Addison Group, Inc. v. Daley

SIXTH DIVISION
May 23, 2008

No. 1-06-0532

ADDISON GROUP, INC., an Illinois ) Appeal from the
Corporation, ) Circuit Court of
) Cook County
Plaintiff-Appellant, )
)
v. )
)
RICHARD M. DALEY, as Mayor of the City )
of Chicago and Local Liquor Control )
Commissioner; THE LOCAL LIQUOR CONTROL )
COMMISSION OF THE CITY OF CHICAGO; THE )
MAYOR'S LICENSE COMMISSION OF THE CITY )
OF CHICAGO; WINSTON L. MARDIS, and SCOTT)
V. BRUNER, as his successor, as )
Director of the Mayor's License )
Commission of the City of Chicago; THE )
CITY OF CHICAGO, a Municipal )
Corporation; THE LICENSE APPEAL )
COMMISSION OF THE CITY OF CHICAGO; )
ANTHONY CALABRESE, as Chairman of the )
License Appeal Commission, IRVING KOPPEL)
and DONALD ADAMS, as Commissioners of )
License Appeal Commission, ) Honorable
) Anthony Young,
Defendants-Appellees. ) Judge Presiding

JUSTICE McNULTY delivered the opinion of the court:

The Local Liquor Control Commission (the Commission)

suspended Addison Group's liquor license for 30 days as a

sanction for serving alcohol to a minor. On appeal Addison

contends that the Commission should not have considered fines

Addison voluntarily paid in the past as part of its disciplinary

history. We hold that the voluntary payment of fines is

evidence, admissible in administrative proceedings, that the

payer committed the violation charged. Evidence of a corporate
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licensee's violation remains admissible after a new owner

purchases the licensee. In light of the disciplinary history,

the Commission did not abuse its discretion by imposing a 30-day

suspension as a sanction for the latest violation.

BACKGROUND

On December 18, 2001, Lisa Schwarz, then 18 years old,

walked into Okocim, a tavern that Addison Group owned. She sat

down at the bar and asked the bartender, Katarzyna Sczepzek, for

a Miller Light. Sczepzek, in her second week of work for

Addison, did not ask to see any identification. She opened a

bottle of Miller Light beer and set it and an empty glass in

front of Schwarz. Schwarz handed Sczepzek a marked $10 bill.

Sczepzek put the bill in the cash register and tendered Schwarz

her change.

Schwarz worked for the Chicago police department's program

intended to stop taverns from selling alcohol to minors. Officer

Dusan Puhar, who observed the transaction, charged Addison Group

with selling alcohol to a minor. The Commission conducted

hearings on the charges in 2002.

Schwarz testified that she carried no identification with

her when she went to the tavern. Puhar spoke to Sczepzek

immediately after she handed Schwarz her change. Puhar testified

that he saw Addison's owner, Gus Giannakopoulos, sitting at a

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table in the tavern during the sale to Schwarz.

Adam Maliszewski testified for Addison that he saw the sale

to Schwarz. Right after Sczepzek gave Schwarz the beer Sczepzek

came to Maliszewski to ask him, in Polish, how to ask the

customer, in polite English, for identification. Maliszewski

told her the correct English. As Sczepzek returned to the bar to

ask to see Schwarz's identification, Puhar and other officers

swarmed the bar while Schwarz showed her police identification.

The officers began the process of charging the bar with selling

alcohol to a minor.

Several other regular patrons testified that the bartenders

always asked to see identification from anyone entering the

tavern. Okocim had a fine reputation in the community as a well-

run, law-abiding business.

Giannakopoulos testified that he purchased Addison in

January 1991. He made sure all of the bartenders knew how to

ask, in English, for proper identification. He had just stepped

away from his table in the tavern moments before Schwarz entered

the tavern.

Margaret Kaczmarszi testified that she trained all the

bartenders, including Sczepzek, to ask for identification.

Because most of the bartenders spoke Polish, she taught them the

correct English for asking for identification.

