Court Opinion

ID: 4319952
Source: CourtListenerOpinion
Date Created: 2018-10-11 21:34:08.636221+00
Date Added: 2024-06-11T14:45:50.669472
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

John Kerr Musgrave, IV,                   :
                          Petitioner      :
                                          :
             v.                           :   No. 1679 C.D. 2017
                                          :   Submitted: May 4, 2018
Pennsylvania Liquor Control Board,        :
                       Respondent         :

BEFORE:      HONORABLE MARY HANNAH LEAVITT, President Judge
             HONORABLE ROBERT SIMPSON, Judge
             HONORABLE JAMES GARDNER COLINS, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE SIMPSON                          FILED: October 11, 2018

             John Kerr Musgrave, IV (Musgrave), representing himself, petitions for
review of an order of the Pennsylvania Liquor Control Board (Board) granting D &
V Restaurant, LLC’s (Licensee) application for extension of its licensed premises to
include a rooftop deck and sidewalk café. The Board determined Musgrave, an
owner/landlord of neighboring residential and commercial rental properties, lacked
standing to intervene in the Board proceeding because he failed to provide sufficient
evidence that he would be directly aggrieved by the grant of Licensee’s application.
Musgrave contends the Board erred in concluding that he would not be directly
aggrieved by the grant of Licensee’s application. Musgrave further asserts the Board
erred in deciding that its grant of Licensee’s extension application would not violate
Section 904.02A of the City of Pittsburgh’s (City) Zoning Code (Zoning Code),
relating to the goal of preserving the quality of residential life in the City’s Local
Neighborhood Commercial (LNC) Districts. Upon review, we affirm.
                                        I. Background
               In February 2017, Licensee, doing business in the City’s Shadyside
neighborhood as Urban Tap, filed an application to amend its restaurant liquor
license for an extension of its premises located at 216 South Highland Avenue.
Licensee sought the extension for a rooftop deck and a sidewalk café.

               In March 2017, Musgrave petitioned to intervene in Licensee’s
application. Pursuant to Section 464 of the Liquor Code,1 the Board’s Bureau of
Licensing (Licensing Bureau) informed Licensee that a hearing would be held in
July 2017 for the purpose of taking legally admissible evidence concerning the
following issues:

               1. The currently licensed premises is located within 200
               feet of other establishments licensed by this Board.

               2. The Board shall take evidence to determine that the
               approval of this application will not adversely affect the
               health, welfare, peace[,] and morals of the neighborhood
               within a radius of 500 feet of the proposed licensed areas.

               3. The Board shall take evidence to determine if
               [Musgrave] would be directly aggrieved by the granting of
               this application, which would qualify him as an intervenor
               in this matter.

Certified Record (C.R.), Item #11 (Board Op., 9/27/17, Finding of Fact (F.F.) No.
3).

      1
          Act of April 12, 1951, P.L. 90, as amended, 47 P.S. §4-464.

                                                2
             Following the hearing, the Board issued an order in September 2017
approving Licensee’s application for the extension and denying Musgrave standing
as an intervenor. In its decision, the Board found the following facts.

             There are two licensed establishments located within 200 feet of
Licensee’s proposed extension premises. F.F. No. 5. Highland Mex, LLP, doing
business as Mad Mex (Mad Mex), abuts Licensee’s premises. Id. El Grande, Inc.,
doing business as Casbah (Casbah) is located approximately 70 feet across the street
from Licensee’s proposed extension premises. Id. Licensee’s proposed extension
brings it five feet closer to Casbah. F.F. No. 6. Neither Mad Mex nor Casbah filed
a protest to Licensee’s extension application. F.F. No. 7.

             The proposed extension consists in part of a sidewalk café. F.F. No. 8.
The City granted Licensee a permit for the proposed extension. Id. The sidewalk
café includes an outdoor serving area of about 132 feet by 4 feet, 6½ inches. F.F.
No. 9. The rooftop deck includes a serving area of about 35 feet by 75 feet. Id.

             The area within a radius of 500 feet of the proposed extension premises
is 75 percent commercial and 25 percent residential. F.F. No. 10. The businesses
located there include a Supercuts (barbershop), a fitness club, a pizza shop and a
vape shop. Id. There are apartments located above some of the shops. Id.

             Licensee’s record owners include its Board-approved manager, John
Demauro (Manager) (70% ownership) and Frank Veltri, II (30% ownership). F.F.
No. 11. Manager testified Licensee’s hours of operation are 11:00 a.m. to 12:00 a.m.

