ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE
CASE
This
matter is before the Administrative Law Court (“ALC”) for a final order and
decision following a contested case hearing pursuant to S.C. Code Ann. §§
1-23-310 et seq. (2005), S.C. Code Ann. § 1-23-600(B) (Supp. 2006), and
S.C. Code Ann. § 61-2-260 (Supp. 2006). The petitioner, Surfside Live, LLC,
d/b/a Surfside Live (“Petitioner”), applied for an on-premises beer and wine
permit pursuant to §§ 61-4-500 et seq. and for a liquor by the drink
license pursuant to §§ 61-6-1600 et seq. for the location at 803 A
Highway 17 South, Surfside Beach, South Carolina 29575. Donald Mazei
(“Protestant”) filed a written protest to the Petitioner’s application.
Respondent South Carolina Department of Revenue (“Department”) denied the
application pursuant to § 61-4-525 and § 61-6-1825 due to the receipt of the
Protestant’s valid public protest. The Department further denied the
application pursuant to § 61-6-1820 because the proposed location did not meet
restaurant requirements.
After
notice to the parties and the Protestant, the court held an expedited hearing with
the parties’ consent on March 15, 2007. Both parties and the Protestant
appeared at the hearing. Evidence was
introduced and testimony presented. After carefully weighing all of the
evidence, the court finds that the Petitioner’s application for this location
should be granted subject to the conditions set forth below.
FINDINGS OF FACT
Having
observed the witnesses and exhibits presented at the hearing and closely passed
upon their credibility, and taking into consideration the burden of persuasion
by the parties, the court makes the following Findings of Fact by a
preponderance of the evidence.
Evidence
was presented regarding all of the relevant statutory criteria. Notice of the
time, date, place, and subject matter of the hearing was given to all parties
and the Protestant.
The
Petitioner seeks a permit for the retail sale of beer and wine for on-premises
consumption and a license to sell liquor by the drink for the location at 803 A
Highway 17 South, Surfside Beach, South Carolina 29575. The proposed location
is inside the municipal limits of Surfside Beach. Notice of the application
was lawfully posted at the location and was published in a newspaper of general
circulation.
Mr.
Shawn M. Croley (“Croley”) is the sole member of the business seeking the
requested permit and license. He is over the age of twenty-one. Although his
prior business was cited for a violation of the alcoholic beverage control
statutes, he has never had a permit or license to sell beer, wine, or liquor
revoked. He has no criminal record and does not currently owe the state or
federal government any delinquent taxes, penalties, or interest.
The
Petitioner seeks an on-premises beer and wine permit and a license to sell
liquor by the drink for Surfside Live, a bar and grill. The proposed location
has not been previously permitted or licensed to sell beer, wine, or liquor by
the drink. The proposed location is on Highway 17, a busy thoroughfare in
Surfside Beach. The area in the vicinity of the proposed location on Highway
17 is substantially commercial, containing mostly businesses such as a hardware
store, an accounting office, a video rental store, a restaurant, and other
similar establishments. There are no churches, schools, or playgrounds within
three hundred feet of the proposed location. Parking at the proposed location
is adequate.
Croley
has previously owned and managed other establishments subject to the alcoholic
beverage control statutes. In October 2003, Croley opened a bar in Garden
City, South Carolina. He owned this bar without any citations for violations
of the alcoholic beverage control statutes until he sold it in October 2004.
From
October 2005 until March 2006, Croley was a twenty-percent owner as well as the
manager of Beer Thirty, a bar and grill in Surfside Beach located across the street
from the proposed location. Ann Chavis (“Chavis”) owned sixty percent of Beer
Thirty and Chavis’s daughter, Holly Udy (“Udy”), owned twenty percent. Beer
Thirty was licensed and permitted to sell beer, wine, and liquor. Through
temporary local option permits (“LOPs”), it also served beer, wine, and liquor on
Sundays. The Department’s record indicates that Beer Thirty did not obtain LOPs
from November 20, 2005 through January 29, 2006. Croley testified that during
that time he believes Beer Thirty served alcohol every Sunday. On January 29,
2006, Beer Thirty received a citation for violation of the alcoholic beverage
control statutes for serving alcohol on Sunday without an LOP. Following this
violation, Beer Thirty obtained an LOP for each Sunday in February and March. In
March 2006, the Protestant purchased Beer Thirty and Croley’s involvement in
that business ceased.
