Loading...
HomeMy WebLinkAbout8.a. Liquor Violation - Applebee's Restaurants North, LLC, dba Applebee's Neighborhood Bar and GrillAGENDA ITEM: Liquor Violation Applebee's Restaurants North, LLC, dba Applebee's Neighborhood Bar and Grill AGENDA SECTION: Id Business PREPARED ARED BY: Gary Kalstabakken, Chief of Police AGENDA NO. 8.L ATTACHMENTS: Resolution, Hearing Officers Findings APPROVED BY: ON RECOMMENDED ACTION: Motion to adopt a resolution imposing civil penalties on Applebee's Restaurants North, LLC for a violation of liquor regulations on April 24, 2008. The dates of suspension of the liquor license will be 4 ROSEMOUNT City Council Meeting: April 7, 2009 CITY COUNCIL EXECUTIVE SUMMARY BACKGROUND During a compliance check on April 24, 2008, a server at Applebee's Neighborhood Bar and Grille made a sale of an alcoholic beverage to the cooperating under age buyer. Two prior violations for under age sale had occurred at this same location; the first occurred on March 24, 2005 and the next occurred on July 26, 2007. The server was charged criminally with the offense for each of the violations. Civil action was also undertaken against the liquor license holder for the violation of the license. ISSUE The City and license holder, Applebee's Restaurant North, LLC (ARN), could not agree upon an acceptable penalty for the license violation. ARN requested a hearing and the Council authorized staff to contract with a hearing officer to conduct the hearing. While there was not a dispute that an offense had occurred on April 24, 2008, the level of the penalty to impose was an issue. A change in the licensee had been approved by Council on February 6, 2008 prior to this violation; however, staff and policies and procedures at the restaurant had not been changed. The hearing officer was asked to determine two items: 1) May the City treat the violation of April 24, 2008 as a third violation although ownership had been transferred from AALP to ARN? and 2) Is the proposed penalty reasonable and within the lawful authority of the City? On March 6, 2009, the hearing officer returned his findings and recommendations. The hearing officer found that ARN is a separate legal entity from the previous owner Apple American Limited Partnership (AALP). ARN was treated by the City as a new owner when it required a new license application and license. Therefore, the City cannot treat the offense as a third violation against the licensee. Regarding the proposed penalty, the hearing officer found the penalty of a $1500 civil penalty and a 21 day license suspension with 10 days immediately imposed and 11 days stayed "is within the statutory and ordinance authority of the City." Furthermore, in the hearing officer's recommendations, he wrote that the City may consider factors other than who is the licensee when determining the penalty for a violation. Factors specifically cited by the hearing officer include "repeated violations at a particular location and /or under particular on -site management." The council may consider other factors in this case in determining the penalty for this violation. For example, while ARN is a different legal entity than the previous license holder, AALP, the corporate officers of the two entities are the same. The officers should have been well aware of the prior violations at the Rosemount Applebee's. In fact, the Resolution and Consent Orders imposing penalties on the prior violations at Applebee's were both signed by Rebecca Tilden. Tilden is the vice president of ARN and she was also the vice president of AALP when she signed the Resolution and Consent Orders. It seems reasonable that signing of the Orders provided Ms. Tilden knowledge of the violations and that knowledge did not dissipate as a result of the transfer of ownership. ARN also retained the same management and employees as AALP. The same policies and procedures were maintained by ARN as had been used by AALP. After assuming ownership, ARN made no operational changes and the ownership change was likely unapparent to the customers business continued in the same manner. Despite being aware of the previous offenses, ARN took no action to prevent the under -age sale on April 24, 2008, until after the incident had occurred. Therefore, based on all of these factors, staff believes that the recommended penalty (a $1500 civil penalty and a 21 —day license suspension with 10 days immediately imposed and 11 days stayed) is appropriate and is also consistent with the recommendations of the hearing officer. The hearing officer specifically found that the facts and circumstances, in his opinion, provide a reasonable basis for the imposition of the proposed fine /suspension that do not rely upon a finding of a third violation by ARN. If Council determines that a lesser penalty should be imposed, two possible options are listed below: $1500 Civil Penalty and a 10 day suspension of