Mentor v. Sines

[Cite as Mentor v. Sines, 2015-Ohio-5546.]

IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT

City of Mentor, :

Appellant-Appellee, :

v. : No. 15AP-171

(C.P.C. No. 14CV-9771)

Sines, Inc., :

(ACCELERATED CALENDAR)

Appellee-Appellant, :

Ohio Liquor Control Commission, :

Appellee-Appellee. :

D E C I S I O N

Rendered on December 31, 2015

Joseph P. Szeman, Assistant Law Director, for appellee City of

Mentor.

Werner G. Barthol, Co., LPA, and Werner G. Barthol, for

appellant.

APPEAL from the Franklin County Court of Common Pleas

BRUNNER, J.

I. INTRODUCTION

{¶ 1} This decision is a review of an administrative appeal of a decision of the

Ohio Liquor Control Commission ("commission") to the Franklin County Court of

Common Pleas. The appeal of the commission's decision (and previously of the decision

of the Ohio Division of Liquor Control ("division") overruling objections to the issuance of

C-1 and C-2 liquor permits to appellant) was filed by appellee City of Mentor ("city" or

"Mentor") concerning the application of appellant, Sines, Inc. ("Sines" or "appellant").

No. 15AP-171 2

II. FACTUAL AND PROCEDURAL BACKGROUND

{¶ 2} The division granted appellant C-1 and C-2 liquor permits for its gas station

located at 8745 Johnnycake Ridge Road in Mentor, Ohio. A C-1 permit is for carryout

retail sale of beer; a C-2 permit is for carryout retail sale of wine and pre-mixed beverages.

R.C. 4303.11; 4303.12. Appellant's station has two service bays, a small sales area and an

office inside, two gas pumps, and a second floor apartment. Appellant has operated the

station since the early 1960s, before the property on which the business is located became

a part of the city of Mentor, including a time before the city enacted a zoning ordinance.

In 2002 appellant applied for but was denied a municipal zoning variance for

reconfiguration of the station's interior and enlargement of the retail area. The

application to reconfigure the premises did not propose the sale of any alcoholic

beverages.

{¶ 3} When the division approved appellant's liquor permit applications more

than ten years later, the city appealed the division's decision to the commission, which

affirmed the division's order. The city thereafter appealed the commission's order to the

court of common pleas pursuant to R.C. 119.12. The court reversed the commission's

order. Although appellant's operation of the gas station, along with the sale of automotive

retail items such as windshield wipers, windshield washer fluid, oil and fuel additives, as

well as soft drinks and snacks, constituted a lawful, non-conforming use in a residential

zone of the city, the court concluded that the sale of alcoholic beverages was an unlawful

extension of Sines' legal non-conforming use.

{¶ 4} Appellant asserts that, without the sale of beverages pursuant to C-1 and C-2

permits, it is unable to compete with other stations within two miles which sell beverages

pursuant to liquor permits. Appellant also maintains that it is unlikely that issuance of

these permits and the resulting sale of additional types of beverages would increase traffic

to and from its premises, and that impact on the nearby residences is unlikely and would

not create any concern for the health, safety or welfare of the community.

III. ASSIGNMENT OF ERROR

{¶ 5} In its appeal to this court, appellant brings the following assignment of

error:

The court of common pleas erred in reversing the decision of

the Ohio Liquor [Control] Commission granting Appellant a

C-1 and C-2 liquor permit as it was supported by reliable,

No. 15AP-171 3

probative and substantial evidence and was in accordance

with the law.

IV. STANDARD OF REVIEW

{¶ 6} An appeal from a state administrative agency is governed by R.C. 119.12(M),

which provides in pertinent part:

The court may affirm the order of the agency complained of in

the appeal if it finds, upon consideration of the entire record

and any additional evidence the court has admitted, that the

order is supported by reliable, probative, and substantial

evidence and is in accordance with law. In the absence of this

finding, it may reverse, vacate, or modify the order or make

such other ruling as is supported by reliable, probative, and

substantial evidence and is in accordance with law.