The
Protestant testified to various concerns with Surfside Live’s application,
since he believes that Croley is an unsuitable applicant. After Mazei purchased
Beer Thirty in March 2006, he learned from the Department that the business
owed delinquent taxes. Through the testimony of Chavis, he introduced evidence
showing that it was Croley’s responsibility to pay all state and local taxes
while he was managing Beer Thirty and that he knowingly failed to do so. Chavis
testified that she was a sixty percent owner of Beer Thirty during the same
time that Croley was the manager and part owner. After Mazei discovered that
Beer Thirty owed back taxes, he contacted Chavis, who hired an accounting firm
to examine the business’s books. Based on the accountant’s review, she
discovered that the business had not properly obtained LOPs for each Sunday that
it served alcohol and that the tax and local tax returns were incorrect.
Chavis then filed amended tax returns for Beer Thirty and paid the additional
taxes.
Croley’s
testimony regarding his responsibilities as to the LOPs was contradictory.
Chavis testified that her role in the business was solely that of an investor, while
Croley provided the management and bookkeeping and Udy worked in the bar and
grill alongside the bartender. Chavis stated that she made no managerial decisions
for Beer Thirty. She further testified that Udy was undergoing in-patient drug
rehabilitation in Florida from November through December of 2005, thus rendering
her unable to obtain the LOPs during that time. Croley offered no evidence
rebutting this contention. Based on this evidence, the court finds that the
failure to obtain the required LOPs between November of 2005 and January of
2006 was attributable to Croley.
The
court therefore finds that Croley was responsible for obtaining the LOPs and on
multiple occasions knowingly sold alcohol on Sundays without them in violation
of state law. The court further finds that as the manager of the business, Croley
was also responsible for ensuring that the proper state and local taxes were
paid and failed to do so.
LAW
Based
upon the foregoing Findings of Fact, the court concludes the following as a
matter of law.
1. Jurisdiction
Jurisdiction
over this case is vested with the South Carolina Administrative Law Court
pursuant to §§ 1-23-310 et seq., § 1-23-600(B), and § 61-2-260. “[T]he
issuance or granting of a license to sell beer or alcoholic beverages rests in
the sound discretion of the body or official to whom the duty of issuing it is committed[.]” Palmer v. S.C. Alcoholic Beverage Control Comm’n, 282 S.C. 246, 248, 317
S.E.2d 476, 477 (Ct. App. 1984); see also Wall v. S.C. Alcoholic
Beverage Control Comm’n, 269 S.C. 13, 235 S.E.2d 806 (1977). The weight
and credibility assigned to evidence presented at the hearing of a matter is
within the province of the trier of fact. See S.C. Cable Television
Ass’n v. S. Bell Tel. & Tel. Co., 308 S.C. 216, 222, 417 S.E.2d 586,
589 (1992). Furthermore, a trial judge who observes a witness is in the best
position to judge the witness’s demeanor and veracity and to evaluate the
credibility of his testimony. See, e.g., Woodall v. Woodall, 322
S.C. 7, 10, 471 S.E.2d 154, 157 (1996); Wallace v. Milliken & Co.,
300 S.C. 553, 556, 389 S.E.2d 448, 450 (Ct. App. 1990).
2. Permit
and Licensure Requirements
Before
the Department can grant a beer and wine permit or a license to sell liquor by
the drink, the applicant must satisfy specific licensure criteria related to
the requested permit or license. Sections 61-2-100 et seq. provides the
basic requirements that all applicants must satisfy to qualify for licensure. The
applicant must be the owner of the business, over the age of twenty-one, and owe
no delinquent state taxes. §§ 61-2-100, -160.
a. Beer
and Wine Permit for On-Premises Consumption
Sections
61-4-500 et seq. establish additional criteria to obtain a beer and wine
permit for on-premises consumption. An applicant must be a legal resident of
the United States and South Carolina and have been domiciled in South Carolina
at least thirty days prior to filing the application. § 61-5-520. An applicant
must be of good moral character and have not had a beer and wine permit revoked
within the preceding two years. §§ 61-2-100(D), -4-520(3). Further, the
proposed location must be a proper and suitable one. §§ 61-4-520(5)-(6). In
determining whether a location is suitable, it is proper for this court to
consider any evidence that shows adverse circumstances of location. Kearney
v. Allen, 287 S.C. 324, 326, 338 S.E.2d 335, 337 (1985); Palmer, 282
S.C. at 249, 317 S.E.2d at 478 (citing Smith v. Pratt, 258 S.C. 504, 189
S.E.2d 301 (1972)). The proximity to residences, churches, schools, and
playgrounds may be considered. § 61-4-520(6); Smith, 258 S.C. at 504,
189 S.E.2d at 301.
Finally,
before a beer and wine permit can be issued, notice of the application must
have been posted at the proposed location for fifteen days and published once a
week for three consecutive weeks in a newspaper of general circulation. § 61-4-520(7).
b. Liquor
by the Drink License
Sections 61-6-1600 et seq. establish additional
criteria to obtain a license to sell liquor by the drink. An applicant must be
a legal resident of the United States and South Carolina and have been
domiciled in South Carolina at least thirty days prior to filing the
application. § 61-6-1820(7). An applicant
must be of good moral character. § 61-2-100(D), -6-1820(2). Further, the
applicant must not have been convicted of a felony within ten years of the date
of the application. § 61-6-1820(8).
