CJSA, Ltd., D/B/A Crabby Jacks Restaurant v. Texas Alcoholic Beverage Commission--Appeal from 45th Judicial District Court of Bexar County

Nos. 04-99-00862-CV & 04-00-00513-CV
CJSA, LTD., d/b/a Crabby Jacks Restaurant,
Appellant and Cross-Appellee
v.
TEXAS ALCOHOLIC BEVERAGE COMMISSION,
Appellee & Cross-Appellant
From the 45th and 150th Judicial District Courts, Bexar County, Texas
Trial Court Nos. 99-CI-14881 and 2000-CI-00610
Honorable David Peeples and Phyllis Speedlin, Judges Presiding

Opinion by: Alma L. L pez, Justice

Sitting: Phil Hardberger, Chief Justice

Alma L. L pez, Justice

Paul W. Green, Justice

Delivered and Filed: March 14, 2001

JUDGMENT IN CAUSE NO. 99-CI-14881 AFFIRMED; JUDGMENT IN CAUSE NO. 2000-CI-00610 REVERSED AND REMANDED

The appellant, Crabby Jacks Restaurant, appeals two judgments in these appeals. The first judgment affirms an order of the Texas Alcoholic Beverage Commission (the Commission) that finds Crabby Jacks violated section 11.61(b) of the Texas Alcoholic Beverage Code (the Code). (1) The second judgment suspends Crabby Jacks license to serve alcoholic beverages for seven days unless Crabby Jacks pays a fine of $3,500.00. (2) The Commission also challenges the second judgment in a cross-appeal. After considering the issues presented on appeal, we affirm the first judgment, and reverse the second judgment and remand the cause to the Commission for further proceedings.

Standard of Review

A decision by the Commission is subject to the "substantial evidence" rule. See Tex. Alco. Bev. Code Ann. 11.67 (Vernon 1995); see also Tex. Gov't Code Ann. 2001.174 (Vernon 2000). Under this standard, Crabby Jacks has the burden to show that the Commission's decision that finds it violated the Code was not based on substantial evidence. See Fay-Ray Corp. v. Tex. Alco. Bev. Comm'n, 959 S.W.2d 362, 365 (Tex. App.-Austin 1998, no pet.). Substantial evidence is more than a mere scintilla of evidence, but less than a preponderance of the evidence. See City of Houston v. Anderson, 841 S.W.2d 449, 451 (Tex. App.--Houston. [1st Dist.] 1992, writ denied). As a result, the evidence supporting the Commission's order may preponderate against the Commission's decision and still amount to substantial evidence. See Four Stars Food Mart v. Tex. Alco. Bev. Comm'n, 923 S.W.2d 266, 269 (Tex. App.-Fort Worth 1996, no pet.). The reviewing court, whether the district court or the court of appeals, may not set aside the Commission's decision because it would reach a different conclusion; the court may only do so if that decision was made without regard to the facts or the law, and was unreasonable, arbitrary, or capricious. See Tex. Gov't Code Ann. 2001.174 (Vernon 2000).

In this case, the Commission determined that Crabby Jacks violated section 11.61(b)(14) of the Code. Section 11.61(b)(14) authorizes the Commission to suspend a holder's permit to sell alcoholic beverages if it finds that a permittee sold or delivered an alcoholic beverage to an intoxicated person. Tex. Alco. Bev. Code Ann. 11.61(b)(14) (Vernon Supp. 2000). The Commission concluded that Crabby Jacks's "agent, servant, or employee, sold, served, or delivered alcoholic beverages to Sean McElheny and Enrique T. Anciola who were then intoxicated." On appeal, Crabby Jacks contends that this conclusion is not supported by substantial evidence. As a result, we will review the evidence to determine whether substantial evidence demonstrates that Crabby Jacks violated the Code by selling or delivering an alcoholic beverage to an intoxicated person.

Substantial Evidence Review

The Commission conducted a hearing to determine whether Crabby Jacks sold an alcoholic beverage to an intoxicated person. During the hearing, the Commission presented evidence that established that Crabby Jacks served alcoholic beverages to two intoxicated patrons--Sean McElheny and Enrique Anciola. Deputy Roland Schuler of the Bexar County Sheriff's Department testified that he observed two men in Crabby Jacks Restaurant who appeared to be underage drinkers. Schuler stated that he first noticed the young men standing near the pool table, but later observed the men sitting at the patio bar. Schuler identified the men as Sean McElheny and Enrique Anciola. Schuler described how he observed Anciola speak to the bartender, give the bartender some money, and the bartender serve a pitcher of beer. Schuler testified that he observed Anciola sway back and forth on the bar stool. Schuler estimated that the men were seated at a distance of about four feet from the bartender. Schuler stated that he had to ask Anciola more than once for his identification, and that both men had slurred speech, were unsteady on their feet, emanated a strong odor of alcoholic beverage from their breaths and persons, and had bloodshot eyes. Schuler explained that although he first noticed the men because they appeared underage, he determined that both men were over twenty-one after he checked their identifications. Schuler testified that he concluded that the men were so intoxicated that they should not be sold alcohol. Schuler also stated that Officer Gomez, who accompanied him to Crabby Jacks, issued the men citations for public intoxication.

Officer Leo Gomez also testified during the hearing. Gomez testified that he observed Deputy Schuler talk with the two intoxicated men. He described one of the men as staggering around, trying to get his wallet out of his pocket. He stated that when he escorted the men out of Crabby Jacks, one man stumbled and bumped into a palm tree as if he did not see it. Gomez stated that both men were swaying and their eyes were bloodshot. This evidence constitutes substantial evidence that Crabby Jacks sold alcoholic beverages to an intoxicated person(s). Because Crabby Jacks failed to show that the Commission's decision was not supported by substantial evidence, we overrule Crabby Jacks's issue challenging the evidence supporting the Commission's conclusion.

