YELDER ENTERPRISES, INC. d/b/a THE QUE, Plaintiff-Appellant, IOWA ALCOHOLIC BEVERAGES DIVISION, Defendant-Appellee.
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IN THE COURT OF APPEALS OF IOWA
No. 6-834 / 06-0160
Filed November 30, 2006
YELDER ENTERPRISES, INC.
d/b/a THE QUE,
Plaintiff-Appellant,
IOWA ALCOHOLIC BEVERAGES
DIVISION,
Defendant-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Johnson County, Douglas S.
Russell, Judge.
Plaintiff appeals the district court ruling affirming an agency decision that it
had violated Iowa Code section 123.49(2)(h) (2003), by selling or supplying an
alcoholic beverage to a person under the legal age. AFFIRMED.
Jerald W. Kinnamon and J. Dean Keegan, Cedar Rapids, for appellant.
Thomas J. Miller, Attorney General, and John R. Lundquist, Assistant
Attorney General, for appellee.
Considered by Huitink, P.J., and Vogel, J., and Robinson, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2005).
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ROBINSON, S.J.
I.
Background Facts & Proceedings
On September 6, 2003, at 7:30 p.m., three Iowa City police officers
entered The Que, a licensed liquor establishment. They saw only three people
sitting in the bar area—an older man in his fifties sitting alone, and two younger
males sitting together. Each of the two younger men had a glass of beer in front
of him.
The officers approached the two younger men. The first man, Tristan
Miller, produced identification showing he was twenty-one years of age. The
second person, Courtney, stated he did not have any identification with him, but
admitted he was only twenty years old.
Courtney was issued a citation for
possession of alcohol under the legal age.
The officers approached the bartender, Alexander Buhlman, and asked
how Courtney had obtained a beer if he did not have any valid identification with
him. Officer David Schwindt testified Buhlman told him he sold two beers to
Miller on three occasions, and each time Miller gave one of the beers to
Courtney. 1 Officer Schwindt completed an incident report that was consistent
with his testimony. Buhlman gave a written statement, as follows:
On 9-6-03 I was serving a gentleman who I knew to be
twenty-one two beers at a time. He then distributed one of them to
a friend. His ID confirmed that he was twenty-one years of age.
The man that was taken out of the bar, who was of legal age, was
the person that I was serving beer to.
1
At the time of the incident, The Que was selling a ten ounce glass of beer for fifty
cents. Buhlman stated most customers purchased two beers at a time for one dollar.
3
Miller was charged with giving a beer to a person under the legal age, and with
public intoxication. Buhlman was also charged with permitting a person under
the legal age to consume beer, but that charge was later dismissed. 2
The Iowa Alcoholic Beverages Division filed a civil complaint against The
Que, alleging it had violated Iowa Code section 123.49(2)(h) (2003). This section
provides a person or club holding a liquor license shall not:
Sell, give, or otherwise supply any alcoholic beverage, wine,
or beer to any person, knowing or failing to exercise reasonable
care to ascertain whether the person is under legal age, or permit
any person, knowing or failing to exercise reasonable care to
ascertain whether the person is under legal age, to consume any
alcoholic beverage, wine, or beer.
Iowa Code § 123.49(2)(h). An establishment that violates section 123.49(2)(h)
may be assessed a civil penalty of $500. Iowa Code § 123.50(3)(a).
A hearing was held before an administrative law judge (ALJ) of the Iowa
Department of Inspections and Appeals. At the hearing, Buhlman testified he
sold two beers to Miller on only one occasion, and Miller was sitting by himself at
that time. He stated he was doing bartending chores, and did not see Miller give
the second beer to anyone. He testified his written statement to police officers
merely reflected his understanding of events which he obtained after the fact.
Officer Schwindt testified as outlined above, that Buhlman told him he sold two
beers to Miller on three occasions, and each time Miller gave one to a friend.
Officer Zachary Diersen was present during the interview with Buhlman, and
testified, “he was aware that Mr. Miller was giving one of the drinks to the person
2
A criminal conviction is not a prerequisite to the imposition of a civil penalty under
Iowa Code section 123.49(2)(h) (2003). Jim O., Inc. v. City of Cedar Rapids, 587
N.W.2d 476, 479 (Iowa 1998).
4
that was sitting right next to him and that that had occurred on several different
occasions.”
The ALJ concluded:
The preponderance of the evidence established that on
September 6, 2003, Alexander Buhlman, the licensee’s employee,
“otherwise supplied” beer to a person under the legal age, in
violation of Iowa Code section 123.49(2)(h). The licensee’s
employee sold two beers to a twenty-one year old customer, who
gave one of the beers to the underage person sitting next to him at
the bar. This happened more than once. The employee never
asked that underage person for identification. The employee failed
to exercise reasonable care to ascertain whether the consumer of
the beer was a person who was under the legal age.
