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Martell's Waters Edge, L.L.C. v. Governing Body of the Township of Berkeley

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


April 7, 2010

MARTELL'S WATERS EDGE, L.L.C., T/A THE WATERS EDGE, APPELLANT,
v.
GOVERNING BODY OF THE TOWNSHIP OF BERKELEY, RESPONDENT.

On appeal from the Division of Alcoholic Beverage Control, Department of Law and Public Safety, Docket No. 7301.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 22, 2010

Before Judges Lisa and Baxter.

Plaintiff Martell's Waters Edge, LLC (Martell's) appeals a June 17, 2009 final agency decision of the Director of the Division of Alcoholic Beverage Control (ABC or Director) in which the Director upheld the conclusion of an Administrative Law Judge (ALJ) that the Township of Berkeley (Township) did not abuse its police powers when it rejected Martell's request to amend the conditions that governed its liquor license. The requested amendment would have extended the hours in which music can be played on the restaurant's outdoor deck on weekday nights by an additional two hours, so that music could be offered outside until midnight, instead of ending at 10:00 p.m. We agree with the Director's conclusion that Martell's construction of a sound wall that reduces the decibel level of the music has no bearing on the Township's right to ban all music after 10:00 p.m. We affirm.

I.

Two years ago, we considered the identical issue Martell's presents in this appeal. In particular, we considered whether the Director reached a decision that was arbitrary and capricious when he approved the Township's decision to deny Martell's request for outdoor music until midnight on weekday nights. Martell's Waters Edge, L.L.C. v. Governing Board of Berkeley, No. A-2743-06 (App. Div. April 3, 2008) (slip op. at 2). We concluded that the judgments of the Township and the ABC Director were neither arbitrary nor capricious and we affirmed the denial of Martell's request to extend the hours of outdoor music on weekday nights. Id. at 11. With the exception of the now-completed sound wall, the facts have not changed since that time.

The restaurant involved in this appeal, known as "Waters Edge," is located in the Bayville section of the Township. Bordered by a commercial boatyard to the south, by undeveloped property to the west, and by Barnegat Bay to the east, the restaurant is adjacent to a residential neighborhood known as "Good Luck Point" at the north and northeast side of the establishment. The closest home is 400 feet from the restaurant's outside deck.

In 1994, the Township issued a plenary retail consumption license to Waters Edge, but imposed a special condition that permitted music to be played on the rear deck of the restaurant only until 10:00 p.m. on weekdays and until midnight on Fridays, Saturdays and holidays. Those same restrictions were imposed in each successive license renewal term. The rear deck, which extends to Barnegat Bay in an easterly direction, includes a bar and bandstand, which at the time of our 2008 decision was screened on several sides by noise barriers. Id. at 2. The deck is typically used, weather permitting, on weekends in the spring through Memorial Day, daily from Memorial Day through Labor Day, and for two or three weekends after Labor Day.

In June 2005, Martell's requested that the Township amend the terms of its license so that it could play music on the deck every night until midnight, rather than only be able to offer music until midnight on weekends and holidays. At a public hearing before the Township Council on July 26, 2005, Martell's outlined the measures it had taken to muffle the sound of the music and also presented a noise expert, who testified that he had measured the sounds emanating from the deck when music was being played. The expert confirmed that the noise levels he recorded were within the decibel levels allowed under State and municipal noise regulations.

Five objectors testified at the June 2005 hearing in opposition to Martell's request, asserting that allowing music to be played until midnight on weeknights would interfere with the sleep of those residents who were required to arise early in the morning for work. Although some of the objectors noted their appreciation of the steps the restaurant's new management had undertaken to contain noise, they urged that no extension of the music hours be approved. The Township Council approved the license renewal, but unanimously voted to deny Martell's application for authorization to play music on the outdoor deck until midnight on weekdays.

Martell's sought review of that local decision by requesting a hearing before an Administrative Law Judge (ALJ). At the hearing before ALJ Dennis Blake, Martell's presented the testimony of its owner, who explained that when he purchased the Waters Edge in 2003, he was aware of numerous complaints from neighbors about excessive noise from the bands on the deck. By installing sound barriers, he succeeded in reducing the noise, because in his two years of operation, between 2003 and 2005, there was only one noise complaint registered with the Berkeley Police Department.

