Patten v. Board of Liquor License Commissioners

FISCHER, Judge. Karen A. Patten (Patten) appeals from an order by the Circuit Court for Baltimore City affirming the Board of Liquor License Commissioners for Baltimore City (Board). The Board denied Patten’s request for the transfer of the ownership and location of a liquor license. Patten raised the following issues for our consideration, which have been reworded and reordered: I. Did the circuit court err by recalculating the universe of possible protest votes from fifty to forty-nine?

II

Did the circuit court err by affirming the Board’s decision to allow a one-half vote of protest for World Cars, Inc. (World Cars), even though its corporate charter had been forfeited?

III

Did the circuit court err by allowing one vote of protest for 888 South Bond Street, where three of the four co-owners actually voted against the transfer?

IV

Did the circuit court err by affirming the Board’s decision to allow Mr. Allen Taylor to cast two protest votes ²²⁸ for London Court Limited Partnership and London Court General Partnership? 1 FACTS On July 14, 1993, Patten filed an application -with the Board for the transfer of the ownership and location of a class BD-7 Beer, Wine, and Liquor license. Patten wanted to relocate a liquor store from 714 South Broadway to 1606-08 Thames Street. 2 Notice of the proposed transfer was advertised to the surrounding Fells Point community. Members of the community protested and invoked the “51%” rule. 3 On October 28, 1993, the Board conducted a hearing and determined the number of votes for and against the application. The Board determined that the number of voters eligible to vote on the Patten matter was fifty.

This number was calculated by using computer listings .of the real property owners and property tax records provided by the Department of Public Works of Baltimore City. The Board’s final vote count tallied twenty-seven and one-half out of fifty against the application. Pursuant to the “51%” rule, the Board rejected the proposed transfer plan. After the Board rejected Patten’s request, Patten appealed ²²⁹ to the circuit court, which affirmed the Board’s mandate. 4 The circuit court found, inter alia: I) the Board had miscalculated the universe of votes and, accordingly, the court reduced the universe from fifty to forty-nine; 2) the Board was correct to allow World Cars to cast a one-half vote of protest; 3) the Board was correct to allow one vote of protest attributable to 838 South Bend Street because a majority of its property owners filed objections to the application; and 4) the Board was correct to allow Taylor to cast the two votes of protest for London Courts because Taylor was an agent of both partnerships.

Subsequently, Patten filed a timely appeal with this Court. STANDARD OF REVIEW Because this case involves an appeal from an administrative agency, it is important that we make clear the applicable standard of review. Md.Code, (1957, 1994 RepLVol.) Art. 2B § 16—101(e)(l)(i) 5 outlines the scope of review for a Board’s decision. Section 16—101 (e)(l)(i) reads, in part: Upon the hearing of such appeal, the action of the local licensing board shall be presumed by the court to be proper and to best serve the public interest.

The burden of proof shall be upon the petitioner to show that the decision complained of was against the public interest and that the local licensing board’s discretion in rendering its decision was not honestly and fairly exercised, or that such decision was arbitrary, or procured by fraud, or unsupported by any substantial evidence, or was unreasonable, or that such decision was beyond the powers of the local licensing board, and illegal. (Emphasis added.) ²³⁰ This scope of review is similar to the scope of review afforded other administrative agencies under the substantial evidence standard. See Md.Code (1984, 1993 Repl.Vol., 1995 Supp.), § 10-222(h)(3) of the State Gov’t Art. (stating that a reviewing court may reverse a decision of an administrative agency if, inter alia, that decision is not supported by “competent, material, and substantial evidence”). The Court of Appeals has described the substantial evidence standard this way: The required process is difficult to precisely articulate but it is plain that it requires restrained and disciplined judicial judgment so as not to interfere with the agency’s factual conclusions under any of the tests, all of which are similar.

There are differences but they are slight and under any of the standards the judicial review essentially should be limited to whether a reasoning mind reasonably could have reached the factual conclusion the agency reached. This need not and must not be either judicial fact-finding or a substitution of judicial judgment for agency judgment. Department of Economic & Empl. Dev. v. Jones, 79 Md.App. 531, 534 , 558 A.2d 739 (1989) (quoting Insurance Comm’r v. Nat’l Bureau, 248 Md. 292, 309-310 , 236 A.2d 282 (1967)) (emphasis added); see also Caucus Distributors, Inc. v. Maryland Sec. Comm’r, 320 Md. 313, 324 , 577 A.2d 783 (1990) (describing the substantial evidence standard as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion).

Reviewing courts do not apply the substantial evidence test to every aspect of an agency decision. For example, questions of law are not afforded any deference by a reviewing court. Liberty Nursing Ctr. v. Department of Health & Mental Hygiene, 330 Md. 433, 443 , 624 A.2d 941 (1993). Thus, the scope of judicial review for findings of fact or mixed questions of fact and law is narrow, United Parcel Service, Inc. v. People’s Counsel, 336 Md. 569, 576 , 650 A.2d 226 (1994), but there is no such limitation on the review of questions of law. ²³¹ DISCUSSION This appeal focuses on four sets of protesting properties within the Fells Point area.

The first set of properties is located at 1605 and 1607 Shakespeare Street. Because the circuit court believed that Gloria J. Hyatt (Hyatt) owned the two contiguous lots, the court gave her only one possible vote in the universe of possible votes. In concluding so, the circuit court reduced the pool of possible votes from fifty to forty-nine. The second disputed property is located at 1619 Shakespeare Street and is owned by World Cars, Inc. (World Cars).

