Estate of G. Deckard, D.I. Grunfeld, Admin. Ad Litem, t/a Beer Hut v. PLCB ( 2015 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Estate of Gloria Deckard, :
David I. Grunfeld, Administrator :
Ad Litem, t/a Beer Hut, :
Petitioner :
: No. 2091 C.D. 2014
v. :
: Argued: June 15, 2015
Pennsylvania Liquor Control Board, :
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ANNE E. COVEY, Judge
OPINION BY
JUDGE McCULLOUGH FILED: July 31, 2015
The Estate of Gloria Deckard, David I. Grunfeld, administrator ad litem,
t/a Beer Hut (Petitioner) petitions for review of the November 1, 2014 order of the
Pennsylvania Liquor Control Board (Board), which approved Acme Markets, Inc.’s
(Applicant) application for double transfer of Restaurant Liquor License No. R-232
(License).
Facts/Procedural History
On January 24, 2014, Applicant filed an application for prior approval
with the Board to transfer both the location and ownership of the License to
Applicant’s proposed restaurant located at 920 Red Lion Road, Philadelphia,
Pennsylvania under section 404 of the Liquor Code (Code).1 Applicant’s proposed
licensed restaurant would include the following: a 22’x80’ outside serving area,
accommodating 16 patrons; a serving area measuring 50’x73’, accommodating 31
patrons; 2 kitchen areas measuring 24’x12’ and 8’x12’; and a 4’x16’ storage area.
The Board’s Bureau of Licensing scheduled a hearing on the application for
September 4, 2014. (Board’s Findings of Fact Nos. 1-2, 4.)
Michael Michlada (Michlada), a Board licensing analyst, testified that
Applicant will have an interior connection to an unlicensed grocery store, which also
is owned and operated by Applicant. Michlada stated that there will be fuel pumps
located 294 feet from the proposed licensed restaurant on the same property.
Michlada testified that he believed the fuel pumps had the “Acme” label and there
was no indication that the fuel pumps were not part of the overall “Acme business.”
(Reproduced Record (R.R.) at 40a, 46a-47a, 52a, 57a.)
Kathleen Emory (Ms. Emory), owner and operator of Beer Hut, testified
that Beer Hut is a licensed distributor whose property is located adjacent to
Applicant’s premises. (R.R. at 66a, 68a.) Steve Emory (Mr. Emory), Ms. Emory’s
husband and a Beer Hut employee, testified that the fuel pumps are labeled “Acme
Gas” and that there is an attendant situated in a kiosk by the fuel pumps. Mr. Emory
stated that he believes the sale of gasoline and alcohol on the same property is
prohibited. (R.R. at 101a-03a.)
Daniel Croce (Croce), Applicant’s Vice President of Operations,
testified in support of the application. Croce stated that while Applicant’s grocery
store and proposed licensed restaurant will be “under the same roof,” the proposed
licensed restaurant will have a separate entrance with signage denoting Applicant’s
1
Act of April 12, 1951, P.L. 90, as amended, 47 P.S. §4-404.
2
proposed business, “Frosted Mug.” (R.R. at 105a, 110a-11a.) Croce further testified
that customers may pay for prepared food items and non-alcoholic beverages at the
unlicensed grocery stores’ cash registers but may only purchase alcohol at the cash
registers in the proposed licensed restaurant. He said that there will be eleven ten-
foot-wide interior connections between the proposed licensed restaurant and the
unlicensed grocery store with signage indicating when a customer will enter the
proposed licensed restaurant.2 Croce stated that Applicant will not display alcohol in
the grocery store. (R.R. at 119a, 124a-25a, 132a, 136a-37a.)
Croce testified that patrons may take alcohol purchased at the proposed
licensed restaurant to the grocery store but may not consume the alcohol in the
grocery store. Croce said that Applicant’s employees working in the proposed
licensed restaurant will be Responsible Alcohol Management Program (RAMP)
certified. He testified that Applicant will have surveillance cameras at the proposed
licensed restaurant with one camera specifically focused on the cash register area.
