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Malfitano v. County of Storey

Supreme Court of Nevada

June 29, 2017

DR. VINCENT M. MALFITANO, AN INDIVIDUAL; VIRGINIA CITY GAMING, LLC, A NEVADA LIMITED LIABILITY COMPANY; AND DELTA SALOON, INC., A NEVADA CORPORATION, Appellants,
v.
COUNTY OF STOREY, ACTING BY AND THROUGH THE STOREY COUNTY BOARD OF COUNTY COMMISSIONERS; AND STOREY COUNTY LIQUOR BOARD, Respondents.

         Appeal from a district court order denying a petition for a writ of mandamus that challenged liquor- and business-licensing decisions. First Judicial District Court, Storey County; James E. Wilson, Judge.

          Holland & Hart LLP and Matthew B. Hippler, Scott Scherer, and Brandon C. Sendall, Reno, for Appellants.

          Anne Langer, District Attorney, and Keith Loomis, Deputy District Attorney, Storey County, for Respondents.

          BEFORE HARDESTY, PARRAGUIRRE and STIGLICH, JJ.

          OPINION

          PARRAGUIRRE, J.

         Storey County Code (SCC) § 5.12.010(A) requires an applicant for a liquor license to "provide the county liquor license board with . .. [p]roof of financial standing to warrant an expected satisfactory and profitable business operation." In this appeal, we must determine whether the term "satisfactory" is vague, thereby rendering SCC § 5.12.010(A) unconstitutional. In addition, we must determine whether appellant Vincent Malfitano's due process or equal protection rights were violated when respondent Storey County Liquor Board (the Liquor Board) denied his applications for liquor licenses. We answer these questions in the negative; therefore, we affirm the district court's order.

         FACTS AND PROCEDURAL HISTORY

         Appellant Vincent Malfitano purchased two saloon casinos located in Virginia City: the Delta Saloon and the Bonanza Saloon. At the time of purchase, Malfitano did not have the requisite licenses to operate these properties. Therefore, Malfitano authorized a properly licensed third-party entity to run the properties while he applied for gaming, liquor, and general business licenses.

         Malfitano first applied for gaming licenses with the Nevada Gaming Commission (NGC). The Nevada Gaming Control Board (NGCB) held a hearing on the matter, after which it issued an order recommending that the NGC deny Malfitano's applications. In particular, the NGCB stated that Malfitano (1) failed to demonstrate "adequate business competence"; (2) failed "to disclose a significant number of important items, " including "lawsuits, foreclosures, business interests, delinquent tax payments, tax liens, and default notices"; and (3) had significant employment-related issues with his assisted-living business and his prior dental practice. The NGCB also stated that Malfitano appeared to have "significant cash flow problems." Ultimately, the NGC issued an order denying Malfitano's applications.

         Malfitano also applied for business and liquor licenses with Storey County. Respondent Storey County Board of County Commissioners (the Board of Commissioners) presides over general business license applications, [1] and the Liquor Board presides over liquor license applications.[2] At a hearing on September 1, 2015, respondents initially denied the applications because a license could not be issued to two different entities for the same property, and the third-party entity still held the relevant licenses. However, Chairman McBride stated that (1) if Malfitano severed relations with the third-party entity, "there would be no delay in obtaining the licenses, " and his applications would "be approved soon after"; and (2) there was "no reason not to license Dr. Malfitano except for the fact that it would be a duplication." Notably, County Manager Pat Whitten clarified that Malfitano's applications would only be considered, not necessarily approved, once he obtained control of the properties.

         Thereafter, Malfitano obtained temporary licenses from Sheriff Antinoro. Malfitano also reapplied for permanent licenses after the third-party entity vacated both properties. The Board of Commissioners and the Liquor Board considered Malfitano's second round of applications on October 6, 2015. Believing his applications would be granted as a matter of course, Malfitano did not attend the hearing.

         Malfitano's liquor license applications were denied after three members of the Liquor Board concluded that he failed to demonstrate "[p]roof of financial standing to warrant an expected satisfactory and profitable business operation" as required under SCC § 5.12.010(A). In particular, the Liquor Board was concerned about Malfitano's financial stability due to the NGCB's findings.[3] With respect to the business license applications, the Board of Commissioners unanimously approved the Delta Saloon application and denied the Bonanza Saloon application. The latter was denied because the property did not have fire sprinklers installed, and the Storey County Fire Protection District Fire Chief stated the building was not safe.

         Malfitano filed a petition for a writ of mandamus with the district court, requesting that the court reverse the respondents' decisions to deny his applications and to compel respondents to approve the applications. In his petition and subsequent pleadings, Malfitano argued that (1) respondents acted arbitrarily and capriciously in denying his license applications, (2) respondents violated his due process and equal protection rights in denying his license applications, and (3) SCC § 5.12.010(A) is unconstitutionally vague. The district court entered an order denying Malfitano's writ petition, from which Malfitano now appeals.

         DISCUSSION

         On appeal, Malfitano argues that SCO § 5.12.010(A) is unconstitutionally vague and that respondents violated his due process and equal protection rights in denying his license applications. We address these arguments in turn.

         "Generally, we review a district court's decision regarding a petition for a writ of mandamus for an abuse of discretion." Veil v. Bennett, 131 Nev., Adv. Op. 22, 348 P.3d 684, 686 (2015). However, when an appeal of an order resolving a writ petition involves questions of law, such as the constitutionality of a statute, this court will review the district court's decision de novo. See id.; Wyeth v. Rowatt,126 Nev. 446, 460, 244 P.3d 765, 775 (2010) (explaining that questions of law are reviewed de novo); see also Tarn v. Eighth Judicial ...


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