SC Administrative Law Court Decisions

The South Carolina Department of Revenue and Taxation (DOR) received notice that the State Law Enforcement Division (SLED) asserted a violation of S.C. Code Regs. 7-9(B) (Supp. 1994) had been committed by Smita J. Desai, d/b/a Pack A Sack Store (Desai), a permit holder, or his agent, Rose Koop (Koop), as an employee on the permitted premises located in Beaufort, South Carolina. Based upon the asserted violation, DOR seeks to impose a fine against Desai's beer and wine permit. The matter is now before me since Desai has challenged DOR's action by seeking a contested case hearing. Jurisdiction is vested in the Administrative Law Judge Division (ALJD) pursuant to S. C. Code Ann. §61-1-55 (Supp. 1994) with the hearing held under S. C. Code Ann. §§1-23-600(B) and 1-23-310 (Supp. 1994).

I find Desai violated Regs. 7-9(B) and impose a fine of $500. Any issues raised in the proceedings or hearing of this case but not addressed in this Order are deemed denied. ALJD Rule 29(B). Further, 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).

1. Did Desai or his agent violate 23 S.C. Code Regs. 7-9(B) (Supp. 1994) on July 19, 1995, by permitting or knowingly allowing a person under twenty-one years of age to purchase beer?

2. If there is a violation, what is the appropriate penalty?

A. Sale of Beer To A Minor

1. Positions of Parties

DOR asserts Desai, by way of Koop, an employee at the permitted premises, knowingly sold or allowed the possession of beer by a person sixteen years of age and to a second person eighteen years of age with both sales made on July 19, 1995. Desai asserts Koop was instructed on the morning of July 19, 1995 to check identification for the customer's age and not to sell to customers under twenty-one. Desai asserts mistakes by a single employee should not warrant a $1,000 fine.

2. Findings of Fact:

I find that clear and convincing evidence establishes the following facts:

1. On July 19, 1995, Randolph Kyle Blackmon (Blackmon) an individual operating as an undercover agent for SLED, entered Desai's permitted premises of Pack A Sack Store in Beaufort, South Carolina.

2. Blackmon held a valid South Carolina driver's license showing his birth date.

3. On the date Blackmon entered the premises he was sixteen years old.

4. Blackmon entered the permitted premises with a valid South Carolina driver's license, five dollars in cash and with no beer on his person.

5. Koop was an employee on the permitted premises of Pack A Sack.

6. After entering the premises, Blackmon picked up a 40-ounce container of Budweiser beer and presented it to Koop for purchase.

7. Koop asked Blackmon if he was old enough to purchase beer to which Blackmon responded he was not.

8. Koop sold the 40-ounce Budweiser beer to Blackmon.

9. After the purchase of the beer, Blackmon left the premises and presented the beer to SLED Agent Ryan A. Neill.

10. Koop was cited for the criminal violation of selling beer to an underage party and entered a guilty plea.

11. On July 19, 1995, Andy Howard (Howard) entered Desai's Pack A Sack Store in Beaufort, South Carolina.

12. On the date Howard entered the premises, he was eighteen years old.

13. Howard, after entering the premises, picked up a six pack of beer and presented the beer to Koop for purchase.

14. Howard presented to Koop a falsified identification showing Howard was twenty-one.

15. Koop sold the container of beer to Howard.

16. After the purchase of the beer, Howard left the premises and was arrested by SLED agents for possession of beer by an underage party.

17. Howard entered a guilty plea to possession of beer by an underage party.

3. Discussion

Beer and wine permit holders are responsible for the actions and conduct of their agents or employees operating under the permit. 48 C.J.S. Intoxicating Liquors §168 (1981). Further, an employee operating under the permit who knowingly sells beer to a person under twenty-one years of age creates a ground for the suspension of the holder's permit. S.C. Code Ann. § 61-9-410 (Supp. 1994). Here, Koop was aware that Blackmon was not twenty-one years of age.

Given the facts in the instant case, the sale of beer to Blackmon was made knowingly. A person has no right to shut his eyes to avoid information clearly before him. 58 Am.Jur.2d Notice § 13. Further, a party manifests consent and knowledge to allowing a person under twenty-one years of age to purchase beer if the party had sufficient information that would lead a prudent person to believe the purchaser was under twenty-one years of age. Feldman v. S.C. Tax Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943). After receiving information that would put a reasonable person on notice that the individual is underage, the knowledge of such underage is imputed to the seller, especially where there is a failure to inquire further into the age of the individual before making the sale. 58 Am.Jur.2d Notice §14.

In the instant case, Koop failed to question Blackmon about his age after being told Blackmon was not old enough to purchase beer. Accordingly, armed with such information, Koop is deemed to have known Blackmon was under twenty-one years of age.

