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HomeMy WebLinkAbout93-0358 Civil (2)PENNSYLVANIA STATE IN THE COURT OF COMMON PLEAS OF POLICE, BUREAU OF CUMBERLAND COUNTY, PENNSYLVANIA LIQUOR CONTROL ENFORCEMENT, Appellee V. CIVIL ACTION - LAW CAN, INC., Appellant 358 CIVIL 1993 IN RE: APPEAL FROM LIQUOR LICENSE SUSPENSION BEFORE OLER, J. ORDER OF COURT AND NOW, this 714 day of July, 1993, upon careful consideration of Appellant's Appeal from a liquor license suspension and fine imposed by the Pennsylvania Liquor Control Board, as well as the briefs submitted upon the matter, and after review of the record from the proceedings below, Appellant's Appeal is DISMISSED and the decision of the Board is AFFIRMED. BY THE COURT, Wesley Oler, Jr. J. Thomas M. Ballaron, Esq. Attorney for Appellee Stephen J. Dzuranin, Esq. Attorney for Appellant :rc PENNSYLVANIA STATE IN THE COURT OF COMMON PLEAS OF POLICE, BUREAU OF CUMBERLAND COUNTY, PENNSYLVANIA LIQUOR CONTROL ENFORCEMENT, Appellee V. CIVIL ACTION - LAW CAN, INC., Appellant 358 CIVIL 1993 IN RE APPEAL FROM LIQUOR LICENSE SUSPENSION BEFORE OLER. J. OPINION AND ORDER OF COURT Oler, J. This case is presently before the Court on an appeal from a Pennsylvania Liquor Control Board (PLCB) decision imposing a $1000 fine upon Can, Inc. (Appellant) and a suspension of Appellant's liquor license for a period of 120 days.' For the reasons set forth in the following Opinion, the decision of the PLCB will be affirmed. As previously determined by this Court, "our scope of review will be limited to an examination of the existing record to determine whether the findings below are supported by substantial evidence, whether there was an error of law committed, and whether there was an abuse of discretion."' Based upon this standard, the facts contained in the record certified by the PLCB may be summarized as follows: 1 See Pennsylvania State Police, Bureau of Liquor Control Enforcement v. Can, Inc., Case No. 92-0295, Opinion of Pennsylvania Liquor Control Board. 2 Opinion of Court, March 2, 1993, at 3-4. 358 CIVIL 1993 In October, 1990, Pennsylvania State Trooper Diane Stackhouse initiated an investigation of Can, Inc., trading as Johnnie's Cafe at 201 Enola Road, East Pennsboro Township, Cumberland County, Pennsylvania.' At this time, Trooper Stackhouse "frequented Johnnie's Cafe several times a week, ... just ... to get a feel for the place [and to be] seen as a regular patron.t4 Subsequently, beginning on November 8, 1990,$ and continuing until August 27, 1991,8 Trooper Stackhouse was involved in approximately thirty drug transactions either in or on the licensed premises.' At least seven of these transactions involved employees of Appellant while they were either working or off duty.' In addition to being involved in drug transactions with the patrons and employees of Johnnie's Cafe, Trooper Stackhouse also observed several instances of unusual behavior which led her to believe that drug activity was occurring on the premises. This behavior included frequent entering and leaving of the bathrooms by 3 Hearing Before Administrative Law Judges of the Pennsylvania Liquor Control Board, May 20, 1992, at 85 (hereinafter N.T. _). 4 N.T. 86. 6 N.T. 86. 6 N.T. 151. ' N.T. 86-151. The Opinion of the Administrative Law Judges makes specific findings as to when the transactions occurred on the licensed premises and the parties involved in these transactions. 8 See Opinion of Administrative Law Judges, Findings of Fact 13, 33-35, 37, 42-43. old 358 CIVIL 1993 the patrons and employees,9 an "unusual amount of phone calls both with the pay phone and the phone underneath the bar,"10 frequent entering and exiting of the bar by certain individuals,11 and smoking of marijuana cigarettes or bowls along the side of or in the parking lot of the building. 12 Furthermore, Trooper Stackhouse overheard conversations regarding drug activity "typically every time on every date that [she] went" into the licensed premises." Trooper Stackhouse also testified as to the extensive involvement in drug activities of several employees of Appellant. Such testimony included Trooper Stackhouse's observations that a certain employee of Appellant,14 "would give [her] information concerning who was dealing inside the bar,i15 and that she would give Trooper Stackhouse information regarding drug activity in and around the premises.18 Additionally, Trooper Stackhouse testified as to the reputation of a cook 9 N.T. 117. 10 N.T. 118. 11 N.T. 118. 12 N.T. 118. 13 N.T. 119. 14 N.T. 135-43. 15 N.T. 139. 16 N.T. 140. 