Croce stated that the proposed licensed restaurant will have its own manager, and the
manager and employees working at the proposed licensed restaurant will never work
at the fuel pumps or the kiosk located near the fuel pumps. Croce further testified
that Applicant owns and operates eight fuel pumps located on the property and that
fuel may never be purchased at the proposed licensed restaurant or in the grocery
store. (R.R. at 137a, 145a, 153a, 157a-58a, 164a-65a.)
Croce testified that the fuel pumps will be located 300 feet away from
the proposed licensed restaurant. He stated that the following will separate the
proposed licensed restaurant from the fuel pumps: curbing that is part of the proposed
2
Under section 468(e) of the Code, “the board may not approve an interior connection that
is greater than ten feet wide between a licensed business and another business.” 47 P.S. §4-468(e).
3
licensed restaurant, horticultural planters along the curbing, a driveway immediately
in front of the proposed licensed restaurant, a parking lot, six landscaped islands in
between the driveway and the parking lot containing trees and mulch, a separate
parking lot/drive lane designated for fuel station customers, and a landscaped oval
separating the proposed licensed restaurant’s parking lot from the fuel station’s
parking lot/drive lane. Croce said that the employee working at the fuel-pump kiosk
is responsible for supervising, observing, and controlling the fuel pumps. He said
that Applicant’s customers at the proposed licensed restaurant will not obtain fuel
rewards points for alcohol purchases. (R.R. at 154a-56a, 159a-60a.)
The hearing examiner issued a recommended opinion, concluding that
our decision in Water Street Beverage, LTD v. Pennsylvania Liquor Control Board,
84 A.3d 786 (Pa. Cmwlth.), appeal denied, 97 A.3d 746 (Pa. 2014), upholding the
Board’s initial determination interpreting the term “location” as used in section
432(d) of the Code, 47 P.S. §4-432(d), is controlling with respect to interpretations of
section 404 of the Code. The hearing examiner found the facts of Water Street
Beverage to be similar to this case, and, thus, recommended that the grant of
Applicant’s application would not violate section 404. The hearing examiner further
found that this Court’s holding in Water Street Beverage should also control
regarding the interpretation of the terms “place” and “property” as used in section
468(a)(3) of the Code, 47 P.S. §4-468(a)(3), because those terms have a similar
meaning to “location.” The hearing examiner determined that Applicant is selling
liquid fuels separately from the proposed licensed restaurant, and, thus, a grant of
4
Applicant’s application would not be in violation of section 468(a)(3). Accordingly,
the hearing examiner recommended approval of Applicant’s application.3
On November 1, 2014, the Board issued an order granting the
application to transfer the License. In its opinion, the Board noted that, while the
term “location” is found in sections 404, 431(b), 4 and 432(d) of the Code, section
468(a)(3) of the Code uses the terms “place” and “property.” The Board
acknowledged that this Court, in Water Street Beverage, interpreted the term
“location” in section 432(d) to allow “an applicant applying for an eating place malt
beverage license to have gasoline pumps located off its proposed licensed premises,”
because “‘location’ is defined in relation to the particular area of the licensed
premises.” (Board’s op. at 36-37.) Because “place” and “property” are not defined
in section 468(a)(3), the Board applied the rules of statutory construction in defining
the terms. Reading section 468(a)(3) in pari materia with sections 404, 431(b), and
432(d), the Board determined that the terms “place,” “property,” and “location”
should be similarly interpreted. The Board concluded that any other interpretation
would lead to an absurd result.
The Board explained as follows:
The record shows the gasoline pumps will be located
approximately three hundred (300) feet from Applicant’s
proposed licensed premises, and between the proposed
licensed premises and the gas pumps, there will be curbing;
a driveway; six (6) landscaped islands located in front of
the parking lot, which contain trees and mulch; parking
3
The hearing examiner also took evidence regarding issues of standing and violations of the
Code and the Board’s regulations. However, none of these issues are raised on appeal.
