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MATTER 330 RESTAURANT CORP. v. STATE LIQUOR AUTHORITY (10/30/69)

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, FIRST DEPARTMENT 1969.NY.43354 <http://www.versuslaw.com>; 304 N.Y.S.2d 888; 33 A.D.2d 36 October 30, 1969 IN THE MATTER OF 330 RESTAURANT CORP., PETITIONER,v.STATE LIQUOR AUTHORITY, RESPONDENT Proceeding under article 78 CPLR (transferred to the Appellate Division of the Supreme Court in the First Judicial Department by an order of the Supreme Court at Special Term, entered in New York County) to review a determination canceling petitioner's restaurant liquor license. Elvin I. Unterman of counsel (James B. Wigdor with him on the brief), for petitioner. Stanley Stein of counsel (Eli Ratner, attorney), for respondent. Steuer, J. McGivern and Macken, JJ., concur with Steuer, J.; Markewich, J., concurs in an opinion; Capozzoli, J. P., dissents in opinion. Author: Steuer


Proceeding under article 78 CPLR (transferred to the Appellate Division of the Supreme Court in the First Judicial Department by an order of the Supreme Court at Special Term, entered in New York County) to review a determination canceling petitioner's restaurant liquor license.

Steuer, J. McGivern and Macken, JJ., concur with Steuer, J.; Markewich, J., concurs in an opinion; Capozzoli, J. P., dissents in opinion.

Author: Steuer

 Petitioner, the holder of a restaurant liquor license, brings this article 78 proceeding to annul the action of respondent State Liquor Authority in canceling its license. Respondent bases its action on a claimed violation of rule 36 of its rules (9 NYCRR 53.1) in that it claims that the licensed premises ceased to be operated as a bona fide premises within the contemplation of the license issued.

There is no substantial dispute as to the facts. The licensee operates a restaurant which has a seating capacity of 162 persons. It also operates a so-called club which has between 1,300 and 1,500 members. There are five classes of membership, depending mostly on age and whether the member is a resident of the city or resides at a distance. These members pay an annual fee, varying between $500 annually for a resident over 30 years of age to $100 for one who resides abroad. There are also honorary members, consisting of celebrities, who pay nothing. One gets to be a member by paying the fee and filling out a form sponsored by a member. There is no admission procedure. The restaurant opens at 7:00 p.m. Admission is limited to members unless there are vacant tables, in which case the public is admitted upon a fee of $7.50 per person. This condition prevails until 10:30 p.m., after which time there is no priority and persons are admitted on a first come first served basis. The only other distinction is that nonmembers must pay cash while members are given credit. About 80% of the income of the club goes to the licensee and the remainder is devoted to the bookkeeping and similar expenses accruing on account of the club.

The Alcoholic Beverage Control Law contains a definition of what constitutes a restaurant (§ 3, subd. 27). In effect, it defines the word as a place which is regularly and in a bona fide manner used and kept open for the serving of meals to guests for compensation and which has suitable kitchen facilities connected therewith. Guests are defined as persons who come to the restaurant for the purpose of obtaining a meal and who actually order and obtain a meal therein.

There is no statutory requirement as to how many meals are to be served daily or at what hours meals are to be available, and the respondent does not base its contentions on the hours petitioner was either open or closed. The gist of the contention supporting the action is that as a general practice persons do not come to petitioner's premises unless they are members of the club.

We can assume for the purposes of this case that a restaurant liquor license may be denied where the general public is refused service, though this question is not free from doubt. However, there can be no doubt at all that the imposition of a cover charge or other admission fee is not a refusal of service (Matter of Castle Hill Beach Club v. Arbury, 2 N.Y.2d 596). It makes no difference whether the fee is in the form of a weekly, monthly or other periodic charge (Matter of Castle Hill Beach Club v. Arbury, 2 N.Y.2d, at p. 601; Playboy Club of N. Y. v. Hostetter, 40 Misc. 2d 449, affd. 19 A.D.2d 822, affd. 14 N.Y.2d 933). Moreover, it surely cannot affect the right to a restaurant liquor license that the annual admission fee is at certain times or under certain conditions not exacted.

Respondent does not suggest, as it did in another situation, that petitioner is in fact a club and should seek a club license (Matter of Gaslight Club v. State Liq. Auth., 18 A.D.2d 413). In that instance, the operator followed the suggestion only to lose the club license when it appeared, as it does here, that the operation was for profit and did not meet the definition of a club contained in the statute (Alcoholic Beverage Control Law, § 3, subd. 9). Quite obviously the fact that petitioner claims that it is a club or has a club in connection with its operation does not make it a club. What petitioner is and does is to operate a restaurant and virtually restrict its guests to those who are willing to pay a substantial sum for the privilege of being accommodated.

Respondent calls attention to a caveat contained in the affirming memorandum of this court in Playboy Club of N. Y. v. Hostetter (19 A.D.2d, at p. 823): "Of course, the declaration does not mean that in any case any one-time charge, under any circumstances, or at any place, would not be a ground for revocation, suspension or denial of a license." Respondent takes the position that these words constitute a grant to revoke, suspend or deny a license in any instance of a one-time charge where it deems such action desirable. What was clearly intended was that respondent may take such action when it appears that the one-time charge and the resulting limitation of access either violates some temperance purpose or interferes with the public convenience. Clearly, the fact of the imposition of a one-time charge is not in and of itself an interference with the public convenience. Nothing more was shown or attempted to be shown. The determination of the State Liquor Authority canceling respondent's restaurant liquor license should be annulled, on the law, without costs and disbursements to petitioner.

Disposition

Determination annulled, on the law, without costs and disbursements.

Markewich, J. (concurring).

I concur for annulment in the reasoning of the majority opinion but I am not entirely persuaded that the definition of a restaurant is quite as clear as that opinion takes for granted (see Alcoholic Beverage Control Law, § 3, subd. 27). However, petitioner never claimed that a restaurant was not operated as adjunctive to a private club, and the point was never raised, argued, or ...


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