Court Opinion

ID: 1068198
Source: CourtListenerOpinion
Date Created: 2013-10-09 19:28:55.067539+00
Date Added: 2024-06-11T15:21:52.737450
License: Public Domain

COURT OF APPEALS OF VIRGINIA

Present: Judges Benton, Elder and Annunziata
Argued at Richmond, Virginia

STEVE KENNETH BRANCH t/a IVORY'S RESTAURANT
                                                   OPINION BY
v.   Record No. 0081-95-2                     JUDGE LARRY G. ELDER
                                                 NOVEMBER 7, 1995
VIRGINIA DEPARTMENT OF
 ALCOHOLIC BEVERAGE CONTROL

         FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND
                    Randall G. Johnson, Judge
          J. Ridgely Porter, III, for appellant.

          John Patrick Griffin, Assistant Attorney
          General (James S. Gilmore, III, Attorney
          General; Michael K. Jackson, Senior Assistant
          Attorney General and Chief, on brief), for
          appellee.

     Steve Kenneth Branch appeals the trial court's affirmance of

the Alcoholic Beverage Control (ABC) Board's revocation of

Branch's two alcohol licenses.   Branch contends (1) the ABC Board

lacked authority to revoke the licenses as a sanction for his

violations after he voluntarily surrendered the licenses; (2) the

ABC Board failed to conduct a de novo hearing after the trial
court vacated the revocations and remanded his case; (3)

insufficient evidence supported the charge that the operation of

his business resulted in breaches of peace and good order; and

(4) he substantially prevailed on appeal to the trial court and

was therefore entitled to an award of attorney's fees and costs.

Because the trial court committed no error, we affirm its

decision to uphold the ABC Board's revocations.
                                  I.

                                 FACTS

        On July 26, 1993, the ABC Board gave Branch notice of

charges of violations of state alcohol beverage control laws,

which concerned his licenses for (1) mixed beverages 1 and (2)

wine and beer 2 at his establishment, Ivory's Restaurant.

        On January 5 and 7, 1994, an ABC Board hearing officer

received testimony from Branch, Branch's employees and

bookkeeper, ABC agents, and local police officers.    At the

hearing, Branch objected to the introduction of a television news

videotape, which depicted various incidents of violence occurring

near Ivory's.    The hearing officer offered to make the video

available to Branch's counsel, but the record does not disclose

whether Branch's counsel availed himself of the opportunity.       On

January 27, 1994, the hearing officer found Branch violated ABC

laws and recommended the revocation of both licenses.
        On April 5, 1994, the case was heard before the full ABC

Board, and Branch presented testimony and additional evidence.
    1
       The charges included (1) Branch no longer conducted
business as a "restaurant;" (2) Branch failed to keep complete,
accurate, and separate records; (3) Branch attempted to defraud
the ABC Board by filing an inaccurate/fraudulent report; (4)
issuance of the license led to breaches of peace and good order;
and (5) Branch concealed the sale or consumption of alcoholic
beverages.
    2
       The charges included counts (1) - (4) of the mixed alcohol
beverage counts, plus a charge that Branch purchased beer or
beverages "except for cash."

                                   2
Branch did not object to the hearing officer's handling of the

video or the other evidence relating to the peace and good order

charge.   On April 6, 1994, the ABC Board revoked both licenses,

and Branch appealed to the Richmond Circuit Court.

     On July 13, 1994, the Honorable Randall G. Johnson affirmed

the hearing officer's factual findings, but found that the

hearing officer improperly admitted the videotape.   The trial

court stated that (1) the videotape was not so crucial to the ABC

Board's final decision that the entire process must be thrown

out; (2) only a remand could answer what the hearing officer or

the ABC Board would have found if the videotape had not been

admitted; and (3) the Board could "not base its decision and

orders on remand on any evidence related to the subject

videotape, unless the case is further remanded to the hearing

officer to allow Branch to present evidence in rebuttal to it."

The trial court therefore vacated the revocations and remanded

the case to the ABC Board.   The trial court refused to award

Branch attorney's fees and costs, as he had not substantially

prevailed on appeal.
     Branch filed a motion with the trial court requesting it to

amend or modify its July 13, 1994 order, which had not ordered a

de novo hearing on remand.   The trial court refused to do so.

     On remand, the ABC Board vacated the two April 6, 1994 final

orders of revocation and scheduled a hearing for the appeal.     On

August 1, 1994, Branch objected to the ABC Board hearing his case

                                 3
without affording him a de novo hearing before an officer.

Immediately prior to the final August 23, 1994 ABC Board hearing,

Branch voluntarily surrendered his licenses (which were to expire

on September 30, 1994) and claimed that the ABC Board could take

no further action against him.   On September 6, 1994, the ABC

Board issued orders revoking Branch's licenses.   On December 13,

1994, the trial court affirmed the ABC Board's revocations and

dismissed Branch's appeal.
                                 II.

