J v. Lounge, Inc. v. Pennsylvania Liquor Control Board

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
J.V. Lounge, Inc. :
:
v. :
:
Pennsylvania Liquor :
Control Board, : No. 824 C.D. 2015
Appellant : Argued: November 17, 2015
BEFORE: HONORABLE MARY HANNAH LEAVIT, Judge
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE ANNE E. COVEY, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COVEY FILED: December 10, 2015
The Pennsylvania Liquor Control Board (Board) appeals from the
Allegheny County Common Pleas Court’s (trial court) April 15, 2015 order granting
J.V. Lounge, Inc.’s (Licensee) appeal nunc pro tunc, and requiring the Board to
renew Licensee’s Restaurant Liquor License No. R-19642 (License). There are three
issues for this Court’s review: (1) whether the trial court erred as a matter of law or
abused its discretion when it granted Licensee’s nunc pro tunc appeal; (2) whether
the trial court erred when it granted renewal of Licensee’s late-filed applications; and,
(3) whether the trial court erred when it ordered the License’s renewal without proof
of Pennsylvania Department of Revenue (Revenue) tax clearance. After review, we
vacate the trial court’s order and affirm the Board’s order.
Licensee holds the License for use at a premises located at 6024
Saltsburg Road, Verona, Pennsylvania. Because the License expired on May 31,
2009, it was placed in safekeeping pursuant to Section 474.1(d) of the Liquor Code,
47 P.S. § 4-474.1(d).1 On March 26, 2013, Licensee untimely filed the following
documents with the Board’s Bureau of Licensing (Licensing): A renewal application
for the licensing period effective June 1, 2009; a validation application for the
licensing period effective June 1, 2010; a renewal application for the licensing period
effective June 1, 2011; and, a validation application for the licensing period effective
June 1, 2012. On that same date, Licensee filed an application to extend the
safekeeping period.
By October 2, 2013 letter (Objection Letter), Licensing notified Licensee
that it objected to the applications based on the following:
1. The applicant has failed to verify and [Revenue] has not
informed the Board that all State tax reports have been filed
and all [S]tate taxes have been paid, timely appealed or
approved for deferred payment as required by Section 477
of the Liquor Code[2] . . . for the licensing periods effective
June 1, 2009, June 1, 2010, June 1, 2011, and June 1, 2012.
2. The renewal application for the licensing period
effective June 1, 2009 was filed on March 26, 2013,
whereas it should have been filed on or before April 2,
2009.
3. The validation application for the licensing period
effective June 1, 2010 was filed on March 26, 2013,
whereas it should have been filed on or before April 2,
2010.
4. The renewal application for the licensing period
effective June 1, 2011 was filed on March 26, 2013,
whereas it should have been filed on or before April 4,
2011.
5. The validation application for the licensing period
effective June 1, 2012 was filed on March 26, 2013,
1
Act of April 12, 1951, P.L. 90, as amended, added by Section 21 of the Act of December
9, 2002, P.L. 1653. Section 474.1(d) of the Liquor Code provides: “Any period of time in which
the licensee allows the license to lapse by not filing a timely license renewal or license validation
shall be considered time in which the license was held in safekeeping for purposes of this section.”
2
Added by Section 77 of the Act of June 29, 1987, P.L. 32, 47 P.S. § 4-477.
2
whereas it should have been filed on or before April 2,
2012.
6. You have failed to submit the renewal application for the
licensing period effective June 1, 2013, whereas it should
have been filed on or before April 2, 2013.
Reproduced Record (R.R.) at 27a-28a. The Objection Letter further stated:
The [Board] HAS NO AUTHORITY to remedy any dispute
over a failure to issue a tax clearance by either [Revenue],
or the Department of Labor and Industry, 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. at 29a. In addition, the Objection Letter explained the limitations and
requirements pertaining to safekeeping, and informed Licensee that a hearing would
be held. Enclosed with the Objection Letter were copies of Section 464 of the Liquor
Code3 and Section 3.41 of the Board’s Regulations.4
By January 27, 2014 letter, Licensing notified Licensee that the hearing
would be held on February 20, 2014 to address the following:
1. The Board shall take evidence to determine whether it
may accept the renewal and validation applications nunc
pro tunc under the standard set forth in Cook v.
Unemployment Compensation Board of Review, . . . 671
A.2d 1130 ([Pa.] 1996).
2. The Board shall take evidence to determine whether it
may accept the safekeeping applications nunc pro tunc
under the standard set forth in Cook v. Unemployment
Compensation Board of Review, . . . 671 A.2d 1130 ([Pa.]
1996).
3. The applicant has failed to verify and [Revenue] has not
informed the Board that all State tax reports have been filed
3
47 P.S. § 4-464 (governing Board license hearings and appeals).
4
40 Pa. Code § 3.41 (relating to application hearings).
3
and all State taxes have been paid, timely appealed or
approved for deferred payment as required by Section 477
of the Liquor Code . . . for the licensing periods effective
June 1, 2009, June 1, 2010, June 1, 2011 and June 1, 2012.
4. The renewal application for the licensing period
effective June 1, 2009 was filed on March 26, 2013,
whereas it should have been filed on or before April 2,
2009.
5. The validation application for the licensing period
effective June 1, 2010 was filed on March 26, 2013,
whereas it should have been filed on or before April 2,
2010.