3 358 CIVIL 1993 at the licensed premises, 17 stating that his "main purpose other than a cook was the runner to get drugs.i18 In this regard, she explained that "[y]ou would give him the money, and he would go get [the drugs] and come back in and bring [the drugs] into the bar or make a deal that you could go outside the parking lot and make that deal." 19 Additionally, Trooper Stackhouse gave testimony as to the presence on the premises of Ronald P. Nott, the owner and president of Can, Inc., 20 on a frequent basis. Trooper Stackhouse stated that during the course of her one-year investigation of the licensed premises, she observed Ronald P. Nott "[alt least 50 or more times" in the licensed premises.21 During this time, Ronald P. Nott "was around the bar, in the dining room, [and] in the kitchen,"22 and "[h]e was there when [Trooper Stackhouse] was there."23 In addition to the testimony presented by Trooper Stackhouse, Ronald P. Nott also testified before the Administrative Law Judges. Mr. Nott stated that the first 17 N.T. 159-60. is N.T. 160. is N.T. 160. 20 N.T. 61. 21 N.T. 161. 22 N.T. 162. 23 N.T. 161. 4 358 CIVIL 1993 time he became aware of the trafficking and use of drugs on the licensed premises was when the arrests were made on November 7, 199124 Moreover, Mr. Nott testified that the employees who were arrested for drug activities were no longer employed by Appellant." Furthermore, Mr. Nott also indicated that if he perceives any drug activity occurring on the licensed premises, he requests the individuals involved in such activity to leave the premises immediately.e There was also testimony presented before the Administrative Law Judges that, on January 22, 1992, David Khali, a liquor control enforcement officer for the Pennsylvania State Police, Bureau of Liquor Control Enforcement '21 mailed two Notice of Violation letters to Appellant, one by first class mail and the other by certified mail.28 The letter sent by certified mail was erroneously received by Christine Zimmerman, 29 the president, secretary and treasurer of the Playground 24 N.T. 243. 25 N.T. 243. ' N.T. 244. Additional testimony was also presented by employees and patrons of Johnnie's Cafe indicating that, subsequent to the arrests of November 7, 1991, Appellant has had a drug-free policy and has instituted patrols of the restrooms in the bar. See N.T. 206-40. 27 N.T. 32. ' N.T. 34. Although Appellant never received either of the two letters, counsel agrees that the address on the letters was correct. N.T. 31. 29 N.T. 43-44. 5 358 CIVIL 1993 Lounge." The letter sent by regular first class mail, although correctly addressed to Appellant, was never received by Mr. Nott.31 Rather, this letter was also received by Christine Zimmerman. However, However, Appellant did receive the citation from the Bureau of Liquor Control Enforcement on February 15, 1992.33 Following the hearing, the Administrative Law Judges ordered Appellant to pay a fine of $1000 and suspended Appellant's Restaurant liquor license for a period of 120 days.34 Appellant appealed this order to the PLCB, which dismissed the appeal and affirmed the decision of the Administrative Law Judges.35 Appellant has presently filed an appeal to this Court, contending that it was first notified of the violations when it received the citation on February 15, 1992, and since this was more than thirty days after the completion of the Bureau of Liquor Control Enforcement's investigation, Section 4-471 of the Liquor Code" prevents the 30 N.T. 43. 3' N.T. 62-63. 32 N.T. 44-46. 33 N.T. 66. 34 Opinion of Administrative Law Judges, at 14. ' Opinion of the PLCB, at 7. ' Act of June 3, 1971, P.L. 143, §1, as reenacted and amended, 47 P.S. 4-471 (1993 Supp.). N 358 CIVIL 1993 imposition of a penalty for the violations.s' Furthermore, Appellant contends that thore "[n]o facts were presented to sustain the finding that Appellant should have known of such activity on the licensed premises until receipt of the citation,"saand, therefore, "[t]he effect of the findings below is to [impermissibly] hold [Appellant] strictly liable for non -liquor code violations .1131 Finally, Appellant contends that "[t]he decisions below failed to afford proper weight to evidence presented that [Appellant] took substantial affirmative action to try to prevent illegal drug activity on the licensed u41 premises,i40 and, as such, those decisions were "arbitrary and capricious. Section 4-471 of the Liquor Code states that "[n]o penalty provided by this section shall be imposed for any violations provided for in this act unless the bureau notifies the licensee of its nature within thirty days of the completion of the investigation. 1141 "The purpose of this provision is to give warning to the licensee that his activities have been under investigation and that his license is about to be endangered." Commonwealth of Pennsylvania, Liquor Control Board v. Greenspan, 438 " Appellant's Appeal, paragraphs 20-21. ' Appellant's Appeal, paragraph 23. ' Appellant's Appeal, paragraph 24. 4' Appellant's Appeal, paragraph 25. 