          REVOCATION SUBSEQUENT TO VOLUNTARY SURRENDER

     In his brief to the Court, Branch argued that once he

voluntarily surrendered his two licenses prior to the ABC Board

hearing, the ABC Board lacked the right to revoke the licenses on

September 6, 1994, thereby affecting what was already a final

termination.   Branch relied on Code § 4.1-203(D), which states in

pertinent part:

     The privileges conferred by any license granted by the
     Board . . . shall continue [for a designated period of
     time, which in this case was September 30, 1994],
     except that the license may be sooner terminated for
     any cause for which the Board would be entitled to
     refuse to grant a license, by operation of law,
     voluntary surrender[,] or order of the Board.

(Emphasis added).   However, at oral argument, Branch conceded

that the voluntary surrender of an alcohol license does not bar

further revocation and sanction proceedings and conceded that

such proceedings may affect a licensee's chances of being granted

                                  4
an alcohol license in the future.     See 48 C.J.S. Intoxicating

Liquors § 171 at 613 (1981 & Supp. 1995).     Because of this

concession we need not exhaustively address this issue.    We

merely note that the ABC Board began its proceedings before

Branch attempted to surrender his licenses.    Nothing in the

statute forbids the ABC Board from continuing an enforcement

action simply because a licensee unilaterally seeks to preclude

an adverse finding by surrender of the license after proceedings

commenced.   We hold the ABC Board retained authority to revoke

Branch's licenses after he voluntarily surrendered them.
                               III.

                 LACK OF DE NOVO HEARING ON REMAND

     We uphold the trial court's ruling that Branch had no

absolute right to a de novo hearing before a hearing officer on

remand.

     The basic law under which the legislature empowered the ABC

Board to act contains no requirement that the case be remanded to

the hearing officer.   The law authorizes the Board to promulgate

reasonable regulations necessary to carry out the provisions of

the basic law.   Code § 4.1-111(A).   The Code also provides that

"[t]he Board's power to regulate shall be broadly construed."

Code § 4.1-111(F).

     The Regulations of the Virginia Department of Alcoholic

Beverage Control, which include the Rules of Practice Before

Hearing Officers and the ABC Board, also guide our determination.

                                 5
Part II of the Rules, concerning hearings before the ABC Board,

includes VR125-01-1 § 2.6 (Evidence), which grants the ABC Board

certain powers.    Section 2.6(B) states:

     Should the Board determine at an appeal hearing, either
     upon motion or otherwise, that it is necessary or
     desirable that additional evidence be taken, the board
     may:

          1.      Direct that a hearing officer fix a time and
                  place for the taking of such evidence . . .
                  and

          2.      Upon unanimous agreement of the board
                  members, permit the introduction of after-
                  discovered or new evidence at [an] appeal
                  hearing.

(Emphasis added).    This section provides an explicit exception to

the general rule that all evidence should be introduced at a

hearing before a hearing officer.      VR125-01-1 § 2.6(A).   Because

the ABC Board may permit new evidence to be admitted after the

hearing officer receives evidence and makes a recommendation, it

follows that the ABC Board had the authority to exclude the

videotape from its consideration on remand.

     VR125-01-1 § 1.7 (Decisions) also supports the conclusion

that the ABC Board was under no duty to instruct the hearing

officer to make new findings of fact on remand, without the use

of the videotape.    VR125-01-1 § 1.7 states:

     A.   Initial decisions.--The decision of the hearing
          officer shall be deemed the initial decision,
          shall be a part of the record and shall include:

          1.      A statement of the hearing officer's findings
                  of fact and conclusions, as well as the

                                   6
                 reasons or bases therefor, upon all the
                 material issues of fact, law or discretion
                 presented on the record; and

            2.   The appropriate rule, order, sanction, relief
                 or denial thereof as to each such issue.

(Emphasis added).

     Additionally, in rendering its decision, the ABC Board "may

adopt, modify or reject the initial decision."   § 1.7(F).    The

ABC Board also has the authority at its hearing to "examine a

witness upon any question relevant to the matters in issue."

§ 2.6(C).   These powers implicitly give the ABC Board the

authority to conduct a de novo review after the initial decision

has been rendered and are sufficiently broad to allow the ABC

Board to reconsider the case on remand from the circuit court

without the necessity to remand for another proceeding before the

hearing officer.

