Tally v. City of Detroit , 58 Mich. App. 261 ( 1975 )

58 Mich. App. 261 (1975) 227 N.W.2d 214

TALLY
v.
CITY OF DETROIT.

Docket No. 16490.

Michigan Court of Appeals.

Decided February 10, 1975.

Hampton, Snavely, Ranno, Lightbody & Girard, for plaintiffs.

Elliott S. Hall, Corporation Counsel, and Maureen P. Reilly and John E. Cross, Assistants Corporation Counsel, for defendants.

Before: BASHARA, P.J., McGREGOR and VAN VALKENBURG,^[*] JJ.

ON REHEARING

McGREGOR, J.

On October 7, 1974, this Court granted a petition for rehearing of this case pursuant to petitions for rehearing filed by all parties in this controversy. On its own motion, this Court requested that the parties file supplemental briefs on the following two issues only:

1. Whether § 5-4-5 of the Detroit City Code provides sufficient standards to uphold the revocation of a license; and

2. Whether § 5-4-7.4 of the Detroit City Code bears a reasonable relationship to the police power granted to municipalities?

This Court, after an extensive review of our prior decision, deems it necessary to address only the first issue. We reaffirm our original opinion cited in 54 Mich. App. 328; 220 NW2d 778 (1974), with the following modifications.

I. Does § 5-4-5 of the Detroit City Code provide sufficient standards to uphold the revocation of a license?

Section 5-4-5 of the Code of the City of Detroit, as amended November 2, 1972, provides:

"The mayor may refuse to issue a license for the operation of any business regulated by this article and may revoke any license already issued upon proof submitted to him of the violation by any applicant, or a licensee, his agent or employee within the preceding two years of any criminal statute of the state or of any ordinance of this city regulating, controlling or in any way relating to the construction, use or operation of any of the establishments included in this article, which evidences a flagrant disregard for the safety or welfare of either the employees, patrons or persons residing or doing business nearby."

In our original opinion, we affirmed the trial court's conclusion that this ordinance, as written, which refers merely to a "violation", was not a reasonable exercise of the police power. We held that the trial court properly ruled that a more definite standard was required in order to uphold the ordinance and affirmed his modification of the ordinance to require a showing of an arrest and conviction before a license could be revoked. Subsequent reflection convinces us that the ordinance, as written, is a reasonable exercise of the police power, and the standards provided for determining whether or not a license should be issued or revoked do not violate the constitutional requirements of due process contained in either the United States or Michigan Constitutions.

There is no dispute that the revocation of the license must comply with procedural due process. Unless the right is waived, the licensee is at least entitled to:

"(1) Notice of a time and place of hearing.

"(2) A hearing before a properly authorized body.

"(3) A reasonably definite statement of the charge or charges preferred against the accused.

"(4) The right to cross-examine the witnesses who testify against him.

"(5) The right to produce witnesses in his own behalf.

"(6) A full consideration and a fair determination according to the evidence of the controversy by the body before whom the hearing is had. Hanson v State Board of Registration in Medicine, 253 Mich. 601, 607; 236 N.W. 225 (1931)." Napuche v Liquor Control Commission, 336 Mich. 398, 403-404; 58 NW2d 118 (1953).

The appellees candidly admit that, even though there is no express provision for procedural due process in the ordinance, the requirements of reasonable notice and opportunity to be heard must be implied. Rydd v State Board of Health, 202 Kan 721; 451 P2d 239 (1969). However, appellees dispute the Court's interpretation that due process requires that the term "violation" as used in the ordinance be interpreted to mean "conviction" of the charged offense.

The trial court erred in failing to recognize the distinction between the requirement of showing a "conviction" and showing a "violation" as a cause for revoking a license. This distinction is discussed in 48 CJS, Intoxicating Liquors, § 175, pp 285-286, as follows:

"If the statute directs the revocation of the license on ``conviction' of such an offense, there must first have been a final judgment, conclusively establishing guilt, rendered by a court of competent jurisdiction; but, when the cause of revocation is specified as a ``violation' of the laws, the licensing authorities may act on other evidence than a judgment of conviction, and the license may be revoked, even though the licensee has been acquitted of a criminal charge for the same violation as is made the basis of the revocation."

