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Circus Liquors, Inc. v. Governing Body of Middletown Township

398 N.J. Super. 220, 941 A.2d 616 (App. Div. 2008)

LIQUOR LICENSES — Holding a third liquor license for a long term in violation of the statute that limits a person from acquiring a beneficial interest in more than two alcoholic beverage retail licenses is not merely a technical violation, but is a persistent violation of law; thus, a municipality is not equitably estopped from denying renewal of the third license just because it had been held for such a long period of time.

A municipality considered an application for the annual renewal of three liquor licenses held by the same entity. The licenses had been previously renewed over the prior seven years. Statutory law prohibits any person from acquiring a beneficial interest in more than two alcoholic beverage retail licenses. This time the licensee acknowledged that it could not hold a third license, but sought a stay of the denial of renewal in order to transfer the third license to some other unrelated person. The Director of the Division of Alcoholic Beverage Control (ABC) ultimately held that the denial could be stayed to permit transfer of the license.

The Appellate Division reversed, finding that the Director of ABC was not authorized to permit a licensee to hold an illegal third license long enough to transfer it to a third party because this was inconsistent with the applicable statute. The Court stated by issuing this relief, the Director mistakenly created a circumstance by which the license holder could continue to profit from its unlawful conduct. It saw the seven year ownership of a third license as not merely a technical violation, but rather as a long term, persistent violation of law. Further, the Court found that the licensee could not, with reason and in good faith, assume that the municipality would continue to permit the unlawful renewals of its third license or that the municipality would be equitably estopped from denying renewal of the third license just because it had held the third license for a significant period of time.


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