                                          3
on Monday through Thursday, 11:00 a.m. to 2:00 a.m. on Friday and Saturday, and
10:00 a.m. to 11:00 p.m. on Sunday. F.F. No. 13. He indicated that Licensee’s sales
are comprised of approximately 60% food and 40% alcohol. F.F. No. 14. During
its eight months of doing business as Urban Tap, Licensee did not have any negative
interactions with the City or its neighbors, and it did not receive any Board citations.
F.F. No. 15.

               Manager acknowledged that Licensee holds an amusement permit. F.F.
No. 16. However, Manager indicated Licensee did not provide entertainment at that
time.   Id.    Further, Manager did not know whether Licensee would provide
entertainment in the future. Id. In any event, Manager continued, Licensee would
comply with the Board’s amplified music regulations. Id.

               Manager further testified the rooftop deck area would be located about
20 feet from the front of Licensee’s building. F.F. No. 17. Licensee plans to build
a wall between its rooftop and the rooftop of its next-door neighbor, Mad Mex. Id.
Manager believes Licensee’s extension will have a positive impact on the
community. Id.

               Musgrave testified he owned the building located at 224 South
Highland Avenue since 2006. F.F. No. 21. His building has seven residential units
and three commercial units. Id. Musgrave does not reside within 500 feet of
Licensee’s premises. F.F. No. 22.

                                           4
             Musgrave’s three commercial units are located along the sidewalk on
the first floor of 224 South Highland. F.F. No. 23. The second floor houses four
residential units. Id. The third floor houses two residential units. Id. An additional
residential unit is located in the rear of the first floor. Id. As of the date of the
hearing, Musgrave had only one commercial tenant, a women’s clothing store, which
normally closes at 5:00 p.m. F.F. No. 24.

             Musgrave’s concerns lie mainly with his residential tenants. F.F. No.
25. At the time of the hearing, three of the seven residential units were occupied.
Id. Musgrave described his tenants as mostly single people without children. Id.
Musgrave admitted he did not talk to any of his tenants about Licensee’s extension
application. F.F. No. 26. Musgrave further acknowledged that Apartment No. 3 is
the only apartment on the second floor facing the proposed licensed rooftop deck
area. F.F. No. 27. Although Apartment No. 3 is rented, the tenant did not attend
the Board hearing. Id.

             Nevertheless, Musgrave expressed his concern that noise from the
rooftop deck would enter the windows of his residential tenants and make it difficult
for those tenants to sleep and study. F.F. No. 28. In addition, Musgrave indicated
that Licensee has an amusement permit allowing it to provide live entertainment
until 2:00 a.m. Id.

             Essentially, Musgrave feared his tenants would move out and he would
be unable to rent those units because of the noise coming from the rooftop deck. Id.
To that end, Musgrave expressed concern that noise from the rooftop deck would

                                          5
rebound off the wall of the building adjacent to Licensee’s building and bounce back
toward 224 South Highland. F.F. No. 30. In particular, Musgrave testified that the
bedroom window for Apartment No. 3 is only 67 feet from the edge of Licensee’s
proposed rooftop deck. F.F. No. 31. Apartment No. 3’s kitchen window is only 64
feet from the edge of the proposed rooftop deck. Id.

             The Board first addressed the Licensing Bureau’s objection concerning
the location of the proposed extended premises being within 200 feet of Mad Mex
and Casbah. Section 404 of the Liquor Code provides the Board with discretion to
refuse a license extension application if the extension is located within 200 feet of
another Board-licensed establishment or within 300 feet of a restrictive institution
such as a church, school, hospital, public playground or charitable institution. 47
P.S. §4-404. However, the Board’s discretion in this area is not dependent upon
whether the other licensed establishments protested the application. Home Aid
Ass’n of John C. Tressler Post 3504 of Veterans of Foreign Wars v. Pa. Liquor
Control Bd., 360 A.2d 834 (Pa. Cmwlth. 1976).

             The Board recognized that Licensee’s proposed extension would be
within 200 feet of Mad Mex and Casbah. Nevertheless, neither Mad Mex nor
Casbah protested Licensee’s extension application. Further, the record contained no
evidence indicating that the proposed extension would adversely affect either of
these establishments in any way. Therefore, the Board found no compelling reason
to deny the extension application based on its proximity to Mad Mex and Casbah.
Bd. Op. at 11-12.

