SC Administrative Law Court Decisions

I. Statement of the Case

Caliente Private Club (Club Caliente) filed with the South Carolina Department of Revenue (DOR), an application for an on premises beer and wine and minibottle license for 1121 Cedar Lane Road, Greenville SC. A protest was filed by Delma L. Lord, Sr. seeking to prevent DOR from granting the application.

In this matter, not all of the requirements for obtaining a beer and wine permit are disputed. Rather, the only the disputed matter is whether Club Caliente meets the requirements of having a location that is a proper location.

Given the protest under S.C. Code Ann. § 61-4-525, a contested case was held before the Administrative Law Court (ALC) under S.C. Code Ann. §§ 61-2-260 (Supp. 2004), 1-23-600(B) (Supp. 2004) and 1-23-310 (Supp. 2004). After reviewing the evidence and relevant factors, the permit and license must be granted but with restrictions.

II. Issue

Does Club Caliente meet the requirements for an on premises beer and wine permit and for a minibottle license in light of an allegation that the location is improper?

III. Analysis

A. Introduction

Club Caliente asserts it meets the statutory requirements as to location. While DOR would have granted the permit and license, Lord argues the location is not proper given its proximity to a Head Start center and to residences in the area.

B. Findings of Fact

Based on the preponderance of the evidence, the following findings of fact are entered:

1. General Facts of Location

On or about October 20, 2004 Club Caliente filed an application with the Department of Revenue for an on premises beer and wine and minibottle license. The application is identified by DOR as AI # 3203-5327-4. The applicant and the location were investigated by SLED and the investigating agent drew a map generally depicting the immediate area of the proposed location.

Following the notices posted by SLED and by the applicant, Delma L. Lord, Sr. challenged the application and presented this controversy. The hearing for this dispute was held February 24, 2005, with notice of the date, time, place and subject matter of the hearing given to the applicant, DOR, and the protestants.

The proposed business (and the place where the beer and wine permit will be utilized) is located at 1121 Cedar Lane Road, Greenville, SC. The business is a private club with entertainment and dancing with business hours of Friday, Saturday, and Sunday from 9:00 p.m until 3:00 a.m. The operation will provide seating for its patrons and live music will be provided.

B. Specific Facts of Location

1. Statutory Proximity Factors

Parker Head Start Center is located in a day care facility that is 513 feet from the proposed location with the rear of the proposed location being visible from the head start center. The closest residences are along Cottingham Circle, a residential street behind the proposed location. Several of these residences are within 400 feet of the rear of the proposed location. The houses on Cottingham Circle are separated from the proposed location by a wooden fence and by a separate chain link fence.

2. Other Factors

While being operated under new ownership, no records of law enforcement show any criminal activity at 1121 Cedar Lane Road. However, prior owners of the location, operating as the Latin Night Club, had some incidences requiring law enforcement involvement. In addition, the prior owners presented a noise problem to the residences behind the location. Further, as for drug activity with the new owners, no law enforcement records show activities involving drugs at the location.

Cedar Lane Road is a multi-lane highway providing an adequate traffic route for the proposed location. Likewise, no hazards impair ingress or egress from the location.

This immediate area along Cedar Lane Road is extensively commercial. For example, the immediate area contains Spanish Amigos Mexican Restaurant, Ken's Quick Cash Pawn Shop, Spanish Amigos Market, Finish Master Automotive and Industrial Paint, Landrith Surveying, Edwards Roofing, Collins Body Shop, T.D.'s Quick Stop, and El Rancho Restaurant. Overall, the area is primarily commercial in nature.

The area has several establishments that hold beer and wine permits or alcohol licenses. For example, Spanish Amigos has a beer and wine permit as well as a minibottle license. Likewise, El Rancho has a minibottle license. Both are within the immediate area.

3. Conclusions of Law

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

A. Law of Location Applied to Location Facts

In reviewing an application for a beer and wine permit and for a minibottle license, two "proximity" statutes are pertinent. One statute covers beer and wine permits while a second addresses only liquor licenses.

For a beer and wine permit, the proximity to residences, schools, playgrounds, and churches is a mandatory consideration. S.C. Code Ann. § 61-4- 520(7) (Supp. 2004). Indeed, for a beer and wine permit, the sole factor of an improper proximity to any of the protected institutions of residences, schools, playgrounds, and churches is a proper basis for denying a beer and wine permit. William Byers v. S.C. ABC Comm'n, 305 S.C. 243, 407 S.E.2d 653 (1991); Moore v. S.C. ABC Comm'n, 308 S.C. 160, 417 S.E.2d 555 (1992). However, no absolute prohibition measurements are set by the beer and wine statutes since the law is well settled that the 300 and 500 feet distances apply only to liquor licenses, not to beer and wine permits. Smith v. Pratt, 258 S.C. 504, 189 S.E.2d 301, 303 (1972). Thus, deciding whether the proximity is improper must be made on a case by case basis resting upon the peculiar facts of each permit request.

