A city of Evanston liquor license once attached to the building most recently housing the Bear Town Restaurant on Bear River Drive is at the heart of a recent lawsuit. HERALD PHOTO/Matt Roberts
EVANSTON — The city of Evanston, city attorney Dennis Boal and the Evanston Golf Club are defendants in a lawsuit filed by a Utah corporation claiming its local liquor license was illegally transferred to the golf club. Also involved in the lawsuit as a defendant is former Evanston restaurateur Paul Nebeker, who has sought exclusion from the suit based on a recent bankruptcy filing.
In the action filed in U.S. District Court, the plaintiff, Claim Jumper, LLC, asserted in an October 2012 amended complaint the city and Boal denied their constitutionally-protected rights to due process when the Evanston liquor license they possessed was transferred first to Nebeker and then to the Evanston Golf Club in 2008. Claim Jumper owns the Bear River Restaurant building, at 240 Bear River Drive, which is now vacant.
The complaint also accuses Nebeker, the golf club and Boal, in his capacity as a private attorney for Nebeker, of committing civil fraud, conversion, civil conspiracy, civil theft, breach of contract, tortious interference with contract and unjust enrichment.
The conflict over the possession of the city’s liquor license has its origins in the leasing of the restaurant property to Nebeker by Claim Jumper in November 2005, where he operated the Bear Town Restaurant and Bar until November 2009. Prior to that date, according to the complaint, Nebeker, without Claim Jumper’s knowledge, sold the liquor license to the Evanston Golf Club, in June 2008.
It wasn’t until two years later, in December 2010, when Claim Jumper vice-president Richard Ringwood toured the Evanston site, that he discovered the license was no longer attached to the building.
The company claims that both Nebeker and Boal knew at the time Nebeker leased the site in 2005 that possession of the liquor license was specifically excluded from the agreement, although Nebeker was permitted to sell alcohol at the restaurant in a November 2005 addendum under the license.
But in 2006, Nebeker filed a request with the city of Evanston to transfer ownership of the license from Claim Jumper to himself and former wife Janice Nebeker, a move the complaint asserts was neither authorized nor legal, although it was based on a “verbal policy, apparently consistent with custom in the state of Wyoming, that in the event a liquor license was to be used by a building tenant, rather than the building owner, the liquor license owner was required to ‘assign and transfer’ the license to the tenant.”
Despite a request by Boal, who was at that time representing Nebeker, to remove verbiage in Nebeker’s lease agreement prohibiting his control of the liquor license, the complaint said a 2007 renewal of the lease maintained the original language.
A request from Boal in 2008 that Claim Jumper permit the transfer of Nebeker’s lease agreement to Gary Ellingford — along with the company’s interest in the license — was rejected.
On June 16, 2008, however, Nebeker was paid $75,000 by the Evanston Golf Club — which operates the Purple Sage Golf Course that is staffed by city employees — for the liquor license. Claim Jumper claims it was not notified of the sale, and renewed its lease agreement in late November 2008 under the belief the license was still attached to the restaurant.
After Nebeker’s exit from the property, it was leased to Jose Valesquez, who informed Ringwood in 2010 he was unable to operate the bar portion of the restaurant because Nebeker had sold the liquor license.
Following the discovery, Claim Jumper contacted Boal through the company’s attorney in January 2011 in an effort to have the liquor license returned, or a new license assigned to Claim Jumper. Not receiving the requested license, Claim Jumper filed a claim against the city of Evanston under the Wyoming Governmental Claims Act; the company’s complaint asserts the city did not respond to the claim, and no license has been issued to Claim Jumper.
The previously-held liquor license has subsequently been transferred to Wyoming Restaurants, LLC, and J&M Hospitality Management, LLC.
Claim Jumper also alleges that about $19,100 in inventory at the restaurant was found to be missing from the building when it was inspected by Ringwood following Nebeker’s vacation of the property after his lease expired.
Boal, in his individual capacity as the attorney who represented Nebeker while Nebeker leased the restaurant property, denied in his answer to the lawsuit filing that he was aware of Claim Jumper’s ownership interest in the liquor license when it was sold to the Evanston Golf Club.
Following the filing of the lawsuit, the Evanston Golf Club filed a cross claim against Boal, asserting that Boal should be held liable for any responsibility the golf club faces if Claim Jumper’s suit is successful.
Boal asserted in his response to the claim that the golf club’s only standing was based on the fact that he represented Nebeker during the transfer of the license, which Nebeker warranted he owned at the time.
The court later dismissed the cross claim.
Nebeker, whose former wife, Janice, was dropped from the initial suit, filed for bankruptcy in 2011; the case was finalized July 3, 2012. He subsequently filed a motion with the district court to be released from the Claim Jumper lawsuit, citing the plaintiff had not filed an adversarial complaint challenging the bankruptcy.
But Claim Jumper’s attorneys filed a response asserting Nebeker should not be discharged from the suit on the grounds that their assertions in the case — that Nebeker’s actions in relation to the transfer of the liquor license were fraudulent and malicious, and therefore not dischargeable through bankruptcy. Nebeker’s list of debts filed with his bankruptcy petition did not initially reference Claim Jumper as an actual or potential creditor, though the company and Evanston Golf Club were added in an amendment after the bankruptcy was finalized.
During a motion hearing Dec. 10, 2012, the court noted the bankruptcy court handling Nebeker’s case is taking into consideration whether the amendment adding the Claim Jumper case participants was proper, and whether that claim was in fact discharged.
But a ruling handed down from the U.S. Bankruptcy Court for the District of Wyoming Jan. 24 indicated the Claim Jumper lawsuit could proceed in federal court, by voluntarily vacating its jurisdiction of the bankruptcy issue to the other court, and Nebeker would remain a defendant in the case.