SC Administrative Law Court Decisions

This matter is before the Administrative Law Judge Division (Division) pursuant to the request of Crenco Food Stores, Inc., d/b/a Crenco Food Store (Respondent) for a contested case hearing pursuant to an administrative violation regarding the off-premise beer and wine permit for the Respondent's premises at 3028 Lancaster Highway, Richburg, South Carolina 29729 (location). Respondent was cited for a violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000), for allegedly permitting or knowingly allowing a person under the age of twenty-one (21) years to purchase a beer on April 26, 2000. Based upon this alleged violation and two prior violations at this location against this permit held by Respondent, the South Carolina Department of Revenue (Department) is seeking to impose a forty-five (45) day suspension of the Respondent's off-premise beer and wine permit.

After notice to the parties, a contested case hearing was held at the offices of the Division in Columbia, South Carolina, on April 17, 2001. After a thorough review of the file and the evidence presented at the hearing, I find and conclude that a ten-day suspension of the Respondent's off-premise beer and wine permit is the appropriate penalty in this case.

Any issues raised in the proceedings or hearing of this case but not addressed in this order are deemed denied. ALJD Rule 29(B). Furthermore, the filing of a motion for reconsideration is not a prerequisite to any party filing a notice of appeal of this order. ALJD Rule 29(C).

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 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.

3. The Respondent holds an off-premise beer and wine permit for the store located at 3028 Lancaster Highway, Richburg, South Carolina 29729.

4. On April 26, 2000, SLED agent Stacy Snow made a "controlled buy" at the Crenco Food Store in Richburg, South Carolina. An underage cooperating individual (UCI), Benjamin Rudy, assisted in the controlled buy. The UCI, who was born on November 15, 1980, was nineteen (19) years old at the time of the purchase. He held a valid South Carolina driver's license which showed his birth date and contained in the upper right hand corner the statement: "Under 21 until 11-15-2001."

5. On the date of the hearing before this court, the UCI's physical appearance accurately reflected his physical appearance on the date in question. He appeared sufficiently youthful so as to merit an inquiry as to his correct age before allowing him to purchase a beer. Based upon this court's observation of the UCI at the hearing, a reasonable person would conclude that the UCI was under twenty-one (21) years of age on the date the purchase of the beer was made.

6. Before the UCI entered the location, Agent Snow searched him and found him to be in possession of only his valid South Carolina driver's license and a $5.00 bill. The UCI entered the store, went to the beer cooler, selected a 24 ounce Bud Light beer, and proceeded to the cash register with the beer.

7. The clerk, Jennifer Gregory, sold the UCI the beer without asking for his identification. The UCI exited the store and gave the beer to Agent Snow.

8. Agent Snow issued a citation to Ms. Gregory for violation of S.C. Code Ann. § 61-4-90 (Supp. 2000), for transferring beer to a person under the age of twenty-one, as well as an administrative citation to the Respondent Crenco Food Stores, Inc., for violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000), for permitting the purchase of beer by a person under twenty-one years of age.

9. This violation constitutes the third violation of S.C. Code Ann. Regs. 7-9(B) written against the beer and wine permit for this location. The first violation report is dated October 14, 1997. The Respondent paid a monetary penalty of Four Hundred Dollars ($400.00) for that violation. The second violation report is dated December 11, 1998. The Respondent paid a monetary penalty of Eight Hundred Dollars ($800.00) for that violation.

10. According to the owner of the Respondent, Harold H. Crenshaw, Jr., the Respondent has its home office in Lancaster, South Carolina, and operates convenience stores in York, Lancaster and Chester counties. Mr. Crenshaw has been in the convenience store business for twenty-one years. I found him to be a very credible witness.

