Case Title: Kurpjuweit v. Northwestern Development Co., Inc.

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1985-10-15T00:00:00Z

Document:
Kurpjuweit v. Northwestern Development Co., Inc.1985 WY 163708 P.2d 39Case Number: 84-264Decided: 10/15/1985WAYNE F. KURPJUWEIT AND LUANN M. KURPJUWEIT, D/B/A TOWN & COUNTRY TAVERN, AND DORA HARVEY, APPELLANTS (DEFENDANTS), 

v. 

NORTHWESTERN DEVELOPMENT COMPANY, INC., A WYOMING CORPORATION, APPELLEE (PLAINTIFF).
Supreme Court of Wyoming
WAYNE F. KURPJUWEIT AND 
LUANN M. KURPJUWEIT, D/B/A TOWN & COUNTRY TAVERN, AND DORA HARVEY, 
APPELLANTS (DEFENDANTS), 

v. 

NORTHWESTERN DEVELOPMENT 
COMPANY, INC., A WYOMING CORPORATION, APPELLEE 
(PLAINTIFF).

 
 
Appeal from the District 
Court, SheridanCounty, Leonard McEwan, 
J.

 
 
Bruce P. Badley, 
Clay B. Jenkins, and Fred R. Dollison (argued) of Badley and Rasmussen, P.C., 
Sheridan, for appellants 
(defendants).

E.E. Lonabaugh 
and Jeffrey J. Gonda (argued) of Lonabaugh and Riggs, Sheridan, for appellee 
(plaintiff).

Before THOMAS, C.J., 
ROSE, ROONEY and CARDINE, JJ., and GUTHRIE, J., Retired. 

CARDINE, 
Justice.

[¶1.]     In February of 1984, 
appellants Wayne F. and Luann H. Kurpjuweit (Kurpjuweits), the owner-operators 
of the Town and Country Tavern in Sheridan, Wyoming, were notified by the 
appellee, Northwestern Development Company, Inc. (Northwestern), that 
Northwestern had decided not to renew or renegotiate the lease for the bar 
premises. In short order a dispute developed over who would be entitled to the 
liquor license for the bar at the conclusion of the lease term on October 1, 
1984. The Kurpjuweits and Northwestern each filed competing applications with 
the Sheridan County Board of Commissioners for issuance of the license. When the 
county commissioners refused to issue a license to either party pending a court 
determination of their respective rights under the lease, Northwestern filed a 
complaint in the district court seeking a declaratory judgment construing the 
terms of the lease as it concerned the status of the liquor license. Following a 
trial before the court on September 26, 1984, the district judge found in favor 
of Northwestern stating that he found Northwestern "has been the equitable owner 
of the license and is entitled to have the license issued in its name * *." A 
written Judgment and Order was entered two days later from which appellants 
bring this appeal.

[¶2.]     In their brief the 
appellants provide the following as their statement of the issues before the 
court:

1. "The district court 
erred in enforcing a lease provision which was void because it was contrary to 
the statutes of the state of Wyoming regulating the sale of alcoholic 
beverages, Wyoming Statutes 12-4-601 through 12-4-604."

2. "The district court 
erred in failing to grant appellants' motion to dismiss, for lack of 
jurisdiction and lack of a justiciable controversy contrary to Wyoming Statutes 
12-4-101 et seq. and 16-3-101 et seq."

Northwestern 
counters this articulation with the following:

"1. Was the Lease 
Agreement which governed the relationship of the parties a legal contract and 
did the District Court properly enforce the provisions of that 
Lease?

"2. Did the District 
Court have jurisdiction over this matter pursuant to the provisions of Wyoming 
Statutes Section 1-37-101 through 1-37-115 W.S.A. 1977?

"3. Did the Appellants 
give any consideration for the liquor license and are they entitled to any 
preferential treatment insofar as issuance of the license is 
concerned?"

We affirm the 
judgment of the district court.