license. (This option eliminates the 11 stayed days from the proposed penalty). $1000 Civil Penalty and a 3 day suspension of license. RECOMMENDATION Staff recommends Council adopt the attached resolution imposing the penalty of a $1500 civil penalty and a 21 day suspension with 10 days served immediately and 11 days stayed for 24 months contingent upon no additional violations occurring. The resolution does not include specific dates; the dates of the suspension must be included within the motion. Staff recommends that the 10 day consecutive suspension be imposed Monday, April 13 through Wednesday, April 22, 2009. If Council chooses not to impose consecutive days, staff recommends that the dates be served as follows: Monday, April 13 through Thursday, April 16, 2009 Monday, April 20 through Thursday, April 23, 2009 Monday, April 27 through Tuesday, April 28, 2009 2 CITY OF ROSEMOUNT DAKOTA COUNTY, STATE OF MINNESOTA RESOLUTION 2009- A RESOLUTION ACCEPTING REPORT OF HEARING OFFICER AND IMPOSING SANCTIONS ON APPLEBEE'S RESTAURANTS NORTH, LLC, "ARN FOR VIOLATION OF STATE LIQUOR LAW WHEREAS, upon referral by the City Council, hearing officer Richard F. Rosow, Esq., accepted written submissions by legal counsel for the City and ARN to consider the case of an alleged violation of state liquor law by ARN, specifically sale of alcoholic beverage to a minor on April 24, 2008, and the appropriate penalty for the violation; and WHEREAS, the City Council has reviewed and duly considered the findings and recommendations of the hearing officer, dated March 6, 2009; and WHEREAS, the City Council recognizes that it may impose a penalty that does not exceed its statutory authority and may consider factors other than who the licensee is in determining the appropriate penalty; and WHEREAS, the City Council concludes that the factors surrounding the April 24, 2008, violation and the operation of the business by ARN warrant the penalty that is set forth herein; and WHEREAS, the City Council accepts the report and recommendations of the hearing officer and wishes to impose sanctions for the violation of state liquor law consistent with the same and within the authority of the ordinances of the City of Rosemount and state law. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ROSEMOUNT, MINNESOTA that the following sanctions are imposed on ARN pursuant to and in accordance with Minnesota Statutes, Section 340A.415, for the unlawful sale to a minor by ARN occurring on April 24, 2008: 1. Within 15 days of the date of this Resolution, ARN shall pay to the City of Rosemount the sum of $1,500 as a civil penalty, paid to the Finance Director of the City at Rosemount City Hall during normal business hours. 2. The liquor license of ARN is suspended for 21 consecutive days, subject to the following conditions: a. Ten days of the suspension must be served immediately; b. Eleven days of the suspension is stayed for 24 months from the date of this Resolution, contingent upon no violations occurring within. that 24 -month period. c. If a violation occurs within 24 months of the date of this Resolution, ARN must immediately serve the 11 -day suspension period. This suspension will be for 11 consecutive days. 349578v1 MDT RS220 -245 1 3. The City Clerk is directed to transmit a copy of this resolution to ARN. ADOPTED this 7th day of April, 2009 by the City Council of the City of Rosemount. ATTEST: Amy Domeier, City Clerk Motion by: Second by: Voted in favor: Voted against: Member(s) absent: 349578v1 MDT RS220 -245 2 William H. Droste, Mayor HEARING OFFICER'S FINDINGS OF FACT AND RECOMMENDATION IN RE THE MATTER OF APPLEBEE'S RESTAURANTS NORTH, LLC LIQUOR LICENSE /CITY OF ROSEMOUNT FINDINGS OF FACT The parties, City of Rosemount "City") and Applebee's Restaurant's North, LLC "ARN") submitted this matter upon a Statement of Uncontested Facts. City is represented by Mary Tietjen of the law firm of Kennedy Graven. ARN is represented by Katherine Becker of the law firm of Madigan, Dahl Harlan, P.A. Both parties submitted a memorandum containing an identical Statement of Uncontested Facts and a Statement of Issue and Legal Argument. In addition both parties submitted Reply Memorandum. City presented the Issue in its original Memorandum as: "May City treat Applebee's April 24, 2008, failed compliance check as a `third' rather than a `first' violation under its practice of imposing penalties." In its Reply Memorandum of Law City presents the Issues as: "Is the proposed penalty against ARN's license reasonable and within the lawful authority of the City." ARN presents the Issue as: "Is the liquor violation that occurred on April 24, 2008 at the Rosemount Applebee's Neighborhood Gill Bar the first or third violation for Applebee's Restaurant's North, LLC The undersigned requested two items of information to supplement the Statement of Uncontested Facts (hereinafter referred to