11. The Respondent has an extensive training program for new employees. Respondent has an Operations Manager, Mr. Terry Thompson, who has been with the Respondent for fourteen years and who is in charge of overseeing training for all of Respondent's stores. Each new employee undergoes a three to four day training process, which is conducted by the store manager at each location. During the training process, each employee is required to read the Respondent's policy manual and to sign a statement indicating that he or she has read the manual and agrees to abide by all rules or regulations therein. The policy manual contains the general policy that no beer or wine is to be sold to minors, and that cashiers must obtain proper identification on all sales unless they are certain of the customer's age; the policy that the only acceptable identifications are either a valid driver's license or a state-issued identification card; and a statement that selling beer or wine to a minor constitutes grounds for termination of employment. In addition, new employees are shown a film about alcohol and cigarette sales, and are shown the procedures for checking identification by the store manager.

12. Neither Mr. Crenshaw nor Mr. Thompson was in the Respondent's Richburg store at the time of the incident on April 26, 2000.

13. Jennifer Gregory, the clerk who made the sale in this case, had been employed with the Respondent since 1998. She signed a statement indicating that she had read Respondent's policy

manual and agreed to abide by all rules and regulations therein. Following the incident on April 26, 2000, Ms. Gregory's employment with the Respondent was terminated.

14. Since April 26, 2000, the Respondent has instituted additional policies which are designed to prevent sales of beer or wine to minors. Each employee of Respondent is now required to read and sign a "Liquor Liability Employment Agreement" in which the employee agrees, inter alia, not to sell any alcoholic beverages to minors; not to purchase any alcoholic beverages for minors; not to give away any alcoholic beverages to minors; to accept only the forms of identification authorized by Respondent from anyone purchasing alcoholic beverages; to request acceptable identification from anyone who does not appear to be at least thirty (30) years old; and to verify that a customer is of legal age before making any sale of alcoholic beverages. In addition, each new employee is required to sign a statement which sets forth the legal ages for purchasing alcoholic beverages and tobacco products, and which states that the employee is responsible for identifying all customers purchasing these items. Furthermore, during the summer of 2000, Respondent installed a new electronic verification system in all of its stores. When a customer attempts to purchase alcoholic beverages, the clerk is prompted to enter the customer's birth date into the register. If the person is under the age of twenty-one, the register will not permit the sale to go through.

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

1. S.C. Code Ann. § 1-23-600 (Supp. 2000) grants jurisdiction to the Administrative Law Judge Division to hear contested cases under the Administrative Procedures Act.

2. S.C. Code Ann. § 61-2-260 (Supp. 2000) provides that contested case hearings arising under the provisions of Title 61 must be heard by an Administrative Law Judge with the Division.

3. A permit is subject to revocation or suspension if the holder or an employee on the permitted premises knowingly sells beer or wine to any person under the age of twenty-one years. S.C. Code Ann. § 61-4-580(1) (Supp. 2000).

4. 23 S.C. Code Ann. Regs. 7-9 (B) (Supp. 2000) prohibits a permittee from permitting or knowingly allowing a person under twenty-one years of age to purchase or possess or consume beer or wine in or on the licensed premises. Such an act is a violation against the permit and constitutes grounds for the suspension or revocation of the beer and wine permit.

5. For a violation of any provision contained in Chapter 4 of Title 61, S.C. Code Ann. § 61-4-250 (Supp. 2000) authorizes discretion in the trier of fact to impose a monetary penalty on the holder of a beer or wine permit in lieu of suspension or revocation.

6. All regulations promulgated by the Commission (now Department), effective on the date of the Government Restructuring Act of 1993, remain in force until modified or rescinded by the Department or SLED. 1993 S.C. Acts 181, § 1604.

7. Permits and licenses issued by the State of South Carolina for the sale of liquor, beer, and wine are not rights or property, but are privileges granted in the exercise of the police power of this state to be used and enjoyed only so long as the restrictions and conditions governing them are complied with. The Administrative Law Judge Division, as the tribunal authorized to grant the issuance of a permit, is likewise authorized to revoke or suspend the permit for cause. See Feldman v. S.C. Tax Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943).

8. A party manifests consent and knowledge to allowing a person under twenty-one years of age to purchase beer if, from the appearance of the person or otherwise, the party had sufficient information that would lead a prudent man to believe the person was under twenty-one, especially where simple inquiry would have confirmed such fact. Feldman, supra; S. C. Atty. Gen. Op. 3395 (1972); see 58 Am.Jur.2d Notice § 14 (1989). A person has no right to shut his eyes to avoid information clearly before him. 58 Am.Jur.2d Notice § 13 (1989).

