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Nick v. City of Lake Forest

California Court of Appeals, Fourth District, Third Division

December 23, 2014

ADAM NICK et al., Plaintiffs and Appellants,
v.
CITY OF LAKE FOREST et al., Defendants and Respondents 7-ELEVEN, INC., Real Party in Interest and Respondent.

Appeal from a judgment of the Superior Court of Orange County No. 30-2011-00489104, Geoffrey T. Glass, Judge.

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COUNSEL

Law Offices of Stephen W. Berger, Steven W. Berger; Law Offices of Joshua Kaplan and Joshua Kaplan for Plaintiffs and Appellants.

Cummins & White, Bohm Wildish and Daniel R. Wildish for Defendants and Respondents.

Solomon, Saltsman & Jamieson, Ralph Barat Saltsman, Stephen Allen Jamieson and D. Andrew Quigley for Real Party in Interest and Respondent.

OPINION

ARONSON, ACTING P. J.

Real party in interest and respondent 7-Eleven, Inc. (7-Eleven) applied to the Department of Alcoholic Beverage Control (Department) for a license to sell beer and wine at its store located within defendant and respondent City of Lake Forest (City).[1] Based on the number of other businesses that held liquor licenses in the area, the Department would not act on the application without first receiving a determination from the City that “public convenience or necessity would be served by... issuance [of the license to 7-Eleven].” (Bus. & Prof. Code, § 23958.4, subd. (b)(2).)[2] After investigating 7-Eleven’s application, the City determined issuing the license would serve public convenience or necessity, and the City forwarded its conclusion to the Department. Plaintiffs and appellants Adam Nick, Sherry Nick, and Adam Nick & Associates, Inc. (collectively, Nick) filed the underlying action to obtain a writ of administrative mandamus compelling the City to set aside its public convenience or necessity decision. The trial court denied Nick’s writ petition and entered judgment in favor of the City and 7-Eleven.

Nick contends we must overturn the City’s public convenience or necessity determination for four reasons. Finding each of Nick’s reasons lacks merit, we affirm the trial court’s judgment. First, Nick contends the City failed to make its determination within 90 days of the Department’s request as required by section 23958.4, subdivision (b)(2), but the plain statutory language states the period begins when the City receives the request for a public convenience or necessity determination, not when the request is made.

Second, Nick contends the City’s resolution delegating authority to make the public convenience or necessity determination to the City’s Planning

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Commission and Director of Development Services (Development Director) unconstitutionally changed the governing standard to public convenience and necessity. We do not interpret the resolution as changing the governing standard, and in any event reject this challenge because the resolution does not apply to the City Council’s final determination.

Third, Nick contends the record lacks evidence showing issuance of the license to 7-Eleven would serve public convenience or necessity because 7-Eleven offers nothing different or unique in the sale of alcoholic beverages. Nick misconstrues the governing legal standard. The City has broad discretion to determine what constitutes public convenience or necessity on a case-by-case basis, and there is no single fact that must be established. The primary considerations are whether the City relied on reasonable factors based on the facts of the particular case, and whether substantial evidence supports its determination. Because we conclude the City relied on reasonable factors supported by substantial evidence, we may not disturb its determination.

Finally, Nick contends the City denied him a fair hearing on his administrative appeals because the Development Director made the City’s initial public convenience or necessity determination and also acted as an advocate for 7-Eleven before the Department. The record, however, shows the Development Director did not advocate on 7-Eleven’s behalf, but merely corrected erroneous information regarding the proximity of 7-Eleven’s store to a future public park site.

I

Legal Background

The California Constitution grants the Department exclusive authority to issue licenses for the sale of alcoholic beverages subject to any limitations the Legislature enacts. (Cal. Const., art. XX, § 22.) The Constitution further provides the Department “shall have the power, in its discretion, to deny, suspend or revoke any specific alcoholic beverage license if it shall determine for good cause that the granting or continuance of such license would be contrary to public welfare or morals. . . .” (Cal. Const., art. XX, ยง 22.)

The Department may not issue a liquor license “if the issuance would result in or add to an undue concentration of licenses.” (§ 23958.) Issuance of a license to sell alcohol for consumption off the premises where it was sold, referred to as an “off-sale license” (§§ 23393, 23394), results in an undue concentration when “the ratio of off-sale retail licenses to population in the

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census tract or census division in which the applicant premises are located exceeds the ratio of off-sale retail licenses to population in the county in which the applicant premises are located.” (§ 23958.4, subd. (a)(3).)

Notwithstanding this prohibition, the Department may issue a license that would result in an undue concentration of licenses “if the local governing body of the area in which the applicant premises are located... determines within 90 days of notification of a completed application that public convenience or necessity would be served by the issuance.” (§ 23958.4, subd. (b)(2).) The local governing body may delegate the public convenience or necessity determination to a “subordinate officer or body.” (Ibid.) If the local governing body or its designee fails to act timely, the Department may still issue the license provided it determines issuance would serve the public convenience or necessity. (Ibid.) Whether the local governing body or the Department makes the public convenience or necessity determination, the ultimate decision to issue the license lies with the Department. (Cal. Const., art. XX, § 22; see §§ 23958, 23958.4, subd. (b)(2).)

II

Facts and Procedural History


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