"The court of common pleas is restricted to determining whether the order is so

supported." Our Place, Inc. v. Ohio Liquor Control Comm., 63 Ohio St.3d 570, 571

(1992).

{¶ 7} As we further noted in Serv. Station Holdings, Inc. v. Liquor Control

Comm., 10th Dist. No. 95APE03-346 (Sept. 28, 1995), under R.C. 119.12 "a court of

common pleas must affirm the order of the commission if the order is supported by

reliable, probative and substantial evidence and the order is in accordance with law." Id.,

citing Univ. of Cincinnati v. Conrad, 63 Ohio St.2d 108, 111 (1980). Our review of the

common pleas court's decision on appeal is limited to an abuse of discretion standard.

Serv. Station Holdings, citing Ford v. Ohio Dept. of Natural Resources, 67 Ohio App.3d

755, 757 (10th Dist.1990).

The appellate court reviews factual issues to determine

whether the court of common pleas abused its discretion in

determining that the administrative action either was or was

not supported by reliable, probative and substantial evidence.

Alternative Residences, Two, Inc. v. Ohio Dept. of Job &

Family Servs., 10th Dist. No. 04AP-306, 2004-Ohio-6444,

¶ 17. See also Blakemore v. Blakemore, 5 Ohio St.3d 217, 219

(1983) (" 'abuse of discretion' connotes more than an error of

law or judgment; it implies that the court's attitude is

unreasonable, arbitrary or unconscionable.").

Yohannes Parkwood, Inc. v. Ohio Liquor Control Comm., 10th Dist. No. 13AP-974, 2014-

Ohio-2736, ¶ 10. Barring an abuse of discretion, we may not substitute our judgment for

that of an administrative agency or the common pleas court; however, we have plenary

review of purely legal questions. Id. See also Univ. Hosp., Univ. of Cincinnati College of

No. 15AP-171 4

Medicine v. State Emp. Relations Bd., 63 Ohio St.3d 339 (1992), paragraph one of the

syllabus, and Johns 3301 Toledo Cafe, Inc. v. Liquor Control Comm., 10th Dist. No.

07AP-632, 2008-Ohio-394, ¶ 13.

{¶ 8} This case involves the legal interpretation of the effect of conflicting

applications of the state of Ohio's liquor laws with the city of Mentor's municipal zoning

ordinances. We review the common pleas court's finding that the decision of the

commission was not based on "substantial, reliable and probative evidence," for abuse of

discretion. Additionally, we consider de novo the common pleas court's legal

determination resolving how state and municipal laws apply in tandem in Sines' situation.

IV. DISCUSSION

{¶ 9} Section 1139.03 of the City of Mentor Zoning Code provides, in pertinent

part:

Where at the time of passage of this Zoning Code or any

amendments thereto lawful use of land and/or structures

exists which would not be permitted by this Zoning Code, the

use may be continued so long as it remains otherwise lawful,

provided:

(a) No such non-conforming use and/or structure shall be

enlarged or increased nor extended to occupy a greater area of

land than was occupied at the effective date of adoption or

amendment of this Zoning Code unless said enlargement does

not result in an increase in non-conformity or results in a

change to a use permitted in the district.

The ordinance thus prohibits an enlargement or increase in the non-conforming use

where an enlargement results in increased non-conformity.

{¶ 10} Mentor ordinance section 1139.01(b) further provides:

Non-conforming uses are declared by this Zoning Code to be

incompatible with permitted uses in the districts involved. A

non-conforming use of a structure, a non-conforming use of

land, or a non-conforming use of structure and land in

combination shall not be extended or enlarged after passage

of this Zoning Code by attachment on a building or premises

of additional signs intended to be seen from off the premises

or by the addition of other uses, of a nature which would be

prohibited generally in the district involved.

