SC Administrative Law Court Decisions

This matter comes before me pursuant to S.C. Code Ann. 61-9-320 and S.C. Code Regs. 7-17 upon application requests for an on-premises beer and wine permit(AI 107844) and a club sale and consumption ("minibottle") license (AI 107845) by Abraham Jeter, d/b/a Army Navy Union Garrison #4051 ("Applicant") for the premises located at 933 Howard Street, Spartanburg, Spartanburg County, South Carolina ("location").

A hearing was held on October 18, 1996 at the Spartanburg County Courthouse, Spartanburg, South Carolina after notice to the parties and the sole Protestant, the Spartanburg County Sheriff ("Protestant"). The applications were protested by the Spartanburg County Sheriff based on the issue of suitability of the location and the availability of police protection. The Protestant did not appear nor send a representative to the hearing. The South Carolina Department of Revenue ("Department") denied Petitioner's applications based upon the issue of unsuitability due to the large number of violations which were written at the location when previously operated as a club and on the contention that Petitioner is not a qualified bona fide corporation for permitting purposes and thus is not entitled to a club sale and consumption license.

The application request for the on-premise beer and wine permit is granted; however, the application request for the club sale and consumption ("minibottle") license is denied.

EXHIBITS

Those certified copies of documents forwarded to the Administrative Law Judge Division ("Division") from the Department's file were made a part of the record.

Various other exhibits including photographs at the proposed location were entered into the record at the hearing by Applicant and Respondent.

FINDINGS OF FACT

After consideration and review of all the evidence and testimony presented, and with an opportunity to observe the witnesses and form an opinion with respect to their credibility, I make the following findings by a preponderance of the evidence:

1. This Division has personal and subject matter jurisdiction.
2. Notice of the date, time, place and nature of the hearing was timely given to all parties and the Protestant.
3. Applicant is seeking an on-premise beer and wine permit and a club sale and consumption ("minibottle") license as a nonprofit corporation for a private club located at 933 Howard Street, Spartanburg, Spartanburg County, South Carolina.
4. The Army Navy Union Garrison #4051 was incorporated as a nonprofit corporation, having been granted a certificate of incorporation by the Secretary of State on April 5, 1996.
5. Applicant's corporation adopted by-laws which were ratified by the members and Directors on April 1, 1996. They provided for a board of directors consisting of not less than three nor more than five members who shall be elected by the members to serve for a term of one year or until a successor shall have been elected or qualified. They further provided that the entire board of directors or any individual director may be removed, with or without cause, by Abraham Jeter, Jr.
6. The by-laws of Army Navy Union Garrison #4051 do not provide a definite fixed method for electing persons into its membership.
7. The by-laws do provide for the election of a President, Vice-President(s), a Secretary, a Treasurer and other Assistant Officers.
8. The by-laws also provide that the salaries of the officers are to be fixed from time to time by Abraham Jeter, Jr. Further, they provide that upon dissolution or the voluntary or involuntary liquidation of the corporation, Abraham Jeter, Jr. shall be entitled to receive the net assets of the corporation after the payment of all legitimate debts, expenses and other charges. They also allow Mr. Jeter to alter, amend or repeal them, in his sole discretion.
9. On the license application, Abraham Jeter, Jr., is listed as the only member of the corporation and as the President. However, during testimony, Applicant stated that Albert Brantley Phillips had been elected President two years ago.
10. Presently, the Applicant is the manager of Army Navy Union Garrison #4058 located near the intersection of Reidville Road and Interstate 26 in Spartanburg County, South Carolina. He receives a weekly salary of $350.00. The officers and members of that club are the same individuals who are proposing this club and will also be its members and officers.
11. Applicant is over twenty-one years of age, is a citizen of the State of South Carolina, and has maintained his principal residence in South Carolina for more than thirty days.
12. Applicant has not had a permit/license revoked in the last five years.
13. Applicant is of good moral character. He has no criminal record.
14. Notice of the application appeared in a newspaper of general circulation in the area of the proposed location for three consecutive weeks and was posted at the proposed location for fifteen days.
15. The location is not within 500 feet of any school, church or playground.
16. The location fronts on a paved road and is surrounded primarily by commercial establishments, i.e., a used car lot, laundry, liquor store and a used furniture store.
17. Applicant held a beer and wine permit and a sale and consumption license in his name at this location between the years of 1988 and 1994. Several violations were written against him during this period which were for the consumption of liquor by a non-member. However, since he has operated the Reidville Road club, there have been no ABC violations. No testimony was presented in opposition to the grant of the permit or to the issue of unsuitability of location for the permit.
19. Applicant does not intend to conduct a bona fide business engaged primarily and substantially in food preparation and service or the furnishing of lodging at the location.
18. The location is suitable for the issuance of a beer and wine permit.