4
47 P.S. §4-431(b).
5
spaces and additional landscaped areas; and a drive-lane for
gas station customers to enter and exit.
The record provides that Applicant will have an employee
located at the kiosk, which is located approximately twenty
(20) feet from the gasoline pumps, who will be responsible
for the gas pumps. Also, the record provides that gasoline
may only be purchased at the gas pumps or kiosk and the
employees who are working at Applicant’s proposed
licensed premises will not have any involvement with the
gas pumps.
Therefore, the Board finds that liquid fuels will not be sold
at the same location as the proposed licensed premises, and
as such, there is no violation of sections 404 and 468 of the
[Code].
(Board’s op. at 38.)5
Discussion
On appeal to this Court,6 Petitioner argues that the Board erred in its
interpretation of the terms “place,” “property,” and “location” in sections 404 and
468(a)(3) of the Code when it granted Applicant’s application for License transfer.
We note that “an administrative agency’s interpretation of a statute is
given controlling weight unless it is clearly erroneous.” Pennsylvania Liquor Control
5
The Board also addressed the same issues concerning standing and violations of the Code
and the Board’s regulations discussed in the hearing examiner’s recommended opinion.
6
“An appellate court’s standard of review over an appeal from an agency requires it to
affirm the administrative adjudication unless it finds that an error of law was committed, that
constitutional rights were violated, that a practice or procedure of a Commonwealth Agency was not
followed, or that any necessary finding of fact is not supported by substantial evidence.” Malt
Beverages Distributors Association v. Pennsylvania Liquor Control Board, 8 A.3d 885, 892 (Pa.
2010). “The ‘error of law’ component of the applicable standard of review may include an issue of
statutory construction, over which our review is plenary.” Id.6
Board v. Richard E. Craft American Legion Home Corporation, 718 A.2d 276, 278
(Pa. 1998).
Section 404 of the Code (pertaining to the issuance, transfer, or
extension of hotel, restaurant, and club liquor licenses) provides that: “The board
shall refuse any application for a new license, the transfer of any license to a new
location or the extension of any license to cover an additional area where the sale of
liquid fuels or oil is conducted.” 47 P.S. §4-404.7 Section 431(b) of the Code
7
Section 404 of the Code states in pertinent part as follows:
Upon receipt of the application and the proper fees, and upon being
satisfied . . . that the premises applied for meet all the requirements of
this act and the regulations of the board, that the applicant seeks a
license for a hotel, restaurant or club, as defined in this act, and that
the issuance of such license is not prohibited by any of the provisions
of this act, the board shall, in the case of a hotel or restaurant, grant
and issue to the applicant a liquor license, and in the case of a club
may, in its discretion, issue or refuse a license: Provided, however,
That in the case of any new license or the transfer of any license to a
new location or the extension of an existing license to cover an
additional area the board may, in its discretion, grant or refuse such
new license, transfer or extension if such place proposed to be
licensed is within three hundred feet of any church, hospital,
charitable institution, school, or public playground, or if such new
license, transfer or extension is applied for a place which is within
two hundred feet of any other premises which is licensed by the
board: And provided further, That the board's authority to refuse to
grant a license because of its proximity to a church, hospital,
charitable institution, public playground or other licensed premises
shall not be applicable to license applications submitted for public
venues or performing arts facilities: And provided further, That the
board shall refuse any application for a new license, the transfer of
any license to a new location or the extension of an existing license to
cover an additional area if, in the board's opinion, such new license,
transfer or extension would be detrimental to the welfare, health,
peace and morals of the inhabitants of the neighborhood within a
radius of five hundred feet of the place proposed to be licensed: And
(Footnote continued on next page…)
7
(pertaining to malt and brewed beverages manufacturers’, distributors’, and importing
distributors’, and importing distributors’ licenses) states that: “The board shall refuse
any application for a new license or the transfer of any license to a location where the
sale of liquid fuels or oil is conducted.” 47 P.S. §4-431(b).8 Section 432(d) of the
(continued…)
provided further, That the board shall have the discretion to refuse a
license to any person or to any corporation, partnership or association
if such person, or any officer or director of such corporation, or any
member or partner of such partnership or association shall have been
convicted or found guilty of a felony within a period of five years
immediately preceding the date of application for the said license.