[¶3.]     The focus of the 
present appeal is the liquor license issued by the Sheridan County Board of 
Commissioners under which the Town and Country Tavern was operated. The building 
and real property where the bar was located have been owned by Northwestern 
since 1958 when title was transferred to the corporation by Robert I. 
Diefenderfer, Jr., one of its incorporators and first president, in exchange for 
stock.

[¶4.]     Diefenderfer was also 
the holder of the liquor license for the premises which was not transferred to 
the corporation despite an earlier agreement that Diefenderfer would transfer 
all his interest in the liquor business to Northwestern. The reason the liquor 
license was not transferred to the corporation was that Northwestern had leased 
the bar premises to a third party to whom the liquor license was directly 
transferred at the suggestion of the county clerk to avoid a double transfer. In 
that lease, like the lease under which appellants eventually operated the bar, 
there is a provision requiring the lessees to keep and maintain the liquor 
license on the premises in good order including obtaining its renewal as needed, 
and upon termination of the lease "without consideration, re-assign and 
re-transfer said liquor license or any subsequent license that may be issued by 
the Board of County Commissioners of Sheridan County, Wyoming to First Party 
[Northwestern] or its assigns." 

[¶5.]     At the termination of 
each subsequent lease the liquor license was transferred directly to each new 
lessee. In each succeeding lease, a term substantially identical to that quoted 
above was part of the lease terms.

[¶6.]     A lease between 
Northwestern and Michael P. and Frances M. Pinder with a primary term of five 
years was executed on October 1, 1974. That lease contained an option to renew 
for an additional five-year term at its expiration; and, importantly, it 
required:

"LESSEES warrant that the 
license for said premises can be put in their name and that they have been 
residents of the State of Wyoming for one (1) 
year."

[¶7.]     It is at this juncture 
that Kurpjuweits began negotiations with the Pinders for purchase of the bar. In 
order to accomplish a transfer to the Kurpjuweits, who as nonresidents were 
prohibited from holding a Wyoming liquor license under § 12-9(C)(10), W.S. 1957, 
a scheme was devised to use a third party, appellant Dora Harvey, as a 
"strawman" for purposes of the transaction.

[¶8.]     On October 29, 1974, 
the Pinders and Harvey executed a Memorandum of Agreement of Sale for the sale 
of the bar business and transfer of the liquor license. On the same day, a 
second Memorandum of Agreement of Sale was entered into between Harvey and 
Kurpjuweits which agreement paralleled the provisions of the Northwestern-Harvey 
agreement with the exception that the transfer of the liquor license was to take 
place as soon as possible after July 
1, 1975, when Kurpjuweits would attain residency. The Northwestern-Pinder lease 
was assigned to Harvey the following day.

[¶9.]     On November 21, 1974, 
an Option Agreement between Harvey and Kurpjuweits was entered into which 
recited that the bar business and liquor license would be transferred to 
Kurpjuweits subject to the approval of the county commissioners on July 1, 1975, 
and that until that date the Kurpjuweits would operate the bar as employees of 
Harvey. The agreements as drafted satisfied the requirements of our licensing 
statutes and, if bona fide and operated by Harvey, may have been lawful. It is clear, 
however, and stipulated to by the parties that no salaries were ever paid 
Kurpjuweits by Harvey. In fact, in her testimony, Dora Harvey 
indicated that she was paid by Kurpjuweits to allow the use of her name in order 
to effectuate the transfer of the liquor license and bar in a manner which 
circumvented the residency requirements of the licensing statutes. In Scranton v. Whitlock, Wyo., 
389 P.2d 1015, 1017 (1964), we said:

"The mentioned statutes 
[§§ 12-13, 12-9, 12-1, W.S. 1957] if interpreted reasonably would seem to 
preclude the operation of a retail liquor business in the State by one person 
when the license to that business is in the name of another * * 
*."