The distinction between proof of a violation of an ordinance as a basis for the revocation of a license, as opposed to proof of a conviction for violation of an ordinance, has long been recognized in Michigan. People v Riksen, 284 Mich. 284; 279 N.W. 513 (1938); Prawdzik v Grand Rapids, 313 Mich. 376; 21 NW2d 168 (1946); Johnson v Commissioner of Agriculture, 314 Mich. 548; 22 NW2d 893 (1946).^[1]

In Riksen, supra, the Court upheld an ordinance which required hawkers and peddlers to be licensed; the ordinance provided that the mayor may suspend a license for violation of a city ordinance, violation of the terms of the license, or for undesirable business practices. The Court held that the ordinance did not give the mayor an arbitrary power to suspend a license, since the ordinance provided a standard for his guidance and bounds within which his discretion may be exercised.

In Eastwood Park Amusement Co v Mayor of East Detroit, 325 Mich. 60; 38 NW2d 77 (1949), the Court held that the part of an ordinance which allowed the mayor to revoke an amusement park license "for good satisfactory reasons", was unconstitutional. The Court stated that the ordinance vested the mayor with arbitrary power to revoke licenses. Revocation of a license "for good and satisfactory reasons" is insufficient, in that it deprives the licensee of the legal safeguards to which he is entitled before a license can be revoked. A notice which states that a license is being revoked for "good and satisfactory reasons" does not comply with the due process requirement that a licensee is entitled to be served with a concise and definite statement of the charge prior to the revocation hearing. A revocation based on such grounds deprives a licensee of his right to cross-examine the witnesses who testify against him and of his right to produce witnesses in his own behalf. Further, such a standard nullifies the requirement that the final decision be based on a fair determination according to the evidence presented at the hearing.

Contrary to the standard of "good and satisfactory reasons" in the Eastwood case, the standard of "proof of violation" of an ordinance does not vest the mayor, acting on a petition for revocation, with arbitrary power. "Proof of violation" provides a definite standard and adequately protects the rights of the licensee. Under this standard, a licensee can be given a definite statement of the charge or charges preferred against him. Since the licensee knows that he is charged with a violation of a particular ordinance, he can intelligently exercise his right to cross-examine the witnesses who testify against him and can produce witnesses in his own behalf. As stated in Riksen, supra, p 290:

"Under this ordinance the mayor may suspend a license for violation of a city ordinance, * * *. A fair construction of this section of the ordinance indicates that the mayor may not arbitrarily suspend a license. The ordinance directs a standard for his guidance and conditions under which suspension may be accomplished. The only discretion the mayor has under the terms of this ordinance is to determine whether there has been a violation of the ordinance for any of the reasons mentioned. In Hughes v City of Detroit, 217 Mich. 567; 187 N.W. 530 (1922), we said:

"``A capricious abuse of that discretion, as tested by the standards so set, would be subject to review.'"

Section 5-4-5 of the Detroit City Code provides sufficient standards to uphold the revocation of a license; therefore, the trial court erred by ruling that a more definite standard was required in order to uphold the ordinance.

Affirmed in part, reversed in part. No costs, a public question being involved.

NOTES

[*] Former circuit judge, sitting on the Court of Appeals by assignment pursuant to Const 1963, art 6, § 23 as amended in 1968.

[1] Such a distinction has been made in the Liquor Control Act (MCLA 436.20; MSA 18.991), wherein the Liquor Control Commission has the power to suspend or revoke any license upon a showing of a violation of any of the provisions of the Liquor Control Act or any of the rules and regulations adopted by the commission under the act. The statute authorizes civil or criminal action, and clearly provides that an acquittal or conviction shall not prevent the suspension or revocation of licenses. Shinavier v Liquor Control Commission, 315 Mich. 188; 23 NW2d 634 (1946); Tift v Liquor Control Commission, 315 Mich. 198; 23 NW2d 696 (1946). Courts in other jurisdictions have likewise recognized the distinction. Jow Sin Quan v Washington State Liquor Control Board, 69 Wash 2d 373; 418 P2d 424 (1966); Legones v License Appeal Commission of the City of Chicago, 100 Ill App 2d 394; 241 NE2d 499 (1968).