The board shall refuse any application for a new license, the transfer
of any license to a new location or the extension of any license to
cover an additional area where the sale of liquid fuels or oil is
conducted.
47 P.S. §4-404 (emphasis added).
8
Section 431(b) provides in relevant part as follows:
The board shall issue to any reputable person who applies therefor,
and pays the license fee hereinafter prescribed, a distributor's or
importing distributor's license for the place which such person desires
to maintain for the sale of malt or brewed beverages, not for
consumption on the premises where sold, and in quantities of not less
than a case or original containers containing one hundred twenty-
eight ounces or more which may be sold separately as prepared for
the market by the manufacturer at the place of manufacture. The
board shall have the discretion to refuse a license to any person or to
any corporation, partnership or association if such person, or any
officer or director of such corporation, or any member or partner of
such partnership or association shall have been convicted or found
guilty of a felony within a period of five years immediately preceding
the date of application for the said license: And provided further,
That, in the case of any new license or the transfer of any license to a
new location, the board may, in its discretion, grant or refuse such
new license or transfer if such place proposed to be licensed is within
(Footnote continued on next page…)
8
Code states that: “The board shall refuse any application for a new license, the
transfer of any license to a location where the sale of liquid fuels or oil is conducted
or the extension of an existing license to cover additional area[.]” 47 P.S. §4-432(d).9
(continued…)
three hundred feet of any church, hospital, charitable institution,
school or public playground, or if such new license or transfer is
applied for a place which is within two hundred feet of any other
premises which is licensed by the board: And provided further, That
the board shall refuse any application for a new license or the transfer
of any license to a new location if, in the board's opinion, such new
license or transfer would be detrimental to the welfare, health, peace
and morals of the inhabitants of the neighborhood within a radius of
five hundred feet of the place proposed to be licensed. The board
shall refuse any application for a new license or the transfer of any
license to a location where the sale of liquid fuels or oil is conducted.
47 P.S. §4-431(b) (emphasis added).
9
Section 432(d) states in pertinent part:
The board shall, in its discretion, grant or refuse any new license, the
transfer of any license to a new location or the extension of an
existing license to cover an additional area if such place proposed to
be licensed is within three hundred feet of any church, hospital,
charitable institution, school, or public playground, or if such new
license, transfer or extension is applied for a place which is within
two hundred feet of any other premises which is licensed by the
board. The board shall refuse any application for a new license, the
transfer of any license to a new location or the extension of an
existing license to cover an additional area if, in the board's opinion,
such new license, transfer or extension would be detrimental to the
welfare, health, peace and morals of the inhabitants of the
neighborhood within a radius of five hundred feet of the place to be
licensed . . . . The board shall refuse any application for a new
license, the transfer of any license to a location where the sale of
liquid fuels or oil is conducted or the extension of an existing license
to cover an additional area: And provided further, That the board
shall have the discretion to refuse a license to any person or to any
(Footnote continued on next page…)
9
Section 468(a)(3) of the Code provides that: “No license shall be transferred to any
place or property upon which is located as a business the sale of liquid fuels and oil.”
47 P.S. §4-468(a)(3).10
(continued…)
corporation, partnership or association if such person, or any officer
or director of such corporation, or any member or partner of such
partnership or association shall have been convicted or found guilty
of a felony within a period of five years immediately preceding the
date of application for the said license. The board may, in its
discretion, refuse an application for an economic development license
under section 461(b.1) or an application for an intermunicipal transfer
or a license if the board receives a protest from the governing body of
the receiving municipality. The receiving municipality of an
intermunicipal transfer or an economic development license under
section 461(b.1) may file a protest against the approval for issuance
of a license for economic development or an intermunicipal transfer
of a license into its municipality, and such municipality shall have
standing in a hearing to present testimony in support of or against the
issuance or transfer of a license. Upon any opening in any quota, an
application for a new license shall only be filed with the board for a
period of six months following said opening.