After considering the testimony of Martell's owner and its noise expert, as well as a transcript of the 2005 proceedings before the Township Council where neighbors had registered their objections to an increase in the hours of outdoor music on weekday nights, ALJ Blake issued a written decision on June 19, 2006 upholding the Township's refusal to modify the special condition. Among other findings, the ALJ observed that the residents who opposed Martell's request had presented a "desire for peace and quiet to enable them to sleep during the work week." He concluded that this rationale "is clearly associated with public health and the general welfare and is a sufficient and appropriate justification for [the Township's] decision to deny [Martell's] request for expanded [music] hours."

After Martell's filed exceptions to the ALJ's decision, the ABC Director issued a ten-page final decision on December 21, 2006, ratifying ALJ Blake's determination. The Director agreed with the ALJ's conclusion that the Township acted reasonably when it denied the expanded music hours on weeknights, in light of the numerous objections raised by residents. The Director found that "the issue of music emanating late at night from the licensed premises does impact on the quality of life of the residents surrounding the licensed business." The Director also found it "noteworthy that... for the last twelve years,... the neighbors have developed an expectation of peace and quiet after 10:00 p.m. during [weeknights]." Consequently, the Director affirmed the ALJ's and the Township's rulings, thereby continuing the weekday restrictions for the 2005-2006 and 2006-2007 license terms.

On appeal, Martell's contended that the Director's determination was unreasonable. Id. at 8. Martell's stressed that it had not violated any noise ordinances while operating its outdoor bar, and asserted that the neighbors' objections were not widespread. Ibid. In rejecting Martell's arguments and affirming the Director's December 21, 2006 determination, we reasoned:

Martell's incorrectly focuses upon the fact that it has not been found during its ownership in violation of the general noise ordinances. There is nothing in the State's noise control statute, N.J.S.A. 13:1G-1 to -23, or other legal authority, that preempts the police powers of a municipality or the ABC to impose reasonable noise-related conditions on a liquor licensee. The question is not merely one of adhering to prescribed decibel levels. There is a reasonable distinction between the sound of music that may emanate from a residence having an occasional social gathering, and a restaurant and bar that intends to play outdoor music on a regular and sustained basis during the summer months. Although reasonable minds might differ about such matters, and we also recognize the earnest efforts of Martell's to be considerate of its neighbors, we cannot conclude that the ultimate judgments of the Township and the ABC Director here were arbitrary or capricious. [Id. at 10-11.]

We turn now to the license renewal proceedings that are the subject of the present appeal. On May 5, 2007, when Martell's liquor license was nearing expiration, it applied for renewal, and again sought a hearing on its request for permission to present outdoor music until midnight on weekdays. Martell's informed the Township that the twelve-foot sound wall that had been in the planning stages during the 2005-2006 and 2006-2007 license terms had now been completed. Martell's requested that the Township conduct a public hearing to consider the additional steps it had taken to accomplish noise reduction. On June 26, 2007, without conducting a public hearing, the Township renewed Martell's plenary liquor consumption license, but again denied Martell's request to expand the hours of its outdoor music on weekday nights. Martell's appealed the Township's June 2007 decision, and its appeal was transferred to the Office of Administrative Law (OAL).

At a hearing before ALJ Joseph Martone on August 5, 2008, Martell's presented the testimony of three witnesses. The first was Martell's owner David Bassinder, who presented an aerial photograph depicting the licensed premises together with surrounding roadways and homes. He testified that he had taken action to substantially reduce the sound from the outdoor deck by constructing a twelve-foot-high wall to the right of the sound stage. Designed by a sound engineer, the wall consists of wood-framed construction covered by wallboard with an overlay of carpeting to further muffle the sound. Bassinder also testified that Martell's had fully complied with existing restrictions on outdoor music and had received no violation notices from the Township. He also stated that there had been no noise complaints from neighbors.

Martell's also presented the testimony of Alexander Litwornia, a licensed professional engineer with considerable experience in the field of noise and noise control. Litwornia's testimony described his visit to the establishment, during which he took sound readings while a singer and acoustic guitar were performing and when a five-piece band was performing. Litwornia's measurements revealed a sound level of forty-five decibels. He opined that the sound wall had enabled Martell's to achieve a twenty-decibel reduction, because typically the noise level from a band performance would be expected to be as high as sixty-five decibels. Thus, in Litwornia's opinion, a significant decrease in the noise level had been achieved. He also asserted that the noise levels, when measured at the spot where the Waters Edge abutted the boundary of the nearest residence, were well within existing Department of Environmental Protection (DEP) noise regulations. See N.J.A.C. 7:29-1.2.

