Opinion
Rоland Richards, owner of a restaurant and supper club known as the Atlas Bar and Grill, appeals a summary judgment in favor of the Department of Alcoholic Beverage Control (Department). He contends the Department acted in an arbitrary and discriminatory manner in revoking or suspending an alcoholic beverage license issued to the prior owner and in causing the prior owner to surrender the license. We conclude that Richards’s failure to apply for a transfer of the license or for an original license was a failure to exhaust an administrative remedy and is a complete defense to this action. We also conclude that the Department established a complete defense based on other independently sufficient grounds. We therefore affirm the summary judgment.
FACTUAL AND PROCEDURAL BACKGROUND
1. Factual Background
The Department first issued a license for the sale of alcoholic beverages at the
The Department sent a warning letter addressed to the limited partnership at the restaurant premises in February 2003 stating that the police had reported several activities that сonstituted violations of the license conditions. Richards admits that when the police or the Department contacted him regarding alleged violations, he falsely informed them that he was the manager and not the owner. 1 The Department filed an accusation against the limited partnership as licensee in June 2003 alleging that the licensee had sold alcoholic beverages from bottles contaminated with insects and debris. The police also reported to the Department other violations of law occurring at the premises, including violent altercations.
Richards met with Vincent Cravens and Hilarie Vazquez of the Department to discuss their concerns in or about November 2003. At the meeting, Richards admitted that he was the owner. Cravens and Vazquez informed Richards that he must apply to the Department to transfer the license, that he was not authorized to sell alcoholic beverages at the premises without a license, and that they would pursue a surrender of the license. Richards testified in a deposition, “And right there at that very moment I was informed from that very minute of that discussion they were suspending my liquor license.” John Tamayo on behalf оf the limited partnership later surrendered the license in December 2003.
Meanwhile, the limited partnership and Alvaro Tamayo filed a complaint against Richards and others in November 2003 alleging several counts, including breach of the purchase and sale agreement and breach of a later agreement, seeking judicial foreclosure of real and personal property and other remedies. Richards and others filed a cross-complaint against the limited partnership, Alvaro Tamayo, and John Tamayo alleging various counts arising from the purchasе and sale of the business.
2. Trial Court Proceedings
Richards filed a complaint against the Department in May 2004 and filed a first amended complaint on October 5, 2004. Neither complaint was included in the appellate record. We have obtained and now augment the appellate record to include the first amended complaint, in which Richards alleges that he acquired the license by purchasing the Atlas Bar and Grill, and that “Said license was transferred to Plaintiff Roland Richards.” Richards alleges that “his liquor license” was “summarily revoked” in November 2003 without prior warning and that he “was not given any rights to appeal the revocation of his liquor license.” He alleges
The Department moved for summary judgment or summary adjudication arguing that (1) Richards has no standing to sue the Department because he never aрplied for a transfer of the license; (2) he failed to exhaust his administrative remedies; (3) he cannot maintain an action for damages based on the alleged violations of the state Constitution; (4) the Department as a public entity is not subject to liability for common law negligence, abuse of process, or the other common law torts alleged in the complaint; (5) the Department is immune from liability for injury caused by its prosecutorial activities pursuant to Government Code sections 821.6 and 815.2; (6) the Department is immune from liability for injury caused by the issuance, denial, suspension, or rеvocation of a license pursuant to Government Code section 818.4; and (7) the Department is immune from liability for injury caused by a public employee’s exercise of discretion, including any abuse of discretion, pursuant to Government Code section 820.2. The Department filed declarations by Cravens and Vazquez and other evidence in support of the motion.
Richards argued in opposition that his purchase of the business effected a transfer of the license, that the Department had recognized a prior transfer of the same license effected in the same manner, and that the Department was subject to liability for the counts alleged and was not immune. Richards filed a declaration by his attorney attaching 475 pages of exhibits in opposition to the motion. Richards also filed objections to the Cravens and Vazquez declarations.
In a minute order filed on May 4, 2005, the court overruled Richards’s evidentiary objections, granted the summary judgment motion “on the grounds set forth therein,” and directed the Department to prepare a proposed order. The minute order also stated, “The Court sustains moving party’s objections to evidence filed April 15, 2005.” It is unclear from the appellate record whether the Department filed a separate document containing evidentiary objections on that date or whether the court was referring to a statement in the Department’s reply memorandum filed on that date asserting an objection “to the ordering and organization” of documents attached to the declaration of Richards’s counsel “to the extent plaintiff asserts this ordering of documents has any particular significance.” Richards filed a notice of appeal from the order granting summary judgment on June 9, 2005. 2 The court filed an order granting summary judgment on June 27, 2005, and entered a judgment the same day. The order stated that the motion was granted based on the grounds set forth in the Department’s moving papers, specified those grounds, and restated the rulings on evidentiary objections.
CONTENTIONS
Richards contends (1) the license was transferred to him as a matter of law
DISCUSSION
1. Standard of Review
A
party is entitled to summary judgment if under the undisputed facts or facts as to which there is no reasonablе dispute the party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c);
Aguilar v. Atlantic Richfield Co.