World Cars forfeited its corporate charter to the State of Maryland four years prior to the Board vote. World Cars, via an affidavit by an individual “owner,” submitted a one-half protest vote. 6 The third property is located at 838 South Bond Street. This property, co-owned by Dorothy Pabst, Rev. Louis Pabst, Audrey Poulton, and Louis Poulton, was awarded one protest vote. Dorothy Pabst went to the Board’s hearing and voted in person against the transfer application.

Rev. Louis Pabst and Audrey Poulton filed their protests by affidavit. Louis Poulton was unable to vote because he was in intensive care at a local hospital. The final set of disputed properties is located at 1616 Thames Street, owned by London Court Limited Partnership, and 1628 Thames Street, owned by London Court General Partnership. Both properties were afforded separate votes of protest.

Mr. Allen Taylor (Taylor), who was not a partner in either entity at the time of the Board vote, acted as manager or agent on behalf of London Courts and cast the votes of protest. I. Patten first argues that the circuit court erred by reducing the possible universe of votes from fifty to forty-nine. ²³² The circuit court found that Hyatt owned contiguous lots at both 1605 and 1607 Shakespeare Street. Appellees argue that the circuit court was correct in its determination of ownership. We agree with Patten that the circuit court erred in reducing the universe of votes.

Our review of the record leads us to believe that at the time of the Board hearing, Hyatt owned the lot at 1605 Shakespeare Street and Edward Fell Graveyard (Graveyard) owned the lot at 1607 Shakespeare Street. The real property file, which lists the owners of the lots subject to this action, supports the Board’s position on this issue. It lists Hyatt as the owner of 1605 and Graveyard as the owner of 1607. Additionally, in the Board’s listings of the parties in opposition to the transfer, it listed Hyatt as owner of “1605 Shakespeare Street.” It did not list Hyatt as the owner of 1607 Shakespeare Street.

The circuit court based its decision on an affidavit signed by Hyatt that listed her property as “1605-07 Shakespeare Street.” 7 There is no other piece of evidence in the record indicating that Hyatt owned two separate lots. Hyatt filed her objection through an affidavit and thus did not testify at the meeting. The appellees offer no explanation for the discrepancy between the property listings and the affidavit. There was substantial evidence to support the Board’s findings.

The relevant and competent evidence before the Board was sufficient to support its findings. Accordingly, the circuit court’s decision to change a factual finding of the Board was clearly erroneous and not supported by the record. Thus, the running sub-total tally is 50 possible votes with 27 voting against the transfer or 27:50. ²³³ II. Patten next argues that the circuit court was incorrect in allowing World Cars, acting through its alleged director of trustees, Mr. Doetsch (Doetsch), to cast a one-half vote of protest. 8 Patten insists that World Cars forfeited its charter four years prior to the Board’s vote, and that this prevents World Cars from casting a vote of protest.

The Board, on the other hand, argues that World Cars’ vote of protest was part of its “winding up” duties. We agree with Patten that World Cars should not have been afforded an opportunity to cast a one-half vote of protest. A director of a corporation is afforded certain powers for dealing with corporate interests even after the corporate charter has been forfeited. Md.Code, (1975, 1993 RepLVol., 1995 Supp.) § 3-515 of the Corp. and Assoc.

Article outlines these powers, including “winding up” duties. 9 Nowhere in section 3-515, or anywhere else in the Maryland Code, does it state that a director, as part of his “winding up” duties, is able to exercise the type of power that was allowed to be wielded by Doetsch in this case. A corporation whose charter has been forfeited has no legal existence. Md.Code § 3-513 of the Corp. & Assoc.Art. (stating that when a corporate charter is forfeited, the corporation ²³⁴ is dissolved); see Atlantic Mill & Lumber Realty Co. v. Keefer, 179 Md. 496, 499-500 , 20 A.2d 178 (1941); see also FDIC v. Heidrick, 812 F.Supp. 586, 592 (D.Md.1991) aff'd, 995 F.2d 471 (4th Cir.1993) (stating that, under Maryland corporate law, when a corporation forfeits its charter, it generally has no legal existence). The “winding up” provision, however, allows for a corporation with a forfeited charter to dispense of its assets and complete corporate business.

The “winding up” duties listed in section 3-515 are administrative in nature, in that they all are related to completing existing corporate business. There is, however, in this case, no rational relationship between section 3-515 and Doetsch’s “right” to cast a vote of protest. In this case, it would be inconsistent with Maryland law and the policy underlining section 3-515 to permit Doetsch to cast a vote of protest against Patten’s transfer request. Our decision is made easier by the fact that World Cars forfeited its charter four years before the Board’s vote.

It is the length of time between the forfeiture and the Board vote that troubles us the most. Arguendo, even if the vote cast by Mr. Doetsch was consistent with “winding up” duties, the length of time between the forfeiture of the charter and the casting of the vote raises an unexplained, perhaps unexplainable, doubt as to there being any logical association between these two actions. It may be reasonable to allow a corporation four years time to “wind up” its corporate affairs, but this is a determination that needs to be examined on a case by case basis. Doetsch was not finalizing a contract or selling off corporate assets.

He cast a vote for a corporation that had no legal existence, in a matter that had very little, if any, relationship to the “winding up” duties listed in section 3-515. In the case sub