47 P.S. §4-432(d) (emphasis added).
10
Section 468(a)(3) provides:
No license shall be transferred to any place or property upon which is
located as a business the sale of liquid fuels and oil. Except in cases
of emergency such as death, serious illness, or circumstances beyond
the control of the licensee, as the board may determine such
circumstances to justify its action, transfers of licenses may be made
only at times fixed by the board. In the case of the death of a
licensee, the board may transfer the license to the surviving spouse or
personal representative or to a person designated by him. From any
refusal to grant a transfer or upon the grant of any transfer, the party
aggrieved shall have the right of appeal to the proper court in the
manner hereinbefore provided.
(Footnote continued on next page…)
10
Specifically, Petitioner contends that the terms “place” and “property”
found in section 468(a)(3) are clear and unambiguous and are not synonymous with
this Court’s interpretation of “location” in Water Street Beverage, and, as undefined
terms in the Code, “place” and “property” should be interpreted according to their
“common and approved usage.”11 Section 1903(a) of the Statutory Construction Act
of 1972, 1 Pa.C.S. §1903(a) (“[W]ords and phrases shall be construed according to
(continued…)
47 P.S. §4-468(a)(3) (emphasis added).
11
Petitioner presents the following Black’s Law Dictionary definitions of “place” and
“property,” as cited in the hearing examiner’s recommended opinion in In re: Ohio Springs, Inc. t/a
Sheetz, No. 13-9164 (PLCB 2014). The definition presented for “place” is as follows:
This word is a very indefinite term. It is applied to any locality,
limited by boundaries, however large or however small. It may be
used to designate a country, state, county, town, or a very small
portion of a town. The extent of the locality designated by it must
generally be determined by the connection in which it is used. In its
primary and most general sense [it] means locality, situations, or
size[.]
Id. at 118 (emphasis added). Petitioner also uses the definition of “property” as cited by the hearing
examiner in In re: Ohio Springs, Inc. t/a Sheetz, as follows:
Land, and generally whatever is erected or growing upon or affixed to
land. Also rights issuing out of, annexed to, and exercisable within or
about land. A general term for lands, tenements, and hereditaments,
property which, on the death of the owner intestate, passes to his
heirs.
Real or immovable property consists of: Land; that which is affixed
to land; that which is incidental or appurtenant to land; that which is
immovable by law[.]
Id. at 119.
11
rules of grammar and according to their common and approved usage; but technical
words and phrases and such others as have acquired a peculiar and appropriate
meaning or are defined in this part, shall be construed according to such peculiar and
appropriate meaning or definition.”).
In the alternative, Petitioner asserts that, if the terms “place” and
“property” are ambiguous, the Code must be interpreted to restrain the sale of alcohol
and that the Board’s interpretation failed to do so. Section 104 of the Code, 47 P.S.
§1-104(c) (“Except as otherwise expressly provided, the purpose of this act is to
prohibit the manufacture of and transactions in liquor, alcohol and malt or brewed
beverages which take place in this Commonwealth . . . .”).
Here, we are bound by our Supreme Court’s decision in Malt Beverages
Distributors Association v. Pennsylvania Liquor Control Board, 8 A.3d 885 (Pa.
2010) (Wegmans). The Supreme Court in Wegmans affirmed our orders that affirmed
the Board’s grant of Wegmans Food Markets, Inc.’s (Wegmans) applications for
transfer of five liquor licenses to its pre-existing market cafés within five separate
grocery stores because of clearly defined parameters between the unlicensed grocery
stores and the proposed licensed cafés.
