Court Opinion

ID: 9625509
Source: CourtListenerOpinion
Date Created: 2023-08-22 07:43:05.487817+00
Date Added: 2024-06-11T18:06:09.799939
License: Public Domain

ELLETT, Chief Justice
(dissenting):
This appeal grows out of a denial by defendant Utah County Board of Commissioners (hereinafter “Commission”) of an application for a class B beer license filed by appellant Eldon Anderson (hereinafter “Anderson”) on or about July 1, 1976. The application was referred to the Utah County Sheriff for recommendation, and he recommended denial based upon a series of reports of trouble at the tavern Anderson had operated during 1975 under a previously issued class B beer license.
The Commission made Anderson aware of the Sheriff’s recommendation and provided him two opportunities to appear before it and present argument and witnesses to show cause why the Commission should not act on the Sheriff’s recommendation. Anderson and his attorney appeared before the Commission on August 16 and again on September 27, 1976. It does not appear from the transcript of the proceedings that witnesses were sworn, but the Sheriff and Sgt. Scott, who had prepared most of the trouble reports, were present and responded to questions.
On October 6, 1976, the Commission issued its formal “Findings and Decision” denying Anderson’s application. Among its findings were that, while Anderson was operating under his previous license, there had been “numerous fights and/or public disturbances” and “minors were readily served beer” on Anderson’s business premises.
Anderson filed a complaint in the Fourth District Court seeking injunction against the Commission’s interference with the operation of his tavern on the grounds that the Commission’s findings were unsupported by evidence, that the hearings were so conducted as to deny Anderson due process, and that the denial of license was arbitrary and irreparably injurious to him. Preliminary injunction was granted in accordance with stipulation of the parties. The Commission’s records relating to Anderson’s application, including transcripts of the hearings, were certified to the court. On January 30,1978, after receiving memo-randa and hearing oral argument, the court entered its Findings of Fact and Conclusions of Law and Judgment dissolving the preliminary injunction and dismissing the action by which permanent injunction was sought. From that judgment, Anderson appeals.
The first ground of appeal relates to the court’s failure to make adequate findings of fact. The findings were, in their entirety, as follows:
1. Pursuant to Court order, the Utah County Commission transmitted to the Court for its review, a certified copy of its proceedings in the matter of the application of the Plaintiff, Eldon L. Anderson, for a Class “B” Beer License.
2. The Court received and reviewed the above-described proceedings of the Utah County Commission.
3. The Court further considered the pleadings on file, oral and written stipulations entered into by the parties, and memoranda and oral arguments of counsel.
I agree with Anderson that this-recital of the procedures by which the court informed itself on the issues of law does not constitute findings of fact within the meaning of Rule 52(a), U.R.C.P. Where findings are required, the court must find on all material issues of fact raised by the pleadings.1 This case was not decided on issues of fact, however, but purely on issues of law. It cannot be determined from the record on *1218appeal how the matter got to argument. Neither a Rule 12 nor a Rule 56 motion is in the record, nor does it appear that the case was noticed for trial. Neither party undertook to adduce evidence in the course of the proceedings before the court, and a stipulation of facts acceptable to counsel was read into the record on the day of oral argument. The case was obviously in summary judgment posture when argued, and the court’s findings were superfluous when the judgment is viewed as a disposition of the cause under Rule 56.2
The conduct of an administrative agency in acting on applications for license to carry on any business activity may not be arbitrary and capricious even though it is appropriate that the activity (as is true of trade in intoxicating liquors) be highly regulated in the public interest.3 If a beer license is available for the area in which an applicant wants to sell beer, the denial of his application in the absence of any indication that he fails to meet reasonable administrative criteria may indeed constitute arbitrary action. We must assume that the trial judge reviewed the record before him including the stipulations of counsel and concluded that the Utah County Ordinances establish reasonable criteria and that the Commission complied with its ordinances in denying Anderson’s application. The record indeed supports those conclusions.
The relevant Utah County Ordinance is Section 4-2-6 which provides that, when an application such as Anderson’s is received:
The application for such license, together with such information and certificate as is required by the County to be attached thereto, shall be referred to the .Sheriff for inspection and report. The said Sheriff shall, within five days after receiving such application, make report to the Commission of the general reputation and character of the persons who habitually frequent such place; the nature and kind of business conducted at such place by the applicant, or by any other person, or by said applicant at any other place; whether said place is or has been conducted in a lawful, quiet and orderly manner; the nature and kind of entertainment, if any, at said place, whether gambling is or has been permitted upon the premises, or by said applicant at any other place; and he shall add thereto his recommendation as to granting or denying said application. Upon receipt of said report, the Commission shall act upon the application as it shall deem fair, just and proper in regard to granting or denying the same.
The record and stipulations show that the ordained procedure was followed. The Sheriff recommended against license issuance and attached to his recommendation a series of reports of disturbances at Anderson’s tavern during the previous permit period. The Commission did not, however, accept the Sheriff’s recommendation in callous disregard of Anderson’s concerns. Anderson was given two opportunities to counter the Sheriff’s report, and the transcripts of the two hearings do not reveal any Commission failure or even reluctance to hear argument, receive testimony, or cooperate with Anderson in his efforts to achieve albescence.
There are two complaints Anderson expresses which deserve treatment. First, he complains that the Commission received and based its decision on reports which cqnsti-tuted hearsay evidence. Assuming that the evidence was hearsay, the hearsay character of information gathered by a hearing body in the performance of its duty does not necessarily invalidate the information as a basis for administrative action.4 In fact, a major part of the evidence was not hearsay. The officer who prepared the reports of disturbances at Anderson’s tavern reported and was available for questioning about what he saw and heard. The significant *1219fact, for purposes of licensing decision, is that the Sheriff’s office frequently had to respond to disturbances at Anderson’s tavern, not that Anderson was or was not responsible for the disturbances.5
Secondly, Anderson complains that the hearings were not conducted in accordance with courtroom ritual. Witnesses were not sworn and subjected to cross-examination. Anderson and his counsel were, however, present at the hearings and made no request that witnesses testify under oath or be subjected to cross-examination. If any procedure was irregular. Anderson’s failure to object to the irregularity may be regarded as waiver.6
It is apparent from the record that the source of information on which the Commission based its findings was the Sheriff’s office, and much of the evidence might not have been receivable over objection in a judicial proceeding. The proceeding before the Commission was not judicial but essentially administrative in character.7 It violates no constitutional concept that, in making an administrative decision, the Commission may rely on the results of investigations by the county’s chief investigative office. The findings are not the basis for any decree or sentence; they are merely the basis for the Commission’s exercise of a broad discretion,8 and they are sufficiently supported by the record to convince me that the Commission did not act arbitrarily or capriciously.
Anderson’s final argument is one which has been frequently made in license cases. He calls attention to the investment he had made in enterprise which depends on periodic renewals of his license. We find no authority (outside Pennsylvania) for the proposition that one who applies for renewal of a license is in favored position over one who applies for initial license. The expectancy of maintaining a licensed status beyond current license term is not property within the meaning of Article I, Section 7 of our Constitution. A licensee is not justified in making investments dependent on renewals. The subject was extensively annotated in 1948 at 2 A.L.R.2d 1239, and research reveals no departure from the doctrine of the annotated cases. The Commission’s action under scrutiny was not a license revocation or suspension, it was the denial of an application for a new license. In taking action on license applications, the Commission is not obliged to show cause; it is merely obliged to exercise its discretion in a reasonable manner, and it did so in this case.
I think the judgment should be affirmed with costs to the respondent.

. LeGrand Johnson Corp. v. Peterson, 18 Utah 2d 260, 420 P.2d 615 (1966), and cases there cited.

. Rule 52(a), U.R.C.P., specifically provides that findings are unnecessary on decisions under Rule 12 or 56 motions.

. The Rogue v. Utah Liquor Control Comm., 28 Utah 2d 212, 500 P.2d 509 (1972).

.Adams Theatre Co. v. Keenan, 12 N.J. 267, 96 A.2d 519 (1953); Davis, Administrative Law, Sec. 14.03.

. Kirby v. Alcoholic Beverages Control Appeals Bd., 7 Cal.3d 433, 102 Cal.Rptr. 857, 498 P.2d 1105 (1972); Nordco, Inc. v. State, 43 N.J.Super. 277, 128 A.2d 491.

. Babbit v. City of Loveland, 488 P.2d 1130 (Colo.App.1971).

. 51 Am.Jur.2d 60, Licenses, § 57.

. 32-4-17, U.C.A.1953, as amended.