Crabby Jacks's Complaint About the Commission's Findings of Fact

Crabby Jacks complains in another issue that the Commission's order does not contain adequate findings of fact to support the Commission's findings that Lesley Zobrosky should have known that Anciola and McElheny were intoxicated. Crabby Jacks relies on section 2001.141(d) of the Government Code which provides, "[f]indings of fact, if set forth in statutory language, must be accompanied by a concise and explicit statement of the underlying facts supporting the findings." Tex. Gov't Code Ann. 2001.141 (Vernon 2000). Despite this complaint, the Commission's order dated August 21, 1998 which addresses the violation, includes a concise and explicit statement of the facts supporting the findings. In paragraph III of the order, the Commission outlines the evidence it relied upon in finding that Zobrosky should have known that Anciola and McElheny were intoxicated. The order concludes by stating that Zobrosky, the bartender, did not know that Anciola and McElheny had already consumed a pitcher of beer when they arrived at her bar because "Crabby Jacks had no procedure to appraise [sic] servers of the amount of alcohol consumed in other sections of the establishment." The order continued, "[t]he violations involving service to . . . intoxicated persons arose from Crabby Jacks carelessness about the regulations, and inattention to the proper training of its employees." Because the Commission's order contains a concise and explicit statement of the facts underlying its finding that Zobrosky should have known that Anciola and McElheny were intoxicated, we overrule this issue.

Crabby Jacks's Complaint About the Commission's Allegations

Crabby Jacks also complains that the Commission failed to prove the allegation that it served an alcoholic beverage to an intoxicated person with criminal negligence. The above excerpts from the Commission's order demonstrates that the Commission attributed the violation of the Code to ordinary negligence rather than criminal negligence. The violation established in section 11.61(b)(14) of the Code, however, does not require a finding of criminal or ordinary negligence. Tex. Alco. Bev. Code Ann. 11.61(b)(14) (Vernon Supp. 2000); see Fay-Ray Corp., 959 S.W.2d at 366. Even where an administrative agency has alleged more than it must prove, the focus of a substantial-evidence-review is to determine whether the administrative agency acted arbitrarily and without regard to the facts. See Texas Health Facilities Commission v. Baptist General Convention, 573 S.W.2d 575, 582 (Tex. Civ. App.-Tyler 1978, writ ref'd n.r.e.). The facts in the instant case indicates that the Commission did not act arbitrarily and without regard to the facts. We overrule this issue.

Complaint about Sanctions

As sanctions for the Code violation, the Commission suspended Crabby Jacks's alcoholic-beverage permit for ten days. Crabby Jacks appealed the sanctions-order to the district court, and the trial court reduced the sanction to a seven-day suspension or a $3,500.00 fine. On appeal, Crabby Jacks contends that the Commission abused its authority by assessing a penalty that deviates from the Commission's own guidelines and that the trial court acted within its discretion to reduce the penalty. In a cross-appeal, the Commission argues that the trial judge may not substitute its judgment for the judgment of the Commission, but was required to reverse and remand the cause to the Commission if the court found that the sanction order prejudiced Crabby Jacks's substantial rights. The Commission is correct.

Section 2001.174 of the Government Code prohibits a court from substituting its judgment for a state agency's judgment on the weight of the evidence on questions committed to agency discretion. See Tex. Gov't Code Ann. 2001.174 (Vernon 2000). An appropriate sanction for a Code violation is a question that has been committed to the discretion of the Commission. See Tex. Alco. Bev. Code Ann. 11.61, 11.64 (Vernon 1995). But although a court may not substitute its judgment for the agency's judgment, the court must reverse or remand the case to the agency for further proceedings if the substantial rights of the appellant are prejudiced because of the agency's findings, inferences, conclusions, or decision. See Tex. Gov't Code Ann. 2001.174 (Vernon 2000). Although the trial judge did not make an explicit finding that the sanctions order prejudiced Crabby Jacks's substantial rights, the trial court's judgment, when read with the reporter's record, contains an implicit finding that Crabby Jacks had a substantial right to be sanctioned in accordance with the Commission's guidelines for first-time violators, and that the right was prejudiced by Commission's departure from its own guidelines. The trial court may make such a finding, but it may not render judgment that the sanction be reduced. Instead of rendering judgment, the trial court was required to remand the cause to the Commission for reconsideration of the appropriate sanction. As a result, we sustain the Commission's issue on cross-appeal. Because we sustain the Commission's issue, we need not reach Crabby Jacks's issues concerning sanctions.

Conclusion

Having determined that the Commission's order finding that Crabby Jacks violated section 11.61(b)(14) of the Code is supported by substantial evidence, we affirm the judgment in Trial Cause No. 99-CI-14881. Having determined that the trial court erred by rendering judgment for a reduction in sanctions, we reverse and remand Trial Cause No. 2000-CI-00610 to the Commission for reconsideration of sanctions for Crabby Jacks's violation of section 11.61(b)(14). See Tex. R. App. P. 43.2, 43.3.

Alma L. L pez, Justice

DO NOT PUBLISH

1. That judgment was rendered in Trial Court Cause No. 99-CI-14881and is the subject of Appeal No. 04-99-00862-CV.

2. That judgment was rendered in Trial Court Cause No. 2000-CI-00610 and is the subject of Appeal No. 04-00-00513-CV.