41 Appellant's Appeal, paragraph 26. ' Act of June 3, 1971, P.L. 143, §1, as reenacted and amended, 47 P.S. 4-471(b) (1993 Supp.). 7 358 CIVIL 1993 Pa. 129, 132, 264 A.2d 690, 691 (1970). In reference to the fulfillment of this notice requirement, the courts of Pennsylvania have held that "Section 4-471(b) does not require actual notice" to be sent to the licensee. Locy v. Commonwealth of Pennsylvania, Liquor Control Board, 125 Pa. Commw. 481, 484, 557 A.2d 1164, 1165, allocatur denied, 522 Pa. 621, 563 A.2d 889 (1989). Rather, "[s]ending the notice by certified mail constitutes sufficient compliance with the statute." Id. In this regard, the Commonwealth Court of Pennsylvania has held that when notice is sent by certified mail and is returned unclaimed, and a second notice is never receivedby the licensee, the "[r]emission of the [original] notice by certified mail [was] sufficient compliance" with the provisions of Section 4-471. Slovak American Citizens Club of Oakview v. Commonwealth of Pennsylvania, Liquor Control Board, 120 Pa. Commw. 528, 536, 549 A.2d 251, 255 (1988). Furthermore, the Commonwealth Court has also held that, when a statute requires mailing of notice by registered mail, "[n]otice of administrative action which is mailed to the interested party's last known address has been found to be reasonable notice." Kobylski v. Milk Marketing Board, 101 Pa. Commw. 155, 159, 516 A.2d 75, 77 (1986) (emphasis added). In its brief, Appellant contends that "[d]elivery of the [notice letter] was not made on the Licensee through no fault of the Licensee.... As between the LCE and the Licensee, the Licensee is the innocent party and should not be made to bear the 12 358 CIVIL 1993 burden for the LCE's actions, oversights and choice of delivery service."' In so contending, Appellant relies on the holding of the Commonwealth Court in Locy v. Commonwealth o f Pennsylvania, Liquor Control Board, 116 Pa. Commw. 473, 542 A.2d 206 (1988). There, the Court held that notice sent via certified mail, which was returned to the Board because of an incorrect zip code, was not sufficient to satisfy the requirements of Section 4-471. The court noted that "[t]he intent of the legislature, obviously, was that Licensee receive timely notice. The language used is unambiguous." Id. at 475, 542 A.2d at 206. Therefore, since the Court could not"find that the Board ha[d] complied with the notice requirement," it vacated the license suspension. Id. at 475, 542 A.2d at 206-07. In the present case, there was evidence adduced at the hearing to support the finding that the Bureau of Liquor Control Enforcement complied with the notice requirements of Section 4-471(b). As stipulated by counsel, the address on the letter was the correct address for Appellant. Therefore, under the holdings of Slovak - American Citizens Club and Kobylski, this constituted reasonable and sufficient notice. Furthermore, unlike the situation of Locy, the failure of Appellant to receive the notice sent via certified mail was not due to any error on the part of the Bureau of Liquor Control Enforcement. Consequently, this Court is of the opinion that the actions of the Bureau of Liquor Control Enforcement in sending the notice to Appellant were in " Appellant's Brief at 13-14. 41 358 CIVIL 1993 sufficient compliance with Section 4-471(b).44 With respect to Appellant's contention that its license was impermissibly revokedbecause "[n]o facts were presentedto sustain the finding that Appellant should have known of such activity on the licensed premises,..41 it has been stated by the Pennsylvania Supreme Court that "violations of criminal laws other than the Liquor Code may constitute sufficient cause for revocation or suspension of a liquor license." Commonwealth of Pennsylvania, Liquor Control Board v. TLK, Inc., 518 Pa. 500, 504, 544 A.2d 931, 933 (1988). However, if the misconduct relied upon to provide sufficient cause is "by an employee or patron [and] is outside the liquor laws, a license is revocable only if the licensee knew or should have known of the misconduct and if he fails to prove that he took substantial affirmative measures to prevent the misconduct." Id. at 505-06, 544 A.2d at 934. In applying this standard to the case before it, the Court in TLK found that the licensee was "deemed to have permitted or acquiesced in the misconduct," and, therefore, affirmed the license revocation. Id. at 506, 544 A.2d at 934. In so holding, the Court relied upon the testimony of an undercover narcotics agent indicating that "he was able to purchase drugs from a patron of the establishment, and that he 44 This holding is further supported by the fact that Appellant should have become aware of the violations and, thus, should have anticipated the Bureau's investigation of these violations when the arrests occurred on the licensed premises on November 7, 1991. 