Opinion
Feb. 10, 1970.
Editorial Note:
This case has been marked 'not for publication' by the court.
F. T. Henry and William T. Eckhart, Colorado Springs, for plaintiff in error.
Donald E. La Mora, Colorado Springs, for defendant in error.
DUFFORD, Judge.
This case was originally filed in the Supreme Court of the State of Colorado and subsequently transferred to the Court of Appeals under the authority vested in the Supreme Court.
From an order of the District Court reversing the City Council's denial of an application for a retail malt liquor license and ordering that the license be granted, the Council brings error.
We will refer to Texas Southland Corporation as 'the applicant' and to the City of Colorado Springs as 'the City' or as 'the Council.'
The applicant is engaged in the retail grocery business under the trade name of 7-Eleven at 604 South Union Boulevard in the City of Colorado Springs. On September 13, 1966, a hearing was held to determine whether applicant, pursuant to C.R.S. 1963, 75--1--5, was entitled to a 3.2 per cent beer license. It is undisputed that applicant complied with all formal requirements in applying for the license. At the hearing the applicant presented a petition signed by 152 residents of the neighborhood and another petition signed by 210 customers of applicant's store. Both petitions were to the effect that the signers were of the opinion that the reasonable needs of the neighborhood required the issuance to applicant of a 3.2 beer license. The City, as required by an adopted resolution, had an independent survey made of the inhabitants within an area of 1,500 feet from applicant's store. This survey showed 123 persons in favor of granting the license, 72 opposed, and 26 expressing no opinion. The Council was also advised that the nearest 3.2 outlet to the applicant's store was approximately a mile and a quarter away, and that there were twenty-one 3.2 beer outlets within a two-mile radius. The City does not contend that the testimony at the hearing in opposition to the granting of the license is entitled to any weight since it came from unidentified persons, persons not living within the 'neighborhood' as defined by the City, and persons who had economic interests in competition with the applicant. Councilmen McCleary and Becker voiced a strong bias against the granting of a liquor license to any grocery stores, and from the record of the Original Council hearing, it is clear that the City had Never issued a malt liquor license to any grocery store within the City of Colorado Springs. The applicant testified that it had no intention of serving liquor on the premises, but a motion was passed to have the City Clerk conduct a second survey, this time advising the inhabitants of the immediate area that if the license were granted applicant could serve liquor on the premises. The matter was then continued until October 11, 1966, at which time the second survey based upon the amended form was presented to the Council, the result of which showed 107 persons favored the granting of the license, 97 opposed, and 23 persons not answering. The Council then adopted a resolution denying the application. They based their decision on the grounds that a large number of inhabitants opposed the granting of the license, and that the neighborhood was adequately served. Councilmen McCleary and Becker did not vote.
At the trial of the case before the District Court, the applicant tendered and the court admitted, over the objection of the City, certain extrinsic evidence to support applicant's allegation that the City discriminated against grocery stores in that no liquor license had ever been issued to a grocery store by the City of Colorado Springs. The District Court concluded that (1) the City denied applicant a license for the principal reason that applicant would have been permitted to sell 3.2 beer in a grocery store; and (2) in denying applicant a license, the City acted arbitrarily and capriciously and without giving due consideration to the reasonable requirements of the neighborhood and the desires of the inhabitants; and (3) such denial was, therefore, without good cause. The District Court ordered the City to issue the applicant a license.
The City assigns as error the admission by the District Court of the extrinsic evidence which was not a part of the Council hearings records. That question need not be considered. From our review of the record of the licensing proceedings which were held before the City Council, and without giving any weight to the extrinsic evidence presented during the District Court proceeding, we find as a matter of law that the applicant established a prima facie case requiring the City to issue it a 3.2 per cent beer license. From such record it is also clear that the denial of the license by the City was based on a policy of not granting licenses to grocery stores, and not on any basis authorized by statute. Regardless of whether such policy was or was not sound from the standpoint of licensing administration within the City, such expansion of issues beyond the question of the needs of the neighborhood and desires of the inhabitants thereof must be disapproved. Kerr v. Board of County Commissioners of the County of Douglas in the State of Colorado, Colo., 460 P.2d 235 (1969) Such being the case, we find, as did the District Court, that the City Council for the City of Colorado Springs disregarded the evidence before it and, in denying the application, acted arbitrarily and capriciously and outside the authority conferred by the controlling statute. Board of County Commissioners of Adams County v. National Tea Company d/b/a Miller's Super Markets, Inc., 149 Colo. 80, 367 P.2d 909. The judgment of the District Court as it now stands, being correct in its ultimate results, should, therefore, be upheld.
The judgment is affirmed.
DWYER and ENOCH, JJ., concur.