Arena Beverage Corp. v. Pennsylvania Liquor Control Board

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Arena Beverage Corp. :
:
:
v. :
:
:
Pennsylvania Liquor Control Board, : No. 1960 C.D. 2013
Appellant : Submitted: March 14, 2014
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE ANNE E. COVEY, Judge
OPINION BY
JUDGE COVEY FILED: July 30, 2014
The Pennsylvania Liquor Control Board (Board) appeals from the
Allegheny County Common Pleas Court’s (trial court) October 8, 2013 order granting
Arena Beverage Corporation’s (Licensee) appeal nunc pro tunc and requiring the
Board to renew Licensee’s Restaurant Liquor License No. R-18325 (License). The
sole issue for this Court’s review is whether the trial court erred as a matter of law or
abused its discretion when it granted Licensee’s nunc pro tunc appeal. Upon review,
we reverse.
Licensee holds the License for the premises located at 330 Hookstown
Grade Road, Moon Township, Pennsylvania. Licensee filed an application to renew
the License for the licensing term beginning June 1, 2011 and ending May 31, 2013.
By letter dated September 13, 2012 (Objection Letter), the Board’s Bureau of
Licensing (Licensing) notified Licensee that it objected to the License renewal based
on the following objections:
[a)] The applicant has failed to verify and the Department
of Revenue [(Revenue)] has not informed the Board that all
State taxes have been filed and all State taxes have been
paid, timely appealed or approved for deferred payment as
required by Section 477 of the Liquor Code,[1] as amended
effective July 1, 1987, for the licensing periods effective
June 1, 2010 and June 1, 2011.
[b)] The validation application for the licensing period
effective June 1, 2010 was filed on September 29, 2010,
whereas it should have been filed on or before April 2,
2010.[2]
[c)] The renewal application for the licensing period
effective June 1, 2011 was filed on June 4, 2012, whereas it
should have been filed on or before April 4, 2011.
[d)] The applicant has failed to submit the validation
application for the licensing period effective June 1, 2012 as
required by Section 3.3 of Title 40, Pennsylvania Code.
[e)] The applicant has failed to submit the Notice of
Waiver in Lieu of Board Hearing/Statement, form PLCB-
1136[.]
Reproduced Record (R.R.) at 18a. The Objection Letter further stated:
The [Board] HAS NO AUTHORITY to remedy any dispute
over a failure to issue a tax clearance by either the
[Revenue], or the Department of Labor and Industry
[(L&I)], or both. This is a matter strictly between you, the
licensee, and the taxing authority. Do not assume that
payment of all taxes constitutes clearance. Renewal of your
license by the [Board] requires notification from the taxing
agency(s) to the [Board].
Id. The Objection Letter also informed Licensee that a hearing would be scheduled,
and if Licensee was represented by counsel, it should forward the extra copy of the
1
Act of April 12, 1951, P.L. 90, as amended, 47 P.S. § 4-477.
2
Restaurant liquor licenses are renewed every two years. In the intervening year, a licensee
is required to validate its license. In order to renew or validate a license a licensee must have tax
clearance confirmed.
2
letter to counsel. The letter also enclosed a copy of Section 464 of the Liquor Code 3
and Section 3.41 of the Board’s Regulations.4
On September 27, 2012, Licensing notified Licensee that a hearing
would be held on October 18, 2012 concerning the aforementioned objections.
Licensee’s principal James E. Lignelli (Lignelli) appeared, and Lignelli’s wife
Catherine Gee (Gee) testified at the October 18, 2012 hearing held before a Board
hearing examiner. Licensee was not represented by counsel.
By December 20, 2012 order, the Board refused renewal of the License.
No timely appeal was filed. On June 7, 2013, almost 6 months after expiration of the
appeal period which ended on January 9, 2013, Licensee filed an appeal nunc pro
tunc with the trial court.