6. The renewal application for the licensing period
effective June 1, 2011 was filed on March 26, 2013,
whereas it should have been filed on or before April 4,
2011.
7. The validation application for the licensing period
effective June 1, 2012 was filed on March 26, 2013,
whereas it should have been filed on or before April 2,
2012.
8. The applicant has failed to submit the renewal
application for the licensing period effective June 1, 2013,
as required by Section 3.2 of Title 40, Pennsylvania Code.
R.R. at 25a (italics added).
On February 20, 2014, a Board hearing examiner held a hearing on
Licensing’s objections. By April 15, 2014 order, the Board refused Licensee’s
untimely-filed renewal and validation applications.5 On August 21, 2014, more than
3 months after expiration of the appeal period,6 Licensee filed an appeal nunc pro
tunc with the trial court. The trial court held a hearing at which it accepted the
5
Section 470(a) of the Liquor Code, 47 P.S. § 4-470(a), provides for a grace period, which
permits the Board, in its discretion, to accept a late-filed application filed within two years after the
expiration date of the license with the payment of the required fees and a late fee.
6
Section 464 of the Liquor Code permits a licensee to file an appeal with the court of
common pleas within 20 days from a Board decision refusing to renew a license. Thus, Licensee’s
appeal period ended on May 5, 2014.
4
Board’s record from below. No new evidence was presented, but the parties were
permitted to submit post-hearing briefs. On April 15, 2015, the trial court issued its
memorandum order reversing the Board’s decision, stating:
After an analysis of the record and testimony, I find that
[Licensee’s] untimely appeal was not due to negligent
circumstances. Furthermore, I find that they [sic] became
aware of the issue with their [sic] [] License when they [sic]
attempted to sell it in 2013. Since then, they [sic] have filed
all of the renewal and validation applications and late fees
with the Board. I find that [Licensee’s] renewal
applications were filed within a reasonable period of time
after they [sic] discovered the error. Finally, I find that the
Board did not provide an argument why it would suffer
prejudice if nunc pro tunc relief is granted in this case. In
addition[,] [Licensee] is not trying to re-open, and equity
and fairness dictate that he [sic] be permitted to recapture
some of his [sic] investment.
R.R. at 165a. The Board appealed to this Court.7
The Board first argues that the trial court erred when it granted
Licensee’s nunc pro tunc appeal under circumstances in which Licensee filed its
appeal more than 3 months after the appeal period expired, and provided no
explanation for its untimely filing. We agree.
This Court recently addressed very similar factual circumstances in
Arena Beverage Corp. v. Pennsylvania Liquor Control Board, 97 A.3d 444 (Pa.
Cmwlth. 2014). In Arena, as in the instant matter, the Board refused the licensee’s
late-filed renewal and validation applications and, after the licensee filed an untimely
appeal from the Board’s decision, the trial court reversed the Board. In reversing the
trial court’s decision, this Court explained:
7
“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
‘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. [Pa.] 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 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:
6
(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
substantive issues of whether the Board properly refused
Licensee’s renewal application.
Arena, 97 A.3d at 448-49. The burden is on the filing party to demonstrate that it
meets the requirements for nunc pro tunc relief. Lopresti v. Unemployment Comp.
Bd. of Review, 55 A.3d 561 (Pa. Cmwlth. 2012).
Importantly, here, as in Arena, there were two separate nunc pro tunc
issues before the trial court The first pertained to whether the circumstances
surrounding Licensee’s untimely appeal from the Board’s decision to the trial court
warranted nunc pro tunc relief. Only if the trial court concluded that circumstances
“involving fraud or its equivalent, duress, or coercion caused the delay in filing an
appeal[,]” did the trial court have jurisdiction to consider the second nunc pro tunc
issue – whether the Board should have accepted the untimely renewal and
validation applications. Id. at 449. Because Licensee offered the trial court no
evidence to justify the late-filing of its appeal, it failed to meet its burden. Moreover,
the trial court did not analyze whether “extraordinary circumstances involving fraud
or its equivalent, duress, or coercion caused the [3 month] delay in filing an
7
appeal[,]” but rather found, based on absolutely no record evidence, that the
“untimely appeal was not due to negligent circumstances.” Id., R.R. at 165a
(emphasis added). Given the absence of any record evidence to support the trial
court’s conclusion, we conclude that the trial court abused its discretion and erred as
a matter of law. As a result, the trial court did not have jurisdiction to decide the
substantive issue of whether the Board properly refused Licensee’s late-filed
applications.
For all of the above reasons, the trial court’s order is vacated, and the
Board’s April 15, 2014 order is affirmed.8
___________________________
ANNE E. COVEY, Judge
8
Even if Licensee had offered evidence sufficient to justify nunc pro tunc relief, the trial
court was prohibited from directing the Board to renew the License without evidence that Licensee
had statutorily-mandated tax clearances. See 47 P.S. § 4-477.
8
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
J.V. Lounge, Inc. :
:
v. :
:
Pennsylvania Liquor :
Control Board, : No. 824 C.D. 2015
Appellant :
ORDER
AND NOW, this 10th day of December, 2015, the Allegheny County
Common Pleas Court’s April 15, 2015 order is vacated, and the Pennsylvania Liquor
Control Board’s April 15, 2014 order is affirmed.
___________________________
ANNE E. COVEY, Judge