[¶10.]  Here Kurpjuweits were operating the 
liquor business when the license was in Harvey's name. It is apparent from the record 
that this arrangement was known to all parties, including Northwestern, who was 
also a party to the arrangement made to circumvent the intent and purpose of the 
licensing statutes. Finally, the arrangement was known to and had the implicit 
approval of the Sheridan County Board of Commissioners who acquiesced in the 
transfer of the liquor license to Harvey to hold in her name until the appellants 
became residents. The issues presented to us in this case concern only the 
effect and validity of the lease provision requiring reassignment of the license 
to Northwestern. Accordingly, in conformance with our long-standing rule under 
which we refuse consideration of questions not directly before us, we decline to 
consider or determine the lawfulness of the transfer of this license to 
appellants.

[¶11.]  The Northwestern-Pinder lease was 
assigned by Harvey without obtaining Northwestern's 
approval to Kurpjuweits on July 2, 1975. On the same date the liquor license was 
also assigned to Kurpjuweits who continued to operate the business pursuant to 
the lease until July 25, 1979, when they and Harvey exercised the option to 
renew the lease for an additional five-year period. In September of 1983, the 
Kurpjuweits notified Northwestern of their desire to extend the lease for an 
additional term. Northwestern, on February 8, 1984, gave notice to the 
Kurpjuweits that it would not renew or negotiate a new lease at the end of the 
lease term when it expired on October 1, 1984.

[¶12.]  On March 16, 1984, Kurpjuweits filed an 
application for renewal and transfer of the liquor license to a new location 
after October 1, 1984. In addition, that application indicated they intended to 
change the name of the business to LuWayne's Liquor on that date. On April 13, 
1984, the Kurpjuweits received a Notice of Termination of the lease from 
Northwestern who had also filed for renewal of the license requesting it remain 
at the leased premises. An amended application for renewal and transfer was 
filed by Kurpjuweits on July 31, 1984, requesting the license be transferred to 
a different location from that described in their first application. The board 
of county commissioners refused to issue a license to either party pending a 
judicial determination of their contractual rights under the lease 
agreement.

[¶13.]  The present action was brought under the 
auspices of the Uniform Declaratory Judgments Act which has been enacted by our 
legislature and codified as §§ 1-37-101 to 1-37-115, W.S. 1977. In particular, 
the complaint in this action seeks a determination of the parties' respective 
rights and interests under the Northwestern-Pinder lease. Section 1-37-103, W.S. 
1977, provides:

"Any person interested 
under a deed, will, written contract or other writings constituting a contract, 
or whose rights, status or other legal relations are affected by the Wyoming 
constitution or by a statute, municipal ordinance, contract or franchise, may 
have any question of construction or validity arising under the instrument 
determined and obtain a declaration of rights, status or other legal 
relations."

[¶14.]  Leases are contractual in nature. Slane v. Curtis, 39 Wyo. 1, 269 P. 31 (1928). 
Other jurisdictions have held that declaratory judgment is an appropriate remedy 
to determine the legal relations between parties under a lease of real property. 
Gillmor v. Gillmor, Utah, 596 P.2d 645 (1979); Interstate Hosts, Inc. 
v. Airport Concessions, Inc., 71 Wn.2d 487, 429 P.2d 245 (1967); Milwaukee Hotel Wisconsin Company v. 
Aldrich, 265 Wis. 402, 62 N.W.2d 14 (1953); and cases cited 
in Annot., 60 A.L.R.2d 400 (1958). This court in Bragg v. Marion, Wyo., 663 P.2d 505 
(1983), held that, provided a justiciable controversy is present, declaratory 
judgment is a proper remedy for construction of a deed or other muniment of 
title. Given the remedial nature of the remedy provided, Poling v. North American Life and Casualty 
Company, Wyo., 593 P.2d 568 (1979) and § 1-37-114, W.S. 1977, we hold that 
declaratory judgment is available to construe the provisions of lease agreements 
provided the other jurisdictional requirements have been 
met.