     The trial court's July 13, 1994 order, which specifically

dealt with the remand issue, distinguished this case from

Virginia Bd. of Medicine v. Fetta, 244 Va. 276, 421 S.E.2d 410

(1992), a case on which Branch relies.   In Fetta, the Supreme
Court held that the Virginia Board of Medicine violated statutory

provisions relating to the conduct of its proceedings.   The Court

affirmed the trial court's ruling that because the violation

could have had an impact on the medical board's ultimate

decision, the proceeding could not be fairly reheard on remand

and had to be dismissed.    Fetta, 244 Va. at 283, 421 S.E.2d at

                                  7
414.       In this case, the trial court wrote:

           Here, the only error found in the agency's proceedings
           concerns a videotape. There is nothing about that
           tape, or the hearing officer's or Board's consideration
           of it, which is per se so crucial or central to the
           Board's final decision that the entire process must be
           thrown out [as in Fetta] because of the hearing
           officer's action.

The trial court wrote that it could not determine what the

hearing officer or the ABC Board would have found had the

videotape not been admitted into evidence and that only a remand

would answer this question.        In fashioning its remand

instructions, the trial court wrote:
                Accordingly, the final decisions and orders of the
           ABC Board revoking the licenses of Mr. Branch will be
           vacated, and the case will be remanded to the Board for
           such further consideration and proceedings as the Board
           deems appropriate. The Board is specifically
           instructed, however, that it may not base its decisions
           and orders on remand on any evidence related to the
           subject videotape, unless the case is further remanded
           to the hearing officer to allow Branch to present
           evidence in rebuttal to it.

(Emphasis added).       We hold that the trial court did not abuse its

discretion in fashioning these remand instructions.       As the
                                               3
Supreme Court stated in Fetta, Code § 9-6.14:19 explicitly
grants trial courts "the discretion to specify exactly what shall
       3
            This section states:

           Where a regulation or case decision is found by the court to
           be not in accordance with law under § 9-6.14:17, the court
           shall suspend or set it aside and remand the matter to the
           agency for such further proceedings, if any, as the court
           may permit or direct in accordance with the law.

                                      8
be done on remand."     Fetta, 244 Va. at 280, 421 S.E.2d at 412.

Here, there is no evidence that the ABC Board based any of its

decision on remand on any evidence related to the videotape.     It

was therefore unnecessary for the ABC Board to remand the case

for a de novo hearing before a hearing officer.     On remand, the

ABC Board has the authority pursuant to its regulations to

reconsider its decision.

                                  IV.
        SUFFICIENCY OF EVIDENCE ON PEACE AND GOOD ORDER CHARGE

        Third, we hold that sufficient evidence supports the finding

that Ivory's was so located that violations of law relating to

peace and good behavior resulted from the issuance of Branch's

ABC licenses. 4
        We are guided in this determination by familiar standards of

appellate review of agency decisions.

             Under Code § 9-6.14:17, the scope of review is
        limited to whether there was "substantial evidence in
        the agency record" to support the decision. The phrase
        "substantial evidence" refers to "such relevant
        evidence as a reasonable mind might accept as adequate
        to support a conclusion." The court may reject the
        agency's finding of fact "only if, considering the
        record as a whole, a reasonable mind would necessarily
        come to a different conclusion." This standard is
    4
       Branch was specifically charged with violating three
separate statutes: (1) Code § 4.1-222(A)(2)(b)(former § 4-31),
which states that the ABC Board can refuse to grant a license if
it has reasonable cause to believe that the establishment "[i]s
so located that granting a license and operation thereunder . . .
would result in violations of this title, Board regulations, or
violation[s] of the laws of the Commonwealth or local ordinances
relating to peace and good order"; (2) Code § 4.1-225(4)(former
§ 4-37), which states that the ABC Board may suspend or revoke a
license, or impose penalties, where "[a]ny cause exists for which
the Board would have been entitled to refuse to grant such
license had the facts been known"; and (3) Code § 4.1-203(D)
(former § 4-34), discussed supra, Section II.

                                   9
     designed "to give great stability and finality to the
     fact-finding process of the administrative agency."

          In addition, we review the facts in the light most
     favorable to sustaining the Board's action and "take
     due account of the presumption of official regularity,
     the experience and specialized competence of the
     agency, and the purposes of the basic law under which
     the agency has acted."

Atkinson v. VABC, 1 Va. App. 172, 176, 336 S.E.2d 527, 529-30

(1985)(citations omitted).

     Regarding the peace and good order charge, the ABC Board had

to determine:
     first, that violations of the ABC Act or other laws of
     the Commonwealth relating to peace and good behavior
     [took] place at the establishment in question; second,
     that there [was] some nexus between these violations
     and the location of the establishment. The location,
     in and of itself, must [have been] a relevant factor in
     the causation of the violations in order to prove that
     the establishment "[was] so located that violations of
     the ABC Act or the laws of the Commonwealth relating to
     peace and good order [had] resulted from issuance of
     the license and operation thereunder."