A liquor license may be denied if the proposed location is
not suitable. See Schudel v. S.C. Alcoholic Beverage Control Comm’n,
276 S.C. 138, 276 S.E.2d 308 (1981). A liquor license shall not be granted if
the proposed location is within three hundred feet (if within a municipality)
or within five hundred feet (if outside a municipality) of any church, school,
or playground. § 61-6-1820(3); § 61-6-120.
Finally, before a liquor license can be issued, notice of the
application must have been posted at the proposed location for fifteen days and
published once a week for three consecutive weeks in a newspaper of general
circulation. § 61-6-1820(4), (5).
3. Local
Option Permits
Sections
61-4-120 and 61-6-2010 establish the criteria for the issuance of an LOP. Three
statutory requirements must be fulfilled to obtain an LOP: (1) the person or
entity must have a license to sell alcoholic liquors during the hours when such
sales are lawful; (2) the location must in a county or municipality which has
passed a referendum allowing the Sunday sales of beer, wine, and liquor by the
drink for on-premises consumption; and (3) the licensee must pay the required
fees. Section 61-6-2010(A) allows an applicant to obtain an LOP for either a
period not to exceed twenty-four hours or on an annual, fifty-two week basis. See
generally John D. Geathers & Justin R. Werner, The Regulation of
Alcoholic Beverages in South Carolina 162-65 (2007) (discussing generally
permits for Sunday sales of beer, wine, and liquor).
4. Conclusions
After
carefully weighing the evidence and applying the law as discussed above, the
court finds that Surfside Live’s application meets all the statutory
requirements and should be granted with the condition set forth below.
The
court finds the proposed location to be suitable. The area surrounding the
proposed location is primarily commercial. The proposed location is not within
three hundred feet of any churches, schools, or playgrounds. No evidence was
presented of law enforcement problems either at the proposed location or in the
surrounding area. Parking is adequate.
The
Protestant expressed concerns regarding whether Croley is a suitable applicant to
obtain a beer and wine permit and a license to sell liquor by the drink based
on his failure to pay proper taxes and obtain LOPs for Sunday sales as manager
of Beer Thirty. While the alcoholic beverage control statutes require that the
applicant not owe delinquent taxes, § 61-2-160, the undisputed evidence shows
that neither Beer Thirty nor Croley nor Surfside Live owes delinquent taxes.
Similarly, while Beer Thirty was cited for a violation under Croley’s
management, he has never had a permit or license revoked. See §
61-4-520(3). Nonetheless, case law indicates that an applicant’s prior licensing history may be taken into account in
deciding whether the applicant is a suitable person to hold a license to sell
liquor by the drink. John D. Geathers & Justin R. Werner, The
Regulation of Alcoholic Beverages in South Carolina 162-65 (2007) (citing Schudel
v. S.C. Alcoholic Beverage Control Comm’n, 276 S.C. 138, 142, 276 S.E.2d
308, 310 (1981)). Moreover, the statutes specifically require the applicant to
be a person of good moral character. §§ 61-2-100(D), -6-1820(2). In light of Croley’s previous
failures to comply with the alcoholic beverage control laws, the court finds it
appropriate to impose a condition on Croley’s permit. Accordingly, the
Petitioner shall not serve alcohol on Sundays unless and until it obtains an
annual, fifty-two week local option permit. See § 61-6-2010.
ORDER
Based upon the Findings of Fact and Conclusions of Law stated
above, the court finds that, with the above-noted restriction, the Petitioner
meets all of the statutory requirements for the issuance of an on-premises beer
and wine permit and liquor by the drink license. It is therefore
ORDERED that the Department shall GRANT Petitioner’s application for an on-premises
beer and wine permit and liquor by the drink license for the premises located
at 803 A Highway 17 South, Surfside Beach, South Carolina 29575 in accordance
with § 61-2-80, § 61-4-540, and § 61-6-1820, subject to satisfying all
applicable final inspection requirements and the Petitioner’s entering a
written agreement with the Department not to sell beer, wine, or liquor by the
drink on Sundays unless and until it obtains an annual, fifty-two week local
option permit pursuant to § 61-6-2010.
IT IS SO
ORDERED.
______________________________________
PAIGE J. GOSSETT
Administrative Law Judge
April 16, 2007
Columbia, South Carolina
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