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The hearing commissioner accepted into evidence a letter

showing that Addison had passed five separate tests for sales to

minors between June 1997 and December 2000. On each occasion a

minor came into the tavern and ordered alcohol, but the bartender

asked for identification and refused to sell the alcohol when the

minor failed to produce acceptable identification.

The hearing commissioner also accepted in evidence several

orders of disposition showing that Addison voluntarily paid fines

to dispose of several charges brought against it. In 1990

Addison paid $200 to dispose of a charge related to an aggravated

battery at the tavern. In 1992, about a year after

Giannakopoulos bought Addison, Addison paid a fine of $400, not

contesting a charge of gambling at the tavern. In August 1998

Addison, charged with failing to display tax emblems, voluntarily

paid a $1,000 fine. Prosecutors charged Addison with permitting

gambling in the tavern on two separate occasions, once in

December 1999 and again in February 2000. To dispose of these

charges Addison agreed to suspend operations for 17 days in

August 2000. For each charge brought after 1991, Giannakopoulos

signed a form in which he said he had "thoroughly discussed the

incident(s) and [had] been afforded the opportunity to present

any or all facts concerning the incident(s), either orally or by

way of affidavit." He waived the right to a hearing and

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voluntarily agreed to accept the penalty the Commission sought to

impose.

Giannakopoulos began to explain why he agreed to the

suspension in 2000. The hearing commissioner disallowed the

testimony. In an offer of proof, Giannakopoulos explained that

he had put $5 in a slot machine, but no one had actually gambled.

He accepted the suspension to avoid the hassle of a trial.

The hearing commissioner found Schwarz and Puhar credible,

and he disbelieved much of Maliszewski's testimony. Thus, he

found that Addison had served alcohol to an 18-year-old person

without checking for identification. In light of the prior

disciplinary history, the commissioner found a 30-day suspension

appropriate. The Commission adopted the hearing commissioner's

findings and suspended Addison's liquor license for 30 days.

Addison appealed to the circuit court. The court affirmed

the Commission's ruling. Addison now appeals to this court.

ANALYSIS

Addison first challenges the decision to admit into evidence

documents showing that Addison voluntarily paid fines associated

with prior charges. Rule 9(b) of the Rules of Procedure for

Contested Hearings before the Department of Business Affairs and

Licensing and Local Liquor Control Commission provides:

"The rules of evidence and privilege as applied in

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civil cases in the circuit courts of the State of

Illinois shall be followed. However, evidence not

admissible under such rules of evidence may be admitted

if it is a type commonly relied upon by prudent persons

in the conduct of their affairs. The purpose of

rulings on evidence shall be to promote the finding of

truth and to seek the greatest accuracy in the

determination of facts. Pursuant to Childers v.

Illinois Liquor Control Commission, 67 Ill. App. 2nd

107 (3rd Dist. 1966), a licensee's prior history shall

be admitted at any time during the hearing for purposes

of aggravation or mitigation, but will only be

considered for those purposes if one or more of the

charges in the Notice of Hearing are sustained. Facts

underlying prior orders of disposition may not be

relitigated."

We will not reverse the Commission's evidentiary ruling unless

the Commission abused its discretion and the ruling demonstrably

prejudiced the objecting party. See Wilson v. Department of

Professional Regulation, 344 Ill. App. 3d 897, 907 (2003).

Addison argues that it voluntarily settled prior charges and

the Commission should not consider settlements as evidence that

Addison committed the charged misconduct. See Pientka v. Board

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of Fire Commissioners of the North Main Fire Protection District,

125 Ill. App. 3d 124, 129 (1984). Voluntary payment of a fine

bears some characteristics of a civil settlement, but it seems

more nearly akin to a plea of nolo contendere. Illinois courts

do not recognize a plea of nolo contendere, so Illinois has

little law on the effect of such a plea. People v. Miller, 264

Ill. 148, 154 (1914).