On the other hand, a two step analysis is needed for reviewing a minibottle license: a distance measurement and a proximity factor.

Under the distance measurement, a "no license zone" may exist for schools, playgrounds, and churches within 300 feet (if in a municipal area) and 500 feet (if in a non-municipal area) of a proposed location. See S.C. Code Ann § 61-6-120 (Supp. 2004) ("[DOR] shall not grant or issue any license provided for in this article or Article 7 of this chapter, if the place of business is within three hundred feet of any church, school, or playground situated within a municipality or within five hundred feet of any church, school, or playground situated outside of a municipality."). However, the distance measurement does not apply to any "new applications for locations which are licensed at the time the new application is filed with [DOR]."

However, in addition to the distance measurement, case law establishes a second proximity test for a liquor license which applies even if the proposed location is permissible under S.C. Code Ann § 61-6-120 (Supp. 2004). The second test asks whether the proposed location is suitable under a fact-based case by case analysis. Schudel v. South Carolina ABC Comm'n, 276 S.C. 138, 276 S.E.2d 308 (1981) (even if specific statutory distance criteria are satisfied, a minibottle license is properly granted only if the location is a suitable location).

Accordingly, for both the beer and wine permit and the minibottle license, the issue is whether the facts demonstrate that the proposed location is within an improper proximity to residences, schools, playgrounds, and churches (see S.C. Code Ann. § 61-4-520(7) (Supp. 2004). However, for the minibottle license only, the second issue is whether the proposed location is within the distance measurements of S.C. Code Ann § 61-6-120) (Supp. 2004).

1. Distance Measurements for Minibottle License

The starting point for the analysis of the minibottle license is the distance measurements of S.C. Code Ann. 61-6-120(A). Since the location under review is within the city limits of Greenville, the statute initially imposes a separation of 300 feet between the proposed location and churches, schools, and playgrounds. However, the requirement of 300 feet does not apply to any "new applications for locations which are licensed at the time the new application is filed with [DOR]." Id.

Here, the application by Club Caliente is a new application filed in October 2004. At the time the new application was filed, the location was already licensed to a former owner holding a minibottle license. Further, Club Caliente continued the activities under a 120 day temporary license. Thus, since a new application was filed at a time when the location was already licensed, the 300 feet requirement does not apply to Club Caliente.

Further, even if the 300 feet measurement were applicable here, no churches, schools, or playgrounds are within that distance. The only institution identified in this case possibly within the reach of the statute is a day care center which houses the Parker Head Start Center. That facility does not trigger the 300 feet requirement for two independent reasons.

First, the SLED agent's measurement shows the facility is 513 feet from the proposed location. Obviously, such is beyond the 300 feet imposed by the statute.

Second, the day care center is not a "school" within the meaning of S.C. Code Ann. § 61-6-120. Under that statute, a "school" is "an establishment, . . . where the usual processes of education are usually conducted." S.C. Code Ann. § 61-6- 120(A)(2) (Supp. 2004). However, it is not enough to merely establish that teaching occurs at the location; rather the predominant role of the location must be education. See e.g. K & K Enterprises Inc. v. Pennsylvania Liquor Control Bd., 602 A.2d 476, 480 (Pa. 1990) (where a day care center was not a school since the primary role of the center was "child care in the absence of a parent or parents" and such was concluded even though the court found "[u]ndoubtedly, this day care center teaches children."). Moreover, a "school" is most likely not present if the activity provided at the establishment is primarily recreational instead of educational. See Surowitz v. City of Pontiac, 132 N.W.2d 628 (Mich. 1965) (where the court commented that a "school" may not be present if the activities "were not offered in contemplation of achieving mastery of a particular vocation, but were recreational in their outlook."). Indeed, even a "dance studio" where obviously significant "learning" is taking place has been traditionally held not to be an establishment where the usual processes of education are conducted. See 45 Am Jur Intoxicating Liquors § 142 (where "so-called schools for... giving instruction in dancing..." did not qualify as a school for purposes of establishing distances from liquor license locations).

Thus, in the instant case, the "day care center" even when used as part of a Head Start program is not a school within the meaning of S.C. Code Ann. § 61-6-120 (Supp. 2004). Rather, the usual processes of education are not being conducted due to the fact that the primary purpose of the facility is (as the name "day care"implies) to provide quality child care in the absence of a parent. Accordingly, the 300 foot prohibition is inapplicable.

