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Clair v. City of Atlantic City

September 4, 2009

EDWARD CLAIR, WILLIAM CIBOTTI, JOHN TAIMANGLO, SEA THRILLS TOURS, INC. AND A.C. CLUB, INC. T/A CHRISTINE'S, PLAINTIFFS-APPELLANTS,
v.
CITY OF ATLANTIC CITY, THE MUNICIPAL BOARD OF ALCOHOLIC BEVERAGE CONTROL OF THE CITY OF ATLANTIC CITY, YVONNE PRESTON, ABC BOARD; SID TRUSTY, ABC BOARD; CATHERINE GRADY, ABC BOARD; DETECTIVE JAMES MOONEY, ACPD; DETECTIVE CHRISTOPHER BARBER, ACPD; AMBER CORBETT, ABC; STEVE FRAME, AC CODE ENFORCEMENT; PAT MALIA, AC CODE ENFORCEMENT; ELMER WALTERS AND WALLACE SHIELDS, DEFENDANTS, AND DETECTIVE JACK IMFELD, ACPD, AND JOHN SCHULTZ, DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-1177-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted March 11, 2009

Before Judges Rodríguez, Payne and Waugh.

Plaintiffs Edward Clair, William Cibotti, John Taimanglo, Sea Thrills Tours, Inc., and A.C. Club, Inc. t/a Christine's (collectively, "A.C. Club"), appeal from a grant of summary judgment dismissing their tortious interference with business relations claim against defendants John Schultz (Schultz) and Jack Imfeld (Imfeld). We affirm.

This matter involves a lengthy and complex history involving several prior lawsuits, the facts of which bear on the issues in the present matter.

A.C. Club leased the first floor of a building located in Atlantic City. A.C. Club intended to open a restaurant on the premises. Another entity, K.A.V., Inc., originally leased the second and third floors of the same building, intending to open a nightclub. In 1999, both A.C. Club and K.A.V. applied for a liquor license with the municipal Board of Alcoholic Beverage Control (ABC Board). Imfeld, an Atlantic City police detective with ABC Board enforcement duties, investigated and opposed A.C. Club's application. The ABC Board granted A.C. Club's application and denied K.A.V.'s application.

A.C. Club then took over the lease for the second and third floors of the building and applied to expand its first-floor liquor license to the second and third floors, enabling it to run a nightclub. The ABC Board granted this application but imposed conditions on the expanded license, prohibiting alcoholic beverage service between 3:00 a.m. and 10:00 a.m. and prohibiting the operation of a "discotheque." These conditions were imposed in response to community objections based on a history of noise, violence, drug use, property destruction, the accumulation of garbage and broken glass, parking congestion and public urination associated with previous nightclubs operating in that location.

Approximately one month later, A.C. Club requested that the ABC Board amend the license conditions, claiming that, with the conditions in place, it could not obtain financing or operate at a profit. The ABC Board partially amended the license conditions but A.C. Club nevertheless appealed to the Division of Alcoholic Beverage Control (State ABC). The State ABC Director stayed enforcement of the conditions pending resolution of the appeal. During this period, A.C. Club operated a nightclub with an unrestricted liquor license. A.C. Club has not produced any business records from this period of operation.

A.C. Club's appeal was heard by an administrative law judge, Edgar R. Holmes (ALJ), in May 2001. The ALJ found the liquor license conditions had been imposed based on A.C. Club's representation to the ABC Board that it intended to open an upscale restaurant and nightclub, but that A.C. Club instead opened a discotheque-style nightclub. Under the circumstances, the ALJ found A.C. Club's assertion that the conditions in the liquor license were arbitrary and capricious was "disingenuous," because they would have been of no consequence if the business had been operated as represented. The ALJ concluded that the imposition of liquor license conditions was not arbitrary or capricious. The ALJ also rejected A.C. Club's contention that similar local establishments were not subject to the same liquor license conditions as untimely raised and insufficiently pled. The State ABC Director affirmed. A.C. Club did not appeal this determination.

In a parallel action, in July 2002, A.C. Club applied to renew its liquor license for 2002-2003. This renewal was denied on the grounds that A.C. Club had not complied with the conditions in the liquor license, based on three separate violations in February and September 2002. Moreover, there was substantial public testimony that A.C. Club's operation was bringing the same drug use, noise, violence and other, related, problems associated with previous nightclubs in that location. A.C. Club appealed the denial to the State ABC.

Meanwhile, in October 2002 and April 2003, the ABC Board began a series of enforcement actions against A.C. Club for various regulatory violations. These violations were discovered in the course of three different inspections in February and September 2002, two of which were led by Imfeld. In May 2003, A.C. Club entered into a consent order under which the ABC Board dropped all charges against A.C. Club and A.C. Club surrendered its liquor license and withdrew its appeal of the denial of its 2002-2003 renewal application.

A.C. Club then brought suit against numerous parties on a variety of claims. Nearly all these claims and parties were dismissed by pretrial motion, leaving only claims of tortious interference with a business relationship against Schultz, a rival club owner, and Imfeld.

The tortious interference claim was based on A.C. Club's allegations that Schultz used his influence with the local police, the ABC Board, and various regulatory agencies to prevent A.C. Club from opening and operating a nightclub. Specifically, A.C. Club complained of arbitrary and unrealistic zoning and occupancy requirements, A.C. Club being required to obtain permits Schultz was not required to obtain, Imfeld's domination of the ABC Board, operational restrictions on A.C. Club's liquor license that were not imposed on any other establishment in Atlantic City, disparate enforcement of health and safety ...


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