Accordingly, Mentor's position is that its ordinance prohibits appellant from extending its

non-conforming use by adding other uses that would be prohibited generally in the zoning

district. In essence, Mentor argues that the sale of intoxicating liquor under C-1 and C-2

No. 15AP-171 5

permits, as beverages, constitutes an expanded use of the property, based on beverages

already sold by Sines at that location, that, in essence, liquor sales are prohibited by its

zoning ordinance and that, increased activity at the location creates safety concerns that

should have caused the commission to reverse the decision of the division in issuing C-1

and C-2 permits to Sines.

{¶ 11} The evidence in the trial record includes appellant's uncontroverted

testimony that sales of auto parts, snacks, and soft drinks were part of the operation

before the enactment of the city's zoning ordinance, and that there are no plans to

increase the retail sales space and operations overall. Appellant has been selling

beverages since it began operating its gas station at that location, which was before

Mentor's zoning ordinance was adopted. Sines' only change in offering is the type of

beverage offered for sale. Based on this evidence, the trial court concluded that the

issuance of C-1 and C-2 liquor permits to appellant has caused appellant to have

unlawfully enlarged or increased its existing non-conforming use and that the

commission should have refused the permits based on the city's objections.

{¶ 12} " 'Owners are permitted to continue a non-conforming use based on the

recognition that one should not be deprived of a substantial investment which existed

prior to the enactment of the zoning resolution.' " Jackson Twp. Bd. of Trustees v.

Donrey Outdoor Advertising Co., 10th Dist. No. 98AP-1326 (Sept. 21, 1999), quoting Beck

v. Springfield Twp. Bd. of Zoning Appeals, 88 Ohio App.3d 443, 446 (9th Dist.1993).

"Nonconforming uses are allowed to exist merely because of

the harshness of and the constitutional prohibition against the

immediate termination of a use which was legal when the

zoning ordinance was enacted."

Beck at 446, quoting Kettering v. Lamar Outdoor Advertising, Inc., 38 Ohio App.3d 16,

18 (2d Dist.1987).

{¶ 13} In Salem Twp. Zoning Comm. v. Kilburn Lodge, Inc., 12th Dist. No. CA90-

11-081 (Aug. 26, 1991), the Kilburn Lodge had hosted horse shows, turkey shoots, archery,

class reunions, wedding receptions, hayrides, private parties, bluegrass concerts,

restaurant services, and pig roasts for many years before Salem Township's 1987

enactment of a new zoning code which zoned the property as "rural residence R-1." This

classification did not permit the types of activities which occurred on the property.

However, the code permitted the lodge to continue operating as a non-conforming use. In

November 1986 the lodge had obtained a liquor permit to serve alcoholic beverages by the

No. 15AP-171 6

glass to patrons. The lodge was granted an extension of its non-conforming use to enlarge

the building, but the zoning commission filed a complaint seeking an injunction to

prevent the lodge from serving alcoholic beverages to its patrons who were not present "in

connection with the rental of the facility for wedding receptions, parties and the like" and

from holding outdoor concerts.

{¶ 14} As persuasive support, the Twelfth District upheld the decision of the

common pleas court that the sale of alcohol and the acquisition of a liquor license did not

change the use of the lodge as a restaurant, and that Salem Township was attempting to

control the dispensing of liquor through zoning in violation of the provisions of R.C.

519.211. Subsection (D) of the statute states: "sections 519.02 to 519.25 of the Revised

Code * * * confer no power on any township zoning commission, board of township

trustees, or board of zoning appeals to prohibit the sale or use of alcoholic beverages in

areas where the establishment and operation of any retail business, hotel, lunchroom or

restaurant is permitted." Id. The court concluded:

As long as the operation of a retail business, hotel, lunchroom

or restaurant is permitted, a township may not regulate the

sale or use of alcoholic beverages at these operations in the

guise of zoning. Accordingly, if the Kilburn Lodge was

permissibly operating as a restaurant, appellant is powerless

to enjoin its operation now merely because alcohol by the

glass is sold and served.