45 Appellant's Appeal, paragraph 23. 10 358 CIVIL 1993 observed drug sales between patrons, sales of stolen goods, the use of drugs in the bathroom, and a drug sale take place in the presence of the bartender." Id. Consequently, the Court held, "[djue to the pervasive nature of this illicit activity, it may be said that the licensee should have known of the misconduct of his employee." Id. In light of the holding of TLK, as well as the testimony given by Trooper Stackhouse, this Court is of the opinion that there is substantial evidence in the record to support the finding that Appellant should have known of the drug activities occurring on the licensed premises. In addition to testifying as to her involvement in at least thirty drug transactions, Trooper Stackhouse also testified as to her observations of numerous instances of behavior leading one to believe that drug activity was occurring on the premises. Such activities included frequent entering and exiting of the restrooms,46 an unusual amount of phone calls made by the individuals in Johnnie's Cafe 41 and the smoking of marijuana along the side of the building or in the parking lot of the licensed premises.48 Furthermore, Trooper Stackhouse testified that she observed Ronald P. Nott, the owner and president of Appellant, in 46 N.T. 117. 47 N.T. 118. 48 N.T. 118. 11 358 CIVIL 1993 the premises on a frequent baSis.49 Finery, Appellant contends that "[t]he decisions below failed to afford proper weight to evidence presented that the Licensee took substantial affirmative action to prevent illegal drug activity on the licensed premises after Licensee became aware of the potential for such activity upon receiving the citation on February 15, 1992.i50 As such, Appellant contends, the "findings and conclusions of the PLCB [were] arbitrary and capricious. 1151 As previously indicated, if it is determined that the licensee should have known of the misconduct on the licensed premises, the burden then shifts to the licensee to "prove the he took substantial affirmative measures to prevent the misconduct." Commonwealth of Pennsylvania, Liquor Control Board u. TLK, Inc., 518 Pa. 500, 506, 544 A.2d 931, 933 (1988). In this regard, Appellant presented evidence before the Administrative Law Judges that it had instituted preventative measures, including the following: regular patrols of the bathrooms, 52 removal of individuals engaged in illegal drug activity from the premises, 53 an anti-drug policy on the licensed 49 N.T. 161. 50 Appellant's Appeal, paragraph 25. 51 Appellant's Appeal, paragraph 26. 52 N.T. 207. 53 N.T. 244. 12 358 CIVIL 1993 premises, 54 an announcement of zero tolerance of drug activity on the licensed premises, 55 and the termination of employees who are caught using or dealing drugs." In considering these measures, the PLCB found that the "steps [taken by Appellant] were not substantial affirmative measures inasmuch as they were limited in their effect since the Licensee instituted these measures almost a year after the investigation into the licensed premises began.i87 Our research has discovered no case law discussing those actions of a licensee which would constitute affirmative measures to prevent misconduct occurring on his or her premises.58 However, based upon the evidence presented at the hearing before the Administrative Law Judges, and in light of the finding that Appellant should have known that illegal drug activity was occurring on the licensed premises while no remedial steps were taken, it cannot be said that the holding of the PLCB was unsupported by substantial evidence. Nor can it be said that the PLCB committed an error of law or abused its discretion in determining that Appellant failed, in a timely u N.T. 247. 55 N.T. 210. 56 N.T. 211. 57 Opinion of the PLCB, at 6-7. 58 Appellant refers the court to a recent Commonwealth Court case which discusses the innocent owner defense under the Controlled Substance Forfeiture Act. Commonwealth V. 502-504 Gordon Street, _ Pa. Commw. _, 607 A.2d 839 (1992). However, the holding of that case was premised upon the specific language of the Act and, therefore, is not applicable to this case. 13 358 CIVIL 1993 sense, to undertake affirmative measures to prevent the illegal drug activity from occurring on the premises. For these reasons, the following order will be entered: ORDER OF COURT AND NOW, thiEV9(day of July, 1993, upon careful consideration of Appellant's Appeal from a liquor license suspension and fine imposed by the Pennsylvania Liquor Control Board, as well as the briefs submitted upon the matter, and after review of the record from the proceedings below, Appellant's Appeal is DISMISSED and the decision of the Board is AFFIRMED. Thomas M. Ballaron, Esq. Attorney for Appellee Stephen J. Dzuranin, Esq. Attorney for Appellant :rc BY THE COURT, J. Wesley OXler, 14