On September 5, 2013, the trial court held a de novo hearing at which
both Lignelli and Gee testified. Gee recounted that upon receiving the Objection
Letter she contacted Revenue and was informed that there were “no issues.” R.R. at
114a. She further reported that there had been an issue with L&I involving
outstanding taxes, but she had resolved it. Gee testified that based on the information
she had received from Revenue and L&I that when she attended the Board hearing
she believed all outstanding taxes had been resolved. Licensee presented a document
to the trial court evidencing Licensee’s L&I tax clearance. Licensee did not produce
a similar certificate from Revenue, but instead offered a printout of a June 7, 2013
email from a Revenue employee which stated: “Everything looks good for clearance.
But their [Board] license expired in 2010.” Original Record at No. 11, Exhibit L2.
Gee admitted on cross-examination that when Licensee received the Board’s
3
47 P.S. § 4-464 (governing Board license hearings; provides for a twenty-day appeal
period from Board decisions).
4
40 Pa. Code § 3.41 (relating to application hearings).
3
December 20, 2012 order, it did “nothing” until “May or June” when it contacted
counsel. R.R. at 122a.
Lignelli testified that, at the time of the Board hearing, he believed all of
Licensee’s taxes were paid. He stated that when he received the Board’s December
20, 2012 order, he believed that although the License had not been renewed for the
licensing term at issue, the License would be available to Licensee again after the
non-renewed term expired. R.R. at 139a-140a. Lignelli further explained that he did
not plan to use the License and attempted to sell it, but while preparing to sell the
License in March 2013, he learned that the License “didn’t exist.” R.R. at 141a.
Lignelli contacted counsel in “April or May of 2013” and an appeal was filed with
the trial court on June 7, 2013. R.R. at 142a.
On October 8, 2013, the trial court granted Licensee’s appeal nunc pro
tunc and ordered the Board to renew the License upon payment of necessary fees or
penalties. The trial court opined:
This case appears to elevate form over substance and places
much greater weight on receiving documents from a sister
state agency than it does on whether the licensee does or
does not owe any taxes. In this case, it is clear that
[Licensee] did not owe any taxes. Ms. Gee, however, could
not navigate the labyrinthine halls of state agencies to come
up with the certificate the Board wanted. Coupled with this
is the low priority that the licensee assigned to this
minimal revenue[-]producing aspect of their business. It
appears, however, that [Licensee] does not want to lose its
total investment of $50,000 in the license which it bought in
1999. It therefore seems to me that the best course of action
is for me to grant renewal of the [L]icense and then place it
in escrow to enable [Licensee] to recover its investment.
This reasonable and equitable suggestion was vigorously
opposed by counsel for the Board . . . .
The fact remains, however, that the [L]icense here was not
renewed – not because of unpaid taxes, but because Gee
could not get the kind of ‘clearance’ the Board wanted.
True to its assertion that the matter of taxes is between the
4
Agency and [L]icensee, the Board here would take no steps
to bridge this gap between paying all taxes and a writing
that says you have paid all taxes. Would a call from a
Board staff to [Revenue] been too much to ask?
While the [L]icensee would have benefitted from
retaining a lawyer in this case, I do not think its
ignorance of ‘clearances’ and how to get them should be
the basis to lose a $50,000 investment. Accordingly I
grant the appeal nunc pro tunc; I order the [L]icense
renewal after [L]icensee has paid all fees, or penalties
associated with the [L]icense.
R.R. at 165a-166a (emphasis added). The Board filed a timely appeal to this Court.5
The Board contends that the trial court erred in granting Licensee’s nunc
pro tunc appeal because it did not apply and analyze the required factors for granting
a nunc pro tunc appeal, and the record evidence does not support such relief. We
agree.
“Where the legislature has fixed a time period within which an appeal
may be filed, that period is mandatory and may not be extended as a matter of
grace or indulgence.” Olson v. Borough of Homestead, 443 A.2d 875, 878 (Pa.
Cmwlth. 1982) (emphasis added); see also Hillanbrand v. Pennsylvania Bd. of Prob.
