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In re Application of Virgo's

December 11, 2002


On appeal from a Final Decision of the New Jersey Division of Alcoholic Beverage Control.

Before Judges Skillman, Lefelt and Winkelstein.

The opinion of the court was delivered by: Lefelt, J.A.D.


Argued November 13, 2002

In this appeal, we answer the question left open in Cavallaro 556 Valley St. Corp. v. Div. of Alcoholic Beverage Control, 351 N.J. Super. 33 (App. Div. 2002): whether the Director of the Division of Alcoholic Beverage Control has authority to find substantial compliance with the statutory time frames for renewal of plenary retail liquor licenses. We conclude that the Director has such authority but affirm the Director's refusal to find substantial compliance in this matter.


The pertinent facts and procedural history follow. Paul Golden, the sole shareholder and president of Virgo's, Inc., submitted a bid on February 25, 1998 for a plenary retail consumption liquor license at a Division of Taxation public auction. The auction was subject to several conditions, including number two, which provided that the license was "sold subject to any and all legal encumbrances." In addition, condition five required any successful bidder to "make a good faith application to the local issuing authority for the transfer of the license within 15 days after acceptance of the bid."

Golden's bid of $126,000 was accepted by the Division, and within the allotted time, Golden applied to the Township of North Brunswick for a person-to-person transfer of the license. Because Golden had two 1984 attempted burglary convictions, however, the Township denied Golden's person-to- person license transfer.

The bid conditions also provided that if a timely transfer application was denied, "the monies paid will be refunded." Instead of seeking a refund, however, Golden requested the Division of Alcoholic Beverage Control (ABC) to remove his disqualification. On November 9, 1999, the Director of the ABC (Director) issued an order removing Golden's criminal disqualification, and a little over one month later Golden filed another person-to-person transfer application. In March 2000, North Brunswick denied Golden's second transfer application, and the next day Golden appealed to the ABC.

The ABC transmitted Golden's appeal to the Office of Administrative Law (OAL) where an administrative law judge on August 11, 2000 noted that the license had not been renewed and directed the parties to seek clarification from the ABC on the status of the license. ABC informed Golden on September 6, 2000 that no one had attempted to renew the license in question for the years 1998-99, 1999-2000 and 2000-2001.

Golden then sought relief in the Law Division by suing the ABC and the Division of Taxation. These suits were dismissed on May 11, 2001. On July 16, 2001, Virgo's petitioned the Director for issuance of the license. The Director denied Virgo's request for a "new" license for the 2001-2002 license term. The Director concluded that because the license was no longer extant, he had no authority to consider, under N.J.S.A. 33:1-12.18, whether Virgo's failure to renew was due to circumstances beyond the licensee's control. Furthermore, the Director found that Virgo's had not established substantial compliance with the statutory renewal requirements. Virgo's timely filed this appeal from the Director's decision.


We first examine the Director's authority to determine whether an applicant has substantially complied with the renewal requirements. Beginning with Ronnie Trent Enterprises, ABC Bulletin 2296, Item No. 2, at 13-14 (1978), the Director has occasionally utilized the substantial compliance doctrine to excuse the failure of a party to comply strictly with the terms of the license renewal statute. E.g., Newby v. Div. of Alcoholic Beverage Control, OAL Docket No. ABC 5980-94 (1996).

The substantial compliance doctrine applies where there is: (1) a lack of prejudice to the opposing party; (2) a series of steps taken to comply with the statute involved; (3) general compliance with the purpose of the statute; (4) reasonable notice of the party's claim; and (5) a reasonable explanation of why there was not strict compliance with the statute. Galik v. Clara Mass Med. Ctr., 167 N.J. 341, 353 (2001) (citing Bernstein v. Bd. of Trs. Teachers' Pension & Annuity Fund, 151 N.J. Super. 71, 76-77 (App. Div. 1977)). "'Substantial compliance' with a statutory requirement is normally sufficient and occurs whenever, as a practical matter, it is ...

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