SC Administrative Law Court Decisions

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 & Supp. 2007), S.C. Code Ann. § 1-23-600(B) (Supp. 2007), and S.C. Code Ann. § 61-2-260 (Supp. 2007). The petitioner, Club Latino Arco Iris, LLC, d/b/a Club Latino Arco Iris (“Petitioner” or “Club Latino”), applied for renewal of an on-premises beer and wine permit pursuant to §§ 61-4-500 et seq. and for renewal of a license to sell liquor by the drink pursuant to §§ 61-6-1600 et seq. for the location at 1970 Ashley River Road, Charleston, South Carolina 29407. Investigator Craig Mielcarek on behalf of the Charleston Police Department (“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 stated in the Final Agency Determination and represented at the hearing that other than the timely filed protest, the Department determined that the Petitioner met all of the other statutory requirements.

After notice to the parties and the Protestant, the court held a hearing on this matter on May 14, 2008. Both parties and Investigator Craig Mielcarek 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 restriction detailed below.

ISSUE

The only issue in dispute is the suitability of the location. §§ 61-4-520(5)-(6), 61-6-1820; Schudel v. S.C. Alcoholic Beverage Control Comm’n, 276 S.C. 138, 276 S.E.2d 308 (1981).

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.

Jose Reyes and Glendy Tahual are the sole members of the business seeking the requested permit and license. The Petitioner seeks renewal of a permit for the retail sale of beer and wine for on-premises consumption and a license to sell liquor by the drink for Club Latino Arco Iris, LLC, a restaurant/bar that was first licensed in October 2006.

Reyes testified that he purchased the business in October 2006 and was working with the former owner until he was able to pay him the entire purchase price. Club Latino is open Thursdays through Sundays from 7:00 p.m. until 2:00 a.m. Club Latino employs three security guards with one stationed outside the bar and two stationed inside the bar. Reyes stated he has never received complaints from the neighborhood. However, the police received several noise complaints during the first six months after Club Latino opened, after which Reyes turned the music down. Since 2006, the business has received one SLED violation for having a 1.5 liter bottle of liquor and one warning for having an inadequate amount of food on the premises.

The proposed location is located at 1970 Ashley River Road, Charleston, South Carolina 29407 and is inside the municipal limits of Charleston. It is located in a strip mall on the corner of Ashley River Road (Highway 61) and Wallenberg Boulevard. The area in the vicinity of the proposed location is substantially commercial, containing businesses such as a hair salon, a dry cleaner, a café, and a post office. There are no churches, schools, or playgrounds within three hundred feet of the proposed location. Parking at the proposed location is adequate.

Thomas “Tommy” Goldstein, a long time resident of the area, testified during the hearing in favor of the application. Goldstein frequently passes the strip mall containing the proposed location and estimates that he drives or bikes to it approximately three or four times per week. Goldstein stated that he has never witnessed litter, broken glass, or evidence of drug use around the proposed location and that it always appears well maintained. Further, Goldstein stated that the proposed location has always been a bar and has long been licensed to sell alcohol under various previous owners. Goldstein stated that he was unaware of any valid reason that the police department would protest this application.

Investigator Mielcarek testified in opposition to the application. Based on several incidents with Club Latino during the past two years, Investigator Mielcarek on behalf of the Charleston Police Department filed a public protest to the renewal of the Petitioner’s permit and license. He believes that this bar is a danger to the community. Investigator Mielcarek testified that since the opening of Club Latino several incidents have occurred, such as a shooting that resulted in a security guard and patron being wounded, several assaults, and an assault and battery of a high and aggravated nature. Additionally, Investigator Mielcarek asserted that illegal narcotics activities were occurring within the club and that the employees of Club Latino were aware of these activities, and possibly directly involved with them. However, no evidence was presented that there have been any narcotics-related convictions arising out of any incidents within Club Latino. Furthermore, Investigator Mielcarek presented evidence of a raid at Club Latino conducted by Immigration and Customs Enforcement (“ICE”) with assistance from the Charleston Police Department on February 7, 2008. As a result of that raid, twenty-one illegal aliens were arrested and detained to be deported, including Club Latino’s manager and part-owner, Tahual, as well as the assistant manager. Finally, Investigator Mielcarek presented evidence that Club Latino received a warning for failing to comply with the restaurant requirements of the Alcoholic Beverages, Beer and Wine regulations. Accordingly, the Charleston Police Department asserts that while individually these incidents are not a huge problem, they collectively pose a nuisance and a danger to the community.

