Court Opinion

ID: 2751066
Source: CourtListenerOpinion
Date Created: 2014-11-13 19:06:00.298719+00
Date Added: 2024-06-11T11:25:59.221227
License: Public Domain

[Cite as Tres Amigos, Inc. v. Ohio Liquor Control Comm., 2014-Ohio-5047.]

                             IN THE COURT OF APPEALS OF OHIO

                                  TENTH APPELLATE DISTRICT

Tres Amigos, Inc.,                                 :

                Appellant-Appellant,               :
                                                                            No. 14AP-309
v.                                                 :                  (C.P.C. No. 13CV-12330)

Ohio Liquor Control Commission,                    :              (REGULAR CALENDAR)

                Appellee-Appellee.                 :

                                          D E C I S I O N

                                  Rendered on November 13, 2014

                Coolidge Wall Co., L.P.A., and Daniel J. Gentry, for appel-
                lant.

                Michael DeWine, Attorney General, and Charles E. Febus, for
                appellee.

                  APPEAL from the Franklin County Court of Common Pleas

DORRIAN, J.
        {¶ 1} Appellant, Tres Amigos, Inc. ("appellant"), appeals the March 18, 2014
judgment entry of the Franklin County Court of Common Pleas that affirmed the
October 18, 2013 order issued by appellee, Ohio Liquor Control Commission ("the
Commission"). For the reasons that follow, we affirm the judgment of the trial court.
I. Facts and Procedural History
        {¶ 2} On July 12, 2010, appellant applied to the Department of Commerce,
Division of Liquor Control (the "Division"), for a new Class D-1-2-3-3A-6 liquor permit at
a property located at 29 E. Franklin Street in Centerville, Ohio ("the property"), which was
owned by E&E Properties, Inc. ("E&E"). Since 1991 and at all times relevant to these
proceedings, Mike & Lou, Inc. ("Mike & Lou"), operated a business and possessed a liquor
permit at the property.
No. 14AP-309                                                                              2

       {¶ 3} On March 2 and October 24, 2011, the Division requested by certified mail
that appellant submit a date for a final inspection of the property. On July 31, 2012, the
Division mailed appellant a decision denying appellant's application for a permit because
appellant: (1) was not the owner or operator of a restaurant at the property; (2) was
unable to operate a restaurant at the property because it does not have tenancy at the
property; (3) failed to cooperate with the Division in its investigation by failing to
schedule, complete, and pass a final inspection; and (4) was preventing the next applicant
in line from having a permit considered.
       {¶ 4} Appellant appealed the decision of the Division to the Commission. The
Commission held a hearing on October 11, 2013. On October 18, 2013, the Commission
mailed appellant its order affirming the July 31, 2012 decision of the Division. On
November 8, 2013, appellant, pursuant to R.C. 119.12, appealed to the Franklin County
Court of Common Pleas. On March 18, 2014, the court filed an entry affirming the
Commission's October 18, 2013 order.
II. Assignment of Error
       {¶ 5} Appellant appeals, assigning a single error for our review:
              The trial court erred by affirming the decision of the Ohio
              Department of Liquor Control denying liquor permits to Tres
              Amigos because Ohio law does not require Tres Amigos to
              have exclusive, present possession of the Location in order to
              qualify for a permit.

       {¶ 6} Pursuant to R.C. 119.12, a common pleas court reviewing an order of an
administrative agency must affirm the order if, upon consideration of the entire record,
the order is in accordance with law and is supported by reliable, probative, and
substantial evidence. Our Place, Inc. v. Ohio Liquor Control Comm., 63 Ohio St. 3d 570,
571 (1992); Colon v. Ohio Liquor Control Comm., 10th Dist. No. 09AP-325, 2009-Ohio-
5550, ¶ 8. To be reliable, the evidence must be dependable, i.e., that there is a reasonable
probability that the evidence is true. Our Place, Inc. at 571. To be probative, the evidence
must tend to prove the issue in question. Id. To be substantial, the evidence must have
some weight, i.e., it must have importance and value. Id.
No. 14AP-309                                                                             3

