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Hickory Garden Country Club, Inc. v. Governing Body of the Borough of Totowa

A-2794-02T2 (N.J. Super. App. Div. 2004 (Unpublished)

ALCOHOLIC BEVERAGES; LICENSES—A liquor license holder that fails to renew its license during the course of a successful appeal to overturn an earlier denial of renewal is entitled to apply for renewal even if such application would otherwise have been time-barred.

A corporation’s liquor license became inactive when it sold its property to a developer. One year later, the corporation negotiated to sell the license to a restaurant. A year after that, the corporation requested a special ruling from the Division of Alcoholic Beverage Control (ABC) granting four one-year license terms. The ABC found good cause to warrant renewing the license terms for the next two years, thereby authorizing the municipality’s governing body to consider whether to renew the license.

The request was denied. On appeal, an Administrative Law Judge granted partial summary judgment in favor of the corporation, concluding that the municipality did not have valid grounds to deny the license renewal for the previous year, and should have granted the application. However, in waiting for the appeal, the corporation failed to apply for renewal for the current year within the proper time frame, and was therefore denied renewal when its application was submitted. The denial was based on the statutory limitations of N.J.S.A. 33:1-12.13 and 33:1-12.18, which sets forth time-frames for renewals. They also provide for late renewal if the tardiness is based upon “circumstances beyond [the applicant’s] control.”

Based on prior case law, the Court ordered that the corporation should be allowed to seek renewal of its liquor license. It found neither statute to be controlling under these circumstances. Instead of declining the renewal, the Administrative Law Judge (from which this matter was referred to) should have made note of the fact that the Director of the ABC can select from two available means of addressing the prospect that the dispute over the license’s renewal would likely continue into subsequent license terms. First, the Director can issue an order to show cause why the term of the license should not be extended pending the determination of the appeal. Second, upon receipt of the initial decision, instead of allowing the time limit to run out without taking action, the Director could have required the parties to consider whether to include the elapsed license term within the order. Since the Director did neither, the Court concluded that it would have been unjust to allow the license to expire, because applying for future renewals before a final decision was made on an earlier renewal would have been futile.

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