& Parole, 508 A.2d 375 (Pa. Cmwlth. 1986); Coshey v. Beal, 366 A.2d 1295, 1297
(Pa. Cmwlth. 1976) (“[T]he timeliness of an appeal goes to the jurisdiction of the
body appealed to and its competency to act”).
“[A]n appeal nunc pro tunc is a recognized exception to the general rule
prohibiting the extension of an appeal deadline. . . . [It] is intended as a remedy to
vindicate the right to an appeal where that right has been lost due to certain
extraordinary circumstances.” Union Elec. Corp. v. Bd. of Prop. Assessment, 746
5
“Where the trial court permits an untimely appeal to be filed nunc pro tunc, our review is
limited to determining whether the trial court abused its discretion or committed an error of law.”
Puckett v. Dep’t of Transp., Bureau of Driver Licensing, 804 A.2d 140, 143 n.6 (Pa. Cmwlth.
2002).
5
A.2d 581, 584 (Pa. 2000) (quotation marks omitted, emphasis added). “‘[A]n appeal
nunc pro tunc may be granted . . . in order to prevent injustice’ in unique cases, ‘upon
a showing that unusual circumstances prevented a party from timely filing.’” In
re Borough of Riegelsville from Bucks Cnty. Bd. of Assessment & Revision of Taxes,
979 A.2d 399, 402-03 (Pa. Cmwlth. 2009) (emphasis added) (quoting Hanoverian,
Inc. v. Lehigh Cnty. Bd. of Assessment, 701 A.2d 288, 289 (Pa. Cmwlth. 1997)).
This Court has explained:
[N]unc pro tunc relief may only be granted in limited
circumstances. ‘When a statute fixes the time within
which an appeal may be taken, a court may not extend
that time period or allow an appeal nunc pro tunc absent
a showing that extraordinary circumstances involving
fraud or its equivalent, duress, or coercion caused the
delay in filing an appeal.’
Id. at 402 (bolded emphasis added).
In determining whether extraordinary circumstances exist, a court must
consider whether there was fraud or a breakdown in the court’s operations or whether
the party seeking relief has proven that:
(1) the appellant’s notice of appeal was filed late as a result
of non-negligent circumstances, either as they relate to the
appellant or the appellant’s counsel; (2) the appellant filed
the notice of appeal shortly after the expiration date; and (3)
the appellee was not prejudiced by the delay.
Criss v. Wise, 781 A.2d 1156, 1159 (Pa. 2001); see also Baum v. Dep’t of Transp.,
949 A.2d 345 (Pa. Cmwlth. 2008).
Thus, in the instant matter, the trial court was required to first address
whether “extraordinary circumstances involving fraud or its equivalent, duress, or
coercion caused the delay in filing an appeal.” Borough of Riegelsville, 979 A.2d at
402 (quoting Hanoverian, Inc., 701 A.2d at 289). Only if the trial court concluded
that such extraordinary circumstances existed, did it have jurisdiction to decide the
6
substantive issues of whether the Board properly refused Licensee’s renewal
application. The trial court made no such analysis. Instead, without applying or
evaluating whether the record evidence supported nunc pro tunc relief, the trial court
considered the substantive issues and then assumed jurisdiction based upon its
perceived unfairness of the Board’s decision.
Despite the trial court’s failure to engage in the mandated nunc pro tunc
analysis when it granted the untimely appeal, Licensee asserts that the trial court’s
action was proper, and makes several arguments in support of its position that there
was an administrative breakdown in the Board’s process. It also maintains that it
took timely action after discovering the missed deadline, and that the Board was not
prejudiced by the granting of its nunc pro tunc appeal.
First, Licensee argues that there was an administrative breakdown
because the Board’s December 20, 2012 order denying its License renewal was not
accompanied “by any findings of fact, conclusions of law or opinion which would
guide [Licensee] as to the basis of the denial of the renewal of its [L]icense.”
