Court Opinion

ID: 9666429
Source: CourtListenerOpinion
Date Created: 2023-08-24 01:14:44.942514+00
Date Added: 2024-06-11T18:15:28.677587
License: Public Domain

WINTERSHEIMER, Justice,
dissenting.
I respectfully dissent from the majority opinion because it tolerates an inexcusable practice by the Alcoholic Beverage Control Board which is contrary to law and is not necessary under all the circumstances.
Although it is difficult to disagree with the skillfully written majority opinion and its application of equitable principles in a prospective manner in order to avoid a possible injustice or hardship, I believe that we cannot continue to tolerate the clear disregard of the applicable regulations and statutes by the ABC Board.
It is abundantly clear that the existing regulations regarding licenses were not followed. Any agency must be bound by its own regulations. Shearer v. Dailey, 312 Ky. 226, 226 S.W.2d 955 (1950).
The Court of Appeals erred in excluding Bloomfield from the application of its decision because under principles of equity a court cannot grant relief to a party whose reliance on a practice of the Board is at variance with the plain language of a regulation and was not reasonable. The authority of the court is limited, and the Court of Appeals exceeded the scope of its review power when it attempted to act under general principles of equity. See K.R.S. 243.-570(2).
The sole issue presented here is whether the ABC Board acted in excess of its power by issuing the license in violation of the dormancy regulation. The Board has unquestionably attempted to alter and expand its own administrative regulation through a private internal policy which is at variance with the plain language of the regulation. Such behavior is specifically prohibited by K.R.S. 13A.130.
The application of general principles of equity regarding reliance is not proper in this situation. In order for reliance to be considered, such reliance must be reasonable. It was not reasonable or prudent for the licensee to rely on the practice of the Board when it clearly conflicted with the promulgated provisions of the administrative regulations. Bloomfield must be charged with legal knowledge of the regulations of the Board. It is not in a position to assert reliance when it purchased a license which is invalid under the clear language of the dormancy regulation. Action based on a prohibited internal policy does not elevate the decision above a mere business decision with full knowledge of the potential risk. Equity can afford no relief from an imprudent business judgment. Mazer v. Hazard Realty Corp., 283 Ky. 283, 140 S.W.2d 1033 (1940). Equity follows the law and whenever the rights of the parties are clearly governed by the rules of law, the courts of equity will follow such rules. Kaufman v. Kaufman’s Adm’r, 292 Ky. 351, 166 S.W.2d 860 (1942). If Bloomfield became involved in this transfer without first consulting the published administrative regulations it was clearly not vigilant and not entitled to the kind of equitable relief provided herein.
The possible expectations of the parties that the Board would continue to ignore its own published regulation are not entitled to the protection of the law. The reliance on internal policy rather than promulgated regulation clearly promotes a loss of confidence in administrative agencies and in the government in general. It engenders a disregard for all legal regulations. Those who rely on the written and promulgated regulations and laws are placed at a serious disadvantage under such a system. There is no guarantee of a consistent or uniform treatment for all citizens if agencies of the law are permitted to go beyond their own written and promulgated policies. Here the ABC Board has clearly disregarded its own regulations and the courts have found there is no remedy to the situation *492other than to let all the improper activities of the Board in the past to be permitted. The mere fact that the movants may gain by enforcement of the law is not a sufficient reason to ignore the disregard of the regulation. This could not be a nation of laws if enforcement could only be sought by those unaffected by a violation. It is impossible to understand how many wrongs make a right.
The decision of the courts in this matter is not absolutely necessary under the circumstances. The practice of the Board in ignoring the dormancy regulations has the effect of conferring a valuable economic right on the owners of the dormant licenses who are not legally entitled to such a benefit. If any injustice or hardship would result, it would appear that the Board has the legal authority to amend or repeal its own regulations. It has the power to increase the quota of licenses allotted to each county. Clearly it is within the authority of the agency to avoid the harsh consequences which have the potential of arising if the decision of the Board was reversed.
There is already enough mystery about Kentucky administrative regulations and there is no need to encourage it further.
STEPHENS, J., joins in this dissent.