In Water Street Beverage, this Court applied the reasoning of the
Supreme Court in Wegmans. Weis Markets, Inc., (Weis) filed an application with the
Board for the double transfer of a liquor license. Weis planned to sell malt beverages
in the café at its grocery store. Weis also planned to install gas pumps approximately
340 feet from the grocery store and café that would be separated by parking spaces,
trees, and islands of shrubbery. Water Street Beverage, LTD., t/a Keller’s Beer
(Water Street) filed a petition for intervention, objecting to Weis’ application.
12
After a hearing, the hearing examiner recommended that the Board grant
Weis’ application. The Board granted the application, concluding that Weis would
not be selling liquid fuels at the same location as the licensed premises in accordance
with section 432(d) of the Code. The Board noted that the Code does not define the
term “location” and considered the “common and approved usage” pursuant to
section 1903 of the Statutory Construction Act. The Board found that Weis would
sell liquid fuels at a location approximately 378 feet from the proposed licensed
premises, have numerous barriers in between, have an employee solely for the sale of
liquid fuels that has no responsibilities on the proposed licensed premises, and that
the liquid fuels would be purchased at the gas kiosk or the gas pumps. Accordingly,
the Board found that, “under a reasonable and practical interpretation of the term
‘location,’ the record indicates that Weis has taken appropriate measures to show that
its liquid fuels would be sold at a different location from the proposed licensed
premises.” Water Street Beverage, 84 A.3d at 791.
On further appeal to this Court, Water Street argued that the Board erred
in approving Weis’ application because the sale of liquid fuels and alcohol would
occur at the same location in violation of sections 432(d) and 468(a)(3) of the Code.
We first determined that Water Street waived any argument pertaining to section
468(a)(3), because no objection regarding that section had been made in the
proceedings below. We stated that the Board properly resorted to the rules of
statutory construction in interpreting “location,” because “location” was an undefined
term in the Code. This Court rejected Water Street’s interpretation of the term
“location” to mean a “single tract of land.” We stated that such an interpretation
would lead to absurd results, because “an applicant could operate a licensed premises
13
only steps away from the gas pumps so long as the pumps and licensed premises are
on separate deeds.” Water Street Beverage, 84 A.3d at 794.
We noted that, pursuant to Richard E. Craft, the Board’s interpretation
of the Code and its regulations should be afforded deference unless clearly erroneous.
We concluded that the Board’s interpretation of the term “location” was consistent
with the Code and its regulations. Relying on the Supreme Court’s decision in
Wegmans, we held that, after reviewing the Code and the Board’s regulations, “a
license is granted to a specific ‘location,’ i.e., premises, with clearly defined
parameters, especially, as in this case, when a licensed premises is interiorly
connected to an unlicensed premises/business.” Water Street Beverage, 84 A.3d at
796. Specifically, we stated:
Here, the Board has interpreted, and our Court affirms that
the term “location” is defined in relation to the particular
area of a licensed premises. Sections 432 and 436 of the
Code, as well as sections 3.22, 3.53-3.56, 7.8-7.9, and 7.21
of the Board’s regulations, consistently refer to the specific
“premises,” “place,” or “portion” to be licensed. Although
section 432(d) of the Code does not define “location,” the
Board’s interpretation of this term is reasonable and
supported by the aforementioned sections of the Code and
existing regulations, as well as established case law. Based
on all of the above, and in light of the deference to be
afforded to the Board’s interpretation of the Code and its
regulations, the Board did not err in approving Weis’
transfer application.
Id. at 796-97.
In Wegmans, Wegmans filed transfer applications for five restaurant
liquor licenses to its Market Cafés in five separate grocery store locations. Malt
Beverage Distributors Association (MBDA) and some of its members intervened in
the licensure proceedings, arguing that the interconnections between the proposed
14
licensed premises and the attached grocery stores would violate the Board’s
regulations at 40 Pa. Code §§3.52–3.54,12 and, thus, effectively allow supermarkets to
sell beer. As a result of the objections, the Board held five separate hearings
regarding each liquor license transfer, but viewed all of the evidence presented as
constituting one record applicable to each license application. The hearing examiner
recommended that the Board approve each liquor license transfer.