The final witness for Martell's was John T. Chadwick, IV, a licensed professional planner, who testified that Martell's is a permitted use in the zone, and that it is not unusual for restaurants to be located near homes. He opined that the existing use had no adverse impact on the surrounding residential area. The Township presented no witnesses, but, without objection from Martell's, presented ALJ Martone with a transcript of the 2006 proceedings before ALJ Blake as well as a transcript of the 2005 license renewal proceeding conducted by the Township.

After receiving proposed findings of fact from both sides, on December 26, 2008, ALJ Martone rendered a seventeen-page opinion in which he thoroughly reviewed the factual and legal contentions of the parties. He upheld the Township's continuation of the special condition that had existed since 1994, and rejected Martell's contention that the construction of the twelve-foot-high sound wall had created such a significant reduction in the noise level in the immediate area of the restaurant as to require the Township to relax the restrictions on outdoor music by permitting such music until midnight on weekdays.

In particular, ALJ Martone reasoned:

The issue in the present case, whether [the Township's] denial of [Martell's] request for expanded hours was arbitrary, capricious or unreasonable, is identical to the issue actually litigated and decided on the merits in the prior proceeding [in 2006]. The petitioner in this case, [Martell's], was a party to the earlier proceeding. The acts complained of, [the Township's] refusal to extend hours, the demand for relief are the same and [Martell's] theory of recovery is the same.... While there is some indication that the sound levels reaching the residential area may have been reduced by the completion of the sound wall, there is nothing in the record to establish that the sound of music being played on the outside deck cannot be heard by the nearby residents.

....

Therefore, I FIND that the [June 30, 2007] renewal of [Martell's] license subject to the existing special conditions, should be affirmed.

ALJ Martone's December 26, 2008 decision was transmitted to the Director of the ABC, Jerry Fischer, who, after considering Martell's arguments, on June 17, 2009 issued a nine-page decision confirming the decision of ALJ Martone and approving the Township's continuation of the existing special condition that limited outdoor music on weeknights to 10:00 p.m.

Director Fischer rejected each of the four arguments advanced by Martell's. First, the Director addressed Martell's claim that the Township's failure to provide a hearing at the local level violated Martell's due process rights by depriving Martell's of the opportunity to demonstrate a lack of opposition from the surrounding community to Martell's request for a modification of the special condition. The Director found that because Martell's was entitled to a de novo hearing before the ALJ, with the same opportunity to present testimony concerning the lack of objections that it would been afforded in a hearing before the Township, that the Township's failure to grant Martell's a hearing was of no consequence.

The Director observed that Martell's had presented ALJ Martone with the testimony of the licensee, the testimony of a noise expert and the testimony of a licensed professional planner. Martell's witnesses described, in considerable detail before ALJ Martone, the construction of the sound barrier and the resultant reduction of noise levels at different surrounding locations. The Director held that Martell's had been afforded the opportunity before the ALJ to present whatever evidence it deemed relevant, including evidence that there had been no community complaints. For those reasons, the Director rejected Martell's argument that it had been prejudiced by the Township's decision to continue the special condition without affording Martell's the opportunity to demonstrate, through a hearing, that there had been no citizen complaints.

The Director also held that N.J.S.A. 33:1-32, which controls special conditions, does not require the issuing authority to provide the licensee a hearing before special conditions are imposed. For that reason, he rejected Martell's claim that the Township's refusal to conduct a hearing at the local level violated Martell's right to due process.

Next, the Director addressed Martell's claim that the Township failed to present evidence that nearby residents were able to hear the outdoor music once the sound wall was completed. Martell's maintained that the special condition was unreasonable and unnecessary to accomplish the objectives of the statutes and regulations pertaining to the issuance of liquor licenses. After acknowledging that Martell's noise expert testified that the construction of a twelve-foot-high wall had resulted in reduced decibel sound readings at various locations from Martell's property line, the Director concluded that such information, "although constructive, does not go to the crux of the issue." The Director found that "[t]he special condition [is not designed to] prohibit[] excessively loud music on the outside deck. Rather, it prohibits any music outside after 10:00 p.m. on weeknights...." Therefore, the Director held, "any argument concerning decibel levels permitted by state statute or local ordinance is misleading and not relevant to a decision in this case."

Third, the Director considered Martell's argument that ALJ Martone improperly utilized the transcript of the prior proceeding before ALJ Blake on October 24, 2006, and had incorrectly identified it as an exhibit entered into evidence by Martell's. The Director rejected that argument, finding that ALJ Martone expressed his intention to review the transcript of the prior OAL proceedings, and Martell's attorney specifically stated that he had no objection. Therefore, the Director rejected Martell's argument that the ALJ had improperly considered evidence developed during the 2006 OAL hearing.