                                         6
             The Licensing Bureau’s second objection concerned whether the
approval of Licensee’s extension application would adversely affect the
neighborhood within a radius of 500 feet of the proposed licensed premises.
Pursuant to Section 404 of the Liquor Code, the Board must deny an application if
it determines the grant of the application would be detrimental to the health, welfare,
peace, and morals of the residents within 500 feet of the licensed premises. 47 P.S.
§4-404. Because an establishment with a liquor license is not presumed to be
detrimental to a community’s welfare, the Board may consider denying an
application only where the nature of the neighborhood and nature of the proposed
licensed premises are such that an approval of the license would be detrimental to
the nearby residents. K & K Enters. Inc. v. Pa. Liquor Control Bd., 602 A.2d 476
(Pa. Cmwlth. 1992). To that end, a perceived threat to an area is not a sufficient
cause to deny the application. Arrington v. Pa. Liquor Control Bd., 667 A.2d 439
(Pa. Cmwlth. 1995); K & K Enters.

             The Board noted that the neighborhood within a 500-foot radius of the
proposed extension is 75% commercial and 25% residential. Manager testified that
Licensee had been in operation for eight months and received no Board citations.
Moreover, Licensee had no negative interactions with the neighborhood or the City.
Consequently, the Board determined that granting Licensee’s extension application
would not harm the nearby neighborhood community. Bd. Op. at 15.

             The Licensing Bureau’s third objection concerned whether Musgrave
would be directly aggrieved by the approval of Licensee’s extension application.
Pursuant to Board regulations, when a licensee files an application for an extension

                                          7
of the licensed premises, a protest may be filed by a resident of the neighborhood
located within a 500-foot radius of the proposed extension.            40 Pa. Code
§17.11(a)(3). However, only valid protests render the protestant a party to the
proceeding. 40 Pa. Code §17.11(e). Otherwise, the party must file a petition to
intervene. Id. Here, Musgrave does not live within a 500-foot radius of Licensee’s
premises. Consequently, he filed a petition to intervene.

             A person who can demonstrate a direct interest in an extension
application, and who can further demonstrate that a Board decision contrary to his
direct interest will cause him to be aggrieved, may file a petition to intervene. 40
Pa. Code §17.12(a). The Board has the discretion to grant or deny the petition, in
whole or in part. 40 Pa. Code §17.12(b). In rendering its decision the Board will
consider whether the person has a direct interest in the proceeding and will be
aggrieved by a decision contrary to that interest. Id.

             In short, in order to be aggrieved, a person must have a direct and
substantial interest in the adjudication. Burns v. Rebels, Inc., 779 A.2d 1245 (Pa.
Cmwlth. 2001). Further, the person must establish a sufficiently close causal
relationship between the decision and his asserted injury to qualify his interest as
immediate rather than a remote consequence. Id. A person who is not adversely
affected in any manner by the application he seeks to challenge is not “aggrieved”
thereby and thus has no standing to obtain a judicial resolution of his challenge.
Tacony Civic Ass’n v. Pa. Liquor Control Bd., 668 A.2d 584, 589 (Pa. Cmwlth.
1995) (citing Wm. Penn Parking Garage, Inc. v. City of Pittsburgh, 346 A.2d 269
(Pa. 1975)). In particular, it is not sufficient for a person claiming to be aggrieved

                                          8
to assert the common interest of all citizens in procuring obedience to the law. Wm.
Penn Parking Garage; Tacony Civic Ass’n.

              Here, the Board observed that Musgrave owns a building at 224 South
Highland which has seven residential and three commercial units. Bd. Op. at 14.
However, Musgrave does not live in the building. Id. Nonetheless, Musgrave
believes that noise from Licensee’s rooftop deck would enter the windows of his
residential tenants and make it difficult for those tenants to sleep or study. Id.
Musgrave fears that this would result in his residential tenants moving out. Id.
Further, Musgrave believes that if Licensee has entertainment on the rooftop deck
that he will not be able to rent his residential units. Id. Musgrave also expressed
concern that objects may be dropped from the rooftop deck and cause injury to the
people below. Id.

