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REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 1424 September Term, 2000

ROSEDALE PLAZA LIMITED PARTNERSHIP

v. LEFTA, INC., ET AL.

Eyler, Deborah S., Rodowsky, Lawrence F. (Ret'd, Specially Assigned), Thieme, Raymond G., Jr. (Ret'd, Specially Assigned), JJ.

Opinion by Thieme, J.

Filed: September 6, 2001

This case presents us with a relatively straight-forward matter of first impression that is complicated by rather

byzantine proceedings.

Like Theseus, however, we must follow We

Ariadne's string to extricate ourselves from the labyrinth.

will begin by briefly setting forth the factual background and proceedings in this case that arose prior to the determination by the Circuit Court for Baltimore County that the individual licensees of a liquor license have no property interest in that license when it is issued on behalf of a corporation. Rosedale Plaza Limited Partnership appeals from that

decision and presents us with the following question: I. Did the circuit court err in holding that the owner of a liquor license was not the named licensees, but rather the corporation for whose use the license was issued? Facts and Proceedings On July 23, 1997, Rosedale and Lefta, Inc. entered into a shopping center lease for the property known as 703 Chesaco Avenue, Baltimore, Maryland 21237 to be used by Lefta, Inc. as a restaurant, bar and packaged goods store. Andreas Pitsos,

Maria Papadimitriou, and Irene Pitsos signed personal guarantees in connection with the lease agreement. These individuals made

application to the Baltimore County Board of Liquor License Commissioners for a Class D beer, wine, and liquor license on behalf of Lefta, Inc.; the liquor license was issued on April 9, 1997. In connection with the purchase of the business to be

operated

in

the

newly

leased

space,

Lefta,

Inc.

granted

a

security interest in certain property held by the corporation, including the liquor license, to Chesaco Enterprises and J&J Real Estate, pursuant to a Security Agreement and Financing Statement. The business ceased operating in August 1997, only months after opening. Lefta, Inc. subsequently defaulted on the rent

payments on the premises, and therefore Rosedale Plaza Limited Partnership filed an action against Lefta, Inc., Andreas Pitsos, Georgia Pitsos, Maria Papadimitriou, Irene Pitsos, and George Dorn. The circuit court entered judgment against the

individuals in the principal amount of $85,430.63 and attorney's fees of $6,742.25. Lefta, Inc. filed a Bankruptcy Petition with the U.S.

Bankruptcy Court for the District of Maryland, and the alcoholic beverages license that is the basis of this appeal was claimed as property of the estate in that bankruptcy case. The trustee

in the Lefta, Inc. bankruptcy case filed a Motion to Sell Personal Property of the Estate free and clear of Liens; the personal property that was the subject of the motion was the liquor license. Rosedale thereafter filed a Motion for Relief

from the Automatic Stay with the U.S. Bankruptcy Court to gain possession of the liquor license, requesting permission to

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execute

on

its

judgment

entered

against

the

individual

licensees' interests in the license.

It is undisputed that the

liquor license in question is the only substantial asset from which to satisfy the respective claims. The Bankruptcy Court

denied the Motion to Lift Stay, indicating that Lefta, Inc. had an interest in the license, and allowed the sale. The license

remained part of the bankruptcy estate upon the failure of the parties to agree on the terms of a Consent Order. Thereafter,

Rosedale requested that a Writ of Execution be issued by the circuit court to attach the interest held in the license by the judgment debtor individual licensees. the Sheriff levied on the license. The Writ was issued, and Rosedale then filed a

request for sale seeking to have the license sold to satisfy the judgment licensees. entered against the judgment debtor individual

Appellees, Chesaco Enterprises, Inc. and J&J Real a

Estate, the secured creditors of Lefta, Inc., then f i l e d

Motion for Release of Property from Writ of Execution concerning the license. Prior to the hearing on the Motion to Release

Property, the trial court ruled that the Motion was stayed "pending resolution of the bankruptcy action in federal court." With the prior Motion To Lift Stay unresolved, the

Bankruptcy Judge ruled that the automatic stay would be lifted and the parties could seek State Court determination as to the

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ownership of the license.

The sale of the license was stayed by

the Bankruptcy Court in order to protect the license during the pendency of any State Court action. Thereafter the case came to

a hearing and the trial court ruled that the license was the property debtors of and and not owned by by the individual the licensee judgment for whose

Lefta,

Inc.,

corporation

benefit the license had been issued. to quash the Writ of Execution. Beverage granted. Association filed a

The trial court declined

The Baltimore County License to Intervene that was

Motion

Chesaco Enterprises, Inc. and J&J Real Estate filed a Once again, the matter

Motion to Alter or Amend the Judgment.

was set for hearing, whereupon the trial court reversed its prior ruling. This time, the trial court ruled that the license

was held for the benefit of the corporation, Lefta, Inc., and that the individual licensees had no ownership interest in it. Rosedale thereupon noted this appeal. Discussion Appellant argues that the circuit court erred in holding that the owner of the liquor license is the corporation for whose use the license was issued. Appellant contends instead

that it is the named licensees that own the license, and that the applicable law precludes a corporation from owning a liquor license.

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The face of the license at issue here reads, in pertinent part: THIS IS TO CERTIFY, that Andreas Pitsos, Maria Papadimitriou, Irene A. Pitsos, Lefta, Inc., t/a Hillbrook Station Raw Bar & Grill/Chesaco Liquors, 1703-09-11 Chesaco Avenue, Baltimore, MD 21237 is licensed by the State of Maryland to keep for sale, and to sell all alcoholic beverages at retail at the place herein described, for consumption on the premises or elsewhere. Md. Code (1957, 1998 Repl. Vol.)

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