Id. at 177, 336 S.E.2d at 530; see Muse v. VABC, 9 Va. App. 74,

79-80, 384 S.E.2d 110, 113 (1989).

     We conclude from a complete review of the record that

"[s]ubstantial evidence was presented . . . which gave the ABC

Board reasonable cause to believe that circumstances had

developed, which, if known, would have entitled the ABC Board to

refuse to grant [Branch's] license at the outset."   Id. at 80,

384 S.E.2d at 113.   The record establishes that violations of the

law occurred at Ivory's and that Ivory's location, in and of

                                10
itself, contributed to disturbances of the peace and other

violations of the law.

     Substantial evidence from the record reveals the following

facts:   ABC agent G.R. Gullo testified that weapons were removed

from people who were refused entry to Ivory's because they were

intoxicated; and a man pulled a gun on a woman who sat in Ivory's

outside "glass booth."   Sergeant Tim Morley of the Richmond

Police Department testified as to multiple violent incidents

related directly to Ivory's location, including (1) the beating

of a nineteen year old after an argument inside Ivory's; (2) the

shooting of five persons "stemming from a crowd situation outside

the club"; (3) the shooting of a person "in the head

approximately 75 feet from the front door of the club after

leaving"; (4) the striking of a police officer in the chest as he

tried to maintain order while Ivory's was closing for the night;

(5) the arrest of a person outside Ivory's for a fight that

originated inside the club; (6) a woman "struck by a bottle and

fists by 12 unknown suspects after refusing to dance with one of

them"; and (7) a man "struck in the head with a bottle inside the

club."   Sergeant Morley also testified that Ivory's spawned the

most violent problems the police encountered in the adjacent

neighborhood.   Lieutenant David Welch of the Virginia

Commonwealth Police Department testified that there were problems

with crowd control at Ivory's; that there were multiple instances

of fighting at Ivory's; and that gunshots were fired at Ivory's.

                                11
Finally, Randall Plummer, formerly in charge of Ivory's

security, testified he was assaulted at least three times and was

shot at while working at the club.

     Based on these facts and circumstances, we hold that the

evidence supported the trial court's finding that a causal

relationship, or nexus, existed between Ivory's location and the

enumerated violations of the law.

                                V.
                     ATTORNEY'S FEES AND COSTS

     Finally, based on our review of the proceedings in this

case, we hold that the trial court did not abuse its discretion

in finding that Branch could not recover from ABC reasonable

attorney's fees and costs.   See Ingram v. Ingram, 217 Va. 27, 29,

225 S.E.2d 362, 364 (1976)("An award of attorney's fees is a

matter submitted to the trial court's sound discretion and is

reviewable on appeal only for an abuse of discretion.").   Code

§ 9-6.14:21(A) of the Virginia Administrative Process Act (VAPA)

states:

          In any civil case brought under Article 4 . . . of
     this chapter and § 9-6.14:4.1, in which any person
     contests any agency action, as defined in § 9-6.14:4,
     such person shall be entitled to recover from that
     agency . . . reasonable costs and attorney fees if such
     person substantially prevails on the merits of the case
     and the agency is found to have acted unreasonably,
     unless special circumstances would make an award
     unjust.

(Emphasis added).   See Commonwealth v. Lotz Realty Co., Inc., 237

                                12
Va. 1, 11, 376 S.E.2d 54, 59 (1989).

        On Branch's first appeal, the trial court found that

"because it cannot be reasonably said that Branch has prevailed

on this appeal, no attorney's fees or costs will be awarded."

The trial court's only reason for vacating the ABC Board's

revocation order and remanding the case was that the hearing

officer inappropriately admitted the videotape into evidence.

The trial court's order specifically stated that "[t]here is

nothing about that tape, or the hearing officer's or Board's

consideration of it, which is per se so crucial or central to the

Board's final decision that the entire process must be thrown out

because of the hearing officers' action."

        Assuming without deciding that Code § 9-6.14:21(A)

supplements the ABC attorney's fees provisions, 5 we hold that the

trial court was not clearly wrong in deciding that Branch did not

"substantially prevail on the merits of the case," see

Commonwealth v. May Bros. Inc., 11 Va. App. 115, 120, 396 S.E.2d
695, 698 (1990)(holding that party "substantially prevailed" on

the merits where all disputed issues were decided in its favor),
and that the agency did not act "unreasonably" at any point in

these proceedings.

    5
       For example, in Shuler v. VEC, 14 Va. App. 1013, 420
S.E.2d 257 (1992), this Court held that VAPA provisions providing
for the award of attorney's fees and costs do not apply to
judicial review of determinations of claims for unemployment
compensation.

                                  13
     Accordingly, we affirm the trial court's order upholding the

ABC Board's revocations.

                                                        Affirmed.

                               14