              However, the Board found that Musgrave failed to present sufficient
non-speculative evidence in support of his assertions that he would be directly
aggrieved by the approval of Licensee’s extension application. Id. A speculative or
perceived threat to a nearby area, unsupported by actual evidence, is not sufficient
to deny a license application. K & K Enters. Therefore, the Board determined
Musgrave failed to establish he would be directly aggrieved by Licensee’s extension
application. Bd. Op. at 14. Musgrave petitions for review.2

       2
         Our review of a decision of the Board is limited to determining whether the Board’s
findings were supported by substantial evidence, whether there was a constitutional violation or
an error of law, and whether the practices and procedures of the Board were followed. Malt
Beverage Distribs. Ass’n v. Pa. Liquor Control Bd., 918 A.2d 171 (Pa. Cmwlth. 2007), aff’d, 974
A.2d 1144 (Pa. 2009).

                                               9
                                    II. Discussion
                              A. Petition to Intervene
                                    1. Argument
             Musgrave contends the Board erred in denying him standing in
Licensee’s extension application because he will be directly aggrieved by the grant
of a permit for a rooftop deck for Licensee’s premises at 216 South Highland
Avenue. Licensee plans to have a 35-foot by 75-foot open-air rooftop deck. In
addition, Licensee has an amusement permit that will allow it to play live music until
2:00 a.m., and Manager indicated that providing live entertainment is a possibility.
Manager foresees Licensee’s hours of operation as 10:00 a.m. to 11:00 p.m. on
Sunday, 11:00 a.m. to 12:00 a.m. on Monday through Thursday, and 11:00 a.m. to
2:00 a.m. on Friday and Saturday.

             Apartment No. 3 in Musgrave’s building at 224 South Highland is
approximately 67 feet from Licensee’s proposed rooftop deck. The apartment’s
bedroom window faces the proposed deck. In addition, many other windows of
various apartment units at 224 South Highland are a similar distance away from the
proposed rooftop deck. Moreover, there is a wall to the side of the proposed deck
that would deflect the rooftop noise toward 224 South Highland.            Musgrave
maintains Licensee presented no specific plans in terms of height or material for a
wall to run between its rooftop premises and that of Mad Mex, a neighboring
establishment. Musgrave believes such a wall could deflect noise away from 224
South Highland.

                                         10
             Musgrave further argues that Licensee performed no studies or tests
regarding ways to prevent or decrease noise emanating from its proposed rooftop
deck from reaching the windows of the rental units at 224 South Highland.
Musgrave is concerned that noise from the rooftop deck will enter the windows of
his residential tenants and make it difficult for them to sleep or study. Therefore,
Musgrave is afraid his current tenants will move out and he will be unable to re-rent
his residential units at a price that will allow his building to survive financially.

                                      2. Analysis
             In Tacony Civic Association, we reasoned that protestants who failed
to present any evidence at the Board hearing that the grant of a license to the
applicant would directly affect their substantial interests failed to demonstrate the
likelihood of immediate harm as required by William Penn Parking Garage. Absent
evidence of specific harmful consequences that would immediately affect them, the
protestants asserted only the potentiality of harm. As such, they could not be
considered aggrieved under either Section 702 of the Administrative Agency Law,
2 Pa. C.S. §702, or Section 404 of the Liquor Code. Therefore, we held the
protestants did not have standing to challenge the Board’s order granting the
applicant’s petition for a license transfer.

             We have some question as to the manner in which the Board explained
its rationale. In particular, we question the Board’s determination that Musgrave
lacked standing to intervene as a party. Although Musgrave does not reside in the
building, he has an immediate possessory interest in the unoccupied residential units,

                                           11
even if he does not sleep in any of them. Accordingly, there is some basis for
Musgrave to have standing to object to the extension application.

             This quirk in rationale, however, is not a reason to disturb the ultimate
result reached by the Board. This is because Musgrave already received all the
procedural benefits of being a party, by reason of his full participation at the hearing
before the Board. However, after an unhindered opportunity to do so, he failed to
produce non-speculative evidence of an immediate injury to his interests.

             More particularly, although Musgrave is worried that noise from
Licensee’s rooftop deck could disturb his residential tenants causing them to move
out, he failed to present any evidence from any of his tenants in support of his
concerns. None of Musgrave’s tenants filed a protest or petitioned to intervene in
Licensee’s extension application. None of Musgrave’s tenants testified they would
move out of 224 South Highland if Licensee opened a rooftop deck. In fact,
Musgrave did not even speak with any of his tenants about the proposed rooftop
deck. Therefore, the record contains no evidence that activities on Licensee’s
rooftop deck would disturb Musgrave’s tenants. Consequently, Musgrave’s fears
that his tenants will be so disturbed that they will move out and that he will be unable
to rent the vacated units to new tenants is speculative.