Last, the Director considered Martell's contention that public sentiment should not have been considered by the ALJ. The Director concluded that the Township was entitled to consider noise complaints and residents' rights to quiet enjoyment of their property after certain hours, and was also entitled to determine that after those hours "no sound should emanate from the outside deck... so local residents can focus on properly preparing to retire for the night." The Director observed that the ALJ was entitled to consider those same factors.

The Director's June 17, 2009 decision ended with the following observations:

In conducting an analysis of the competing interests, it is apparent that Martell's business interests should not supersede [the Township's] desire to maintain a reasonable quality of life for its residents. I do not see, nor has Martell's demonstrated, how playing music on the outside deck after 10:00 p.m. on weeknights... enhances the quality of life of anyone in the community. In fact, what has been persuasively argued is that the quality of life of neighborhood residents is enhanced by the condition prohibiting music outside after 10:00 p.m. on week nights, and after 12:00 midnight on Fridays, Saturdays and holidays.

[The Township] is entitled to maintain the integrity of its community, and I find that the special provision is necessary, proper and reasonably related to safeguarding the health, safety and welfare of area residents. N.J.S.A. 33:1-32. Martell's has operated under this special condition since it first opened for business, and there is nothing in the record before me that would warrant a change in the status quo.

On appeal, Martell's advances the same claims it presented before the Director, whose decision Martell's characterizes as manifestly unreasonable. Martell's stresses that it has not violated any noise ordinances while presenting music on its outdoor deck. Martell's also maintains that the neighbors' objections to its request for expanded music hours were not widespread, and that the completion of the twelve-foot sound barrier has reduced the noise level to forty-five decibels, which it claims is the same level as naturally-occurring sounds at the shoreline, such as waves hitting the bulkhead or seagulls cawing.

The scope of our review of final agency decisions is narrow, and is confined to four inquiries:

(1) whether the agency's decision offends the State or Federal Constitution; (2) whether the agency's action violates express or implied legislative policies; (3) whether the record contains substantial evidence to support the findings on which the agency based its action; and (4) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors. [George Harms Constr. Co. v. N.J. Tpk. Auth., 137 N.J. 8, 27 (1994).]

On the whole, "[o]ur function is to determine whether the administrative action was arbitrary, capricious or unreasonable." Burris v. Police Dep't, W. Orange, 338 N.J. Super. 493, 496 (App. Div. 2001). "The burden of demonstrating that the agency's action was arbitrary, capricious or unreasonable rests upon the [party] challenging the administrative action." In re Arenas, 385 N.J. Super. 440, 443-44 (App. Div.), certif. denied, 188 N.J. 219 (2006); Barone v. Dep't of Human Servs., 210 N.J. Super. 276, 285 (App. Div. 1986), aff'd, 107 N.J. 355 (1987).

When issuing liquor licenses under the oversight of the ABC, local officials are vested with long-standing police powers to protect the public health and welfare. See N.J.S.A. 33:1-3.1; Lyons Farms Tavern, Inc. v. Mun. Bd. of Alcoholic Bev. Control, 55 N.J. 292, 303 (1970). In exercising those powers, the "'interests of effective liquor control are best advanced where the municipal licensing program displays fair regard not only for the convenience of residents who purchase alcoholic beverages but also for the sentiments of residents who are unsympathetic or hostile to their sale.'" Id. at 306. This sensitivity to local residents extends to a licensee's request to enlarge its activities. Id. at 306-07.

We have considered Martell's claims on appeal in light of the record as a whole and the applicable law. We affirm the Director's final decision substantially for the reasons set forth in ALJ Martone's opinion and Director Fischer's well-reasoned final agency decision. We add only the following comments.

Martell's incorrectly focuses upon the fact that during its ownership it has not been found to be in violation of the general noise ordinances. As we observed in our 2008 opinion, Martell's, supra, (slip op. at 10), and reiterate today, there is nothing in the State's noise ordinance control statute, N.J.S.A. 13:1G-1 to -23, or other legal authority, that preempts the police powers of a municipality or the ABC to impose reasonable noise-related conditions on a liquor licensee.

The question is not merely one of adhering to prescribed decibel levels. After area residents have already retired for the night, they have the right to be free of the music emanating from an outdoor band playing music on a regular and sustained basis during the summer months. Although reasonable minds might differ about such matters, and we again recognize the earnest efforts of Martell's to be considerate of its neighbors, we cannot conclude that the ultimate judgments of the Township and the ABC Director here were arbitrary or capricious.

Affirmed.

20100407

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