(2001)
We review the trial court’s ruling de novo and apply the same legal standard that governs the trial court.
(Johnson v. City of Loma Linda
(2000)
2. Richards’s Purchase of the Business Did Not Transfer the License to Him
Article XX, section 22 of the California Constitution grants the Department the exclusive power “to license the manufacture, importation and sale of alcoholic beverages in this State.” (Ibid.) Section 22 grants the Department the discretion to deny, suspend, or revoke a license in the interest of “public welfare or morals” or if the person holding or seeking a license has committed a violation of law involving moral turpitude, and states that it is “unlawful for any person other than a licensee of said department to manufacture, import or sell alcoholic beverages in this State.” (Ibid.) The Alcoholic Beverage Control Act (Act) also states that no person may perform any act for which a license is required under the Act unless the person is so authorized under a license. (Bus. & Prof. Code, § 23300.)
In addition to the general provision in Business and Professions Code section 24070 quoted ante, the Act includes specific provisions governing certain types of transfers, including a transfer upon a change of ownership of 50 percent or more of the shares of stock of a corporation (id., § 24071.1, subd. (a) [stating, “the license of the corporation shall be transferred to the corporation as newly constituted”]). Despite the seemingly mandatory language of section 24071.1,. sections 24070, 23958, and 23987, prior opinions, and the Department’s regulations make it clear that a transfer is effective only upon approval by the Department of a transfer application.
The California Supreme Court has stated, “all transfers are subject to official investigation and approval in the same manner as the initial issuance of a license. (Bus. & Prof. Code, §§ 24070, 23958, 23987, 23988.) Indeed,
the omission of a provision for such approval in the private agreemеnt of the parties does not affect the need for official sanction. [][] The requirement for such approval is an implied condition of all agreements for the transfer of alcoholic beverage licenses, whatever the context and whatever the nature of the consideration. [Citations.]”
3
(Greve v. Leger, Ltd.
(1966)
Moreover, the Department’s regulations provide for the transfer of a license only upon approval of an application, payment of a transfer fee, and issuance of a license certificate to the transferee: 4
“(a) Subject to the provisions of law and of the department’s rules limiting the number of licenses which may be issued in any county, licenses may be transferred from person to person and from premises to premises within the same county upon a single transfer application.
“(b) The transferee shall make application to the department for a license of the type to be transferred and shall meet all the qualifications required of an original applicant for such license. The transferor shall join in the application.
“(c) The transfer fee shall be paid by the transferee and shall accompany the application. . . .
“(d) In the absence of a temporary permit, the transferee shall not exercise any of the privileges of a licensee until the license is transferred by the issuance of a license certificate to the transferee. The transferor shall not permit the transferee to еxercise any of the privileges of his license until the license is transferred.” (Cal. Code Regs., tit. 4, § 60.)
These authorities make it clear that the purchase of the business did not effect a transfer of the license to Richards and that a transfer could be effective only upon approval of an application made to the Department. Richards never became a licensee because he never applied for a license. He therefore never suffered a revocation or suspension of what he calls “his license.” This compels the conclusion that the appropriate remedy for Richards was to apply for a transfer of the license or for an original license, as we shall explain.
3. Richard Failed to Exhaust His Administrative Remedy
A party ordinarily must exhaust an administrative remedy available before seeking judicial relief.
(Campbell
v.
Regents of University of California
(2005)
Richards cites no authority to support his contention that the presentation of a claim under the California Tort Claims Act (Gov. Code, § 810 et seq.) in lieu of pursuing an administrative remedy established by the Department satisfiеd the exhaustion requirement. The presentation of a claim pursuant to the Tort Claims Act is a separate, additional prerequisite to commencing an action against the state or a local public entity and is not a substitute for the exhaustion of an administrative remedy. (See
Bozaich
v.
State of California
(1973)
Richards complains that the Department revoked or suspended “his license” and caused the prior owner to surrender the license. Yet Richards never applied to the Department for a transfer of the license, or for an original license, either at the time he first began to operate the business or at any time thereafter. Richards could have applied for a transfer even after the limited partnership surrendered its license.
Courts recognize certain established exceptions to the exhaustion requirement, including where the administrative remedy is inadequate or where pursuit of the administrative remedy would be futile or would result in irreparable injury.
(Coachella Valley Mosquito & Vector Control Dist. v. California Public Employment Relations Bd., supra,
35 Cal.4th at pp. 1080-1081;
Glendale City Employees' Assn., Inc. v. City of Glendale
(1975)
The failure to exhaust an administrative rеmedy is an independently sufficient ground to affirm the summary judgment.
4. The Department Established an Additional Complete Defense to Each Count
a. Constitutional Count
The Department established an additional complete defense to each count apart from Richards’s failure to exhaust an administrative remedy. The first count alleges a violation of article I, sections 1 to 31 of the state Constitution and seeks only money damages. Although the complaint refers to article I, sections 1 to 31 generally, Richards’s argument on appeal with respect to the first count is limited to due process. Article I, section 7, subdivision (a) states in relevant part, “A person may not be deprived of life, liberty, or property without due process of law or denied equal protection of the laws.” Courts that have carefully considered the question have held
b. Public Entity Immunity
The Tort Claims Act provides that a public entity is not liable for an injury “[ejxcept as otherwise provided by statute” (Gov. Code, § 815).
