Agenda - Council - 03/28/1989 - Laserfiche WebLink

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BERGMANN v. CITY OF MELROSE CItens420 lq.W.2d 663 (Mlnn. App. 1988) be in operation on the premises. Again agreeiug to the condition, Bergmann pro- vided the requisite written assurance. On June 19, 1982, the Travelounge Fami- ly Restaurant opened for business and was in continuous operation until the end of 1983, when the bar, restaurant and liquor store closed. A sign indicated that they were "Closed for Repairs." In March 1984 all three reopened. The bar and restaurant closed again on December 31, 1985, n~ver reopening, and Bergmann did not obtain any restaurant licenses for 1986 or 1987. A sign outside announces, "Closed for Re- pairs." The liquor store has remained open since March 1984. As part of its routine licensing renewal process, the city council learned in Decem- ber 1986 that taxes for the Travelounge and Bottle Shop premises were delinquent. Shortly after purchasing the property, Bergmann had become embroiled in a dis- pute with the SBA regarding the taxation of the property. Consequently, the real estate taxes and special assessments on the property went largely unpaid for the years 1983 through 1986. As of January 31, 1987, unpaid taxes, penalties and assess- ments totaled over $10,000. Spurred on by the unpaid taxes, the city initiated proceedings to deny Bergmann's liquor license renewals. A contested-case hearing was held before an AL J, who rec- ommended denying the liquor licenses be- cause (1) there were unpaid taxes and spe- cial assessments on the property, and (2) Bergmann had discontinued operation of the restaurant which was required by his licenses. Adopting the ALJ's findings, the city council denied the license renewals. Bergmann then obtained an alternative writ of mandamus, which the trial court later quashed. After the trial court upheld the city council's action, Bergmann paid all outstanding taxes owed on the premises. ISSUES 1. Did the city council act arbitrarily and capriciously in refusing to renew Berg- mann's liquor licenses? 2. Did the city council's conditioning of the issuance of the liquor licenses on the Minn. 665 operation of a restaurant deprive Berg- mann of equal protection of the laws? 3. Is the City of Melrose entitled to attorney's fees on appeal? DISCUSSION I [1] A city council has broad discretion in determining whether to renew a liquor license, and a court's scope of review of such a determination is narrow. See Waj- da v. City of Minneapolis, 310 Minn. 339, 343, 246 N.W.2d 455, 457 (1976). The su- preme court has been reluctant to overturn a municipality's discretionary action in the issuance or nonissuance of a liquor license. See id. Reversal is not compelled unless the city council's action is unreasonable, arbitrary or capricious. Id. The applicant bears the burden of proving that the city council acted in an arbitrary manner. Country Liquors, Inc. v. City Council of the City of Minneapolis, 264 N.W.2d 821, 824 (Minn.1978). A. Failure to Operate a Family Res- taurant Bergmann claims that conditioning his liquor licenses on the operation of a family restaurant is arbitrary, capricious and un- reasonable. [2,3] A city may subject businesses conducted on premises where liquor is sold to reasonable regulations and conditions necessary to control its sale. See Cleve- land v. Rice County, 238 Minn. 180, 183, 56 N.W.2d 641, 643 (1952). It may also require license holders to make certain con- cessions in exchange for their licenses. The license to sell [alcoholic] beverages is not a property right but is in the nature of a privilege, and, as such, subject to reasonable regulations. The disadvan- tage of most "privileges" is that to ob~ tain them one must give up certain "rights." The simple result in this case is that to enjoy the profits of this type of business, one must make certain conces- sions, among them the possibility Of be-