Subsequently, the Board approved Wegmans’ restaurant liquor license
transfer applications. The Board stated that its approval of interior connections in
between restaurants and unlicensed premises is entirely discretionary and that it
12
Section 3.52 provides:
(a) A licensee may not permit other persons to operate another
business on the licensed premises.
* * *
(b) Licensed premises may not have an inside passage or
communication to or with any business conducted by the licensee or
other persons except as approved by the Board.
(c) A licensee may not conduct another business on the licensed
premises without Board approval.
40 Pa. Code §3.52.
Section 3.53 states that “[w]here the Board approved the operation of another business
which has an inside passage or communication to or with the licensed premises, storage and sales of
liquor and malt or brewed beverages shall be confined strictly to the premises covered by the
license.” 40 Pa. Code §3.53. Section 3.54 provides that “[w]here the Board has approved the
operation of another business which has an inside passage or communication to or with the licensed
premises, the extent of the licensed area shall be clearly indicated by a permanent partition at least 4
feet in height.” 40 Pa. Code §3.54.
15
historically permitted such interior connections. The Board found that the
requirements of the Board’s regulations at 40 Pa. Code §§3.53–3.54 had been met
because the perimeter of the proposed licensed premises was clearly marked with
four-foot walls and the beer storage and sales were confined to the cafés. The Board
concluded that Wegmans also met the requirements of the Board’s regulation at 40
Pa. Code §3.52(c), because, in exercising its discretion, the Board found that the
public welfare, health, peace, and morals would not be compromised by the
preparation and storage of food items on the licensed premises that would be sold in
the grocery store. The Board specifically found that Wegmans built its cafés in order
to provide its customers with easy access to food options and not as a “veiled attempt
to have the opportunity to sell takeout beer.” Wegmans, 8 A.3d at 891 (citation and
quotations omitted). MBDA appealed to this Court.
We first noted that neither party disputed whether Wegmans met the
definition of a “restaurant” under section 102 of the Code, 47 P.S. §1-102.13 We
concluded that merely because Wegmans’ cafés resided within the grocery stores did
not disqualify them from receiving a restaurant liquor license. This Court further
concluded that the requirements of the Board’s regulations at 40 Pa. Code §§3.52–
13
Section 102 provides as follows:
“Restaurant” shall mean a reputable place operated by responsible
persons of good reputation and habitually and principally used for the
purpose of providing food for the public, the place to have an area
within a building of not less than four hundred square feet, equipped
with tables and chairs, including bar seats, accommodating at least
thirty persons at one time. The board shall, by regulation, set forth
what constitutes tables and chairs sufficient to accommodate thirty
persons at one time.
Id.16
3.54 had been met by Wegmans “demarcating the proposed restaurant by four-foot
walls and restricting beer storage and sales exclusively to that area.” Wegmans, 8
A.3d at 891. Accordingly, we affirmed the approval of Wegmans’ applications.
On further appeal, our Supreme Court also concluded that the Board did
not abuse its discretion in approving the interior connections between the proposed
licensed premises and the grocery stores under the Board’s regulation at 40 Pa. Code
§3.52, because “the [cafés] predate the applications for liquor license, are vastly
larger and more sophisticated than the minimum statutory requirements for
restaurants, and easily satisfy every other applicable statutory and regulatory
criterion[.]” Id. at 894. The court further determined that the Board’s regulations at
40 Pa. Code §§3.53–3.54 were satisfied, because the record supports the Board’s
findings that Wegmans “has made a physical distinction between the proposed
licensed area and the rest of the store by way of a four-foot dividing wall with interior
and exterior passageways,” and “beer is being stored and sold exclusively on the
licensed premises.” Wegmans, 8 A.3d at 894.
