              IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Pennsylvania Liquor Control Board,             :
                       Appellant               :
                 v.                            :    No. 104 C.D. 2018
                                               :    Submitted: November 2, 2018
Stone Neapolitan Pizzeria, Inc.                :
                                               :



BEFORE:        HONORABLE RENÉE COHN JUBELIRER, Judge
               HONORABLE PATRICIA A. MCCULLOUGH, Judge
               HONORABLE CHRISTINE FIZZANO CANNON, Judge




OPINION NOT REPORTED


MEMORANDUM OPINION BY
JUDGE COHN JUBELIRER                               FILED: February 13, 2019


      The appeal before us is from the December 15, 2017 Order of the Court of
Common Pleas of Allegheny County (common pleas) issued following this Court’s
remand in Stone Neapolitan Pizzeria, Inc. v. Pennsylvania Liquor Control Board
(Pa. Cmwlth., No. 19 C.D. 2017, filed September 22, 2017) (Stone Neapolitan I).
In Stone Neapolitan I, we vacated common pleas’ prior orders resolving the
statutory appeal of Stone Neapolitan Pizzeria, Inc. (Licensee) from the
Pennsylvania Liquor Control Board’s (Board) denial of Licensee’s application to
renew (Application) its Restaurant Liquor License No. R-129481 (License) for its
premises located at 300 Liberty Avenue, Pittsburgh, Pennsylvania. We remanded


      1
          Licensee also has a Sunday sales permit and an amusement permit.
for common pleas to address “whether Licensee’s untimely appeal” and “untimely
Application may be accepted nunc pro tunc,” and, “if necessary, the merits of
Licensee’s appeal from the non-renewal of its License.” Stone Neapolitan I, slip
op. at 11.
       In its remand opinion and Order, common pleas accepted Licensee’s
untimely appeal and untimely Application nunc pro tunc, reiterated its decision
granting Licensee’s statutory appeal, and directed the Board, as it had before, to
renew the License subject to certain conditions related to Licensee’s paying its
delinquent taxes and obtaining a tax clearance from the Department of Revenue
(Revenue). On appeal, the Board argues2 common pleas: (1) abused its discretion
by accepting the untimely appeal and untimely Application nunc pro tunc where
the circumstances did not meet the standard for granting such relief; and (2) erred
by granting the appeal and directing the Board to renew the License, where
Licensee has not established its payment of State sales taxes to Revenue. We have
recently held that Sections 470 and 477 of the Liquor Code (Code), 47 P.S. §§ 4-
470, 4-477,3 preclude renewal where a licensee has not paid its State sales taxes;
therefore, common pleas could not direct the Board to renew the License.
Accordingly, we reverse.

                                          I. Background
                         A.      The Application and the Board’s Denial
       The facts have been previously set forth in Stone Neapolitan I, slip op. 2-8.
Briefly, Licensee, through its owner and president, Richard Werner, Jr., acquired

       2
         Licensee is precluded from participating in this appeal due to its failure to file a brief.
       3
         Act of April 12, 1951, P.L. 90, as amended. Section 477 was added by Section 77 of
the Act of June 29, 1987, P.L. 32.



                                                 2
the License in 2012 for $70,000. Werner filed the Application for the licensing
period effective June 1, 2015, online on May 18, 2015, when it should have been
filed on or before April 2, 2015, to be timely per Section 470(a) of the Code
(requiring that a renewal application be filed at least 60 days before the expiration
date of the license). The Application indicated that Licensee’s tax status with
Revenue was “not clear” and the reason the Application was late was because the
“taxes are not up to date and [Licensee] needed time to get things in order before
filing for renewal.” (Reproduced Record (R.R.) at 4a-5a.) On the Application,
Werner listed himself as Licensee and used his home address (Home Address) as
requested on the Application.4 The Application included Licensee’s name and
address (Business Address) next to a list of the license and permits being renewed.
       The Bureau of Licensing (Bureau), by letter dated July 30, 2015 (Objection
Letter), sent to the Home Address, objected to the renewal of the License because:
the Application was untimely; and Licensee did not include verification, and the
Board had not received notice from Revenue, that Licensee’s State tax reports had
been filed and all State taxes had been paid as required by Section 477(a) of the
Code.5 (R.R. at 2a.) The Objection Letter advised Licensee that a hearing on the
objections would be scheduled and Licensee would be contacted to schedule that
hearing.