"Turning to the views of other jurisdictions, we

find that it is generally recognized that a plea of

nolo contendere cannot be used as an admission in any

civil suit for the same act nor in a later criminal

proceeding. [Citation.] On the other hand the effect

and admissibility of a conviction under such a plea is

the subject of much discussion and widely divergent

points of view. Some jurisdictions, such as

Massachusetts, flatly prohibit proof of conviction on

the plea [citation], while others hold that the fact of

conviction may be shown with the same consequences as

if the conviction were after a plea of guilty or not

guilty." In re Eaton, 14 Ill. 2d 338, 341-42 (1958).

Many courts admit evidence of a prior adjudication based on a

plea of nolo contendere in deciding the proper sanction to impose

for a more recent infraction. See, e.g., United States ex rel.

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Clark v. Skeen, 126 F. Supp. 24, 26 (N.D. W. Va. 1954); State v.

Crowe, 168 S.W.3d 731, 748 n.20 (Tenn. 2005); Texas Department of

Public Safety v. Richardson, 384 S.W.2d 128, 132-33 (Tx. 1964);

People v. Daiboch, 265 N.Y. 125, 129, 191 N.E. 859, 860 (1934);

State v. Suick, 195 Wis. 175, 177-78, 217 N.W. 743, 744 (1928).

Here, Addison did not plead nolo contendere. It voluntarily

paid fines and accepted a suspension, but it never formally

admitted the facts underlying the charges for which it accepted

these sanctions. Courts have not treated uniformly the voluntary

payment of fines. Some courts have held evidence of the

voluntary payment inadmissible in a later case because the

accused did not admit the underlying facts. See, e.g., Hannah v.

Ike Topper Structural Steel Co., 120 Ohio App. 44, 47, 201 N.E.2d

63, 65 (1963); Waszczak v. City of Warner Robbins, 221 Ga. App.

528, 529-30, 471 S.E.2d 572, 574-75 (1996). Other courts have

held that the accused effectively admitted to the underlying

offense. See Wilson v. Burke, 356 Mo. 613, 202 S.W.2d 876

(1947); Krystal Jeep Eagle, Inc. v. Bureau of Professional &

Occupational Affairs, 725 A.2d 846, 850 (Pa. Commw. 1999); Kravis

v. Hock, 54 A.2d 778 (N.J. 1947).

Some courts have held that the voluntary payment qualifies

as rebuttable evidence of the charged violation. "[A] voluntary

payment of fine and costs is evidence of the violation. However,

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it is not conclusive and does not foreclose an inquiry into

defenses and the guilt of the violation underlying the

revocation." Bruce Appeal, 41 Pa. D. & C.2d 195, 196 (1966).

In Chodorov v. Eley, 239 Va. 528, 391 S.E.2d 68 (1990),

Eley's automobile struck the rear of the car in which Chodorov

rode as a passenger. Eley voluntarily paid a fine to dispose of

a charge that he followed too closely the car he hit. Chodorov

sued Eley for negligence. The trial court allowed Chodorov to

introduce evidence of the fine, but it also permitted Eley to

explain that he paid the fine to keep from having to take time

off from work. The jury found Eley not liable for the accident.

The appellate court affirmed, holding that by voluntarily paying

the fine Eley did not judicially admit to following too closely:

"Although the jury reasonably could have found

from this evidence that Eley, by paying the fine

voluntarily, had acknowledged that he was following too

closely, the jury also reasonably could have found that

Eley paid the fine to avoid the inconvenience and

expense of contesting the charge." Chodorov, 239 Va.

at 532, 391 S.E.2d at 71.

In People ex rel. Attorney General v. Edison, 100 Colo. 574,

69 P.2d 246 (1937), a lawyer pled nolo contendere to a charge of

perjury. That plea did not estop the lawyer from relitigating

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the perjury charge in a subsequent disciplinary proceeding.

In Ayala v. Department of Professional Regulation, 478 So.

2d 1116 (Fla. App. 1985), Dr. Louis Ayala pled nolo contendere to

a charge of submitting fraudulent insurance claims. Following a

hearing before the Board of Medical Examiners, the Department of

Professional Regulation suspended Ayala's license as a result of

the plea in the criminal action. On appeal the court held:

"[T]he Board of Medical Examiners may presumptively

consider the nolo contendere plea as evidence of a

conviction ***; however, *** the Board must allow

appellant the opportunity to rebut this presumption and

assert his innocence of the underlying criminal charges

by explaining the reasons and circumstances surrounding

his plea of nolo contendere, and thereby attempt to

convince the Board that he is not guilty of a crime."

