Ziemlewicz v. Bd. of License

Wlodzimier Ziemlewicz, Appellant v. Board of License and Inspection Review

No. 1088 C.D. 2015

COMMONWEALTH COURT OF PENNSYLVANIA

Submitted: February 8, 2016

March 3, 2016

BEFORE: HONORABLE ROBERT SIMPSON, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE MICHAEL H. WOJCIK, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY JUDGE SIMPSON

In this license revocation case, the City of Philadelphia (City) Board of License and Inspection Review (Board) affirmed the revocation of Wlodzimier Ziemlewicz's (Vendor) sidewalk vending license to operate a food cart. The Board revoked his license based on his alleged improper transfer or assignment of his license to Sardar Ali (Ali), who operated and managed the cart. Vendor appeals from an order of the Court of Common Pleas of Philadelphia County (trial court)¹ affirming the decision of the Board. Vendor argues there is no substantial evidence to support the finding that he transferred or assigned his license. He contends Ali acted with his authorization, showing an agency relationship, not an assignment. Upon review, we affirm.

I. Background

Section 9-204 of the Philadelphia Code (Code), which went into effect in the early 1990s, regulates sidewalk vending in Center City Philadelphia (Ordinance). "Center City" is defined as the area from Vine Street to the south side of Bainbridge Street, between the Delaware River and the Schuylkill River. See Section 9-204(1)(b) of the Code. Previously, Section 9-205 of the Code allowed a sidewalk sales licensee to vend anywhere in the City where vending was not expressly prohibited. The Ordinance now requires a special license assigning a particular location within Center City. It also reduced the number of assigned locations from 429 to 300.

In September 1993, Vendor obtained a license to vend at location #74 on 10th Street, between Chestnut and Sansom Streets under License No. 354894 (License). In 2013, the City's Department of Licenses and Inspections (Department) conducted a review of vendor records. As a result of that review and on-site inspections, the Department determined Ali was unlawfully operating at Vendor's assigned location, and it issued a notice of intent to revoke the License (Notice). Reproduced Record (R.R.) at 103a. The Notice specified the grounds for revocation as a violation of Section 9-204(3)(f) of the Code, which prohibited assignment or transfer of a license. The Notice advised that unless Vendor fully complied with legal requirements within 30 days, his License would be revoked. Vendor appealed to the Board, arguing he did not assign or transfer the License.

The Board held a hearing where the Department presented the testimony of Maureen Blaney, Manager of its Vending Unit (Manager). Managertestified regarding the regulations and license requirements applicable to sidewalk vending licensees and her investigation into Vendor's operations.

During her 2013 review of tax numbers for Center City vendors, Manager noticed Vendor's tax account pertaining to the cart was closed. Vendor did not pay his tax accounts (net profits or business privilege) from 2008 through 2011. Also, his License was delinquent. She sent an inspector to the cart who reported the cart did not show current licenses. As a result, the cart was shut down.

The tax records stated Vendor "closed down business in 2008." R.R. at 76a. However, during that period, Ali continued to operate the cart and renewed the License under Vendor's name in 2010. On January 25, 2013, Vendor reopened the tax accounts retroactive to 2011, "when he re-started his bus[iness] again." Id. Manager emphasized that the records dated after 2006 did not show Vendor was at the cart for any of the inspections, listing Ali as the person in charge.

In addition, Manager testified each vendor is required to have a "commissary" license for the location where vendors store and clean their carts. R.R. at 33a-34a. Manager explained the commissary license may only serve a single cart. Id.; Bd. Op., 3/25/15 Finding of Fact (F.F.) No. 6. When Manager searched the records for a commissary license corresponding to Vendor's cart, she learned Vendor's commissary license was delinquent since 2010. However, Ali held a commissary license in his name since 2004. As the vendor should hold the commissary license, she looked into Ali's tax records.

Manager's investigation revealed that Ali engaged in the business under Vendor's license. Ali had his own tax account number for payment of net profits tax, and a business privilege license, but not his own vending license. R.R. at 37a. If Ali were only an employee, he would not need these licenses or tax accounts. Ali renewed all licenses and certifications, including health inspection licenses in 2012, 2013 and 2014. In addition, while the cart was allegedly "closed" by Vendor, Ali paid with his own check to renew the license in 2010. R.R. at 70a ("It says his name on the check, the check number and the name. And they can pay cash for a license, so if he gave them cash - he could have brought the cash in.").

