Señor Iguana's, Inc. v. Idaho State Police Bureau of Alcohol Beverage Control

IN THE SUPREME COURT OF THE STATE OF IDAHO
Docket No. 43158
SEÑOR IGUANA'S, INC., MARCIA E. )
CORONA, )
)
Boise, April 2016 Term
Petitioners-Appellants, )
)
2016 Opinion No. 54
v. )
)
Filed: May 3, 2016
IDAHO STATE POLICE BUREAU OF )
ALCOHOL BEVERAGE CONTROL, )
Stephen W. Kenyon, Clerk
)
Respondent. )
)
Appeal from the District Court of the Sixth Judicial District, State of Idaho,
Bannock County. Hon. Robert C. Naftz, District Judge.
District court order upholding cancellation of liquor license, affirmed.
Racine, Olson, Nye, Budge & Bailey, Chtd., Idaho Falls, for appellants. Brent
Whiting argued.
Hon. Lawrence G. Wasden, Idaho Attorney General, Boise, for respondent.
Stephanie A. Altig, Deputy Attorney General argued.
_________________________________
BURDICK, Justice
Señor Iguana’s (Iguana’s) appeals the Bannock County District Court’s order upholding
the Idaho State Police, Bureau of Alcohol Beverage Control’s (ABC) order that cancelled
Iguana’s liquor license. The district court ruled that because Iguana’s failed to pay the renewal
fee before the end of the thirty-one day grace period, the license expired by operation of law
under Idaho Code section 23-908(1). Iguana’s contends that the license constituted a property
right and that because the ABC failed to provide notice and a hearing before cancelling the
license Iguana’s was denied its constitutional and statutory rights. We affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
Iguana’s is a restaurant in Pocatello that has held a liquor license for approximately
twelve years. On October 22, 2014, in accordance with Idaho Code section 23-908(1), Iguana’s
filed a renewal application with ABC, including a check written for the required renewal amount
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of $800.00. After receiving the renewal application and the check written for the fee amount, but
before the check cleared, ABC sent Iguana’s a 2015 Retail Alcohol Beverage License. The 2015
License stated that it was valid from November 1, 2014, through October 31, 2015. On October
28, 2014, Iguana’s check for the $800.00 in renewal fees was returned for “Not Sufficient
Funds” (NSF). ABC learned the renewal fee check had been returned NSF on November 4,
2014. On November 6, 2014, ABC sent a certified letter, return receipt requested, addressed to
“Señor Iguana’s, Inc., 961 Hiline Road, Pocatello, ID 83201,” advising Iguana’s that their
license renewal fee check was returned NSF. The letter also stated that if Iguana’s failed to
submit a money order or cashier’s check in the amount of $800.00 by November 25, 2014, along
with an additional separate money order or cashier’s check in the amount of $20.00 to cover the
handling fee, Iguana’s license renewal application would be cancelled. United States Postal
Service (USPS) tracking records indicate that because no authorized recipient for the certified
letter was available, the USPS left notice at Iguana’s on November 10, 2014, that the letter was
available for pickup at the USPS facility in Pocatello. On November 26, 2014, the letter was still
unclaimed at the USPS facility in Pocatello and was returned to ABC on December 3, 2014.
On December 10, 2014, ABC Detective H. Caldera served the Order to Cease and Desist
and Notice of Cancelled Retail Alcohol Beverage License on Marcia Corona for Iguana’s, and
removed the 2015 license from the premises. That same day, Corona, on behalf of Iguana’s, sent
cashier’s checks to ABC for the $800.00 renewal fee and for the $20.00 handling fee. On
December 16, 2014, ABC returned the cashier’s checks to Iguana’s, explaining that the license
had been cancelled due to non-renewal because the required renewal fee was not timely received.
On December 17, 2014, Iguana’s filed a Petition for Judicial Review and a Motion to
Stay in the Sixth Judicial District Court for the State of Idaho, in and for the County of Bannock.
Argument was held on January 26, 2015, and on March 13, 2015, the district court entered its
Memorandum Decision and Order and Judgment. In its Decision and Order the district court
dismissed Iguana’s Petition for Judicial Review and Motion to Stay, ruling that because Iguana’s
had failed to pay the required fee within the time frame allowed under Idaho Code section 23-
908(1) the license expired by operation of law and notice and opportunity to be heard under
Idaho Code section 67-5254(1) was not required. Iguana’s timely appealed.
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II. STANDARD OF REVIEW
“Any final decision or order of the district court on judicial review of an agency decision
is appealable as a matter of right. We are procedurally bound to affirm or reverse the decisions of
the district court. When considering an appeal from a district court acting in an appellate capacity
under the Idaho Administrative Procedures Act, this Court reviews the agency record
independently of the district court’s decision.” Flying “A” Ranch, Inc. v. Cnty. Comm’rs of
Fremont Cnty., 157 Idaho 937, 939–40, 342 P.3d 649 651–52 (2015) (citations omitted) (internal
quotation marks omitted).
III. ANALYSIS
Iguana’s contends that ABC violated the governing provisions of the Idaho Code by
cancelling Iguana’s liquor license without providing notice or an opportunity to be heard. ABC
argues that notice and a hearing was not required because the liquor license expired by operation
of law when Iguana’s failed to timely submit payment of the required renewal fee. Iguana’s also
contends it has a property right in its liquor license and that ABC’s actions deprived it of
property without notice or opportunity to be heard in violation of the United States Constitution.