As the trial court indicated, appellant attempts to claim that

the "serving of alcoholic beverages is a lawful extension of a

prior non-conforming use only when served to private parties

in conjunction with the rental of the facility (but not when

served to the public in conjunction with the restaurant

facilities or the outdoor concerts)" (emphasis in original).

However, "the exclusive authority to regulate the sale and

consumption of alcoholic beverages is vested in the Ohio

Department of Liquor Control [and the Ohio Liquor Control]

Commission." Westlake v. Mascot Petroleum (1991), 61 Ohio

St.3d 161, 167. Appellant is clearly attempting to use zoning

regulations to control or prohibit the sale of alcohol, which is

prohibited by R.C. 519.211. See Id. at paragraph two of the

syllabus.

{¶ 15} Arguably, Sines' legal operation of its retail business obviates Mentor's

claim that it can restrict Sines' business from selling the carryout beverages of beer, wine

and pre-mixed alcoholic beverages. Nor can the city successfully object based on

arguments about an increased volume of business at Sines' location. As the court further

No. 15AP-171 7

observed in Salem Twp., "[a]n increase in the volume of business alone does not

constitute an unlawful extension of a nonconforming use where the nature of the land is

virtually unchanged." Id., citing Hunziker v. Grande, 8 Ohio App.3d 87, 89 (8th

Dist.1982), and State ex rel. Zoning Inspector of Montgomery Cty. v. Honious, 20 Ohio

App.2d 210, 212 (2d Dist.1969). "Nonconforming use restrictions are meant to apply to

the area of the use and not to inventory." Hunzicker at 89. The court in Salem Twp.

rejected the contention that an increase of business and traffic proved a more intensive

use of the property.

{¶ 16} Even without the existence of this caselaw, I cannot agree with the common

pleas court based on the clear instruction from the legislature in R.C. 4303.292. This law

instructs:

(A) The division of liquor control may refuse to issue, transfer

the ownership of, or renew, and shall refuse to transfer the

location of, any retail permit issued under this chapter if it

finds * * *:

(2) That the place for which the permit is sought:

(a) Does not conform to the building, safety, or health

requirements of the governing body of the county or

municipal corporation in which the place is located. As used in

division (A)(2)(a) of this section, "building, safety, or health

requirements" does not include local zoning ordinances. The

validity of local zoning regulations shall not be affected by this

section.

(Emphasis added.)

{¶ 17} The city argues plainly and simply that the issuance of the subject liquor

permits would violate its zoning ordinance. Yet, the Ohio legislature has instructed the

commission in R.C. 4303.292(A)(2)(a) that local zoning ordinances are not considered to

be a basis for objection to the issuance, transfer of ownership, renewal or transfer of

location of a liquor permit. The division and the commission followed this law in

disregarding the objections of the city that were based on its zoning ordinances. Even the

city's suggestion of increased traffic was dependent on its zoning ordinance violation

argument. The common pleas court impermissibly used Mentor's zoning ordinance as a

basis for reversal contrary to R.C. 4303.292(A)(2)(a).

{¶ 18} Sines makes various arguments within the context of considering the

zoning ordinance as a valid objection by the city. It is not a valid objection by the city, and

No. 15AP-171 8

we decline to further address arguments relating to the interpretation of the ordinances

and whether the sale of wine and mixed spirituous liquor and/or beer by Sines is a non-

conforming use under Mentor's zoning ordinance.

{¶ 19} The common pleas court found our decision in Serv. Station Holdings to be

controlling, but the situation in this case is readily distinguishable from appellant's

situation. In Serv. Station Holdings, the Willoughby Hills City Council objected to the

issuance of a C-1 liquor permit for the appellant's service station operating under a

variance in a residential zone. That is, the zoning code pre-dated the use of the property

sought by the gas station, and the non-conforming use existed because of a variance

granting the type of use in the first instance. Willoughby Hills' ordinance prohibited the

sale of alcoholic beverages in residential zones,1 and the appellant agreed not to sell

alcohol as a condition for the municipality granting it the variance.