Licensee Br. at 11. As such, Licensee insists that the Board failed to comply with
Section 464 of the Liquor Code, and that the lack of compliance inhibited Licensee’s
ability to appeal from the Board’s decision.6
We reject Licensee’s argument that pursuant to Section 464 of the
Liquor Code, the Board was required to include the reasons for the Board’s License
6
Section 464 of the Liquor Code, 47 P.S. § 4-464, provides, in relevant part:
If the board shall refuse such license, renewal or transfer or the
renewal of an amusement permit, following such hearing, notice in
writing of such refusal shall be mailed to the applicant at the address
given in his application. In all such cases, the board shall file of
record at least a brief statement in the form of an opinion of the
reasons for the ruling or order and furnish a copy thereof to the
applicant.
7
renewal denial in its December 20, 2012 order. Notably, Section 464 of the Liquor
Code requires the Board to mail a “notice in writing of such refusal” to the applicant
at his address. 47 P.S. § 4-464. It then separately addresses the Board’s
responsibility to file and furnish an opinion, stating, “the board shall file of record at
least a brief statement in the form of an opinion of the reasons for the ruling or order
and furnish a copy thereof to the applicant.” Id. (emphasis added). Giving the
statutory words their plain meaning, as we must,7 Section 464 of the Liquor Code
clearly contemplates circumstances in which the Board may mail its license renewal
refusal to a licensee and, thereafter, file an opinion of record and furnish it to the
licensee. In its December 20, 2012 order, the Board stated that “[i]n the event an
appeal is filed[,] an [o]pinion will be issued.” R.R. at 23a. There is nothing in the
Liquor Code that required the Board to furnish its opinion to Licensee before the
appeal period expired.8 Consequently, there was no administrative breakdown in the
7
Our Supreme Court recently explained:
To determine the legislature’s intent . . . we necessarily turn to the
Statutory Construction Act. 1 Pa.C.S.[] §§ 1501 et seq. The
objective of all interpretation and construction of statutes is to
ascertain and effectuate the intention of the General Assembly. 1
Pa.C.S.[] § 1921(a). The best indication of the legislature’s intent is
the plain language of the statute. When considering statutory
language, ‘[w]ords and phrases shall be construed according to rules
of grammar and according to their common and approved usage.’ 1
Pa.C.S.[] § 1903(a). Further, when the words of a statute are clear
and unambiguous, there is no need to go beyond the plain meaning of
the language of the statute ‘under the pretext of pursuing its spirit.’
Id. § 1921(b).
Lancaster Cnty. v. Pennsylvania Labor Relations Bd., ___ A.3d ___, ___ (Pa. No. 36 M.A.P. 2013,
filed June 16, 2014).
8
This interpretation of Section 464 of the Liquor Code is substantially the same as the
process set forth in Pennsylvania Rule of Appellate Procedure 1925(a)(1), which pertains to appeals
from lower courts, and provides:
Except as otherwise prescribed by this rule, upon receipt of the
notice of appeal, the judge who entered the order giving rise to the
8
Board’s process of issuing its order refusing the License renewal and thereafter filing
its opinion in support thereof.
Further, we reject Licensee’s assertion that because the Board’s order did not
include specific reasons for the Board’s refusal, the Licensee was unable to timely
appeal from the order. First, as discussed above, the Board has no statutory
obligation to set forth the reasons for its non-renewal in its “notice in writing of such
refusal.” Second, there could be no confusion as to the rationale for the Board’s
refusal. The record evidence demonstrates that Licensee received the Board’s
Objection Letter9 and then a notice of hearing which clearly explained the reasons for
the objection. Further, Licensee’s principals attended the administrative hearing, at
which time the objections were raised and addressed, and Licensee was advised that
the Board still did not have proof of Licensee’s tax clearance. Thus, Licensee’s
notice of appeal, if the reasons for the order do not already appear of
record, shall forthwith file of record at least a brief opinion of the
reasons for the order, or for the rulings or other errors complained of,
or shall specify in writing the place in the record where such reasons
may be found.