Ayala, 478 So. 2d at 1118-19.

The court reversed the suspension and remanded the case for the

Board to consider evidence concerning Ayala's reasons for his

plea and for presentation of any further evidence concerning his

guilt on the charge of insurance fraud.

We find that prudent persons would see voluntary payment of

a fine for a violation as evidence that the payer committed the

violation charged. Under the rules for evidence in hearings

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before the Commission, as in other administrative proceedings

(see 5 ILCS 100/10-40(a) (West 2002)), the administrative body

may admit into evidence documents showing that a party

voluntarily paid such a fine. Courts have persuasively held that

the voluntary payment should not preclude the payer from

presenting evidence that he did not commit the underlying

violation. However, the Commission's rules expressly prohibit

litigation of facts underlying the prior disposition orders.

Here the hearing commissioner, following the Commission's rule,

disallowed Giannakopoulos's testimony concerning his reasons for

paying the fines and his defenses to the underlying charges for

past violations. The hearing commissioner did not abuse his

discretion by admitting the evidence of the voluntary payments as

part of Addison's disciplinary history.

Addison separately objects to evidence of the 1990 voluntary

payment of a fine because Giannakopoulos did not own Addison at

that time. Addison, a corporation, is a legal person, and sale

of the corporation to a new owner usually does not affect the

corporation's liabilities. Sinquefield v. Sears Roebuck & Co.,

209 Ill. App. 3d 595 (1991). Addison holds the liquor license

and the Commission decided only a charge that Addison, not

Giannakopoulos, violated the conditions of the license. The

trial court here held:

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"[T]he consequence of a ruling that Addison Group

suggests would permit a corporate licensee to disavow

prior bad behavior by a mere change of ownership. Such

a decision would inevitably stymie the [Commission's]

efforts in policing those who are precluded from

holding a liquor license."

We agree that a corporate owner should not use a sale to

avoid the consequences of past misconduct, especially where

evidence shows an intent to use the sale to avoid such

consequences. The Commission might consider a change in

ownership as a mitigating circumstance, where the current owner

did not participate in past violations. See Beer & Brat, Inc. v.

Liquor Control Comm'n, 44 Ill. App. 3d 713, 715 (1976). However,

the Commission here correctly considered prior misconduct by the

corporate licensee in assessing the penalty to impose on the

corporation for the new violation.

Addison asks us to reverse the suspension as unduly harsh.

Addison argues that its owner, Giannakopoulos, neither knew of

nor ratified Sczepzek's conduct, as Giannakopoulos had left the

tavern a few minutes before Schwarz entered and ordered a beer.

Puhar testified that he saw Giannakopoulos at his table in the

tavern at the time Schwarz ordered the beer. On this conflicting

evidence we cannot make any factual findings as to

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Giannakopoulos's presence.

Addison cites Hanson v. Liquor Control Comm'n, 201 Ill. App.

3d 974 (1990), and Jacquelyn's Lounge, Inc. v. License Appeal

Comm'n, 277 Ill. App. 3d 959 (1996), as support for the claim

that the Commission imposed too harsh a penalty. In both of

those cases the Commission revoked the tavern's license. While

we might find revocation too harsh a penalty here, too, the

Commission here did not impose that penalty. It imposed only a

30-day suspension, justified by the history of progressive

discipline for a series of violations. We cannot say that the

Commission abused its discretion by imposing this progressive

discipline.

The Commission correctly considered voluntary payments as

evidence that Addison committed the violations charged. The

Commission also correctly took into account a violation that

occurred before a change in Addison's ownership. In light of the

disciplinary history, we cannot say that the Commission abused

its discretion by suspending Addison's license for 30 days.

Accordingly, we affirm the judgment of the trial court, which

affirmed the Commission's decision.

Affirmed.

JOSEPH GORDON and O'MALLEY, JJ., concur.

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