The ALJ specifically found officers Schwindt and Diersen were credible
witnesses, and their testimony was more credible than that of Buhlman. The
Que was assessed a civil penalty of $500. The ALJ’s decision was affirmed by
the Iowa Alcoholic Beverages Division.
The Que filed a petition for judicial review. The district court concluded
there was substantial evidence in the record to show Buhlman violated section
124.49(2)(h).
The court noted it was within the agency’s domain to assess
Buhlman’s credibility. The court affirmed the decision of the Division. The Que
appeals.
II.
Standard of Review
Our review is governed by the Iowa Administrative Procedure Act. Iowa
Code § 17A.20; Acuity Ins. v. Foreman, 684 N.W.2d 212, 216 (Iowa 2004). We
review the district court’s decision by applying the standard of chapter 17A to the
agency to determine if our calculations are the same as those reached by the
district court. University of Iowa Hosp. & Clinics v. Waters, 674 N.W.2d 92, 95
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(Iowa 2004). We may reverse, modify, or grant other relief if a party shows the
agency’s action is “[b]ased upon a determination of fact clearly vested by a
provision of law in the discretion of the agency that is not supported by
substantial evidence in the record before the court when that record is viewed as
a whole.” Iowa Code § 17A.19(10)(f).
III.
Substantial Evidence
The Que claims there is not substantial evidence in the record to show its
employee was knowingly complicit in the transfer of an alcoholic beverage to an
underage person. The Que asserts that Buhlman’s statement on the date of the
event, and his later testimony at the administrative hearing, show he did not
know Miller had given one of his two beers to Courtney. The Que contends the
testimony of officers Schwindt and Diersen was based on an improper
understanding of Buhlman’s written statement, and not on an independent
memory of their conversation with him.
The agency specifically found officers Schwindt and Diersen were credible
witnesses, and their testimony was more credible than that of Buhlman. We give
deference to an agency’s credibility determinations.
Lange v. Iowa Dep’t of
Revenue, 710 N.W.2d 242, 247 (Iowa 2006). Furthermore, on September 6,
2003, before his shift ended at 11:00 p.m., officer Schwindt typed up a narrative
of the events at The Que that evening. The narrative states Buhlman said he
had sold two beers to Miller on three occasions, and Miller “would then give one
of the beers to his friend . . . .” Officer Schwindt’s written narrative, made shortly
after the event, supports his testimony at trial.
6
We conclude there is substantial evidence in the record to support the
agency’s finding that The Que’s employee knew some of the beer he was selling
Miller was being consumed by another person, and the employee failed to
exercise reasonable care to ascertain whether that person was under the legal
age. See Jim O., Inc. v. City of Cedar Rapids, 587 N.W.2d 476, 479 (Iowa 1998)
(noting a civil penalty may be imposed upon a finding that an employee of an
establishment sold alcohol to a person under legal age “without exercising
reasonable care to ascertain whether she was under legal age . . . .”); State v.
Hy-Vee, Inc. 616 N.W.2d 669, 673 (Iowa Ct. App. 2000) (finding that under
section 123.49(2)(h), there must be evidence an establishment knew or failed to
exercise reasonable care to ascertain whether the person is under legal age).
IV.
Evidentiary Rulings
The Que claims the ALJ abused her discretion by permitting police officers
to testify to whether Buhlman’s conduct met a legal standard.
Officer Becki
Sammons was asked whether Buhlman acted reasonably in ascertaining
whether Courtney was of legal age. The Que’s attorney objected, and the ALJ
permitted the question.
Additionally, The Que claims the ALJ abused her
discretion by permitting Officer Schwindt to testify to his impression of the
meaning of Buhlman’s written statement.
In administrative hearings,
A finding shall be based upon the kind of evidence on which
reasonable prudent persons are accustomed to rely for the conduct
of their serious affairs, and may be based upon such evidence even
if it would be inadmissible in a jury trial.
7
Iowa Code § 17A.14(1). An ALJ may consider evidence that would ordinarily be
deemed inadmissible under the rules of evidence, as long as the evidence is not
immaterial or irrelevant. Clark v. Iowa Dep’t of Revenue, 644 N.W.2d 310, 320
(Iowa 2002). An administrative agency is not bound by the technical rules of
evidence.
IBP, Inc. v. Al-Gharib, 604 N.W.2d 621, 620 (Iowa 2000).
We
conclude the ALJ did not abuse her discretion in her evidentiary rulings in this
case. The evidence was relevant, and therefore was admissible under section
17A.14(1).
The decision of the agency was supported by substantial evidence. We
affirm the decision of the agency and the district court.
AFFIRMED.
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