Pa.R.A.P. 1925(a)(1) (emphasis added).
9
“When a potential licensee seeks permission from the state to engage in alcoholic beverage
sales, that licensee does so with full notice of all relevant statutory provisions[.]” Replogle v. Pa.
Liquor Control Bd., 506 A.2d 499, 500 (Pa. Cmwlth. 1986), aff’d, 523 A.2d 327 (Pa. 1987).
Moreover, the Board’s Objection Letter to Licensee enclosed a copy of Section 464 of the Liquor
Code which states, in relevant part:
Any applicant who has appeared at any hearing, as above provided,
who is aggrieved by the refusal of the board to issue any such license
or to renew or transfer any such license . . . may take an appeal
limited to the question of such grievance, within twenty days from
date of refusal or grant, to the court of common pleas of the county
in which the premises or permit applied for is located.
47 P.S. § 4-464 (emphasis added). The Objection Letter also advised Licensee that “[i]f you are
represented by Legal Counsel, please forward the extra copy to your attorney.” R.R. at 50a.
Despite being sent a copy of the applicable law, Licensee failed to comply with the Liquor Code’s
explicitly clear language requiring a licensee to file an appeal from a Board decision denying a
license renewal within twenty days.
9
argument is disingenuous that it was without knowledge of the reasons for the
Board’s order and that this lack of knowledge somehow prevented Licensee from
filing its appeal until 6 months after expiration of the appeal period. The record
evidence establishes that Licensee knew or should have known of the reasons for
non-renewal of its License and that it had twenty days to appeal from that refusal.10
Accordingly, we conclude that the Board not including the specific reasons for its
refusal to renew Licensee’s License in its December 20, 2012 order did not constitute
an administrative breakdown justifying nunc pro tunc relief.
Licensee further alleges an administrative breakdown occurred because
the Board had an obligation to advise Licensee that, barring an appeal, the Board’s
refusal of Licensee’s renewal application for the licensing term at issue would result
in the permanent loss of its License. 11 Licensee does not allege that it was advised
by any Board representative that, in the absence of an appeal, the License would still
be available after the expiration of the subject licensing term nor is there any record
evidence that Licensee was in any manner misinformed or misled. An agency is not
required to “list . . . all of the consequences which could result from a decision not to
appeal an adverse . . . determination.” Wojciechowski v. Unemployment Comp. Bd. of
Review, 407 A.2d 142, 143 (Pa. Cmwlth. 1979).12 The law is well-established that
10
Licensee knew the Board had refused to renew its License. The Liquor Code provides for
a de novo hearing wherein a “trial court may alter the decision of the [Board] even if its findings of
fact are identical to those made by the [Board].” Pennsylvania Liquor Control Bd. v. Richard E.
Craft Am. Legion Home Corp., 718 A.2d 276, 278 (Pa. 1998). Thus, in an appeal under Section 464
of the Liquor Code, a trial court is free to consider any relevant evidence and legal arguments made
by the parties and may decide the case anew. Given the trial court’s ability to conduct a de novo
hearing, and make its own findings of fact and conclusions of law, the absence of a rationale
contained in the Board’s order also undermines Licensee’s contention that not having the Board
expressly state its reasons for renewing its License prevented it from filing its appeal.
11
Licensee’s brief attempts to frame the Board’s action as a license revocation. The Board
did not revoke the License. Instead, after receiving and reviewing Licensee’s renewal application,
the Board concluded it was statutorily barred from approving it.
12
This Court has recognized that “due process ‘does not even require an administrative
agency to provide a party with notice of the right to appeal the agency’s decision when the agency
10
where a liquor license is not renewed, and the Board’s decision is not appealed, the
license ceases to exist. See Replogle v. Pa. Liquor Control Bd., 506 A.2d 499 (Pa.