A. Iguana’s license expired by operation of law.
Iguana’s contends that ABC cancelled its liquor license without following the appropriate
procedures defined under the governing provisions of the Idaho Code. Specifically, Iguana’s
contends that under Idaho Code section 23-933(1) ABC was required to provide notice and a
hearing before cancelling Iguana’s license. ABC maintains that notice and a hearing were not
required because Iguana’s failed to submit sufficient funds with its renewal application and
therefore the license expired by operation of law.
Idaho Code section 23-908(1) states in pertinent part:
All licenses shall expire at 1:00 o’clock a.m. on the first day of the
renewal month . . . . Renewal applications for liquor by the drink
licenses accompanied by the required fee must be filed with the
director on or before the first day of the designated renewal month.
Any licensee holding a valid license who fails to file an application
for renewal of his current license on or before the first day of the
designated renewal month shall have a grace period of an
additional thirty-one (31) days in which to file an application for
renewal of the license. The licensee shall not be permitted to sell
and dispense liquor by the drink at retail during the thirty-one (31)
day extended time period unless and until the license is renewed.
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Accordingly, under the statute, all licenses “expire at 1:00 o’clock a.m. on the first day of
the renewal month.” The expiration happens by operation of law. It requires no action by ABC or
by the licensee. BV Beverage v. State, 155 Idaho 624, 628, 315 P.3d 812, 816 (2013) (“Liquor
licenses therefore expire by operation of law . . . .”). If a licensee fails to file an application for
renewal they are automatically granted “a grace period of an additional thirty-one (31) days.”
I.C. § 23-908(1). The grace period, however, does not extend the life of the previous year’s
license, as a licensee is not permitted to sell and dispense liquor during the thirty-one day period.
Id. Rather, the grace period simply provides an extension of time in which the license, although
having expired, may still be renewed. Id. If, however, the license is not renewed by submitting
an application for renewal of the license “accompanied by the required fee” within the thirty-one
day period, the licensee looses his privilege to renew his license under section 23-908(1) and
must re-apply for a new license under the applicable code sections.
Here, the first day of Iguana’s renewal month was November 1, 2014. The thirty-one day
grace period ended on December 2, 2014. Iguana’s did not submit the required fee until
December 10, 2014. Although a renewal was submitted earlier on October 22, 2014, the fee was
not paid. “[P]ayment by check is conditional and is defeated as between the parties by dishonor
of the check on due presentment.” I.C. § 28-2-511(3). Iguana’s had the obligation to make timely
payment of the required fee. Although ABC attempted to notify Iguana’s that its check was
returned NSF, ABC was under no obligation to do so. Having chosen to submit a check in
payment of the fee, it was Iguana’s obligation to make sure that there were funds in the account
to pay the check upon presentment. Iguana’s failed to do so. Accordingly, because Iguana’s
failed to timely submit the required fee, its license expired by operation of law on November 1,
2014. Similarly, having failed to submit the require fee before the end of the thirty-one day grace
period, Iguana’s, also by operation of law, lost its privilege to renew its license under section 23-
908(1).
Iguana’s attempts to make much of the fact that ABC issued a 2015 license after Iguana’s
submitted its renewal application and the NSF check. Having issued such a license, Iguana’s
argues that ABC was bound by Idaho Code section 23-933(1) to provide notice and a hearing
before cancelling the 2015 license. Section 23-933(1) provides that ABC cannot revoke a license
without following the procedures set forth in the Idaho Administrative Procedure Act. Section
67-5254(1) of that Act provides:
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An agency shall not revoke, suspend, modify, annul,
withdraw or amend a license, or refuse to renew a license of a
continuing nature when the licensee has made timely and sufficient
application for renewal, unless the agency first gives notice and an
opportunity for an appropriate contested case in accordance with
the provisions of this chapter or other statute.
As discussed above, Iguana’s did not make a “timely and sufficient application for
renewal.” Consequently, section 67-5254(1) does not apply. Therefore, ABC was not statutorily
required to provide notice and an opportunity to be heard before cancelling the erroneously
issued 2015 license. Having not timely paid the required fee, Iguana’s was never in compliance
with the requirements of Idaho Code section 23-908(1), and therefore the 2015 license was
subject to cancellation. See Henson v. Dep’t of Law Enforcement, 107 Idaho 19, 24, 684 P.2d
996, 1001 (1984).
We do not decide whether Iguana’s had a property interest in its liquor license because it
is undisputed that Iguana’s failed to timely submit the required renewal fee. Having failed to
meet the statutorily mandated requirements for renewal, the license, and any property interest
Iguana’s may or may not have had, expired by operation of law.
B. Attorney fees and costs.
Both parties claim attorney fees under Idaho Code section 12-117(1). Fees are mandated
under section 12-117(1) when the “non-prevailing party acted without a reasonable basis in fact
or law.” Iguana’s is the non-prevailing party. However, Iguana’s did not act without reasonable
basis in fact or law and we decline to award fees on appeal.
IV. CONCLUSION
Because Iguana’s did not tender the required renewal fee within the statutorily mandated
time frame, its liquor license expired by operation of law. The district court is affirmed. Costs to
Respondent.
Chief Justice J. JONES, EISMANN, HORTON and KIDWELL, Pro Tem, CONCUR.
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