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Carr v. Washington State Liquor Control Board

Court of Appeals of Washington, Division 2

June 4, 2015

Tillman Carr et al., Appellants ,
v.
The Washington State Liquor Control Board et al., Respondents

Oral Argument January 15, 2015

Appeal from Thurston Superior Court. Docket No: 12-2-02279-5. Judge signing: Honorable H Christopher Wickham. Judgment or order under review. Date filed: 11/22/2013.

Kevin W. Roberts and Robert A. Dunn (of Dunn Black & Roberts PS ); and Stanley E. Perdue, for appellants.

Robert W. Ferguson, Attorney General, and Fronda C. Woods, Chuck Zalesky, and Kelly Owings, Assistants, for respondents.

Authored by Linda CJ Lee. Concurring: Jill M Johanson, Bradley A. Maxa.

OPINION

Page 850

Lee, J.

[188 Wn.App. 215] [¶1] A group of former contract liquor store owners (collectively " the Owners" ) appeal the superior court's order dismissing their complaint against the Washington State Liquor Control Board (Board) and the Washington State Department of Revenue (Department). After Initiative 1183 (I-1183) was adopted, the sale and distribution of liquor in Washington was privatized. As a result, the Board terminated the contracts it had with current liquor store owners. The Owners filed a complaint against the Board and the Department based on the termination of their contracts and alleged violations of RCW 66.24.620 and section 303 of I-1183.

[¶2] Under our recent decision in Fedway Marketplace West, LLC v. State, 183 Wn.App. 860, 336 P.3d 615 (2014), review denied, 182 Wn.2d 1013 (2015), we hold that the superior court properly dismissed the Owners' contract claims. And, the superior court properly determined that there were no private causes of action created under RCW 66.24.620 or section 303 of I-1183. Accordingly, we affirm the superior court's order granting summary judgment and dismissing the Owners' complaint.

FACTS

[¶3] Tillman Carr, Cal and Jenell Farrer, Kuo-Ying Frenzel, Julie Ganas, William Minaglia, Darryl and Rose Hudson, Keith Peterson, Kathryn Debernardi, Katherine Meade, Rob and Shara Coffman, and Pamela Smith (the Owners) all owned contract liquor stores. The Owners entered into new, identical, five-year contracts with the Board, effective June 30, 2011. Under the contracts, the Owners sold liquor on behalf of the Board in exchange for a base rate compensation and commission based on monthly net sales. The contracts contained the following provisions governing termination of the contract:

6.5 TERMINATION BY MUTUAL AGREEMENT
The [Board] and the Contractor may terminate this Contract in whole or in part, at any time, by mutual agreement.
[188 Wn.App. 216] ... .
6.9 TERMINATION FOR WITHDRAWAL OF AUTHORITY
In the event that the [Board's] authority to perform any of its duties relating to this

Page 851

Contract is withdrawn, reduced, or limited in any way after the commencement of this Contract and prior to normal completion, the [Board] may terminate this Contract in whole or in part, by seven (7) calendar day's written notice to Contractor. Contractor shall have no right of appeal when this clause is exercised by the [Board].

Clerk's Papers (CP) at 148-49.

[¶4] In November 2011, the people of Washington State passed I-1183, an initiative privatizing the sale of liquor. I-1183 required the Board to close all state liquor stores by June 1, 2012. Laws of 2012, ch. 2, § 102 (codified at RCW 66.24.620(2)). To comply with I-1183, the Board offered the Owners a contract amendment that changed the contract termination date to May 31, 2012. All of the Owners, except Carr and Farrer, signed the contract amendment. The contract amendment also allowed the Owners to sell liquor to licensees (primarily bars and restaurants) at the Board's discounted rate and allowed the Owners to solicit licensee accounts prior to June 1, 2012. And, the contract amendment allowed the Owners to make deliveries directly to licensees.

[¶5] In February 2012, the Board presented another contract amendment that allowed the Owners to purchase their current liquor inventory from the Board. All the Owners signed the second contract amendment.

[¶6] As a result of I-1183, many owners lost licensee accounts because they were required to pay a higher percentage of their sales to the State. Additionally, overall sales dropped considerably, ...


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