SC Administrative Law Court Decisions

This matter comes before me pursuant to S.C. Code Ann. §§ 61-1-55 (Supp. 1995), the Administrative Procedures Act, §§ 1-23-310, et seq. (Rev. 1986 & Supp. 1995), and § 12-60-1320 (Supp. 1995) of the Revenue Procedures Act, upon the application of Joseph Thomas, Jr., for an on-premises beer and wine permit and a business sale and consumption (mini-bottle) license at the Why Not Club 34 located on Highway 34, at Route 5, Box 375, Bishopville, South Carolina. Individuals residing near the proposed location and the Misgah Baptist Church protested the application. After notice to the parties and protestors, a contested case hearing was conducted on February 26, 1997. Based upon the evidence presented, the application is DENIED.

ISSUES PRESENTED

The issues presented are (1) whether the proposed location is suitable for the issuance of a beer and wine permit and (2) whether the proposed location is engaged primarily and substantially in the preparation and serving of meals so as to meet the legal requirements for issuance of a business sale and consumption (mini-bottle) license.

I make the following findings of fact, taking into consideration the burden on the parties to establish their respective cases by a preponderance of the evidence, and taking into account the credibility of the witnesses:

1. Petitioner, Joseph Thomas, Jr., submitted an application (AI# 109833 & SB#109834), received by the Department of Revenue on July 26, 1996, to apply for an on-premises beer and wine permit as well as a business sale and consumption (mini-bottle) license.
2. Thomas is over the age of twenty-one, has no criminal record and is of good moral character and good repute.
3. He is a legal resident of the United States and South Carolina. He is a life long resident of South Carolina and is employed in Bishopville.
4. Petitioner has not previously held a beer and wine permit or a sale and consumption license. Therefore, he has not had any permit or license revoked.
5. Notice of application has appeared in the Lee County Observer during the weeks of July 17, 24 and 31, 1996.
6. Notice of application was posted for fifteen days at the proposed location.
7. The Department of Revenue issued a Final Department Determination on December 17, 1996, denying the application because, inter alia, the proposed location was not "[b]ona fide engaged primarily and substantially in the preparation and serving of meals" (citing § 61-5-20(4)(Supp. 1995)).
8. The proposed location is a nightclub located along Highway 34 in Lee County, at Route 5, Box 375, Bishopville, South Carolina. It is located within the Cedar Creek Community, at the corner of Highway 34, a two-lane highway connecting Bishopville to Camden, and Dogwood Springs Drive, a street into a rural, residential area adjoining the proposed location.
9. The proposed location is close to residences.
10. The Cedar Creek community is generally a rural residential area.
11. Under previous ownership, the location was a private club licensed to sell beer and wine and mini-bottles from 1986 to 1995.
12. The location is not near any schools or playgrounds.
13. The closest church to the proposed location is 0.9 miles away. Misgah Baptist Church, which protested the application, is approximately five miles from the proposed location and beyond the Cedar Creek community.
14. On August 13, 1996, the Department of Revenue received a petition, signed by 128 "citizens of Lee County," protesting the application because it would lower property values, increase criminal activity in the neighborhood, and pose safety problems.
15. No evidence has been presented to support the contention directly that property values would be lowered as a result of granting the application.
16. A resident living within 350 feet of the location owns three pastures close to the proposed location, including one that adjoins the club property. The resident keeps horses in the pastures, and the fences enclosing them intermittently carry electric current.
17. Under previous ownership and currently, residents have observed beer bottles, beer cans, liquor bottles, and cardboard in their yards and pastures within the neighborhood surrounding the nightclub.
18. Patrons or guests of the Why Not Club 34 have thrown rocks at a horse in a pasture near the nightclub. Patrons of the prior business destroyed fence posts to the horse fields letting horses loose onto the highway in the middle of the night.
19. Patrons or guests of the location, both previously and currently, have disturbed the neighborhood by playing music loudly, slamming car doors, squalling tires, and throwing beer bottles at signs. In addition, cars have been parked along Highway 34 creating a traffic danger.
20. Several homes have been built in proximity of the proposed location in the intervening years between operation of the previous business and the current operation of the Why Not Club.
21. Misgah Baptist Church protests the application on the grounds that Lee County has an adequate number of existing beer and wine permits; however, it presented no evidence to establish the number of licensed premises in Lee County or the optimal number of licensed premises for Lee County.
22. Misgah Baptist Church opposes the granting of any beer and wine permit or business sale and consumption (mini-bottle) license.
23. Petitioner lives 1.5 miles from the proposed location.
24. The proposed location does not furnish lodging but is a gathering place for people to socialize. It is open Wednesday through Saturday beginning at 6:00 p.m. and has no set closing hour.
25. The Why Not Club 34 has been licensed as a food-service establishment with an "A" rating by the South Carolina Department of Health and Environmental Control.
26. The proposed location is not equipped with a kitchen or a separate and distinct area adequately equipped and used solely for the cooking, preparing, serving, storing, and disposal of solid foods for meals.
27. The food preparation and service area is located behind the bar and is part of the bar service space. It is not a separate and distinct area used solely for food preparation and service.
28. On August 5, 1996, an investigation of the proposed location by the special agent Lawrence Brooks of the State Law Enforcement Division (SLED) revealed a working sink near the bar area but no facilities to prepare food, no refrigerator, and no freezer.
29. Petitioners have prepared a menu indicating hot wings, hot dogs, sausage dogs, drinks, and side orders are available for consumption and the location has adequate facilities to prepare these items. There are enough tables and seats to serve at least 40 people.
30. The club does not prepare for customers hot meals at least once each day nor does it offer an assortment of prepared foods.
31. Serving meals does not constitute a regular and substantial source of business to the proposed location.
32. Petitioner has not established that an adequate supply of food is present on the licensed premises to meet the demand for meal service during normal business hours.
33. The proposed location is not engaged primarily and substantially in the preparation and serving of meals.