[¶15.]  Appellants argue that the jurisdiction of 
the district court, and consequently that of this court, was not properly 
invoked. It is contended that the district court usurped the power of the 
licensing authority, the Sheridan County Board of Commissioners, by deciding 
which of two competing applicants was to receive a liquor license. Appellants 
also make vague reference to a "lack of justiciable controversy" and "failure to 
exhaust administrative remedies" without demonstrating how these concepts are 
involved in the controversy currently before the court. Mere incantations of 
legal phraseology do not require the attention or consideration of this court; 
cogent authority and argument must be presented. In the absence of such 
authority or argument, this court has often refused to consider purported issues 
on appeal. Tremblay v. Reid, Wyo., 
700 P.2d 391 (1985), and Haddenham v. 
Board of County Commissioners of County of Carbon, Wyo., 679 P.2d 429 
(1984). 

[¶16.]  We are, however, under an independent 
duty to examine whether this court's jurisdiction has been properly invoked, 
even where the parties have not raised the jurisdictional issue. White v. Board of Land Commissioners, 
Wyo., 595 P.2d 76 (1979). When considering the issue of whether a 
declaratory judgment is proper under the circumstances, we have carefully 
examined the record before us to ascertain whether the jurisdictional 
prerequisite of a justiciable controversy has been satisfied. Carlson v. Bratton, Wyo., 681 P.2d 1333 
(1984); Mountain West Farm Bureau Mutual 
Insurance Company, Inc. v. Hallmark Insurance Company, Wyo., 561 P.2d 706 
(1977); and Anderson v. Wyoming 
Development Company, 60 Wyo. 417, 154 P.2d 318 (1944). A declaratory 
judgment cannot be used as a vehicle to secure an advisory opinion. Langdon v. Aetna Life Insurance Company, 
Wyo., 640 P.2d 1092 (1982); White v. 
Board of Land Commissioners, supra; and Cranston v. Thomson, Wyo., 530 P.2d 726 
(1975). In Brimmer v. Thomson, Wyo., 
521 P.2d 574, 578 (1974), we quoted the following test from Sorenson v. City of Bellingham, 80 Wn.2d 547, 496 P.2d 512, 517 (1972):

"`First, a justiciable 
controversy requires parties having existing and genuine, as distinguished from 
theoretical, rights or interests. Second, the controversy must be one upon which 
the judgment of the court may effectively operate, as distinguished from a 
debate or argument evoking a purely political, administrative, philosophical or 
academic conclusion. Third, it must be a controversy the judicial determination 
of which will have the force and effect of a final judgment in law or decree in 
equity upon the rights, status or other legal relationships of one or more of 
the real parties in interest, or, wanting 
these qualities be of such great and overriding public moment as to constitute 
the legal equivalent of all of them. Finally, the proceedings must be 
genuinely adversary in character and not a mere disputation, but advanced with 
sufficient militancy to engender a thorough research and analysis of the major 
issues. Any controversy lacking these elements becomes an exercise in academics 
and is not properly before the courts for solution.'" (Emphasis in 
original.)

[¶17.]  These requirements have been satisfied in 
the present appeal. Appellants and Northwestern have real and existing adverse 
interests in the construction given to the terms of the Northwestern-Pinder 
lease. In particular, the parties will be directly affected by a judicial 
determination of the enforceability of the clause requiring the lessee at the 
termination of the lease to reassign and retransfer the liquor license to 
Northwestern.1 The judgment of the court, while 
not determinative of the right to issuance of a liquor license, can establish 
the rights and responsibilities of the parties under the lease. While the court 
cannot direct issuance of a liquor license to either party, it can fashion a 
remedy requiring the losing party to take those actions necessary for 
reassignment of the license or payment of damages.