as "Supplemental Material 1. The proposed Consent Order sent to counsel for Applebee's on May 29, 2008 by the City Chief of Police; and 2. Whether the City of Rosemount has a written policy, adopted by either the City Council or by a department of the City, adopting the first, second and third offense penalty practice described in paragraph 7 of the Statement of Uncontested As to Supplemental Material 1, counsel for ARN has provided a March 28, 2008 letter of the Chief of Police of the City of Rosemount, attached to which is an unsigned Resolution entitled "Resolution and Consent Order Imposing Civil Penalty and Suspension on Applebee's Restaurant's North, LLC D/B/A Applebee's Neighborhood Grill Bar." Counsel for City was copied on the correspondence sent to the undersigned by counsel for ARN and no objection has been received regarding this document. The undersigned takes as established that the proposed Resolution was prepared by City and sent to ARN's counsel but that it was never agreed to by ARN or adopted by City. As to Supplemental Material 2, counsel for City responded that: "Neither the City Council nor any City Department has formally adopted a written policy with respect to penalties. It is a practice." Counsel for ARN responded that: "As far as the written policy regarding penalties, I am unaware of whether any written policy exists and will let Mary weigh in on that question." The undersigned takes as established that City adopted no written policy with respect to penalties. ISSUES 1. May City treat Applebee's April 24, 2008, failed compliance check as a "third" rather than a "first" violation under its practice of imposing penalties? 2. Is the liquor violation that occurred on April 24, 2008 at the Rosemount Applebee's Neighborhood Gill Bar the first or third violation for Applebee's Restaurant's North, LLC? 3. Is the proposed penalty against ARN's license reasonable and within the lawful authority of the City? Based upon the Statement of Uncontested Facts, the Supplemental Material, the Memoranda and Reply Memoranda of counsel, and the law, the undersigned makes the following: MEMORANDUM Issues one and two as presented by the parties are essentially the same. Issue 3 as stated in the Reply Memorandum of City is different. Both issues will be addressed in this Recommendation. Issues 1 and 2: 1. May City treat Applebee's April 24, 2008, failed compliance check as a "third" rather than a "first" violation under its practice of imposing penalties? 2. Is the liquor violation that occurred on April 24, 2008 at the Rosemount Applebee's Neighborhood Gill Bar the first or third violation for Applebee's Restaurant's North, LLC? City' statement of the issue refers to Applebee's" while ARN's statement of the issue refers to Applebee's Restaurant North, LLC." The undersigned takes the reference to "Applebee's" as shorthand for ARN. The term "Applebee's" is used in the Statement of Uncontested Facts, Stipulation 41 and can only be understood to refer therefore to ARN. The Statement of Uncontested Facts establishes that the offenses of March 24, 2005 and July 26, 2007 were committed while the licensee was AALP, not ARN. Both Minnesota Statute Chapter 340A and City Code 3- lrequire a person to hold a license in order to sell liquor. Both the statute and City Code authorize the imposition of a fine/suspension upon a person holding a license. While the Statement of Uncontested Facts establishes that the directors, officers and on -site management of AALP and ARN were the same (Stipulations 23 and 33), City treated ARN as a new owner and required a new on -sale intoxicating liquor license. (Stipulation 26). Further the Statement of Uncontested Facts establishes that Apple American Limited Partnership "AALP and ARN are "separate legal entities." There is nothing in the record that indicates or establishes that the change in ownership was anything other than a legitimate transaction. Nothing in the record even hints that the sale was carried out as an artifice or device for the purpose of avoiding imposition of a "third" violation. Stipulation 40 of the Statement of Uncontested Facts states that "Chief Kalstabakken indicated that Rosemount was treating the incident as a third violation." The May 29, 2008 letter of the Chief states that "this violation is to be viewed as a third violation..." City cannot treat ARN as a new owner, require a new license application and license and at the same time hold ARN as a licensee responsible for a third violation. The Statement of Uncontested Facts, Stipulation 7 and the Chief's letter do not explicitly identify whether City's progressive practice for a first, second or third offense is imposed by licensee or by location. It is well established that city ordinances are to be construed strictly against the city and in favor of the property owner. Amcon Corp. v. City of Eagan, 348 N.W.2d 66, 72 (Minn. 