       {¶ 7} "The common pleas court's 'review of the administrative record is neither a
trial de novo nor an appeal on questions of law only, but a hybrid review in which the
court "must appraise all the evidence as to the credibility of the witnesses, the probative
character of the evidence, and the weight thereof." ' " Colon at ¶ 8, quoting Lies v. Ohio
Veterinary Med. Bd., 2 Ohio App. 3d 204, 207 (1st Dist.1981), quoting Andrews v. Bd. of
Liquor Control, 164 Ohio St. 275, 280 (1955). Although the reviewing court must "give
due deference to the administrative agency's resolution of evidentiary conflicts, the
findings of the agency are not conclusive." Colon at ¶ 8, citing Univ. of Cincinnati v.
Conrad, 63 Ohio St. 2d 108, 111 (1980).
       {¶ 8} On appeal to an appellate court, the standard of review is even more limited.
"In reviewing the court of common pleas' determination that the Commission's order was
supported by reliable, probative, and substantial evidence, this court's role is limited to
determining whether the court of common pleas abused its discretion." Duncan v. Liquor
Control Comm., 10th Dist. No. 08AP-242, 2008-Ohio-4358, ¶ 10, citing Roy v. Ohio State
Med. Bd., 80 Ohio App. 3d 675, 680 (10th Dist.1992). Abuse of discretion connotes more
than an error of law or judgment; rather, it implies that the trial court's decision was
unreasonable, arbitrary or unconscionable. Blakemore v. Blakemore, 5 Ohio St. 3d 217,
219 (1983). Nonetheless, an appellate court does have plenary review of purely legal
questions in an administrative appeal. Colon at ¶ 9, citing Big Bob's, Inc. v. Ohio Liquor
Control Comm., 151 Ohio App. 3d 498, 2003-Ohio-418, ¶ 15 (10th Dist.).
       {¶ 9} Here, the Division in its July 31, 2012 decision found that appellant was not
the owner or operator of a restaurant at the property and, further, was unable to conduct
a restaurant business because it did not have tenancy at the address. In support of these
findings, the Division stated:
              On June 3, 1991, the former Department of Liquor Control
              issued a D-2-2x-3-3A-6 liquor permit to Mike & Lou, Inc., 29
              East Franklin St., Centerville, Ohio. This permit remains in
              full force and effect.

              Investigations conducted by the Division revealed that Mike &
              Lou, Inc. is in control of the liquor permit business operating
              at 29 East Franklin St., Centerville, Ohio under the liquor
              permit described above.
No. 14AP-309                                                                                4

(July 31, 2012 Decision, at 2.) Because there was already a business with a liquor permit
operating at the property for which appellant sought a new permit, the Division concluded
that appellant was precluded from obtaining a permit for the property.
       {¶ 10} Appellant does not contest the Division's finding that Mike & Lou were in
control of a liquor permit business operating at the property. Instead, appellant argues
that, although it was not in control of the business operating on the property, it possessed
sole tenancy rights to the property pursuant to a lease agreement with E&E after E&E
terminated its prior lease of the property to Mike & Lou. However, due to a dispute
between E&E and Mike & Lou over the termination of their leasing agreement, Mike &
Lou refused to vacate the property pending adjudication of the dispute. As a result,
appellant was unable to establish its business and permit the Division to make an
inspection.
       {¶ 11} Appellant contends that it does not need exclusive, present possession of the
property to qualify for a liquor permit under R.C. Chapter 4303. To support this
contention, appellant relies on the holding in Painesville Raceway, Inc. v. Dept. of Liquor
Control, 70 Ohio App. 2d 219 (8th Dist.1980), which, in a split decision, held that "[w]here
the holder of a liquor permit issued by the Department of Liquor Control for a specified
location does not have the legal right to exclusive, year-round possession of the premises
at such location, the provisions of R.C. Chapter 4303 do not prohibit the Department of
Liquor Control from issuing a second liquor permit for that location to another applicant
for periods during the year when such applicant is entitled to exclusive possession of the
same premises." Id. at paragraph three of the syllabus. As we have previously recognized,
Painesville concerned the application of a liquor license at a horse racing facility, a
location at which different applicants had exclusive control over the same space for only a
portion of the year. Duncan v. Ohio State Liquor Control Comm., 10th Dist. No. 08AP-
236, 2008-Ohio-4550, ¶ 12.
       {¶ 12} Here, however, appellant sought a new permit for a location exclusively
occupied by another business that possessed a license and was continuing to operate from
the location. The record fails to reflect that appellant has at any point in time occupied the
No. 14AP-309                                                                                           5