             Further, Musgrave did not present testimony from any professional
realtor or prospective tenant in support of his concerns. Musgrave also failed to
present any data, report or other documents supporting his subjective and speculative
beliefs. Cf. Manyunk Dev. Corp. v. Pa. Liquor Control Bd., 715 A.2d 518 (Pa.

                                          12
Cmwlth. 1998) (lower court’s finding that expansion of premises would be
detrimental to community was supported by expert engineering testimony and traffic
and parking studies presented by protestants).

            Also, as to a potential music/noise injury, Licensee holds an amusement
permit. F.F. No. 16. However, in the eight months prior to the Board hearing that
it had been in business, Licensee did not provide entertainment. Id. Further,
Licensee’s Manager did not know whether Licensee would provide entertainment in
the future. Id. In any event, the Manager testified that Licensee would comply with
the Board’s amplified music regulations. Id. Pursuant to Section 493(34) of the
Liquor Code, 47 P.S. §4-493(34), a licensee may not use a loudspeaker or similar
device whereby the sound of music or other entertainment can be heard beyond the
licensee’s property line. See Haugh v. Pennsylvania Liquor Control Bd., 185 A.3d
469 (Pa. Cmwlth. 2018). Under these circumstances, a potential music/noise injury
is speculative and remote.

            Similarly, Musgrave’s concerns that Licensee’s patrons may drop or
throw objects from the rooftop deck and injure people on the sidewalk below is also
unsupported by any testimonial or documentary evidence. Licensee’s rooftop deck
will be set back approximately 20 feet from the front of the building. Further,
Musgrave may not rely on speculative harm to the public in general to establish
standing. Wm. Penn Parking Garage; Tacony Civic Ass’n.

            For these reasons, we discern no error or abuse of discretion in the
Board’s ultimate determination that Musgrave failed to present sufficient, non-

                                        13
speculative evidence to show he would be harmed by Licensee’s extension
application. Tacony Civic Ass’n.

                                    B. Zoning Code
                                      1. Argument
              Musgrave also points out that Licensee’s establishment (Urban Tap)
and the apartment building at 224 South Highland are in an LNC Zoning District.
Pursuant to Section 904.02A of the City’s Zoning Code, entitled “Purpose,” an LNC
district is intended to:

              1. Maintain the small scale and rich diversity of
              neighborhood-serving commercial districts;

              2. Promote and enhance the quality of life in adjacent
              residential areas; and

              3. Reduce the adverse impacts that are sometimes
              associated with commercial uses in order to promote
              compatibility with residential development.

Pgh. Zoning Code §904.02A.

              In the present case, Musgrave argues, noise from Licensee’s rooftop
deck would not enhance the quality of life for the residents of 224 South Highland.
To the contrary, it would interfere with their ability to sleep or their ability as college
students to study. Therefore, Musgrave essentially asserts the Board’s grant of
Licensee’s extension application is inconsistent with Section 904.02A of the Zoning
Code.

                                            14
                                     2. Analysis
             Having determined the Board did not err in concluding that Musgrave
failed to present sufficient non-speculative evidence that he would be harmed by
Licensee’s extension application, we need not address Musgrave’s specious
argument that the Board erred in determining that the grant of the extension
application would not violate Section 904.02A of the City’s Zoning Code. In
addition, we note that the application of the City’s Zoning Code was never at issue
in the Board proceeding or in this appeal. As the Board acknowledges in its brief, it
has no authority to enforce the City’s Zoning Code. See Board’s Br. at 13 n.5.

             Therefore, we affirm the Board’s order approving Licensee’s
application for an extension of its premises.

                                       ROBERT SIMPSON, Judge

                                         15
       IN THE COMMONWEALTH COURT OF PENNSYLVANIA

John Kerr Musgrave, IV,                  :
                          Petitioner     :
                                         :
           v.                            :   No. 1679 C.D. 2017
                                         :
Pennsylvania Liquor Control Board,       :
                       Respondent        :

                                       ORDER

           AND NOW, this 11th day of October, 2018, for the reasons stated in
the foregoing opinion, the order of the Pennsylvania Liquor Control Board is
AFFIRMED.

                                        ROBERT SIMPSON, Judge