{¶ 20} As we observed in Serv. Station Holdings, if the property had been zoned

for commercial use and would otherwise qualify for a permit, the city could not use local

zoning regulation to prohibit the sale of alcoholic beverages at this location. "However,

the variance granted to appellant did not change the nature of the premises for purposes

of zoning. The area is zoned residential and the city * * * has a valid ordinance prohibiting

the sale of alcoholic beverages in areas zoned residential." Id. See also R.C.

4303.292(A)(2)(a) ("The validity of local zoning regulations shall not be affected by this

section."). In the case under review, the sale of beverages by Sines was permitted from

the inception of Sines' use of the premises. It is the later adopted zoning ordinance that

made the previous legal use illegal, if "expanded." Yet, R.C. 4303.292(A)(2)(a) does not

permit the commission to consider any objection made based on a municipal zoning

regulation, so it was instructed by the legislature not to consider whether the sale of liquor

pursuant to C-1 and C-2 liquor permits was an expanded use under a municipal zoning

code. The common pleas court should not have considered this factor either.

{¶ 21} Sines sought only to obtain C-1 and C-2 liquor sale permits for beverage

sales that included beer, wine, and pre-mixed alcoholic beverages among the drinks it

offers for sale. Notwithstanding appellant's unrefuted testimony, the trial court opined

that "the sale of alcoholic beverages would constitute, at a minimum, enlarging or

increasing an existing non-conforming use, in violation of the City of Mentor's zoning

ordinances." (Decision, 6.) The decision of the common pleas court was contrary to law,

1 We make no judgment in this decision on the legal correctness of this ordinance in light of R.C. 4303.26.

No. 15AP-171 9

and thus, we reverse the common pleas court in the exercise of our plenary power. It was

neither for the commission nor the common pleas court to determine whether the

addition of liquor sales was an unlawful extension of appellant's legal non-conforming use

of the premises according to Mentor's zoning ordinances. Further, based on our review of

the evidence in the record, we find no basis for the trial court to have found that the

commission's order was not supported by reliable, probative and substantial evidence.

The trial court's consideration of the effect of Mentor's zoning ordinance and the absence

of evidence in the record that could have satisfied the factors listed in R.C. 4303.2922 for

denying the issuance of one or more liquor permits, causes us to find that the trial court

abused its discretion, and we reverse its order.

VI. CONCLUSION

{¶ 22} We sustain appellant's sole assignment of error, reverse the judgment of the

Franklin County Court of Common Pleas, and hereby affirm the order of the Ohio Liquor

Control Commission in affirming the decision of the Ohio Division of Liquor Control.

Judgment reversed.

SADLER, J., concurs in judgment only

DORRIAN, J., concurs in judgment only.

2 See, e.g., R.C. 4303.292(A)(1)(a) (persons convicted of crime relating to fitness to operate under liquor

permit); R.C. 4303.292(A)(1)(b) (liquor permit business operated in a manner that demonstrates disregard

for law); R.C. 4303.292(A)(1)(c) (misrepresentation of material fact in application); R.C. 4303.292(A)(1)(d)

(use of alcohol or drugs in excess); R.C. 4303.292(A)(2)(a) (physical location does not conform to building,

safety or health requirements); R.C. 4303.292(A)(2)(b) (location constructed in a way that would prevent

law enforcement or division agent access); R.C. 4303.292(A)(2)(c) (location would substantially interfere

with public decency, peace, sobriety and good order of neighborhood); R.C. 4303.292(A)(2)(d) (location

declared a nuisance); R.C. 4303.292(B)(1) (location within 500 feet of and would substantially affect church,

school, public playground, library or hospital); R.C. 4303.292(B)(2) (permit detrimental due to number of

permits already in neighborhood); R.C. 4303.292(D) (conviction under division (C)(1) of section R.C.

2913.46); R.C. 4303.292(F) (maintaining a nuisance).