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. Suitability of Location

a. Generally

Section 61-4-520 establishes the criteria for the issuance of a beer and wine permit. Included in the criteria is the requirement that the proposed location be a proper and suitable one. See § 61-4-520(5)-(6). Additionally, § 61-6-1820 sets forth the basic criteria for the issuance of a liquor license. However, a liquor license may be denied if the proposed location is not suitable. See Schudel, 276 S.C. 138, 276 S.E.2d 308. Therefore, either a beer and wine permit or a liquor license may be denied if the location of the business is not a proper one.

b. Factors in Determining Proper Location

“Proper location” is not statutorily defined, but broad discretion is vested in the trier of fact to determine the fitness or suitability of a particular location for the requested permit. See Fast Stops, Inc. v. Ingram, 276 S.C. 593, 281 S.E.2d 118 (1981). In determining whether a proposed location is suitable, it is proper for this tribunal 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 determination of suitability of location is not necessarily solely a function of geography. Rather, it involves 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, 287 S.C. at 326-27, 338 S.E.2d at 337; Schudel, 276 S.C. at 138, 276 S.E.2d at 308. Further,

a liquor license or permit may be properly refused on the ground that the location of the establishment would adversely affect the public interest, that the nature of the neighborhood and of the premises is such that the establishment would be detrimental to the welfare . . . of the inhabitants, or that the manner of conducting the establishment would not be conducive to the general welfare of the community.

48 C.J.S. Intoxicating Liquors § 168 at 366 (2004). 

Other factors may be considered when determining whether a location is proper. For example, a liquor license shall not be granted if the place of business is within 300 feet (if within a municipality) or within 500 feet (if outside a municipality) of any church, school, or playground. S.C. Code Ann. § 61-6-1820(3); S.C. Code Ann. § 61-6-120. Although the General Assembly did not provide absolute statutory distance requirements for beer and wine permits as it did for liquor licenses, the proximity to residences, churches, schools, and playgrounds may be considered for beer and wine permits as well. § 61-4-520(6); Smith, 258 S.C. at 504, 189 S.E.2d at 301. Therefore, the decision as to whether the proximity is improper for a beer and wine permit must be made on a case-by-case basis resting upon the peculiar facts of each permit request.

Additionally, consideration can be given to the impact the issuance of the permit or license will have on law enforcement. Fowler v. Lewis, 260 S.C. 54, 194 S.E.2d 191 (1973); Roche v. S.C. Alcoholic Beverage Control Comm’n, 263 S.C. 451, 211 S.E.2d 243 (1975). Evidence that the granting of a permit will place a strain upon police to adequately protect the community must be weighed. Moore v. S.C. Alcoholic Beverage Control Comm’n, 308 S.C. 160, 162, 417 S.E.2d 555, 557 (1992). Denial is appropriate where the public areas surrounding the proposed location have been the source of constant law enforcement problems or significant problems with public intoxication. Roche, 263 S.C. at 451, 211 S.E.2d at 243. Another pertinent factor is whether police have been summoned to the scene on prior occasions when licensed to another party. Schudel, 276 S.C. at 141-42, 276 S.E.2d at 309-10. It is relevant whether the location is near other locations that have either been a constant source of law enforcement problems or are locations where young people congregate and loiter. Palmer, 282 S.C. at 250, 317 S.E.2d at 478.

Similarly, consideration can be given to whether the location is heavily traveled or creates a traffic danger. Id. Furthermore, whether the location has in the recent past been permitted and whether the location is now more or less suitable than it was in the past is a relevant factor. Taylor v. Lewis, 261 S.C. 168, 198 S.E.2d 801 (1973). Finally, a valid consideration is whether the surrounding area is substantially commercial. Id.; Byers v. S.C. Alcoholic Beverage Control Comm’n, 281 S.C. 566, 316 S.E.2d 705 (Ct. App. 1984).