       4
          The Application requested the “name and address of the owner of the premises,” and the
“home address” of the signatories of the Application, here, Werner as “Licensee” and
“President” of Licensee. (R.R. at 4a-5a.)
        5
          The Bureau also objected because Werner did not pay the required late fee. Werner
paid application fees of $1,140.00 and a late fee of $100.00, but the Bureau contended that the
fee for filing a late application is $150. (R.R. at 2a.) Although the Board reiterates this as a
reason we should reverse, we need not address it because of our disposition.



                                               3
      At the hearing on November 5, 2015, the Bureau appeared but no one for
Licensee was present. The Bureau introduced, inter alia, the Objection Letter, and
a letter rescheduling the hearing from its initial date to November 5, 2015, which
had been sent to the Home Address, and the completed Application, all of which
were admitted into the record. When asked whether the Bureau’s counsel had any
contact with Licensee, counsel indicated “it’s unclear to me whether there was any
direct contact” via the Bureau’s hearing scheduler. (Id. at 10a.) The hearing
examiner recommended that the Application be denied because Licensee did not
“comply with the[] basic requirements for the renewal of a liquor license” by
obtaining the tax clearance required by Section 477(d)(2)-(3) of the Code. (Id. at
15a (“[t]he [B]oard shall not approve any application for . . . renewal . . . of any
license . . . where the applicant” has not filed all of its State tax reports or paid the
State taxes “not subject to a timely . . . appeal or . . . a duly authorized deferred
payment plan,” 47 P.S. § 4-477(d)(2), (3)).)
      After review, the Board denied the Application by order dated January 13,
2016 (January 13, 2016 Order), which it sent to the Home Address with a letter
informing Licensee of its refusal to renew the License and that Licensee could
appeal (Refusal Letter).

                      B.    Licensee’s First Appeal to Common Pleas
      Licensee filed an appeal with common pleas on February 16, 2016, asserting
it was unaware of the November 5, 2015 hearing and the Board’s refusal to renew
the License was arbitrary, capricious, not supported by competent evidence, and
contrary to law. (R.R. at 23a.) The Board requested the dismissal of the appeal
(Motion to Dismiss) because it was untimely filed more than 20 days after the
January 13, 2016 Order. Licensee responded that its appeal should be accepted


                                           4
nunc pro tunc because it did not receive the January 13, 2016 Order and did not
learn of the denial of the Application until February 11, 2016. Common pleas held
a de novo hearing on June 27, 2016.
         Werner testified on Licensee’s behalf that he did not receive notice of the
November 5, 2015 hearing or the Board’s January 13, 2016 Order. Prior to the
Objection Letter, all the mail Licensee received from the Board, including notices
to renew the License, was sent to the Business Address, and Werner expected that
correspondence would continue to be sent to that address.6 He used the Home
Address on the Application only because it was the billing address for the debit
card used to pay the application fees. Werner does all of his business online, all of
his financial statements and bills are received and paid online, and he uses the
Home Address, which is his father’s address, as his mailing address and on his
driver’s license. However, no one actually resides there, he does not go there to
retrieve his mail, and his father does not deliver Werner’s mail to him. Werner
learned of the Board’s Order while obtaining a loan to pay Licensee’s outstanding
taxes and immediately began the process of appealing.
         On the merits, Werner testified that the renewal application was sent to and
received at the Business Address, and he was aware that the renewal was due in
April 2015. (R.R. at 107a, 116a, 137a-38a.) He did not timely file the Application
because he was trying to obtain a loan to pay the approximately $25,000 in State
sales taxes Werner acknowledged Licensee owed to Revenue. (Id. at 117a, 120a,
125a.)       Werner testified Licensee’s employees collected the sales tax from

         6
          For example, Licensee introduced a supplemental order by the Board’s Office of
Administrative Law Judge, mailed to the Business Address, related to a citation and associated
unpaid fine. (Licensee’s Ex. B1.) Werner testified at the hearing that this fine had been paid.
(R.R. at 110a.)



