August 12, 2009
IN THE MATTER OF THE APPLICATION FOR RELIEF PURSUANT TO N.J.S.A. 33:1-12.18 FOR THE 2006-2007 AND 2007-2008 LICENSE TERMS
JB CASSANO, INC., APPELLANT.
On appeal from the Department of Law & Public Safety, Agency No. 06-08-5467.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued April 28, 2009
Before Judges Yannotti and LeWinn.
Petitioner, JB Cassano, Inc. (Cassano), appeals from the June 17, 2008 order of the Division of Alcoholic Beverage Control (ABC) denying the issuance of a liquor license. For the reasons that follow, we affirm.
Cassano owned a plenary retail alcohol distribution license pursuant to which it operated a liquor store in Jersey City since 1984. In late 2005, Cassano failed to pay its sales tax obligation to the State of New Jersey. Therefore, the Division of Taxation (Taxation) seized Cassano's liquor license in July 2006 and offered the license at auction the following September.
No one purchased Cassano's license at the auction, and Cassano began negotiating the sale of its license to Susan Saeed. Cassano claimed that it entered into these negotiations based upon advice from a Jersey City official that the license could be sold despite the seizure so long as all outstanding taxes were paid in full.
Cassano paid its outstanding tax liability on January 2, 2007, and Taxation released its liquor license. The sale to Saeed fell through, and another prospective purchaser inquired about the validity of the license. Cassano contacted Jersey City officials who informed him that the license had been "forfeited" because it had not been renewed by July 1, 2006 On May 27, 2008, Cassano filed a petition with the ABC seeking reinstatement of its liquor license. In its petition, Cassano asserted that it had relied upon advice from "representatives of the City of Jersey City that [Cassano] could market and sell the [l]icense notwithstanding its seizure as long as the State was paid." Cassano further alleged that when the attempted sale to Saeed fell through, Cassano learned [u]pon contacting the City of Jersey City[,] . . . [that] the [l]icense was forfeited because it was not renewed by July 1, 2006 . . . . Prior to the fall of 2007 [Cassano] was never advised by any representatives of the State of New Jersey that the [l]icense was no longer held by it and had been forfeited due to the failure to pay a renewal fee in July 2006.
Cassano also asserted that "[b]ecause the [l]icense had been seized by the State in 2006 and because no representatives of the City advised [Cassano] to the contrary, [Cassano] believed that due to the seizure it could not renew the [l]icense." On June 17, 2008, the ABC rendered a decision denying Cassano's petition, and stated its reasons as follows:
Liquor licenses are issued for an annual term of July 1 through June 30 of the following year. . . . Thus, every liquor license expires on June 30. However, there is a 30-day grace period for a licensee to file a late renewal application. . . . Thus, the municipal issuing authority has jurisdiction to consider the renewal of a liquor license if the renewal application and fees are filed with the issuing authority by July 30 of the year beginning the term for which renewal is sought. A municipal issuing authority cannot consider an application for renewal filed after July 30 without a Special Ruling from the Director of the . . . ABC. . . . N.J.S.A. 33:1-12.18 permits the Director to issue a Special Ruling authorizing the municipal issuing authority to consider a renewal application filed within 60 days of the July 30 deadline and to issue a "new" license. The petition requesting that the Director issue a Special Ruling must be filed with the [ABC] by September 28 of the year beginning the term for which renewal is sought. . . .
The Director has no jurisdiction to grant a petition for the issuance of a "new" license when the renewal application has been filed after September 28 of the year beginning the term for which renewal is sought.
This licensee . . . took no steps to comply with the license renewal requirements in Title 33. Moreover, its explanation of why there was not strict compliance with the statute is inadequate, since a municipal issuing authority is not required to "remind" a licensee to renew its license each year. . . .
In the instant matter, the City of Jersey City said nothing about the licensee's obligation to file a renewal application for the 2006-2007 license term and was under no obligation to do so. All of the licensee's State contacts were with [Taxation] and not the [ABC]. The licensee's obligation to pay its tax liabilities to [Taxation] does not affect its obligation to file a timely renewal application with the municipal issuing authority each year. . . .
I recognize that the loss of this license may be an economic hardship to the licensee and its shareholders. However, this license was not "forfeited," but expired due to the licensee own failure to renew.
On appeal, Cassano argues that "equity" mandates barring the ABC from denying relief, and that the ABC erred by not affording Cassano a plenary hearing. Having thoroughly reviewed the record in light of these contentions and the controlling legal principles, we find them to be without merit.
N.J.S.A. 33:1-12.18 provides in pertinent part:
Nothing in this act shall be deemed to prevent the issuance of a new license to a person who files application therefor within 60 days following the expiration of the license renewal period if the director shall determine in writing that the applicant's failure to apply for a renewal of his license was due to circumstances beyond his control.
The renewal process contemplated by this statutory provision requires the submission of an application for a new license, along with payment of the appropriate fees, to the municipal issuing authority at the very latest by September 28 of the renewal term, as well as the filing of a petition with the Director of the ABC by that same deadline. N.J.A.C. 13:2- 42.1(a)(1). That petition must include the licensee's explanation of its efforts to renew the license. N.J.A.C. 13:2- 42.2(a)(3).
It is undisputed that Cassano never filed an application for renewal of its license with the Jersey City issuing authority for the 2006-2007 term. Cassano filed its petition with the ABC on May 27, 2008, well after the September 28, 2006 deadline afforded by N.J.A.C. 13:2-42.1(a)(1).
In Cavallaro 556 Valley St. Corp. v. Div. of Alcoholic Beverage Control, 351 N.J. Super. 33, 42-43 (App. Div. 2002), we held that the filing deadline set forth in N.J.S.A. 33:1-12.18 is mandatory and the ABC lacks authority to enlarge it. We noted:
This [legislative] scheme establishes an "orderly process of timely renewal of licenses." The legislation also fosters the strict regulatory control of liquor licenses that are not only renewed annually but are also regulated in number. Should renewal be permitted after September 28th of the new license year, the regulators' ability to control the number of licenses may be made significantly more difficult. At some point, the local issuing authority must be free to consider a particular license lapsed.
Once the extended sixty-day period expires on September 28, and assuming there are no Constitutional implications present, the [D]irector has no legislative authority to consider either a renewal license . . . or a new license . . . . No matter what excuses for failing to renew in timely fashion are asserted, the Director lacks authority after September 28th .
[Id. at 42, 43 (citations omitted).]
Cassano's claim that it substantially complied with the statutory deadline for renewing its liquor license is baseless.
We have noted, in the context of liquor license renewal applications, that
[t]he 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.
[In re Application of Virgo's, Inc., 355 N.J. Super. 590, 595 (App. Div. 2002) (emphasis added).]
Cassano failed to take any steps towards the timely renewal of its license for 2006-2007. Having held such a license for over twenty years, Cassano was well aware of the need for annual renewal by June 30 of the renewal term. Cassano claims that it relied upon information from "representatives" of Jersey City.
However, there is no statutory obligation upon a municipal issuing authority to remind licensees of the need for annual renewal. Moreover, Taxation's involvement in the seizure and subsequent restoration of Cassano's license had no bearing upon Cassano's obligation to comply with the ABC's renewal requirements.
Under these circumstances, we are satisfied that the ABC properly declined to provide Cassano with a plenary hearing on its petition. We affirm substantially for the reasons set forth by the Director of the ABC in his order and decision of June 17, 2008.
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