1984); Frank's Nursery Sales, Inc. v. City of Roseville, 295 N.W.2d 604, 608 (1980); Rowell, 446 N.W.2d 917 at 920. "The interpretation of an existing ordinance is a question of law for the court." Frank's Nursery, 295 N.W.2d 604 at 608. Three rules of construction apply to interpretation of a city's ordinance: 1) Each term should be construed according to its plain and ordinary meaning; 2) Any term that is susceptible of various interpretations must be strictly construed against the city in such a way that the ordinance is least restrictive on the property owner; and 3) the ordinance should be considered in light of its underlying policy. Id. at 608 -09. To the extent there is any ambiguity in City's unwritten practice, the same standard that is applied to ordinances should apply to City's practices. Therefore the undersigned considers the practice to be directed to "licensees" not "locations." Issue 3: Is the proposed penalty against ARN's license reasonable and within the lawful authority of the City. It is stipulated that on April 24, 2008 ARN failed a routine alcohol compliance check conducted by the Rosemount Police Department when it (ARN) served alcohol to a minor. (Stipulation 39). It is also stipulated that the Applebee's restaurant under prior ownership failed 2 prior compliance checks, one on March 24, 2005 and a second on July 26, 2007. (Stipulations 8 and 12). At the time of those failed compliance checks the license was held by AALP. The undersigned takes into account Minnesota Statutes Chapter 340 and Rosemount City Ordinance 3 -1 Liquor Regulations. City's Ordinance 3 -1 sets forth City's liquor regulations. City Code Section 3 -1 -1 adopts provisions of Minnesota Statutes Chapter 340A. Section 3- 1 -14 -1 of the City Code enacts Grounds for Revocation. The first paragraph of 3- 1 -14 -1 states: "The council shall suspend a license for a period of not to exceed sixty (60) days, revoke a license, impose a civil fine not to exceed two thousand dollars ($2,000.00) or impose any combination of these sanctions for each violation on a finding that the licensee has committed a violation of any of the following... C. Violation of any provision of this chapter." Under City Code Section 3- 1 -12 sales to minors are prohibited. Minnesota Statutes Section 340A.415 provides that upon a finding that a licensee has failed to comply with an applicable statute, rule, or ordinance relating to alcoholic beverages, the commissioner or the authority [City in this instance] issuing a retail license or permit under this chapter may revoke the license or permit, suspend the license or permit for up to 60 days, impose a civil penalty of up to $2,000 for each violation, or impose any combination of these sanctions. The April 24, 2008 offense is referred to by City as a "third offense." Stipulation 40 of the Statement of Uncontested Facts. However, nothing in Chapter 340A or City Ordinance 3 -1 requires that City impose a fine/suspension in a progressive manner based on the number of violations. Chapter 340A and City Ordinance 3 -1 do not limit the authority of City to revoke, suspend, impose a fine of up to $2,000 for each violation or impose any combination of the above. No statute, ordinance or written policy requires the progressive imposition of penalties based on a first, second or third violation. In addition nothing prohibits City from considering imposition of penalties based on factors other than the identity of the license holder. The proposed sanction of a "$1,500 civil penalty and a 21 -day license suspension with 10 days immediately imposed and 11 days stayed pending compliance with specified conditions" is within the statutory and ordinance authority of City. RECOMMENDATION The undersigned recommends as follows: 1. City should not impose the proposed fine/suspension based upon a finding of "third" violation by ARN. City should not justify the proposed fine/suspension upon a finding, either express or implied, that this is ARN's third violation. The Statement of Uncontested Facts establishes that the offenses of March 24, 2005 and July 26, 2007 were committed while the licensee was AALP, not ARN. 2. City may impose a fine/suspension up to the maximum provided for by statute and ordinance. In establishing a fine/suspension, the undersigned is of the opinion that City may consider factors other than who is the licensee. Such factors may include repeated violations at a particular location and/or under particular on -site management. The undersigned recommends that City adopt findings supporting whatever fine/suspension is imposed. The Statement of Uncontested Facts sets forth facts and circumstances that in the opinion of the undersigned provide a reasonable basis for the imposition of the proposed fine /suspension that do not rely upon a finding a third violation by the licensee ARN. Dated: March 6, 2009 Ri and F. Ros Hearing Officer