property in question or possessed control over the space. As a result, the principles
articulated in Painesville are inapplicable here. Duncan at ¶ 12.
        {¶ 13} Pursuant to R.C. 4303.13, 4303.14, 4303.15, 4303.16, and 4303.182, the
permits sought by appellant may only be issued to the "owner or operator * * * of a retail
food establishment or a food service operation licensed pursuant to Chapter 3717 of the
Revised Code that operates as a restaurant for purposes of this chapter" at the location for
which the permit is sought.1 R.C. 4301.01(B)(12) defines a "restaurant" as "a place located
in a permanent building provided with space and accommodations wherein, in
consideration of the payment of money, hot meals are habitually prepared, sold, and
served at noon and evening, as the principal business * * * [excluding] pharmacies,
confectionery stores, lunch stands, night clubs, and filling stations." We have previously
held that the ownership or operation of a restaurant is a prerequisite to the issuance of the
types of permits sought by appellant.2 Duncan at ¶ 13; Café Napoli Partnership v. Ohio
State Liquor Control Comm., 10th Dist. No. 06AP-1055, 2007-Ohio-3210,¶ 18.
        {¶ 14} Although appellant argued throughout the proceeding that it was the holder
of tenancy rights for the location in question, the Division found that appellant was not
the owner or operator of a restaurant at the property. Appellant at no point during the
underlying proceeding demonstrated that it owned or operated a business at the location
for which it sought the permit. Appellant asserted at the hearing before the Commission
that it reached an agreement with Mike & Lou to transfer all of Mike & Lou's assets at the
property, including the existing liquor permit possessed by Mike & Lou, but noted that the
agreement was not finalized. However, the existence of such an agreement to transfer the
existing liquor permit undercuts appellant's rationale for continuing to seek a new permit

1 We note that R.C. 4303.16, which pertains to D-3A permits, respectively, does not contain the quoted
language, but depends on the issuance of a D-3 permit under R.C. 4303.15, which contains the quoted
requirement. Similarly, R.C. 4303.182, pertaining to D-6 permits, does not contain the quoted language,
but depends upon the issuance of one of the permits provided in R.C. 4303.13, 4303.14, 4303.15, or
4303.16.
2 Although our prior decisions in Duncan and Café Napoli Partnership v. Ohio State Liquor Control
Comm., 10th Dist. No. 06AP-1055, 2007-Ohio-3210, held that the ownership or operation of a restaurant
is a prerequisite to the issuance of a liquor permit in the context of D-5 and D-6 permits, the statutory
language underlying the requirement in those cases is also present in the statutory sections dealing with
the types of permit at issue in this case. Compare R.C. 4303.13, 4303.14, 4303.15 with R.C. 4303.18. As a
result, we find the holdings of those cases to be applicable here.
No. 14AP-309                                                                              6

for the same location before the Commission. Appellant admitted that, if the transfer
between Mike & Lou was approved and "the permits are actually transferred, then there
would be nothing else that would need to be done. The existing permits would be
transferred to [appellant], and we would have no reason to go forward on this
application." (Oct. 11, 2013 Tr. 8-9.) Regardless, the ultimate outcome of appellant's
agreement with Mike & Lou is immaterial to the underlying legal issue in the present
proceeding. Appellant does not dispute that it never owned or operated a restaurant at the
property. As a result, appellant did not meet the qualifications for the issuance of permits
under applicable law. Duncan at ¶ 13; Café Napoli at ¶ 18.
       {¶ 15} The trial court also considered evidence that appellant failed to cooperate
with the investigation. Ohio Adm.Code 4301:1-1-12 provides that "No class * * * D permit
* * * shall be issued by the division until the division has conducted a complete
examination, including inspection of the premises, and the division finds that the
applicant and the location meet all of the requirements imposed by law and rules." The
Division requested by certified mail sent to appellant's authorized representative that
appellant submit a date for a final inspection. Despite the Division's repeated requests to
appellant to schedule a date for a final inspection, appellant failed to schedule, complete,
and pass a final inspection in the two-year period from appellant's application to the
Division's decision denying the application. In sum, the evidence in the record sustains
the trial court's conclusion that reliable, substantial, and probative evidence supports the
Commission's order.
       {¶ 16} Because appellant does not contest that it never owned or operated a
business at the property, and because it failed to schedule, complete, and pass a final
inspection, we conclude that the trial court did not abuse its discretion in finding that
reliable, substantial, and probative evidence supported the Commission's order and that
such order was in accordance with law because appellant failed to qualify under the
statutory provisions relating to the issuance of the permits sought. Accordingly, we
overrule appellant's single assignment of error.
No. 14AP-309                                                                      7

III. Disposition
       {¶ 17} Having overruled appellant's single assignment of error, we affirm the
judgment of the trial court.
                                                                 Judgment affirmed.

                               TYACK and CONNOR, JJ., concur.
                                   _________________