                                              5
customers and admitted that the non-payment “f[e]ll[] on [him]” because he “filed
but didn’t send it in.” (Id. at 117a.) Werner had secured a loan, using the License
as collateral, to pay the taxes, but could not close on the loan because the License
had not been renewed. As of the date of the de novo hearing, the taxes remained
unpaid.
      Common pleas issued a Memorandum Order on December 9, 2016, finding
that Licensee was in a “proverbial ‘Catch 22’” situation whereby it could obtain a
loan using the “[L]icense as collateral but the collateral was flawed because it had
not been renewed and thus the loan would not be granted.” (Memorandum Order
at 2.) Concluding that Licensee’s problem was the “inability to borrow money to
pay delinquent sums to other Commonwealth Agencies,” the operation of the
restaurant “has not been problematic,” and it would be inequitable for Licensee to
lose its $70,000 investment, common pleas directed the following:

      1.       [The Board] is to renew the [L]icense on a provisional basis
            subject to [Licensee’s] paying the delinquent taxes due.

      2.       Within 60 days, [Licensee] shall secure the Funds, by loan or
            otherwise to pay the aforesaid delinquent amounts.

      3.       On making such payments, Licenses[7] will be renewed.

(Id. at 2-3.) Common pleas issued a Supplemental Memorandum Order, adding
that Licensee “shall pay a civil penalty of $2,500 so as to defray such expense as
the Board has incurred and to impress upon [Licensee] the necessity to follow the
rules.” (Supplemental Memorandum Order at 2.)



      7
          The use of “Licenses” includes Licensee’s Sunday sales and amusement permits.



                                               6
                      C.    The Board’s First Appeal to this Court
      The Board appealed to this Court, arguing that common pleas erred by
addressing the merits of Licensee’s appeal without first determining whether
Licensee established that it was entitled to nunc pro tunc relief for its untimely
appeal and untimely Application. We agreed, observing that common pleas had
not made “findings of fact or analyze[d] whether Licensee’s untimely appeal met
the requirements for being accepted nunc pro tunc” or addressed “whether the
untimely Application may be accepted nunc pro tunc.” Stone Neapolitan I, slip op.
at 11. However, we declined the Board’s request that we reverse common pleas’
orders, as we had under similar circumstances in J.V. Lounge, Inc. v. Pennsylvania
Liquor Control Board, 131 A.3d 517 (Pa. Cmwlth. 2015), and Arena Beverage
Corp. v. Pennsylvania Liquor Control Board, 97 A.3d 444 (Pa. Cmwlth. 2014).
We explained that, unlike in those cases, Licensee had “provide[d] a plausible
basis, if credited and supported by factual findings based on the record, that could
warrant the grant of nunc pro tunc relief on the basis of an administrative
breakdown.” Stone Neapolitan I, slip op. at 10. “The crux of Licensee’s position,”
we noted, “was that there was a breakdown in the administrative process when the
Board used the Home Address to send, among other things, the January 13, 2016
Order, rather than the Business Address, where all other communications to
Licensee ha[d] been sent.” Id. at 10 n.14 (emphasis omitted). Accordingly, we
vacated common pleas’ orders and remanded for it to issue a new opinion and
order addressing those issues and, if nunc pro tunc relief was granted, to address
the merits of Licensee’s appeal.




                                         7
                      D.   Common Pleas’ Remand Opinion and Order
      Common pleas issued its remand opinion and order on December 15, 2017,
in which it articulated reasons for granting Licensee nunc pro tunc relief pursuant
to Cook v. Unemployment Compensation Board of Review, 671 A.2d 1130 (Pa.
1996). After citing this Court’s discussion on the plausibility of Licensee’s basis
for nunc pro tunc relief, common pleas found “that there really was a breakdown in
the Board’s administrative process” through its “inconsistent method[s] . . . to give
notice” and that “Werner never did get proper notice of the need to renew [the
L]icense” or of the January 13, 2016 Order. (Remand Op. at 2-3, 5.) Then, citing
the remaining Cook factors for granting nunc pro tunc relief, requiring that the
appeal be “‘filed within a short time after learning of and having an opportunity to
address the untimeliness’ of the matter”; that “‘the elapsed time period is of very
short duration’”; and that “the other party ‘will not be prejudiced by the delay,’”
common pleas analyzed whether Licensee’s appeal and Application met these
requirements. (Id. at 3 (quoting Cook, 671 A.2d at 1131).) Common pleas held
that they did, citing Werner’s testimony regarding the filing of the February 16,
2016 appeal as soon as he learned of the Board’s denial. (Id. at 4.) As for the
Application, common pleas found that: “Werner did his best to renew once he
learned that he needed to;” the Board is authorized to, and does, accept untimely
applications, with the filing of a late fee; the delay between the deadline for the
Application and the date it was actually filed was not excessive; and no one was
prejudiced by the delay. (Id. at 4-5.) Accordingly, common pleas found that
Licensee “ha[d] satisfied the nunc pro tunc standards and . . . [it] should hear” the
appeal. (Id. at 5.)



