Opinion
April 21, 1970.
Editorial Note:
This case has been marked 'not for publication' by the court.
Page 621
Anthony V. Zarlengo, Denver, for plaintiff in error.
Max P. Zall, Lee G. Rallis, Denver, for defendant in error.
ENOCH, Judge.
This case was originally filed in the Supreme Court of the State of Colorado and subsequently transferred to the Court of Appeals under authority vested in the Supreme Court.
Plaintiff in error, hereinafter referred to as Hamilton, filed his application with defendant in error for the issuance of a hotel and restaurant liquor license. Defendant in error, hereinafter referred to as the Manager of Safety, held a hearing upon said application, at the conclusion of which the application was denied.
The Manager of Safety's denial was affirmed by the district court. The basic issue before this court is whether the action of the Manager of Safety was arbitrary or capricious in denying the license on the evidence presented.
Hamilton has been in the restaurant business since 1924 in Denver and at the time of the hearing before the Manager of Safety owned and operated three restaurants in the city. Application was made for a license for the restaurant at 3233 Osage Street, known as the Original Mexican Cafe. Hamilton had been successfully operating this restaurant for approximately five years when the hearing was held in January, 1967. This restaurant specialized in and served only Mexican foods. The physical facilities had a seating capacity for 130 on the main floor and an additional 150 in the banquet rooms on the second floor. The customers for lunch and dinner came from within the designated neighborhood and from outside--in fact from all parts of the city. The noon business was said to be 100% From the business and commercial area. Much of the business was done on a reservation basis.
The neighborhood as specified by the Manager's office (Exhibit A--1) includes land on both the north and south sides of the Valley Highway. The area to the south of the highway is totally industrial, commercial and contains no dwellings. The area north of the highway, which is about three-fourths of the total designated neighborhood, contains commercial, industrial, and residential property. There has been a major change in the character of the neighborhood since Hamilton first opened his business. Many residences have been moved making way for commercial and business operations and much of the land has been cleared and left vacant.
The evidence in support of the application showing need and desire was in the form of a petition signed by 77 people supporting the application, testimony of the applicant, his son and a third party who had lived in the neighborhood and continues to own property in the neighborhood. There was no opposition to the granting of this license, either by petition or by witnesses. The undisputed evidence indicated that customers made requests daily for alcoholic beverages in one form or another with their meals, including owners of other liquor outlets in the neighborhood who at times came to the applicant's restaurant for their meals. The Manager of Safety's findings and decision showed that Hamilton in all respects was qualified to receive a license. The following last half of the Manager's decision is important in the determination of this case:
'The applicable neighborhood, as specified by the Manager's office, Includes land lying to the south of the Valley Highway when in fact this area south of the highway is not a functional part of the real neighborhood affected by applicant's business. This area south of the highway does not contain any of the presently licensed outlets and does not appear to have any permanent residents living in it. It has been disregarded in making this decision.' (Emphasis added.)
'The evidence clearly established the qualifications of the applicant to run a first class restaurant and the success he has had testifies to the acceptance that this operation has had in the over-all Denver community. By virtue of the type of operation conducted, it could be argued that the applicable neighborhood to be considered in determining needs would be the whole metropolitan area. Campbell v. City Council of Montrose, 150 Colo. 471, 374 P.2d 348 (1962). On the other hand, the evidence also establishes that the applicant has chosen to locate his business in a neighborhood that is still primarily residential in character which is already served by an abundance of liquor outlets of the same general nature as the one for which he has made application.'
'In view of the facts, I find that a petition signed by 77 people and the testimony of the applicant, his son and one other person is not sufficient to show either a need in this neighborhood or that it's inhabitants desire this license. Accordingly, the application is denied.'
We do not agree with the Manager of Safety's conclusion based on his own findings. The Manager's own office specified the neighborhood which included land south of the Valley Highway. He cannot then, because this area contains no dwellings, arbitrarily disregard this area in making his decision. The designated neighborhood is not primarily residential in character if all of the designated area is considered. The evidence and his findings likewise do not support the statement that the area 'is already served by an abundance of liquor outlets of the Same general nature as the one for which he has made application.' Hamilton clearly established that if he had a license it would Not be the same general nature as the existing outlets.
We agree that the burden is upon the applicant to show a need in the neighborhood and the licensing authority has broad discretionary powers, however there is a limit to what can be required of an applicant and a limit to the discretionary powers. In Capra v. Davenport, 158 Colo. 537, 408 P.2d 448, the Supreme Court, quoting from the district court, said what we think is applicable to the case at hand:
'All the evidence in the record concerning the issuance of the license was positive; there were no protests against its issuance either verbally or by petition. Therefore, in order for the Manager to conclude that the reasonable requirements of the neighborhood were met without this license, he must have based his conclusion on some facts or some reasons not in this record. This was arbitrary action. The legislature in giving to the licensing authority the power to grant or deny a license did not give him unbridled discretion, and in the opinion of this Court did not permit him to exercise such discretion without the application of the standards upon which his conclusion was to be exercised. An agency empowered with discretion, such as the one under consideration here, does not have untrammeled power; he, too, is subject to standards and delimitations.'
The unopposed petition in support of the granting of this license is also to be taken as some evidence that the reasonable requirements of the neighborhood were not being met in the opinion of the 77 signers. Anderson v. Spencer, 162 Colo. 328, 426 P.2d 970.
In deciding this case we are not unmindful of Schooley v. Hamilton, 147 Colo. 605, 364 P.2d 584. In that case Hamilton, who is the same applicant now before the court, was denied a license. The evidence now shows a major change in the character of the neighborhood as has already been indicated and several other changes in the facts which did not exist at the former hearing. However, more important is our review of the Manager's findings and decision before us in the instant case. We find the Manager's decision to be arbitrary in light of his own findings in this particular case.
The judgment is reversed with directions to the trial court to remand the cause to the Manager of Safety for issuance of the license.
SILVERSTEIN, C.J., and PIERCE, J., concur.