Cmwlth. 1986), aff’d, 523 A.2d 327 (Pa. 1987). Had Licensee educated itself or
retained counsel, it would have been aware of the ramifications of a Board decision
denying renewal of a license.13 It chose not to do so. While we are sympathetic to
Licensee’s situation, “any layperson choosing to represent himself in a legal
proceeding must, to some reasonable extent, assume the risk that his lack of expertise
and legal training will prove his undoing.” Vann v. Unemployment Comp. Bd. of
Review, 494 A.2d 1081, 1086 (Pa. 1985) (quoting Groch v. Unemployment Comp.
Bd. of Review, 472 A.2d 286, 288 (Pa. Cmwlth. 1984)). Accordingly, the Board not
advising Licensee that failure to appeal the non-renewal of its License would result in
the loss of its License does not evidence an administrative breakdown in the Board’s
process.
Finally, Licensee maintains that there was an administrative breakdown
in communications between the Board and Revenue because, according to Licensee,
its taxes were paid, but the Board did not have confirmation of tax clearance, and
both the Board and Revenue failed to ensure that the Board’s information was
correct. This argument must fail because it relates to the merits of Licensee’s appeal
rather than satisfying the requirements for nunc pro tunc relief. The correct issue to
be addressed is whether “extraordinary circumstances involving fraud or its
equivalent, duress, or coercion caused the delay in filing an appeal.” Borough of
Riegelsville, 979 A.2d at 402 (quoting Hanoverian, Inc., 701 A.2d at 289). Thus,
Licensee’s argument does not support the granting of nunc pro tunc relief.
or the Legislature . . . has provided a duly published procedure for a hearing or appeal after such
order.’” Seropian v. State Ethics Comm’n, 20 A.3d 534, 539-40 (Pa. Cmwlth. 2011) (quoting
Walker v. Unemployment Comp. Bd. of Review, 381 A.2d 1353, 1354 (Pa. Cmwlth. 1978)).
13
Notably, Licensee’s counsel does not argue in this appeal that the Board’s refusal of the
renewal application did not result in the permanent loss of the License.
11
Licensee’s assertion that it took timely action after discovery of the
missed appeal deadline is without merit. First, the undisputed record evidence
reveals that the only reason Licensee missed the mandatory appeal period was
because upon receipt of the Board’s December 20, 2012 order refusing renewal,
Licensee chose to do “nothing[.]” R.R. at 122a. As the trial court itself recognized,
Licensee considered the License to be a “low priority.” R.R. at 165a. Approximately
two months after the appeal period expired, in March 2013, Licensee discovered its
License was in jeopardy. Licensee Br. at 14-15; R.R. at 141a. Licensee did not meet
with counsel until “April or May of 2013.” R.R. at 142a. Licensee’s appeal was not
filed until June 7, 2013. R.R. at 168a. Making the decision to do “nothing” in
response to a time-sensitive appeal cannot satisfy the required criteria for nunc pro
tunc relief. Moreover, waiting for a month or more after learning that the License
was in jeopardy, and then another month or more to file the appeal is not timely
action. 14
We conclude that the trial court abused its discretion and committed an
error of law when it granted Licensee’s nunc pro tunc appeal without considering and
applying the mandatory factors which must be present before nunc pro tunc relief
may be granted. We further rule that the record evidence does not reveal fraud, non-
negligent circumstances or an administrative breakdown caused Licensee’s late-
filing. There were no extraordinary circumstances to justify the trial court’s
extension of the legislatively-mandated twenty-day appeal period.
For all of the above reasons, the trial court’s order is reversed.
___________________________
ANNE E. COVEY, Judge
14
Because we find that Licensee did not satisfy the first two prongs of the test justifying
nunc pro tunc relief, we need not address whether the Board was prejudiced by the delay.
12
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Arena Beverage Corp. :
:
:
v. :
:
:
Pennsylvania Liquor Control Board, : No. 1960 C.D. 2013
Appellant :
ORDER
AND NOW, this 30th day of July, 2014, the Allegheny County Common
Pleas Court’s October 8, 2013 order is reversed.
___________________________
ANNE E. COVEY, Judge