                                         8
       On the merits of that appeal and the question of the unpaid sales tax,
common pleas posited that “[m]aybe Werner has paid it since the issue arose and it
is now moot” but that, if not, he remained “in the ‘Catch 22’ status.” (Id.) It was
because of this status, common pleas explained, that it had “devised the provisional
status, so that the [L]icense can be renewed subject to [Licensee] paying the
delinquent sales tax.”       (Id.)    Common pleas maintained that this “device is
appropriate under [its] powers as the trier of fact in a de novo proceeding” and its
“$2,500 penalty is appropriate as a learning tool for Werner.”                     (Id. at 6.)
Accordingly, it issued the December 15, 2017 Order reiterating the relief set forth
in its prior orders. (Id.) The Board again appeals.8

                              II. The Board’s Current Appeal
                                     A.   Nunc Pro Tunc Relief
                              1. Licensee’s Appeal to Common Pleas
       The Board contends common pleas abused its discretion when it accepted
Licensee’s appeal nunc pro tunc without actually analyzing whether extraordinary
circumstances, as required by Cook, caused the untimeliness of the appeal. It
asserts that common pleas erred in concluding that the mailing of the January 13,
2016 Order and accompanying Refusal Letter to the Home Address was a




       8
          Our review of a decision to allow an untimely appeal nunc pro tunc “is limited to
determining whether [common pleas] abused its discretion or committed an error of law.” J.V.
Lounge, Inc., 131 A.3d at 521 n.7 (internal quotation marks and citation omitted). Our review of
the grant or denial of liquor license renewal “is limited to determining whether [common pleas’]
findings are supported by substantial evidence and whether [common pleas] committed an error
of law or an abuse of discretion.” Whalla v. Pa. Liquor Control Bd., 176 A.3d 1080, 1085 n.5
(Pa. Cmwlth. 2018).



                                               9
breakdown in the Board’s administrative process because Werner provided that
address to the Board on the Application. We disagree.
      It is undisputed that Licensee’s appeal to the trial court was filed beyond the
20-day appeal period set forth in Section 464 of the Code. 47 P.S. § 4-464.
“Where the legislature has fixed a time period within which an appeal may be
filed, that period is mandatory and may not be extended as a matter of grace or
indulgence.” Arena Beverage Corp., 97 A.3d at 448 (quoting Olson v. Borough of
Homestead, 443 A.2d 875, 878 (Pa. Cmwlth. 1982)) (emphasis omitted). “The
timeliness of an appeal goes to the jurisdiction of the [court] and [to] its
competency to act.” Id. (citing Coshey v. Beal, 366 A.2d 1295, 1297 (Pa. Cmwlth.
1976)). An appeal nunc pro tunc is an exception to this general rule, and it may
only be granted where “extraordinary circumstances involving fraud or its
equivalent, duress, or coercion caused the delay in filing an appeal.” In re Appeal
of Borough of Riegelsville from Bucks Cty. Bd. of Assessment & Revision of Taxes,
979 A.2d 399, 402 (Pa. Cmwlth. 2009) (emphasis omitted). Such extraordinary
circumstances may include a “breakdown in the court’s [or administrative body’s]
operation.” Cook, 671 A.2d at 1131 (quoting Bass v. Bureau of Corr., 401 A.2d
1133, 1135 (Pa. 1979)). Alternatively, nunc pro tunc relief may be granted where
the late filing was “a result of non-negligent circumstances, either as they relate to
the appellant or the appellant’s counsel;” the appeal was filed “shortly after the
expiration date;” and there is no prejudice to the appellee. Criss v. Wise, 781 A.2d
1156, 1159 (Pa. 2001); see also Cook, 671 A.2d at 1131. The party seeking nunc
pro tunc relief carries a “heavy burden to justify an untimely appeal.” Blast
Intermediate Unit No. 17 v. Unemployment Comp. Bd. of Review, 645 A.2d 447,
449 (Pa. Cmwlth. 1994).