CONCLUSIONS OF LAW

Based upon the foregoing Findings of Fact, I conclude as a matter of law the following:

1. S.C. Code Ann.  61-1-55 (Supp. 1995) provides that the South Carolina Administrative Law Judge Division is empowered to hear this case pursuant to Chapter 23 of Title I of the 1976 Code, as amended.
2. S.C. Code Ann.  61-9-320 (Supp. 1995) provides the criteria to be met by an applicant for a beer and wine permit in South Carolina.
3. S.C. Code Ann.  61-5-50 and 61-3-440 (Supp. 1995) set forth the requirements for a sale and consumption (minibottle) license.
4. S.C. Code Ann.  61-5-20(3); 61-5-50(1) (Supp. 1995) and 23 S.C. Code Ann. Regs. 7-17 (Supp. 1995) set forth the criteria for a bona fide nonprofit corporation to be eligible for a sale and consumption (minibottle) license.
5. A license for the sale and consumption of alcoholic beverages must not be granted unless the provisions of  61-5-50 are met. In addition to the requirements contained in S.C. Code Ann.  61-9-320,  61-5-50 requires that the mini-bottle licensee be either a bona fide non-profit organization or conduct bona fide business engaged primarily and substantially in food preparation and service or the furnishing of lodging.
6. A permit may not be issued under S.C. Code Ann.  61-3-730 (Supp. 1995) if the applicant is not a suitable person to be licensed; the place of business is not a suitable place; or a sufficient number of licenses have already been issued in the state, municipality or community.
7. S.C. Code Ann.  61-3-440 (Supp. 1995) prohibits the issuance to an applicant of a liquor license for on-premise consumption if the place of business (location) is within three hundred feet (300') of any church, school or playground within a municipality or is within five hundred feet (500') of a church, school or playground where situated outside of a municipality.
8. S.C. Code Ann.  61-3-490 provides that applicants for a license under Chapter 3, Chapter 7, and Article 3 of Chapter 13 shall advertise at least once a week for three consecutive weeks in a newspaper most likely to give notice to interested citizens of the county, city, or community in which the applicant proposes to engage in business. It further provides that notice also must be given by displaying a sign for fifteen days at the site of the proposed business. The sign must:

(1) state the type of license sought;
(2) tell an interested person where to protest the application;
(3) be in bold type;
(4) cover a space at least eleven inches wide and eight and one-half inches high;
(5) be posted and removed by an agent of the department.
9. The factual determination of whether or not an application is granted or denied is usually the sole prerogative of the executive agency charged with rendering that decision. Palmer v. South Carolina ABC Comm'n, 218 S.C. 246, 317 S.E.2d 476 (Ct. App. 1984). As the trier of fact, an administrative law judge is authorized to determine the fitness or suitability of the proposed business location of an applicant for a permit to sell beer and wine using broad but not unbridled discretion. Ronald F. Byers v. S.C. ABC Comm'n, 281 S.C. 566, 316 S.E.2d 705 (Ct. App. 1984). It is also the fact finder's responsibility to judge the demeanor and credibility of witnesses and determine the relevance and weight of any testimony and evidence offered.
10. Although "proper location" is not statutorily defined, broad discretion is vested in the judge in determining the fitness or suitability of a particular location. Fast Stops, Inc. v. Ingram, 305 S.C. 243, 281 S.E.2d 181 (1981). The determination of suitability of a location is not necessarily a function solely of geography. It involves an infinite variety of considerations related to the nature and operation of the proposed business and its impact on the community within which it is to be located. Kearney v. Allen, 287 S.C. 324, 338 S.E.2d 335 (1985). Any evidence adverse to the location may be considered. The proximity of a location to a church, school or residences is a proper ground by itself, on which the location may be found to be unsuitable and a permit denied. Byers v. South Carolina ABC Comm'n, 305 S.C. 243, 407 S.E.2d 653 (1991). Further, the court can consider whether "there have been law enforcement problems in the area." Palmer v. S.C. ABC Comm'n, 282 S.C. 246, 317 S.E.2d 476 (Ct. App. 1984).
11. In considering suitability of location, it is relevant to consider the previous history of the location and to determine whether the testimony at a hearing in opposition to a permit consists only of opinions and conclusions or is supported by facts. Taylor v. Lewis, 261 S.C. 168, 198 S.E.2d 801 (1973).
12. The trier of fact may need to consider one or more of the above factors in making a decision as to whether a location is proper. The determination of suitability is highly factual and is based upon the weighing and balancing of these considerations where applicable.
13. S.C. Code Regs. 7-88 (1976), authorizing the imposition of restrictions to permits, provides:

Any stipulation and/or agreement which is voluntarily entered into by an applicant in writing for a beer and wine permit between the applicant and the South Carolina Alcoholic Beverage Control Commission, if accepted by the Commission, will be incorporated into the basic requirements for the enjoyment and privilege of obtaining and retaining the beer and wine permit and which shall have the same effect as any and all laws and any and all other regulations pertaining to the effective administration of beer and wine permittees.


In the event that evidence is presented to this Commission that any part of the stipulation or agreement is or has been knowingly broken by the permittee will be a violation against the permit and shall constitute sufficient grounds to suspend or revoke said beer and wine permit.

14. Permits and licenses issued by the State for sale of liquor, beer, and wine are not rights or property, but are rather privileges granted in the exercise of the police power of the State to be used and enjoyed only so long as the restrictions and conditions governing them are complied with. As the tribunal authorized to grant the issuance of a permit is also authorized, for cause, to revoke it, that tribunal is likewise authorized to place restrictions or conditions on the permit or license. See Feldman v. South Carolina Tax Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943).
15. A violation of any regulation or code section of the Alcoholic Beverage Control Act is punishable by revocation or suspension of the license pursuant to S.C. Code Ann.  61-5-60 (Supp. 1995).
16. Army Navy Union Garrison #4051 is not a bona fide nonprofit organization within the meaning and definition of S.C. Code Regs. 7-17. It has no fixed method for electing persons on an individual basis to membership; the affairs and management of the corporation are to be conducted by Abraham Jeter, Jr., not its board of directors or a body chosen by its members, and upon dissolution or liquidation the net assets of the corporation go to Mr. Jeter and not to the benefit of its members or shareholders.
14. Accordingly, because of Petitioner's failure to properly organize this organization and corporation, I conclude that a license may not be issued for the sale and consumption of liquor at the location. Petitioner requested the license for a nonprofit corporation which does not meet the requirements of Regs. 7-17.
15. However, I conclude that Petitioner meets the requirements under  61-9-320 for the issuance of an on-premise beer and wine permit. There was no testimony or evidence that the location,if permitted, would be a detriment to the community or would impact upon the health, safety and welfare of the citizens therein. However, the following restrictions are to be a part of the permit:

1. No outside speakers shall be installed on the exterior of the building or outside the building at the location;
2. All exterior doors at the location shall remain closed at all times except when employees or patrons are entering or exiting the building; and
3. Applicant shall not serve beer or wine later than 12:00 a.m. Monday through Thursday and Saturday evenings and shall not serve beer or wine later than 1:00 a.m. on Friday evenings.

ORDER

Based upon the above Findings of Fact and Conclusions of Law, It is hereby:

ORDERED that the club sale and consumption (minibottle) license (AI 107845) applied for by Abraham Jeter, Jr. d/b/a Army Navy Union Garrison #4051 for the premises located at 933 Howard Street, Spartanburg, Spartanburg County, South Carolina is hereby denied, and

IT IS FURTHER ORDERED that the on-premise beer and wine permit (AI 107844) applied for by Abraham Jeter, Jr. d/b/a Army Navy Union Garrison #4051 for the premises located at 933 Howard Street, Spartanburg, Spartanburg County, South Carolina is granted with the following restrictions, upon the applicant signing a written agreement to be filed with the Department to adhere to the stipulations set forth below:

1. No outside speakers shall be installed on the exterior of the building or outside the building at the location;
2. All exterior doors at the location shall remain closed at all times except when employees or patrons are entering or exiting the building; and
3. Applicant shall not serve beer or wine later than 12:00 a.m. Monday through Thursday and Saturday evenings and shall not serve beer or wine later than 1:00 a.m. on Friday evenings.

IT IS FURTHER ORDERED that a violation of any one of the above conditions is considered a violation against the permit and may result in a fine, suspension, or revocation.

IT IS FURTHER ORDERED that the Department of Revenue and Taxation shall issue the permit upon payment of the required fees and costs by the Applicant.

AND IT SO ORDERED.

_________________________________
MARVIN F. KITTRELL
CHIEF JUDGE

Columbia, South Carolina
October 30, 1996