Vendor testified regarding his operation of the business. He worked the cart with his wife starting in 1993. He stopped in 2008 after his first heart attack. He did not operate the cart from 2008 to 2011 as the business was "closed" then. R.R. at 54a. He returned to the business in 2012, but he did not work the cart as he had a second heart attack. His wife could not work the cart because she has a cleaning business. He testified "[his wife] hired an employee," Mohammed Iqbal, in 2012. Id. at 50a. Iqbal also worked for his wife's cleaning business.

Regarding his relationship with Ali, Vendor explained "Ali helped" by taking the cart for inspection "[b]ecause he know - he work for my wife, Theresa." R.R. at 52a. Significantly, he did not produce any records showing that Ali was his employee, and he did not refer to Ali as his employee. He repeated that he did not pay Ali "because he work [sic] for my wife." Id. Vendor testified others who "helped" him were also his wife's employees and he did not pay them. Id. at 51a-54a. Also, Ali opened a wage account to pay Iqbal in 2012. Id. at 55a.There was no record of a wage account before then. Notably, Vendor initially stated the cart was Ali's, but, when corrected by counsel, he stated it was his. Id. at 53a ("Whose cart? Ali cart"). As to business operations, Vendor was unclear that Ali renewed the License. First, he testified the License was not renewed in 2010. Then, he revised his testimony, stating he thought his wife gave Ali the money to renew the License. Id. at 57a.

Ali also testified for Vendor. He confirmed he worked for Vendor's wife for four or five years. When asked why he helped Vendor, he replied he did so when Vendor's wife asked. He explained he used to work another food cart at another location that is now closed. He explained he had a commissary license in his name, and he had to obtain a business privilege license to get the commissary license. R.R. at 64a. He also confirmed he paid net profits tax. Id. He had a "Serve Safe Certification" because he works part-time in a restaurant. Id. at 63a.

Ultimately, the Board affirmed the City's revocation. The Board found the testimony of Vendor and Ali not credible. The Board credited Manager's testimony regarding Ali's control over and responsibility for the business. The Board found Ali was not an employee of Vendor. However, it found Ali operated the licensed location. Vendor appealed to the trial court.

Based on the certified record and after oral argument and briefing, the trial court affirmed the Board. At the trial court's direction, Vendor filed a statement of the errors complained of on appeal setting forth a single issue: "the record did not support a finding that the [License] was unlawfully transferred orassigned." Tr. Ct., Slip Op., 8/24/15, at 5. In response, the trial court filed its Pa. R.A.P. 1925(a) opinion. The trial court concluded the record contained substantial evidence to support the Board's finding. Vendor appeals from that decision.

II. Discussion

On appeal to this Court,² Vendor asserts the trial court committed reversible error when it affirmed the Board because the record lacks substantial evidence that Vendor transferred or assigned the License. Vendor argues the Code does not prohibit hiring employees to handle operations, or to act as agents or managers of the license holder. Vendor contends Ali acted as his agent.

The City responds that the trial court properly affirmed the License revocation because substantial evidence supports revocation. The City argues the record reflects Ali unlawfully operated Vendor's cart. That Ali held the requisite licenses and paid the applicable taxes for the cart's operation shows a transfer of the License. The City emphasizes Vendor admitted he closed the business from 2008 through 2011; however, Ali continued to operate the cart during that period. In contrast to the evidence showing Ali's control of the business, there is no evidence showing any control by Vendor over the business.

"Government licenses to engage in a business or occupation create an entitlement to partake of a profitable activity, and therefore, are property rights." City of Phila., Bd. of License & Inspection Review v. 2600 Lewis, Inc., 661 A.2d 20, 22 (Pa. Cmwlth. 1995) (remanding to ensure due process prior to license revocation; citing Young J. Lee, Inc. v. Dep't of Revenue, Bureau of State Lotteries, 474 A.2d 266 (Pa. 1983)). Pennsylvania courts recognize a sidewalk vending license as a property right. See Scott v. City of Pittsburgh, 903 A.2d 110 (Pa. Cmwlth. 2006); see also Lindsay v. City of Phila., 863 F. Supp. 220 (E.D. Pa. 1994) (distinguishing property right in license to vend from a license to vend in a particular location as required by Ordinance). Thus, a local agency must provide a licensee with notice of the pending revocation and an opportunity to be heard on that revocation. 2600 Lewis, Inc....