                                         10
       As we previously observed in Stone Neapolitan I, and found by common
pleas on remand, the crux of Licensee’s position was that there was a breakdown in
the administrative process when the Board used the Home Address to send the
January 13, 2016 Order and Refusal Letter, rather than the Business Address.
Werner testified that prior to the Objection Letter and subsequent notices and
Board orders related to these proceedings, all communications from the Board to
Licensee had been sent to the Business Address. Werner indicated he believed
any communications related to the License would continue to be mailed to the
Business Address, as it always had been. Finally, Werner testified he did not
receive anything mailed to the Home Address, including the January 13, 2016
Order and Refusal Letter. Common pleas accepted this testimony as credible and
as supporting the conclusion that the Board’s “inconsistent method” of giving
notice to Licensee was a breakdown in the administrative process. (Remand Op. at
5.)
       We agree there was a breakdown in the administrative process here. While
the Board is correct that Werner listed the Home Address in the Application, the
Application also included the Business Address.                         Prior to the current
proceedings, all other mail from the Board to Licensee, including the current
renewal notice, had been mailed to, and received by, Licensee at the Business
Address. There was no reason for Werner to believe that, by providing the Home
Address on the Application, this communications process would change.9 Because
Licensee did not receive notice of the January 13, 2016 Order and Refusal Letter


       9
         A review of the Application reveals there is no place for a licensee to designate, if there
are multiple addresses listed thereon, which address should be used for mailing purposes, which
might have avoided the confusion here.



                                                11
until after the appeal period had expired as a result of a breakdown in the Board’s
administrative process, we will not find that common pleas abused its discretion in
accepting the appeal nunc pro tunc.


                                 2. Licensee’s Application
      The Board also argues common pleas abused its discretion in finding that the
untimely Application could be accepted nunc pro tunc. According to the Board,
Licensee did not have reasonable cause for the Application’s untimeliness, and,
therefore, the Application could not be accepted nunc pro tunc pursuant to Section
470(a), 47 P.S. § 4-470(a) (providing “[t]hat the [B]oard, in its discretion, may
accept nunc pro tunc a renewal application filed less than sixty days before the
expiration date of the license . . . , upon reasonable cause shown . . . .”)
(emphasis added).
      Although common pleas found that “Werner never did get proper notice of
the need to renew [the L]icense,” (Remand Op. at 5), Werner testified that the
renewal notice was mailed to the Business Address and he was aware that the
Application was due in April 2015, (R.R. at 107a, 116a). Thus, the reason found
by common pleas for the Application’s untimeliness is not supported by the record.
Instead, the reason Licensee gave on the Application for the untimeliness was that
the “taxes [were] not up to date and [Licensee] needed time to get things in order
before filing for renewal.” (Id. at 5a.) However, for reasons discussed below, it
would not matter whether this asserted basis for the untimeliness of the
Application would constitute “reasonable cause” under Section 470(a), 47 P.S. § 4-
470(a), because, even if the Application was accepted nunc pro tunc, renewal




                                        12
could not have been granted as a result of Licensee’s nonpayment of State sales
taxes.


                          B.       The Nonpayment of State Sales Taxes
         The Board argues that it, and by extension common pleas, is precluded from
renewing the License by the Code and, therefore, common pleas erred in granting
Licensee’s appeal and directing the renewal of the License with conditions. Citing
Sections 470(a) and 477(d) of the Code, as well as 3 Ram, Inc. v. Pennsylvania
Liquor Control Board (Pa. Cmwlth., No. 637 C.D. 2017, filed March 28, 2018),10
the Board maintains it is statutorily precluded from renewing a liquor license
where a licensee has failed to pay its State taxes and obtain tax clearance from
Revenue.
         Section 470(a) of the Code addresses the renewal of liquor licenses and
states, in pertinent part, that:

         All applications for . . . renewal of licenses under the provisions of
         this article shall be filed with tax clearance from the Department
         of Revenue and the Department of Labor and Industry and requisite
         license and filing fees, . . . at least sixty days before the expiration
         date of same . . . .