The court concluded that “[r]efusing to acknowledge the validity of
these restaurants would violate, rather than vindicate, legislative intent. The
legislature has stated clearly that restaurants are entitled to obtain liquor licenses if
they satisfy criteria, and those criteria are met here.” Id. at 896. Accordingly, the
Supreme Court affirmed this Court’s orders affirming the Board’s approvals of
Wegmans’ applications for transfer of the restaurant liquor licenses.
The Supreme Court in Wegmans clearly set the standard that, as long as
the requirements set forth in the Code and the Board’s regulations for plainly defined
parameters between a licensed and an unlicensed premises are satisfied, the Board
does not abuse its discretion in granting a liquor license to a proposed licensed
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premises that has clear physical demarcations from the interconnected unlicensed
premises.
Similar to the situation found in Water Street Beverage, Applicant has
met the requirements to have physical demarcations between the grocery store/fuel
station and the proposed licensed restaurant. There are approximately 300 feet in
between the proposed licensed restaurant and the liquid fuel pumps, which are
separated by curbing, a parking lot, landscape planters, and driveways. The proposed
licensed restaurant and the unlicensed grocery store will have separate entrances, cash
registers, managers, and employees and will have signs denoting that customers are
entering the licensed restaurant at each of the ten-foot-wide interior connections.
Further, all liquid fuel sales occur on the unlicensed premises, and the employee
working at the kiosk near the fuel pumps is solely charged with supervising,
observing, and controlling the fuel pumps. Accordingly, Applicant has met the
standard announced by the Supreme Court in Wegmans to have clearly defined
parameters in between the proposed licensed and unlicensed premises, and, thus, the
Board did not err or abuse its discretion in granting Applicant’s application for
License transfer.
Petitioners attempt to parse the Code’s language in an effort to
differentiate between this Court’s interpretation of the term “location” in section
432(d) of the Code in Water Street Beverage, based on our Supreme Court’s opinion
in Wegmans, and the terms “place” and “property” in section 468 of the Code. As
Petitioner concedes, this Court’s interpretation of “location” in Water Street Beverage
is binding on this case. Giving deference to the Board, Richard E. Craft, the Board’s
interpretation of “place” and “property” is consistent with the Code and its own
regulations. As we stated in Water Street Beverage, the Code and the Board’s
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regulations “consistently refer to the specific ‘premises,’ ‘place,’ or ‘portion’ to be
licensed.” 84 A.3d at 797. The terms “location,” “place,” and “premises” are also
used interchangeably in sections 404, 431(b), 432(d), and 468(a)(1)–(3) of the Code.
Such use reflects the Legislature’s intent that the terms “location,” “place,”
“premises,” and “property” should be similarly construed.
The Legislature’s use of each of these words in the noted sections
reflects an overall intent to control the “licensed premises.” As the Board correctly
asserts, absurd results would follow if “place,” “property,” and “location” are
interpreted differently. Notably, a new liquor license could be granted under section
432 but may not be transferred under section 468(a)(3) if a stricter analysis is applied
when dealing with a “place” or “property” where liquid fuels and alcohol are sold.
Conclusion
As it must under Wegmans, Applicant has constructed clearly defined
parameters in between the proposed licensed premises and the unlicensed premises.
The Board concluded that the prohibitions in the Liquor Code against licensing
locations, places, or properties that sell liquid fuels apply to the actual licensed
premises. We discern no error or abuse of discretion in the Board’s interpretation of
the terms “place” and “property” in section 468 of the Code to have the same
meaning as the term “location” in section 404 of the Code.
Accordingly, we affirm.
________________________________
PATRICIA A. McCULLOUGH, Judge
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IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Estate of Gloria Deckard, :
David I. Grunfeld, Administrator :
Ad Litem, t/a Beer Hut, :
Petitioner :
: No. 2091 C.D. 2014
v. :
:
Pennsylvania Liquor Control Board, :
Respondent :
ORDER
AND NOW, this 31st day of July, 2015, the November 1, 2014 order
of the Pennsylvania Liquor Control Board is affirmed.
________________________________
PATRICIA A. McCULLOUGH, Judge