9. A licensee may be held liable for violations of liquor statutes and regulations committed by his agent while pursuing the ordinary business entrusted to him. The licensee is liable even though the violations are committed in his absence and without his knowledge, consent, or authority. See 48 C.J.S. Intoxicating Liquors § 276 (1981).

10. If an agent is doing some act in furtherance of the principal's business, he will be regarded as acting within the scope of his authority. On the other hand, a principal generally is not liable when an agent is acting for his own independent purposes, wholly disconnected from furtherance of his employer's business; such conduct falls outside the scope of his employment. Crittenden v. Thompson-Walker Co., 288 S.C. 112, 341 S.E.2d 385 (Ct. App. 1986).

11. The record is clear that the clerk, Jennifer Gregory, was acting within the scope of general authority placed in her by her principal, the Respondent, in selling beer and wine at the location. No evidence was entered into the record that Ms. Gregory was not authorized to be at the location or to make sales of beer and wine. In addition, the evidence is overwhelming that she did sell a beer to the UCI.

12. The evidence in the record clearly shows that the Respondent, through its employee, permitted the sale of beer to a person under twenty-one years of age. Despite the youthful appearance of the UCI, the Respondent's employee neglected to ask the UCI for identification. In this case, the UCI's identification would have shown that he was nineteen years of age at the time of the purchase.

13. Based upon the evidence, I conclude that the Respondent violated S.C. Code Ann. § 61-4-580 (Supp. 2000) and 23 S.C. Code Ann. Regs. 7-9 (B) (Supp. 2000) on April 26, 2000, by selling a beer to a person under twenty-one years of age.

14. S.C. Code Ann. § 61-4-250 (Supp. 2000) authorizes, for any violation of any regulation promulgated by the Department pertaining to beer and wine, in lieu of a suspension or revocation of the beer and wine permit, the imposition of a monetary penalty not less than twenty-five dollars ($25.00) and not more than one thousand dollars ($1,000.00).

15. It is a generally recognized principle of administrative law that the fact finder has the authority to impose an administrative penalty, as established by the legislature, after the parties have had an opportunity to have a hearing and be heard on the issues. Walker v. S.C. ABC Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991); see also City of Louisville v. Milligan, 798 S.W.2d 454 (Ky. 1990); Matter of Henry Youth Hockey Ass'n, 511 N.W.2d 452 (Minn. Ct. App. 1994); Shadow Lake of Noel, Inc. v. Supervisor of Liquor Control, 893 S.W.2d 835 (Mo. Ct. App. 1995); Ohio Real Estate Comm'n v. Aqua Sun Inv., 655 N.E.2d 266 (Ohio 1995); State Police v. Cantina Gloria's, 639 A.2d 14 (Pa. 1994); Vermont Agency of Natural Resources v. Duranleau, 617 A.2d 143 (Vt. 1992).

16. Based upon the evidence presented and after considering the credibility of the witnesses, the Respondent's policies regarding the adherence to ABC statutes, and the Respondent's efforts to comply with the laws regulating the sale of beer and wine, I conclude that a ten-day suspension of Respondent's off-premise beer and wine permit is the appropriate penalty in this case.

Based upon the foregoing Findings of Fact and Conclusions of Law,

IT IS HEREBY ORDERED that the Respondent, Crenco Food Stores, Inc., d/b/a Crenco Food Store, is in violation of S.C. Code Ann. § 61-4-580 (Supp. 2000) and 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000) for selling a beer to a person under the age of twenty-one years on April 26, 2000.

IT IS FURTHER ORDERED that the off-premise beer and wine permit issued by the Department to the Respondent at 3028 Lancaster Highway, Richburg, South Carolina 29729, is hereby suspended for a period of ten (10) days, to begin on the fifteenth day from the date of this order.

AND IT IS SO ORDERED.

_____________________________________

Marvin F. Kittrell

Chief Judge

Columbia, South Carolina

May 2, 2001