47 P.S. § 4-470(a) (emphasis added). Section 477 of the Code, which is titled
“Applicants to provide [S]tate tax identification numbers and statement of [S]tate
tax status . . . ,” provides, in relevant part:

         (d) The board shall not approve any application for the . . . renewal
         . . . of any license . . . where the applicant has failed to:

         10
         The Board cites 3 Ram, Inc. for its persuasive value in accordance with Section 414(a)
of the Commonwealth Court’s Internal Operating Procedures, 210 Pa. Code § 69.414(a).



                                              13
            (1) provide any of the information required by subsection (a);
            (2) file required State tax reports; or
            (3) pay any State taxes not subject to a timely administrative or
               judicial appeal or subject to a duly authorized deferred payment
               plan.

47 P.S. § 4-477(d) (emphasis added). Recently, this Court considered Section
477(d) and concluded that the word “shall” as used in that provision was
mandatory. 3 Ram, Inc., slip op. at 10. Accordingly, the Court held that, under
this provision, “the Board ha[s] no authority to approve a renewal application”
“unless the applicant has paid any [S]tate taxes owed that are not subject to a
timely administrative or judicial appeal or . . . a duly-authorized deferred payment
plan.” Id. at 10-11 (emphasis added). Because there was no dispute that the
licensee in 3 Ram, Inc. did not have the required tax clearance from Revenue, the
Board could not approve the renewal application.11 Id.
       The analysis in 3 Ram, Inc. is consistent with the statutory language of
Section 477(d) of the Code. Here, as in 3 Ram, Inc., there is no dispute that
Licensee had not paid the State sales taxes it owed to Revenue at the time Licensee
had filed the Application. At the time of the hearing before common pleas, Werner
acknowledged that Licensee owed State sales taxes in the amount of “about
$25,000.” (R.R. at 117a.) There is no evidence that the outstanding amount of
State sales taxes was “subject to a timely administrative or judicial appeal or . . . a
duly authorized deferred payment plan.” 47 P.S. § 4-477(d)(3). “As such, the




       11
          We also held that because the Board had no authority to approve a renewal application
where the licensee did not have the requisite tax clearances, the Board could not be compelled to
enter into a conditional licensing agreement as doing so “would have conflicted directly with
Section 477 of the . . . Code.” 3 Ram, Inc., slip op. at 11.



                                               14
Board had no authority to approve [Licensee’s] renewal [A]pplication.” 3 Ram,
Inc., slip op. at 11.
       Common pleas explained it was authorized by its powers of hearing
Licensee’s appeal de novo to grant the appeal and to direct the Board “to renew the
[L]icense on a provisional basis.” (Remand Op. at 5-6.) However, although courts
of common pleas “are free to substitute their discretion for that of the Board” when
considering whether to renew a liquor license, U.S.A. Deli, Inc. v. Pennsylvania
Liquor Control Board, 909 A.2d 24, 28 (Pa. Cmwlth. 2006), the Board had no
discretion to renew Licensee’s License. Pursuant to the plain language of Section
477(d), the Board “shall not approve” the renewal of the License. 47 P.S. § 4-
477(d). Because the Board lacked the discretion to renew the License under the
Code, common pleas likewise could not do so. Therefore, common pleas erred
when it directed the Board to renew the License.12
       Accordingly, common pleas’ Orders are reversed.


                                              _____________________________________
                                              RENÉE COHN JUBELIRER, Judge




       12
           It is commendable that common pleas attempted to resolve this matter in a fair manner
given the deficiency of the notices and the loss of the License; however, for the reasons set forth,
it did not have the legal authority to direct the renewal of that License.



                                                15
        IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Pennsylvania Liquor Control Board,     :
                       Appellant       :
                                       :
                   v.                  :   No. 104 C.D. 2018
                                       :
Stone Neapolitan Pizzeria, Inc.        :


                                  ORDER


      NOW, February 13, 2019, the Order of the Court of Common Pleas of
Allegheny County, entered in the above-captioned matter, is hereby REVERSED.



                                     _____________________________________
                                     RENÉE COHN JUBELIRER, Judge