1. The Administrative Law Judge is vested with the powers, duties and responsibilities of hearing officers of the former Alcoholic Beverage Control Commission and hearing officers pursuant to Chapter 23 of Title 1. S.C. Code Ann. § 61-1-55 (Supp. 1995).
2. S.C. Code Ann. § 61-9-320 (Supp. 1995) provides the statutory requirements for the issuance of on-premises beer and wine permits. It provides in part that the location must be suitable.
3. S.C. Code Ann. § 61-5-10(1)(Supp. 1995) provides the statutory requirements for the issuance of on-premises business sale and consumption (mini-bottle) licenses. It provides in part that the location must be suitable.
4. S.C. Code Ann. § 61-5-20(4)(a)(Supp. 1995) provides that a business may sell mini-bottles only if it is "bona fide engaged primarily and substantially in the preparation and serving of meals or furnishing of lodging."
5. As the trier of fact, the Administrative Law Judge is authorized to decide the fitness or suitability of the proposed business location for a permit to sell beer and wine using broad, but not unbridled, discretion. Byers v. South Carolina ABC Comm'n, 281 S.C. 566, 316 S.E.2d 705 (Ct. App. 1984).
6. Although "proper location" is not statutorily defined, broad discretion has been vested in the finder of fact in determining the fitness or suitability of a particular location. See Fast Stops, Inc. v. Ingram, 276 S.C. 593, 281 S.E.2d 118 (1981); Smith v. Pratt, 258 S.C. 504, 189 S.E.2d 301 (1972); and Taylor v. Lewis, 261 S.C. 168, 198 S.E.2d 801 (1973).
7. The determination of suitability of the proposed location is not necessarily a function solely of geography. It may involve 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).
8. "[P]roximity of a location to a church, school or residence is a proper ground, by itself, on which the [fact finder] . . . may find the location to be unsuitable and deny a permit for the sale of beer or wine at that location." Byers v. South Carolina ABC Comm'n, 305 S.C. 243, 246, 407 S.E.2d 653, 655 (1991)(construing § 61-9-320).
9. The proposed location is not suitable for the issuance of an on-premises beer and wine permit or a business sale and consumption (mini-bottle) license due to its proximity to residences.
10. The proposed location is not suitable for the issuance of an on-premises beer and wine permit or a business sale and consumption (mini-bottle) license because licensing the proposed location would create adverse circumstances for owners of the horse pastures near the club because of the likelihood of club patrons interfering with the horses and the electric fences enclosing the pastures.
11. The proposed location is not suitable for the issuance of an on-premises beer and wine permit or a business sale and consumption (mini-bottle) license because licensing the proposed location would create adverse circumstances for the community because of the likelihood that problems currently experienced by the residents would continue including the littering, loitering, loud noises and disturbances, and traffic problems.
12. "'Bona fide engaged primarily and substantially in the preparation and serving of meals' shall refer only to such a business which has been issued a Class A restaurant license prior to issuance of a license under this article and in addition provides facilities for seating not less than forty persons simultaneously at tables for the service of meals." § 61-5-10(1)(Supp. 1995).
13. 23 S.C. Reg 7-19 (1976) provides as follows:

A. Any business establishment that applies for or holds a sale and consumption license pursuant to § 61-5-20(4) of the Code and is not engaged in the furnishing of lodging, must:

1. Be equipped with a kitchen that is utilized for the cooking, preparation, and serving of meals; and

2. Have readily available to its guests and patrons either "menus" with the listings of the various meals offered for service or a listing of available meals and foods, posted in a conspicuous place readily discernible by the guest or patrons; and

3. Prepare for service to customers hot meals at least once each day the business establishment chooses to be open.

4. If such establishment advertises, a substantial portion of its advertising must be devoted to its food services.

B. The following definitions shall be used in conjunction with § 61-5-20(4) of the Code and this Regulation:

1. "Meal" means an assortment of various prepared foods which shall be available to guests on the licensed premises during the normal "mealtimes" which occur when the licensed business establishment is open to the public. Sandwiches, boiled eggs, sausages and other snacks prepared off the licensed premises but sold thereon, shall not constitute a meal.

2. "Kitchen" means a separate and distinct area of the business establishment that is used solely for the preparation, serving and disposal of solid foods that make up meals. Such area must be adequately equipped for the cooking and serving of solid foods, and the storage of same.

3. "Primarily" means that the serving of meals by a business establishment constitutes a regular and substantial source of business to the licensed establishment and that meals shall be served upon the demand of guests and patrons during the normal "mealtimes" which occur when the licensed business establishment is open to the public and that an adequate supply of food is present on the licensed premises to meet such demand.

1. Licensing as a food-service establishment with an "A" rating by the South Carolina Department of Health and Environmental Control does not by itself satisfy the requirements of S.C. Code Ann. §§ 61-5-10 & 61-5-20(4) and regulations promulgated pursuant to these sections.
2. The proposed location does not satisfy 23 S.C. Reg. 7-19 (1976) because it is not equipped with a separate and distinct area adequately equipped and used solely for the cooking, serving, and storage, and disposal of solid foods for meals.
3. The proposed location does not satisfy 23 S.C. Reg. 7-19 because the club does not prepare for customers hot meals at least once each day or offer an assortment of prepared foods.
4. The proposed location does not satisfy 23 S.C. Reg. 7-19 because the club does not have a kitchen that is utilized for the cooking, preparation, and serving of meals or a separate and distinct area used solely for the preparation, service, and disposal of solid foods that make up meals.
5. The proposed location does not satisfy 23 S.C. Reg. 7-19 because the club does not have an area adequately equipped for the cooking, serving, and storage of solid foods or an adequate supply of food present on the licensed premises to meet the demand for meals to be served during normal business hours.
6. That the club has facilities to prepare hot wings, hot dogs, sausage dogs, drinks, and side orders does not by itself satisfy the requirements of Reg. 7-19.
7. Serving meals does not constitute a regular and substantial source of business to the proposed location within the meaning of S.C. Code Ann. §§ 61-5-10 & 61-5-20(4).
8. The proposed location is not engaged primarily and substantially in the preparation and serving of meals and does not qualify for the issuance of an on-premises business sale and consumption (mini-bottle) license.

Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby

ORDERED, that the application of Joseph Thomas, Jr., for an on-premises beer and wine permit and business sale and consumption (mini-bottle) license for the Why Not Club 34 at Route 5, Box 375, Bishopville, South Carolina, is DENIED.

AND SO IT IS ORDERED.

___________________________

ALISON RENEE LEE

Administrative Law Judge

April 23, 1997

Columbia, South Carolina