Opinion
April 1, 1971
Appeal from the Onondaga Special Term.
Present — Goldman, P.J., Del Vecchio, Witmer, Moule and Henry, JJ.
Order unanimously reversed, without costs, petition dismissed and determination reinstated. Memorandum: Petitioners were notified by the Authority that their application for an on-premises liquor license was disapproved without prejudice because of a pending investigation of gambling activities involving the current licensee. They requested the Authority to reconsider its action. After reconsideration, the Authority disapproved the application on the merits because of the history of gambling activities involving the current licensee, because it was not satisfied that the sale to petitioners was a bona fide transaction, and that the petitioners had the financing, experience or time necessary properly to supervise the business. The trial court found that the Authority should have limited its review to the pending gambling investigation or given petitioners an opportunity to refute the other reasons given for disapproval and remitted the matter to the Authority for further proceedings. We find nothing improper about the Authority reconsidering the entire application on the merits. The first notice of disapproval stated that it was because of the pending gambling investigation. The reasons set forth in the second notice of disapproval were related to the pending investigation and were important considerations on whether the business could be run independently of influence from the current licensee. Petitioners were given an adequate opportunity to present all relevant facts and were not entitled to a quasi-judicial hearing. ( Matter of Fink v. Cole, 1 N.Y.2d 48; Matter of Moltzen v. Hostetter, 24 A.D.2d 1018, affd. 18 N.Y.2d 629.) The issue presented is whether there was a rational basis for the Authority's determination. ( Matter of 125 Bar Corp. v. State Liq. Auth., 24 N.Y.2d 174; Matter of Sled Hill Cafe v. Hostetter, 22 N.Y.2d 607.) The record supports the finding that the current licensee engaged in gambling activities. Therefore, a bona fide transfer was an important consideration. ( Matter of Stuart Stuart v. State Liq. Auth., 32 A.D.2d 912.) The finding that there was not a bona fide sale is supported, since the only consideration for the goodwill was one dollar and the rent to be paid to the current licensee's father was $7,200 per year. Also, petitioners had no experience in managing such a business, and their financing, consisting mostly of borrowed funds, was inadequate. This also was an important consideration. ( Matter of Farone v. State Liq. Auth., 30 A.D.2d 752; Matter of Graziani v. Rohan, 10 A.D.2d 154.) Under all the circumstances, there was a rational basis for the determination, and it was not arbitrary and capricious. ( Matter of Farone v. State Liq. Auth., supra; Matter of Intino v. Hostetter, 29 A.D.2d 625.)