S.C. Code Ann. § 61-4-580(5) (Supp. 2007) prohibits a permittee from knowingly allowing “any act, the commission of which tends to create a public nuisance or which constitutes a crime under the laws of this state” to occur on the licensed premises. The term “licensed premises” includes not only the interior of Club Latino, but also the areas immediately adjacent to the entrance and exit, as well as the parking areas. See 23 S.C. Code Ann. Regs. 7-700 (Supp. 2007) (“Licensed premises shall include those areas normally used by the permittee or licensee to conduct his business and shall include but are not limited to the following: selling areas, storage areas, food preparation areas and parking areas.”). “[O]ne who holds a license to sell alcoholic beverages is responsible for supervising the conduct of his clientele, both within the licensed premises and in the immediate vicinity, in order to ensure that his operations do not create a nuisance for the surrounding community.” Dayaram Krupa, LLC v. S.C. Dep’t of Revenue, 06-ALJ-17-0929-CC, 2007 WL 1219343 (S.C. Admin. Law Ct., March 19, 2007) (citing § 61-4-580(5) and A.J.C. Enters., Inc. v. Pastore, 473 A.2d 269, 275 (R.I. 1984)). The court in A.J.C. Enterprises held that a liquor licensee “assumes an obligation to supervise the conduct of its clientele so as to preclude the creation of conditions within the surrounding neighborhood which would amount to a nuisance to those who reside in the area.” A.J.C. Enters., Inc., 473 A.2d at 275. In the event that a licensed location becomes a public nuisance to the surrounding community, the Department may revoke or refuse renewal of the license for the location. See S.C. Code Ann. § 61-4-580(5).

Without sufficient evidence of an adverse impact on the community, a permit or license application must not be denied if the statutory criteria are satisfied. The fact that the issuance of a permit or license is protested is not a sufficient reason, by itself, to deny the application. See 48 C.J.S. Intoxicating Liquors § 166 (2004). Moreover, the denial of a permit or license to an applicant on the ground of unsuitability of location is without evidentiary support when relevant testimony of those opposing the requested license or permit consists entirely of opinions, generalities, and conclusions not supported by the facts. Taylor, 261 S.C. at 171, 198 S.E.2d at 802.

c. Conclusions

After carefully weighing the evidence and applying the law as discussed above, the court finds the proposed location to be suitable as long as certain conditions are met. The evidence presented demonstrates that the location has had some problems with crime and violence over the past two years. While several incident reports were introduced at the hearing, there was insufficient evidence presented that Club Latino and its employees are actively engaged in narcotics activities. No evidence was presented that any of the Petitioner’s employees or its owners have been convicted of any narcotics-related crimes or that the owners were even aware that any incidents had occurred. Considering the evidence as a whole, these incidents do not rise to the level that the location should be denied its permit and license, but rather they warrant placing a restriction on Club Latino’s permit and license requiring it to employ on Friday and Saturday nights security personnel registered with the South Carolina Law Enforcement Division (“SLED”). Moreover, the Petitioner consented to this restriction being placed on the permit and license.

The proposed location is not within three hundred feet of any church, school, or playground and thus does not violate the statutory prohibition for the sale of liquor by the drink. Further, the Department represented at the hearing that SLED has returned to the proposed location after Club Latino received a warning for violating the restaurant requirements of the Alcoholic Beverages, Beer and Wine regulations and determined that Club Latino is currently in compliance with the applicable laws. Moreover, it is not illegal for a foreign national, in this case Tahual, to hold an ownership interest in the limited liability company that is issued the permit and license.

Thus, the court finds, based on Cub Latino’s representations and on the evidence presented, that for the location to remain a suitable one and to ensure that the location will not endanger or disturb the community, the Petitioner must retain on Friday and Saturday evenings the services of at least two security guards registered with SLED.

ORDER

Based upon the Findings of Fact and Conclusions of Law stated above, the court finds that, with the above-noted restrictions, the Petitioner meets all of the statutory requirements for the renewal of an on-premises beer and wine permit and liquor by the drink license. It is therefore

ORDERED that the Department shall GRANT the renewal of the Petitioner’s on-premises beer and wine permit and license to sell liquor by the drink for the premises located at 1970 Ashley River Road, Charleston, South Carolina 29407 in accordance with § 61-2-80, § 61-4-540, and § 61-6-1820, subject to the Petitioner’s entering a written agreement with the Department requiring the Petitioner to retain on Friday and Saturday evenings at least two security guards registered with SLED.

Violation of any of the above-listed condition shall be deemed a violation of the permit and license.

IT IS SO ORDERED.

__________________________________

PAIGE J. GOSSETT

Administrative Law Judge

May 27, 2008

Columbia, South Carolina