4. Conclusions of Law

Based on the foregoing Findings of Fact and Discussion, I conclude the following as a matter of law:

1. Where the subject of an administrative violation also implicates a violation of criminal law as well, the administrative violation must be established by the standard of proof of clear and convincing evidence. Anonymous (M-156-90) v. State Board of Medical Examiners, South Carolina Court of Appeals Op. # 2417 (filed November 13, 1995).

2. The sale of beer to a person under twenty-one implicates a violation of criminal law since such a finding may lead to criminal charges for the seller as well as the purchaser. S.C. Code Ann. §§ 61-9-40, 61-9-85, and 20-7-370 (Supp. 1994).

3. A permit holder is subject to revocation or suspension if the holder or an employee on the permitted premises sells beer or wine to any person under twenty-one years of age. S.C. Code Ann. § 61-9-410(1) (Supp. 1994).

4. All regulations promulgated by the Commission (DOR), effective on the date of the Government Restructuring Act of 1993, remain in force until modified or rescinded by the Department or the State Law Enforcement Division. 1993 S.C. Acts 181, §1604.

5. Applicable regulations in effect on the effective date of the Government Restructuring Act of 1993 provide that a party holding a beer and wine permit commits a violation if the holder permits or knowingly allows a person under twenty-one years of age to purchase beer in or on a permitted establishment. S.C. Code Regs. 7-9(B) (Supp. 1994).

6. 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 v. S.C. Tax Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943); see 58 Am.Jur.2d Notice §14.

7. A person has no right to shut his eyes to avoid information clearly before him. 58 Am.Jur.2d Notice § 13.

8. The license holder is responsible for the actions and conduct of employees utilizing the permit upon the permitted premises. 48 C.J.S. Intoxicating Liquors §168 (1981).

9. A sale of beer to a minor is forbidden irrespective of whether the sale is made by the permit holder or by an employee. 48 C.J.S. Intoxicating Liquors § 259 (1981).

10. A violation of S.C. Code Ann. § 61-9-410(1) and S.C. Code Ann. Regs. 7-9(B) (Supp. 1994) occurred as a result of Koop's sale of beer to Blackmon.

1. Positions of Parties:

DOR asserts the sale to underage parties is a serious offense and warrants a $1,000 fine. On the other hand, Desai asserts Koop was instructed not to sell to persons under twenty-one and that he takes care to inform his employees of the law. He also asserts the current citation is his first offense and that a warning is more appropriate. In short, Desai argues the current violation is simply an error by a single employee not warranting a fine of $1,000.

2. Findings of Fact:

I find that clear and convincing evidence establishes the following facts:

1. Koop is an employee of Desai at the permitted premises of Pack A Sack in Beaufort County.

2. Koop received instruction provided by Desai with such instruction designed to prevent the sale of beer to underage persons.

3. On July 19, 1995, Koop was instructed twice to check identification and not to sell beer to anyone under twenty-one years of age.

4. Koop is no longer employed by Desai.

5. The current citation is the first issued to Desai.

6. As of the time of the violation, Desai had been operating four months.

7. DOR seeks a $1,000 fine for Desai's violation of the beer and wine permit at the permitted premises in Beaufort, South Carolina.

3. Discussion

The location under review has had no previous violations and had been in operation for only four months at the time of the sale to the underage parties. The employee responsible for the violation is no longer in the employment of Desai. Desai has instructed all of his employees not to sell to underage persons. For these reasons a $500 fine rather than a $1,000 fine is appropriate.

4. Conclusions of Law

Based on the foregoing Findings of Fact and Discussion, I conclude the following as a matter of law:

1. The sale of beer or wine to any person under twenty-one years of age subjects the permit holder to revocation or suspension. S.C. Code Ann. § 61-9-410 (Supp. 1994); S.C. Code Ann. Regs. 7-9(B) (Supp. 1994).

2. DOR may impose a monetary penalty as an alternative to revocation or suspension in all cases where the department has the authority to suspend or revoke a license or permit, and DOR, in its discretion, may also suspend payment of a monetary penalty. S.C. Code Ann. §61-1-80 (Supp. 1994).

3. For all violations of Chapter 9 of Title 61 and for a violation of any regulation pertaining to beer, DOR in its discretion may impose a monetary penalty upon the holder of a beer and wine permit in lieu of a suspension. S.C. Code Ann. § 61-13-510 (Supp. 1994).

4. The discretionary authority of DOR to impose a monetary penalty as an alternative to revocation and to suspend payment of a monetary penalty is granted to an Administrative Law Judge. S.C. Code Ann. §61-1-55 (Supp. 1993) [current version at S.C. Code Ann. §61-1-55 (Supp. 1994)].

5. A monetary penalty of $500 rather than $1,000 is more appropriate for a first time offense under the circumstances of this case.

Based upon the foregoing Findings of Fact, Discussion, and Conclusions of Law, the following ORDER is issued:

Desai is ordered to pay a fine of $500 to DOR within fifteen days of the date of this Order.

IT IS SO ORDERED.

____________________________

RAY N. STEVENS

Administrative Law Judge

This 21st day of December, 1995