[¶18.]  Appellants have argued that the district 
court, by exercising its jurisdiction to construe the terms of the lease, has 
usurped the power of the county commissioners who are charged by statute with 
the determination of issues concerning the issuance of liquor licenses. Section 
12-4-101, et seq., W.S. 1977.

[¶19.]  This argument misconstrues the nature of 
the remedy provided by the Uniform Declaratory Judgments Act, §§ 1-37-101 to 
1-37-115, W.S. 1977. The court can construe an agreement, in this case a lease, 
and provide the parties with a determination of their respective rights and 
liabilities under the agreement. Holly 
Sugar Corporation v. Fritzler, 42 Wyo. 446, 296 P. 206 (1931). Declaratory 
judgment cannot be used to usurp or replace specific administrative relief, 
particularly, as in the present case, when the initial decision is committed to 
an administrative body. City of Cheyenne 
v. Sims, Wyo., 521 P.2d 1347 (1974). Our legislature has placed the 
responsibility of regulating the retail sale of alcoholic and malt beverages 
upon incorporated cities, towns, and counties who are the licensing authorities. 
Section 12-4-101, et seq., W.S. 1977; Walker v. Board of County Commissioners, 
Wyo., 644 P.2d 772 (1982).

[¶20.]  It is argued that the provision in the 
lease requiring reassignment or transfer of the liquor license to Northwestern 
should be held to be illegal and unenforceable as being violative of the 
provisions of § 12-4-102(b), W.S. 1977, which provides:

"No person or partner 
shall have any interest, directly or indirectly, in a license or permit unless 
he signs and verifies the application for the license or permit. No corporation 
shall be granted a license or permit unless two (2) or more of the officers or 
directors sign and verify the application on behalf of the corporation and also 
verify upon their oath as individuals that the statements and provisions are 
true."

[¶21.]  Given the manner in which they originally 
acquired their interest in the liquor license, appellants' newly-found concern 
for following statutory provisions is admirable and rather suspect. 
Nevertheless, appellee has presented its application for the license to the 
licensing authority, and the duty to determine whether appellee satisfies 
statutory requirements and meets qualifications for holding a license belongs to 
the licensing authority.

[¶22.]  Other courts which have construed similar 
agreements requiring the transfer of a liquor license to a lessor at the 
conclusion of a lease term have generally found that such agreements can be 
drawn and enforced subject to the other requirements for approval of the 
transfer by the licensing authority. Uptick Corporation v. Ahlin, 103 Idaho 
364, 647 P.2d 1236 (1982); Greve v. 
Leger, Ltd., 64 Cal. 2d 853, 52 Cal. Rptr. 9, 415 P.2d 824 (1966); Beard v. McCormick, 147 Mont. 361, 411 P.2d 964 (1966); A.D. Jones & Company 
v. Parsons, 136 Colo. 434, 319 P.2d 480 (1957).

[¶23.]  Transfers and assignments of the liquor 
licenses are authorized by § 12-4-601(b), W.S. 1977, which 
provides:

"A licensee, or the 
executor or administrator of the estate of a deceased licensee, may assign and 
transfer the license or permit by a sale made in good faith. The assignment and 
transfer shall first have the approval of the licensing authority, which 
consideration shall be based in part upon a public hearing and an application 
filed under oath by the assignee or transferee showing the person or entity to 
be qualified to hold a license or permit under Wyoming law. The approval of the 
transfer shall not be given by the licensing authority if proceedings are 
pending to suspend, revoke or otherwise penalize the original license or permit 
holder. A transfer of a license or permit shall not require the payment of any 
additional license fee for the transfer and upon assignment the assignee may 
exercise the privilege of continuing the business authorized by the license or 
permit."

 

[¶24.]  In Scranton v. Whitlock, supra, 389 P.2d  at 
1018, this court quoted the following with approval:

"A license to sell 
liquor, being a mere personal privilege, is generally held not to be assignable 
or transferable, except where a statute so provides, and then only in the manner 
and form prescribed." 30 Am.Jur. Intoxicating Liquors § 
167.

