ORDERS:
FINAL ORDER AND DECISION
STATEMENT
OF THE CASE
This matter comes before the Administrative Law Court (ALC or
Court) pursuant to S.C. Code Ann. §§ 61-2-20 and 61-2-260 (Supp. 2007). The
South Carolina Department of Revenue (Department) seeks a $500 fine from
Respondent for his first alleged violation of 23 S.C. Code Ann. Regs. 7-200.4 (Supp.
2007) within a three-year period. After notice of the date, time, place, and
nature of the hearing was timely given to all parties, a hearing was held before
me on March 27, 2008 at the offices of the Administrative Law Court.
FINDINGS
OF FACT
Having
observed the witnesses and exhibits presented at the hearing and closely passed
upon their credibility, taking into consideration the burden of persuasion by
the parties, I make the following Findings of Fact by a preponderance of the
evidence:
1. The
Respondent, Russell Wormald, holds an on-premises beer and wine permit for American
Photographic Services, a convenience store that is located close to the Anderson County line at 901 East Fair Play Blvd. Fair Play, South Carolina. Respondent’s business
is named American Photographic Services because Respondent also has an off-site
photographic corporation and it was easier to keep the name of that business
when incorporating the general store as a C-corporation. Respondent is the sole
shareholder of the corporation.
2. On
August 3, 2006, SLED agent, James R. Causey conducted an investigation of the
premises by driving a youthful-looking underage cooperating individual (UCI) by
the name of Jordan Lutz to the general store. The UCI entered the general store,
carrying only a five-dollar bill and his identification, which correctly showed
that he was sixteen (16) years of age. The UCI was allowed to purchase a 24
ounce can of Bud Light beer from Respondent’s employee Tammy McCall (McCall). McCall
did not ask for the identification of the UCI or his age before making the sale
of the beer to the minor.
3. SLED
agent Causey was waiting in the parking lot when the UCI returned to the car
with his can of beer. Accordingly, Causey entered the store and issued an
administrative violation to the licensee for violating the provisions of
Regulation 7-200.4 by permitting the purchase of beer by a person under the age
of 21. Causey also issued a criminal citation to McCall for violation of S.C.
Code Ann. 61-4-90 (Supp. 2007) for the transfer of beer to a person under 21.
4. The
Department issued a proposed assessment to the Respondent on August 18, 2006
which instituted a $500 fine for the violation. Respondent timely protested
the proposed penalty by letter postmarked November 17, 2006. The Department
issued its Final Determination on January 12, 2007.
5. The
Respondent further appealed to the ALC. In his Notice of Appeal, Respondent
admits that McCall never received any training on how to check IDs.
Moreover, since the incident, no new policies or procedures have been
implemented at American Photographic Services to prevent the sale of alcohol to
underage individuals. However, Respondent did purchase a “Ruby” system to identify
minors when driver’s licenses are scanned, but admitted that his employees
could scan their own licenses to bypass the system. Since this incident,
Respondent received another violation from SLED for selling alcohol to a minor at
another one of his locations.
CONCLUSIONS OF LAW
Based
upon the above Findings of Fact, I conclude the following as a matter of law:
1. S.C.
Code Ann. § 1-23-600 (Supp. 2007) grants jurisdiction to the Court to hear
contested cases under the Administrative Procedures Act. Specifically, S.C.
Code Ann. § 61-2-260 (Supp. 2007) grants the ALC the authority to hear
contested case hearings in matters governing alcoholic beverages, beer and
wine.
2. Permits
and licenses issued by this state for the sale of liquor, beer and wine are
privileges to be used and enjoyed only so long as the holder complies with the
restrictions and conditions governing them. See Feldman v.
S.C. Tax Comm’n, 203 S.C. 49, 26 S.E.2d 22 (1943).
3. Permitting
or knowingly allowing a person under the age of twenty-one (21) to purchase or
possess beer upon the licensed premises is a violation against a beer and wine
permit. 23 S.C. Code Ann. Regs. 7-200.4 (Supp. 2007). Such a violation
constitutes sufficient grounds for either suspension or revocation of the
permit. Id. The term “knowingly” in Regulation 7-200.4 includes not
only actual knowledge, but also knowledge that could be gained by reasonable inquiry
when the circumstances are such as would cause a prudent man to inquire. See Feldman, 203 S.C. 49, 26 S.E.2d 22. A person may be found to act “knowingly”
where it appears that the person “[shut] his eyes to avoid knowing what would
otherwise be obvious.” State v. Thompkins, 263 S.C. 472, 484, 211
S.E.2d 549, 554 (1975).
4. Furthermore,
the permittee is responsible for the acts of his servants, agents, or employees
and cannot seek to avoid the consequences of a violation for lack of personal
knowledge. See, e.g., Crystal Ice Co. of Columbia, Inc. v.
First Colonial Corp., 273 S.C. 306, 309, 257 S.E.2d 496, 497 (1979) (“It is
well established that a principal is affected with constructive knowledge of
all material facts of which his agent receives notice while acting within the
scope of his authority.”); S.C. Law Enforcement Div. v. The “Michael and
Lance,” 284 S.C. 368, 327 S.E.2d 327 (1985) (determining that civil
forfeiture of a corporation’s boat based upon an employee’s illegal transporting
of drugs was warranted even though the corporation claimed that the use of the
boat to transport drugs was without its knowledge); 48 C.J.S. Intoxicating
Liquors § 259 (1981) (a permit holder is responsible for the actions and
conduct of employees utilizing the permit upon the permitted premises).
5. It
is undisputed that McCall knowingly permitted the sale to the underage
individual. While it is true that McCall is no longer employed by the
Respondent, there is no evidence that McCall or any other employee at the store
received training on how to properly check for identification. Additionally,
there is no evidence that Respondent has instituted any further training
policies or programs for his employees. The Department generally seeks a $500
fine for a first violation, within a three-year period, of Regulation 7-200.4. See Revenue Procedure 04-4. Although this Court has the authority to impose a
lesser sanction than that sought by the Department, in this case, the evidence demonstrates that Respondent has not changed any of
its policies or procedures since the incident. Therefore, I find that the $500
fine sought by the Department in this case is an appropriate penalty.
ORDER
Based
upon the foregoing Findings of Fact and Conclusions of Law,
IT
IS HEREBY ORDERED that Respondent shall pay a fine of $500 to the
Department no later than thirty (30) days after the date of this Final Order
and Decision.
AND
IT IS SO ORDERED.
________________________________
Carolyn C. Matthews
Administrative
Law Judge
April 16, 2008
Columbia, South Carolina
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