Case Title: In re Con-Elec Corporation

Citation: 168 Vt. 576, 716 A.2d 822

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1998-06-19T00:00:00Z

Document:
In re Con-Elec Corporation  (96-487); 168 Vt. 576; 716 A.2d 822

[Filed 19-Jun-1998]

                                 ENTRY ORDER

                       SUPREME COURT DOCKET NO. 96Ä487

                              MARCH TERM, 1998

In re Con-Elec Corporation      }     APPEALED FROM:
d/b/a Wolf's Lair               }
                                }
                                }     Liquor Control Board
                                }
                                }
                                }     DOCKET NO. None

               In the above-entitled cause, the Clerk will enter:

       Licensee Con-Elec Corporation, d/b/a Wolf's Lair, appeals from a
  decision of the Vermont Liquor Control Board, which revoked its first-class
  and third-class licenses to sell alcoholic beverages for on-premises
  consumption.  Licensee contends that (1) the Board exceeded its authority
  by partially basing the revocations upon proscribed activities, which are
  beyond the scope of the Board's enabling legislation, and (2) the factual
  findings, with regard to licensee's violation of several of the Board's
  regulations, were clearly erroneous and unsupported by the evidence.  We
  affirm.

       After a hearing before the Board, licensee was found to have violated
  the Board's General Regulation No. 9 (illegal gambling), No. 19
  (intoxicated patrons), No. 41 (disorderly conduct), and No. 49 (refilling
  bottles), and the Board's Credit Regulation No. 2 (credit sales). Due to
  these violations, licensee's liquor licenses were revoked.  This appeal
  followed.

       With regard to the violation of Regulation No. 9,(FN1) licensee's sole
  argument on appeal is that the Board exceeded its authority by promulgating
  a regulation prohibiting illegal gambling on licensed premises.  In its
  decision, the Board found, and the licensee does not dispute, that the
  licensee's employees sold break-open tickets on the licensed premises from
  the time it was first licensed in 1994 until the present case was filed in
  1996.  The evidence before the Board indicated that the gambling was
  constant and that "the proceeds were substantial."(FN2)

       This Court has not hesitated to strike down a Liquor Control Board
  regulation where there is no "nexus between the regulation and the
  consequences of excessive use of alcohol." In re Club 107, 152 Vt. 320,
  324, 566 A.2d 966, 968 (1989).  In Club 107, we held that "the mere
  coincidence of the sale of liquor and some other activity is not ÄÄ by
  itself ÄÄ sufficient to allow the Board to regulate the other activity. " 
  Id.  Central to our decision in Club 107 was the fact that the Legislature
  had not spoken about live entertainment in establishments serving alcoholic
  beverages, nor had it authorized the Board to regulate the activity at
  issue.  See id. at

 

  325, 566 A.2d  at 969; accord SBC Enterprises, Inc. v. City of S. Burlington
  Liquor Control Comm'n, 7 Vt. L. W. 362, 363 (1996) ("The Board may not,
  through promulgation of regulations, expand its authority into areas of
  activity that are beyond the focus of Title 7.").

       Thus, licensee's reliance on Club 107 is misplaced.  Unlike the
  challenged regulation in Club 107, the Legislature has spoken directly and
  clearly about the distribution of break-open tickets on premises licensed
  to sell alcoholic beverages.  Section 10203(f) of Title 32 provides in
  relevant part:

     Break-open tickets shall not be sold at premises licensed to sell
     alcoholic beverages except at clubs as defined in subdivision 2(7)
     of Title 7.  However, a nonprofit organization may sell break-open
     tickets at premises licensed to sell alcoholic beverages if,
     notwithstanding 13 V.S.A. § 2143(e), all proceeds from the sale
     of break-open tickets are used by the nonprofit organization
     exclusively for charitable, religious, educational and civic
     undertakings . . . .

  The Legislature has imposed a flat prohibition against the sale of tickets
  on licensed premises by any entity other than a non-profit organization. 
  See also 13 V.S.A. § 2101 (Cum. Supp. 1997) (banning games of chance unless
  conducted by non-profit organizations as provided in 13 V.S.A. § 2143). 
  Regulation No. 9 merely prohibits what the Legislature has proscribed.  The
  Board has not presumed to define and outlaw any gambling activity that is
  otherwise legal or to impose further regulation in a field fully occupied
  by the Legislature.  Regulation No. 9 protects "the public welfare [and]
  good order", 7 V.S.A. §1, by conditioning the license privilege on
  compliance with a statute that regulates gambling on licensed premises, and
  thus, its promulgation and enforcement did not exceed the Board's
  authority.

       Licensee also claims that the Board's Findings of Fact, with regard to
  violations of General Regulation Nos. 49, 19, and 41, are clearly erroneous
  and unsupported by the evidence. We disagree.  The Board found that
  licensee instructed its bartenders "to funnel liquor from gallon bottles
  into smaller bottles (`fifths')," a violation of Regulation No. 49,(FN3) and
  if questioned, "to say that it was done strictly for catering purposes." 
  The Board's findings are supported by the testimony of two witnesses, one a
  former bartender who testified that the practice occurred possibly
  "hundreds" of times.  The owner, the bar manager, and a present bartender
  contradicted this testimony, but as we have stated often, credibility of
  witnesses "is a matter for the trier of fact to judge."  In re Johnston,
  145 Vt. 318, 322,