[¶25.]  In Scranton v. Whitlock, supra, this court 
was confronted by a situation in which the actual operators of a bar did not 
hold the liquor license in their own name. Rather, the license was held by the 
persons from whom the bar was being purchased. We found the arrangement between 
the sellers and purchasers of the bar to be illegal and unenforceable for the 
reason that it was an attempt to transfer the liquor license without the consent 
of the licensing authority. We find expressed in our statutes a policy of 
requiring the actual operator of the retail liquor establishment to be exposed 
to the scrutiny of the licensing process including a public hearing. See also Johnson v. Smith, Wyo., 455 P.2d 244 (1969); Hill v. Hamilton, Wyo., 
368 P.2d 957 (1962); and Bogus v. American National Bank of Cheyenne, 
401 F.2d 458 (10th Cir. 1968).

[¶26.]  In the present case, § 12-4-601(b), W.S. 
1977, requires that prior to the transfer or assignment of a liquor license, the 
assignee or transferee must file an application under oath demonstrating his 
qualification to be a holder of a license under Wyoming law. The transfer or 
assignment can only be approved by the licensing authority after publication of 
notice and a public hearing on the application for transfer. The licensing 
authority is free to reject a proposed transfer if it finds that the proposed 
transferee or assignee is not an appropriate person or entity to hold a license 
and operate such a business.

[¶27.]  We hold that the provision of the lease 
containing the requirement that appellants transfer the liquor license to 
Northwestern at the conclusion of the lease is valid and enforceable as between the parties. Any such 
transfer is, however, subject to the provisions of § 12-4-601(b), W.S. 1977, 
requiring a public hearing and approval by the licensing authority. Appellants 
have not argued, and we do not address, the question of whether such a transfer 
would be pursuant to a "sale made in good faith." As an appellate court, we 
cannot prosecute an independent inquiry for errors upon which an appellant could 
possibly rely and may invoke abandonment or waiver where such errors are not 
asserted by the parties. Scranton v. 
Whitlock, supra, 389 P.2d  at 1018.

[¶28.]  We find expressed in the trial court's 
Judgment and Order an awareness that any such transfer is subject to the 
approval of the licensing authority. It finds that the lease provision is valid 
and enforceable between the parties. The court's judgment as to the validity of 
that portion of the lease agreement does not bind the county commissioners to 
allow the transfer. This assignment cannot affect or limit the discretion of the 
board, nor does it grant assignee any preference, right or privilege. It is 
beyond the power of any person to bind a license to any particular set of 
premises. The licensing authority still must follow the statutory procedures and 
exercise its independent judgment whether such transfer should be 
allowed.

[¶29.]  Affirmed.

1 That provision required 
as follows:

"It is agreed between the 
parties that LESSEES shall continue to operate on said premises, a tavern and 
liquor store and that LESSEES shall not in any way endeavor to move the location 
of said tavern or liquor store from said premises and that the license issued by 
the Board of County Commissioners of Sheridan County, Wyoming, shall at all 
times remain with said location. LESSEES further agree that they will keep and 
maintain said liquor license in good order and will at all proper times, apply 
to the Board of County Commissioners for a renewal of same and that at the 
termination of this lease, LESSEES shall, if said lease is not extended or 
renewed by LESSOR, without consideration, reassign and retransfer said liquor 
license or any subsequent liquor license that may be issued by the Board of 
County Commissioners of Sheridan County, Wyoming, to LESSOR or its assigns * * 
*. In the event LESSEES, for any reason cease to operate a bar and tavern on 
said leased premises, then LESSEES, if LESSEES are unable to sell their business 
and assets to a qualified, acceptable third person, upon receiving a written 
request from LESSOR, shall immediately reassign and retransfer said liquor 
license or any subsequent liquor license that they may hold for said premises, 
to LESSOR."