| Matter of JMH, Inc. v New York State Liq. Auth. |
| 2009 NY Slip Op 03085 [61 AD3d 1260] |
| April 23, 2009 |
| Appellate Division, Third Department |
| In the Matter of JMH, Inc., Doing Business as Pauly's Hotel,Petitioner, v New York State Liquor Authority, Respondent. |
—[*1] Mark D. Frering, New York State Liquor Authority, Albany, for respondent.
Kavanagh, J. Proceeding pursuant to CPLR article 78 (transferred to this Court by order ofthe Supreme Court, entered in Albany County) to review two determinations of respondentwhich revoked petitioner's liquor license.
In November 2007, respondent filed two sets of charges against petitioner alleging that itviolated various sections of the Alcoholic Beverage Control Law, as well as provisions containedin respondent's regulations, in its operation of Pauly's Hotel, located in the City of Albany(see Alcoholic Beverage Control Law § 65 [1], [2]; § 106 [2], [12]; §117-a [1] [a], [c]; 9 NYCRR 48.2, 48.3, 48.8, 53.1 [f]). In particular, it is alleged that during anunscheduled inspection of Pauly's Hotel, representatives from the Albany Police Department,respondent's Enforcement Bureau and the Department of Motor Vehicles observed individualswho were underage and intoxicated being served and consuming alcohol on the premises(see Alcoholic Beverage Control Law § 65 [1], [2]). In addition, petitioner wascharged with, among other things, failing to maintain proper business records (seeAlcoholic Beverage Control Law § 106 [12]), employing unlicensed security guards(see 9 NYCRR 48.3, 53.1 [f]), permitting smoking inside the premises (see 9NYCRR 53.1 [f]), failing to exercise adequate supervision over its [*2]clientele (see 9 NYCRR 48.2, 53.1 [f]) and employing adisc jockey on the premises in violation of the provisions contained in its license (see 9NYCRR 48.3, 53.1 [f]). After hearings were held on both sets of charges, two AdministrativeLaw Judges found that substantial evidence existed to sustain the charges as filed againstpetitioner. Respondent, in response to these findings, revoked petitioner's liquor license, imposeda $1,000 fine and placed a two-year prohibition on relicensing of the premises. Petitionersubsequently commenced this proceeding to review respondent's determinations. Upon transferto this Court (see CPLR 7804 [g]), we now confirm.
Petitioner claims that respondent only offered hearsay evidence to prove the charges and didnot establish the existence of these violations by substantial evidence. "Hearsay evidence isadmissible in administrative hearings and may, under appropriate circumstances, form the solebasis of an agency's determination," unless it is seriously controverted (Matter of McGillicuddy's Tap House, Ltd.v New York State Liq. Auth., 57 AD3d 1052, 1052-1053 [2008] [citations omitted]; see Matter of S & S Pub, Inc. v New YorkState Liq. Auth., 49 AD3d 654, 654-655 [2008]). In that regard, we note that petitionernot only failed to call any witnesses to testify on its behalf at either hearing, but submitted little,if any, proof to controvert the evidence presented by respondent in support of these charges(see Matter of McGillicuddy's Tap House, Ltd. v New York State Liq. Auth., 57 AD3dat 1053; Matter of Cumberland Farms v New York State Liq. Auth., 290 AD2d 915, 916[2002], lv denied 98 NY2d 607 [2002]).
As for the evidence presented at the hearing, it established that on November 10, 2007, 18 to19 different individuals, all of whom were later determined to be underage, were observedconsuming alcoholic beverages on petitioner's premises.[FN1]Many of these individuals gave statements to investigators in which they acknowledged theirtrue age and admitted having purchased and consumed alcoholic beverages while in petitioner'sestablishment.[FN2]In addition, petitioner, when asked, could not produce records that, by law, it was required tokeep regarding its operation of the premises and acknowledged not only that it employedindividuals on the premises as security guards who were not properly licensed, but alsoemployed a disc jockey, which did not comply with the provisions contained in its liquor license.Investigators also testified to observing some patrons, as well as petitioner's own employees,smoking on the premises, and noted during their inspection that beer was being advertised forsale at half its regular price. This evidence constituted substantial evidence supportingrespondent's determination sustaining the charges as filed against petitioner (see Matter ofMcGillicuddy's Tap House, Ltd. v New York State Liq. Auth., 57 AD3d at 1052; Matter of Price Chopper Operating Co.,Inc. v New York State Liq. Auth., 52 AD3d 924 [2008]; Matter of CumberlandFarms v New York State Liq. Auth., 290 AD2d at 916).
Petitioner claims that the penalty imposed—in particular, the revocation of itslicense—was unduly harsh and an abuse of respondent's discretion. "Penalties imposed bygovernmental agencies will be modified only if the penalty is 'so disproportionate to the offense,in light of all the circumstances, as to be shocking to one's sense of fairness' " (Matter ofKTD Enters. v New York State Liq. Auth., 205 AD2d 938, 939 [1994], lv denied 84NY2d 807 [1994], quoting Matter of GCA Rest. v New York State Liq. Auth., 171AD2d 489, 490 [1991]). The sheer number of underage individuals being served alcohol on thepremises is ample proof that petitioner was well aware that it was operating its business inviolation of its license. In fact, petitioner's apparent lack of regard for its responsibilities underthe license is made even more manifest by the fact that it has been cited on numerous prioroccasions for similar violations, yet the complained-of conduct on its premises continued almostunabated (see Matter of Antolino v NewYork State Liq. Auth., 38 AD3d 881, 882 [2007]; Matter of Oneonta Water St. vNew York State Liq. Auth., 279 AD2d 849, 851 [2001]; Matter of Kelly v Casale,263 AD2d 889, 890-891 [1999]; Matter of Murphy v New York State Liq. Auth., 223AD2d 818, 819 [1996]). Therefore, we see no reason to disturb the penalty imposed.
To the extent not specifically addressed herein, petitioner's remaining contentions have beenreviewed and found to be lacking in merit.
Cardona, P.J., Mercure, Malone Jr. and McCarthy, JJ., concur. Adjudged that thedeterminations are confirmed, without costs, and petition dismissed.
Footnote 1: According to the investigator'sreport, when the uniform police officers entered the establishment, there were 35 to 40 patronsinside, 29 of whom were underage and 18 to 19 of whom were observed consuming alcoholicbeverages. Some of the patrons used altered driver's licenses as identification when purchasingthe beverages, while others used valid driver's licenses obtained from other patrons inside thepremises. Other underage individuals admitted that they gained entrance to the premises by useof valid identification, which clearly showed that they were, in fact, underage.
Footnote 2: One such individual submittedto a test that determined that the alcohol content in his blood was .185%.