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