South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
Surfside Live, LLC, d/b/a Surfside Live vs. SCDOR

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioner:
Surfside Live, LLC, d/b/a Surfside Live

Respondent:
South Carolina Department of Revenue
 
DOCKET NUMBER:
07-ALJ-17-0061-CC

APPEARANCES:
For the Petitioner:
Kenneth E. Allen, Esquire

For the Respondent:
Lynn M. Baker, Esquire

For the Protestant:
James H. Harrison, Esquire
 

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.[1] 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



[1] At the beginning of the hearing the Protestant moved to intervene as a party in this matter pursuant to ALC Rule 20. The court denied this motion because the Protestant failed to demonstrate good cause for failing to move to intervene earlier in the proceeding. See ALC Rule 20(C) (requiring a motion to intervene to be filed “as early in the proceedings as possible”).


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