affected apparently flowed from his observation that the store would be located across the street from Middletown High School and would be near a number of other schools, including the Silver Lake adolescent residential center, and that an additional package store would provide enhanced opportunity for the purchase or sale of alcohol to people under the age of 21. "It is not enough that the Commission[er] is apprehensive of ill results from hypothetical situations." And, the opinions of witnesses that a license will result in adverse consequences must be supported by facts. The record before the Commission was devoid of specific evidence that Kreston's store will adversely affect this community. As the Appeals Commission correctly concluded: "It cannot be presumed that the mere presence of a package store or other liquor outlet will result in [the feared evil that children will obtain alcohol.]"
The Commissioner found that the residential center should be characterized as a "school" under the statute. While his reasoning is flawed, it is a distinction which does not affect the Court's decision today.
Park Distrib. Co., 54 A.2d at 559.
Id.
In Re: The Application of Kreston Liquor Mart, Inc., No. 13059, Final Decision and Order, (Aug. 7, 2002), at 11.
20. By his decision, the Commissioner sought to placate the vague and enigmatic fears of an apprehensive group of protestors. The Appeals Commission correctly concluded that the substantial evidence does not support a denial of the application for license in this case. Accordingly, its decision to grant the license is
AFFIRMED.
IT IS SO ORDERED.