(Zelig v. County of Los Angeles
(2002)
A public employee acting within the scope of employment is immune from liability for an injury caused by the employee’s “instituting or prosecuting any judicial or administrative proceeding . . . even if he acts maliciously and
without probable cause.” (Gov. Code, § 821.6.) Courts liberally construe “administrative proceeding” to include investigatory and other аctivities in preparation for more formal proceedings.
(Amylou R.
v.
County of Riverside
(1994)
Moreover, a public entity is immune from liability for an injury caused by the suspension, revocation, issuance, or denial of a license if the public entity is authorized by law to determine whether the license should be suspended, revoked, issued, or denied. (Gov. Code, § 818.4.)
7
The same immunity also applies to a public
Richards’s reliance on Government Code section 945.4 and the Alcoholic Beverage Control Act as statutory bases for liability is misguided. Section 945.4 states that before filing a suit for money or damages against a public entity, the plaintiff must first present a claim under the Tort Claims Aсt, and the claim must be acted on by the appropriate body or deemed rejected, if a claim is required to be presented under the act.* 11 Section 945.4 establishes a precondition to suit, not a substantive basis for public entity liability. Richards also fails to cite any provision of the Alcoholic Beverage Control Act that provides for public entity liability.
5. Richards Has Shown No Prejudicial Error in the Overruling of His Evidentiary Objections
Richards contends the court erred by overruling his objections to the declarations of Cravens and Vazquez, but does not specify or discuss his objections tо the Cravens declaration and therefore waives any error with respect to the Cravens declaration.
(Guthrey v. State of California
(1998)
DISPOSITION
The judgment is affirmed. The Department is entitled to recover its costs on appeal.
Klein, P. J., and Aldrich, J., concurred.
Notes
Richards misconstrues these facts in an effort to support his argument that the Department recognized him as the licensee and should be estopped to claim otherwise. Contrary to Richards’s argument, the undisputed evidence shows that the Department never recognized him as the licensee and that there is no basis for an estoppel.
The notice of appeal was premature because an order granting summary judgment is nonappealable.
(Levy v. Skywalker Sound
(2003)
Former Business and Professions Code section 23988, since repealed, provided for a protest by a local governing body to the issuance or transfer of a license and a public hearing on the protest. (Stats. 1955, ch. 447, § 67, p. 912.) Current section 24013 now provides for protests by local governing bodies and other persons.
The Department has enacted regulations pursuant to the authority granted by the Legislature in Business and Professions Code section 25750, subdivision (a).
“(a) Every licensee who surrenders, abandons or quits his licensed premises, or who closes his licensed business for a period exceeding 15 consecutive calendar days, shall, within 15 days after closing, surrendering, quitting, or abandoning his licensed premises, surrender his license or licenses to the department. The department may seize the license certificate or certificates of any licensee who fails to comply with the surrender provisions of this rule, and may proceed to revoke his license or licenses. fi[] . . . [][] (d) Any license voluntarily surrendered under paragraph (a) of this rule shall be revoked if it is not transferred to another person or for use at another premises, or redelivered and the licensed activity resumed, within one year from the date of such surrender.” (Cal. Code Regs., tit. 4, § 65.)
Even if the Department improperly had revoked or suspended “his license” as Richards maintains, he would have been required to appeal the decision to the appeals board rather than sue directly in court.
(Cardoso v. Dept. Alcoholic Bev. Control
(1958)
“A public entity is not liable for an injury caused by the issuance, denial, suspension or revocation of, or by the failure or refusal to issue, deny, suspend or revoke, any permit, license, certificate, approval, order, or similar authorization where the public entity or an employee of the public entity is authorized by enactment to determine whether or not such authorization should be issued, denied, suspended or revoked.” (Gov. Code, § 818.4.)
“A public employee is not liable for an injury caused by his issuance, denial, suspension or revocation of, or by his failure or refusal to issue, deny, suspend or revoke, any permit, license, certificate, approval, order, or similar authorization where he is authorized by enactment to determine whether or not such authorization should be issued, denied, suspended or revoked.” (Gov. Code, § 821.2.)
“Except as otherwise provided by statute, a public entity is not liable for an injury resulting from an act or omission of an employee of the public entity where the employee is immune from liability.” (Gov. Code, § 815.2, subd. (b).)
The Department is immune from liability for the alleged counts for negligent hiring and supervision of employees, abuse of process, intentional interference with contract or prospective economic advantage, аnd intentional infliction of emotional distress. In light of the statutory immunities, we need not discuss the other defenses asserted.
“Except as provided in Sections 946.4 and 946.6, no suit for money or damages may be brought against a public entity on a cause of action for which a claim is required to be presented in accordance with Chapter 1 (commencing with Section 900) and Chapter 2 (commencing with Section 910) of Part 3 of this division until a written claim therefor has been presented to the public entity and has been acted upon by the board, or has been deemed to have been rejected by the board, in accordance with Chapters 1 and 2 of Part 3 of this division.” (Gov. Code, § 945.4.)
