| Matter of Today's Lounge of Oneonta, Inc. v New York StateLiq. Auth. |
| 2013 NY Slip Op 01315 [103 AD3d 1082] |
| February 28, 2013 |
| Appellate Division, Third Department |
| In the Matter of Today's Lounge of Oneonta, Inc.,Petitioner, v New York State Liquor Authority, Respondent. |
—[*1] Lisa Bonacci, New York State Liquor Authority, Albany (Mark D. Frering ofcounsel), for respondent.
Mercure, J.P. Proceeding pursuant to CPLR article 78 (transferred to this Court byorder of the Supreme Court, entered in Otsego County) to review a determination ofrespondent which, among other things, revoked petitioner's onsite liquor license.
Petitioner operates a tavern, known as Today's Lounge, and was issued a liquorlicense by respondent. Following a joint investigation by respondent and police intounderage drinking at the tavern, respondent commenced a proceeding to revokepetitioner's license. Respondent alleged that petitioner served alcohol on January 28,2012 to individuals under the age of 21, failed to maintain proper business records,employed unlicensed security guards and failed to exercise adequate supervision over itsclientele. An Administrative Law Judge sustained the charges after a hearing, andrespondent adopted the determination. Petitioner then commenced this CPLR article 78proceeding challenging the determination and seeking reinstatement of its liquor license.
Petitioner asserts that the determination that it sold alcohol to underage patrons wasnot supported by substantial evidence because respondent failed to call the patrons aswitnesses, produce copies of the patrons' photo identifications or present proof that thebeverages served [*2]actually contained alcohol. Inessence, petitioner's challenges are grounded in its argument that hearsay evidencecannot constitute substantial evidence to sustain a determination. We disagree and,therefore, confirm.
Alcoholic Beverage Control Law § 65 (1) directs that "[n]o person shall sell,deliver or give away or cause or permit or procure to be sold, delivered or given awayany alcoholic beverages to . . . [a] person, actually or apparently, under theage of [21] years." To establish a violation, respondent must prove "that the proscribedconduct was open, observable and of such nature that its continuance could, by theexercise of reasonable diligence, have been prevented" (Matter of S & R LakeLounge v New York State Liq. Auth., 87 NY2d 206, 209 [1995] [internal quotationmarks and citations omitted]). Contrary to petitioner's argument, "direct nonhearsaytestimony establishing the precise manner in which the minor obtained the alcoholicbeverage is not a prerequisite to establishing a violation of section 65 (1) where. . . there is strong circumstantial evidence that the illegal conduct was openand observable" (id. at 210 [citations omitted]). That is, " '[h]earsay evidence isadmissible in administrative hearings and may, under appropriate circumstances, formthe sole basis of an agency's determination,' unless [the hearsay evidence] is seriouslycontroverted" (Matter of JMH,Inc. v New York State Liq. Auth., 61 AD3d 1260, 1261 [2009], quoting Matter of McGillicuddy's TapHouse, Ltd. v New York State Liq. Auth., 57 AD3d 1052, 1052-1053 [2008];see Matter of Surf City Enters.of Syracuse, Inc. v New York State Liq. Auth., 96 AD3d 1458, 1458 [2012];Matter of Cumberland Farms v New York State Liq. Auth., 290 AD2d 915, 916[2002], lv denied 98 NY2d 607 [2002]; see also Matter of Ridge, Inc. v NewYork State Liq. Auth., 257 AD2d 625, 626-627 [1999]; see generally Matter ofGray v Adduci, 73 NY2d 741, 742 [1988]).
Here, police officers testified that numerous underage patrons were permitted toenter petitioner's establishment based upon false identification, identification containingno date of birth, identification indicating an age under 21 years or no identification.Investigators employed by respondent, John Meyer and Bart Gottesman, testified thatthree additional patrons admitted that they were underage and drank a pitcher of beer.Gottesman, who was sitting at the bar, further stated that he observed the bartender pourthe pitcher of beer from a tap labeled Bud Light and serve it to the patrons, whoconsumed it in front of her. Gottesman also witnessed an underage agent enterpetitioner's establishment without being asked for identification and order a Coors Lightbeer, which the bartender served him. Supporting depositions from Gottesman and theunderage agent, as well as signed written statements from the three patrons who wereserved the pitcher of beer, confirmed the testimony. In contrast, petitioner called nowitnesses and did not seriously controvert any of the evidence presented.
In our view, the foregoing provides substantial evidence to support the charges ofviolating Alcoholic Beverage Control Law § 65 (1), as well as 9 NYCRR 48.2,which requires licensees to exercise adequate supervision over the establishment. Alongwith evidence of prior charges, the foregoing also established a violation of AlcoholicBeverage Control Law § 118, which prohibits the sale of illegal alcoholicbeverages and a pattern of misconduct related to the premises operation (see Matterof Surf City Enters. of Syracuse, Inc. v New York State Liq. Auth., 96 AD3d at1458; Matter of JMH, Inc. v New York State Liq. Auth., 61 AD3d at 1261-1262;see also Matter of S & R Lake Lounge v New York State Liq. Auth., 87 NY2d at210; cf. Matter of JJRB, Inc. v New York State Liq. Auth., 203 AD2d 25, 26[1994]; but see Matter of 25-24Cafe Concerto Ltd. v New York State Liq. Auth., 65 AD3d 260, 266-267 [1stDept 2009]).[*3]
With respect to the remaining twocharges—failure to maintain adequate business records and employing unlicensedsecurity guards—Meyer testified that he interviewed three members of petitioner'ssecurity staff, who admitted that they were paid in cash and unlicensed as securityguards, and signed employee questionnaires to that effect. Gottesman verified with theDepartment of State that two of the three were unlicensed. Petitioner did not seriouslycontrovert this evidence, and its sole challenge to the finding of guilt on these charges isbased upon its fallacious argument that respondent may not rely on hearsay evidence tosupport its determination. Inasmuch as substantial evidence supports these charges,however, it cannot be said that respondent erred in sustaining them (see Matter ofJMH, Inc. v New York State Liq. Auth., 61 AD3d at 1261-1262).
Petitioner's remaining arguments have been considered and, to the extent notaddressed herein, found to be lacking in merit.
Spain, Stein and McCarthy, JJ., concur. Adjudged that the determination isconfirmed, without costs, and petition dismissed.