2. Proximity Requirements for Beer and Wine Permit and Minibottle License

However, notwithstanding the fact that an applicant meets the statutory distance measurements imposed for minibottles, the minibottle applicant must nonetheless demonstrate that the location is a suitable location. Schudel v. South Carolina ABC Comm'n, 276 S.C. 138, 276 S.E.2d 308 (1981) (even if the specific statutory distance criteria of 500 feet or 300 feet to a church, school, or playground are satisfied, a minibottle license is properly granted only if the location is a suitable location). Therefore, neither a minibottle license nor a beer and wine permit may be granted unless the location of the place of business is a proper location. Palmer v. S.C. ABC Comm'n, 282 S.C. 246, 317 S.E.2d 476 (Ct. App. 1984); Kearney v. Allen, 287 S.C. 324, 338 S.E.2d 335 (1985).

a. Specific Location Criteria

While both the minibottle license and beer and wine permit require a proper location, as to the beer and wine permit, the sole factor of an improper proximity to any one of the institutions of residences, churches, schools, or playgrounds is a proper basis for denying such a permit. William Byers v. S.C. ABC Comm'n, 305 S.C. 243, 407 S.E.2d 653 (1991); Moore v. S.C. ABC Comm'n, 308 S.C. 160, 417 S.E.2d 555 (1992). Here, with the restrictions imposed in this case, no improper proximity to any of the protected institutions exist.

First, no churches are in the immediate area. Second, as discussed above, no schools are in the immediate area. Rather, the only proximity factor is that of residences.

Cottingham Circle, a residential street behind the proposed location, has several residences within 400 feet of the rear of the proposed location. While the houses on Cottingham Circle are separated from the proposed location by a wooden fence and by a separate chain link fence, noise has been a factor with former owners. The noise factor is a significant problem given the late hours of operation of Club Caliente often lasting until 3:00 a.m. Indeed, without such accommodations to reduce the noise caused to nearby residents, the proposed location is improper. Kearney v. Allen, 287 S.C. 324, 338 S.E.2d 335, 336 (1985). Restrictions are needed here given the presence of live music provided at the location and the history of prior operators creating excessive noise.

Accordingly, in this case, no permit and no license may be issued unless Club Caliente enters an agreement with DOR imposing the following restrictions on both the permit and the license:

1. No audio equipment of any kind shall be located on or beyond the exterior of the building.

2. No entertainment or performances of any kind shall be allowed at the location except in the interior of the building.

3. The location must be sound proofed so that at no time will any sound emanating from any point in the interior of the building be audible to the normal human ear at a distance of 75 feet in any direction from any exterior wall of the building.

b. Location Factors: Other

A proper consideration for reviewing a beer and wine permit and a minibottle license is examining the impact granting the permit and license will have upon 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).

Here, no law enforcement records demonstrate the existence of crime during the operation of the activity by the current owners. Thus, the presence of crime is not a basis for denial.

In a similar vein, consideration can be given to the extent to which the highway traffic presents a location that is heavily traveled or creates a traffic danger. Palmer v. S.C. Alcoholic Beverage Control Comm'n, 282 S.C. 246, 317 S.E.2d 476 (Ct. App. 1984). Here, Cedar Lane Road is a multi-lane highway presenting proper traffic route for the location. Likewise, no evidence establishes any difficulty entering or leaving the location.

A valid consideration is whether the surrounding area is substantially commercial. Taylor v. Lewis, 261 S.C. 168, 198 S.E.2d 801 (1973); Ronald Byers v. S.C. Alcoholic Beverage Control Comm'n,, 281 S.C. 566, 316 S.E.2d 705 (Ct. App. 1984). Here, Cedar Lane Road is extensively commercial and other activities in the area are similar to that to be operated by Club Caliente. Indeed, such a factor weighs in favor of granting the permit and license. See Taylor v. Lewis, 261 S.C. 168, 198 S.E.2d 801 (1973) (consideration may be given to whether other similar businesses that sell beer and wine or alcohol already exist within the area).

Finally, when required, it is appropriate to impose restrictions. Granting beer and wine permits and minibottle licenses is the granting of a privilege which may be restricted under the police powers of the State. Feldman v. S.C. Tax Comm’n, 204 S.C. 49, 26 S.E.2d 22 (1943). Furthermore, permits and licenses are authorized by statute and regulation to be issued with restrictions. S.C. Code Ann. § 61-2-80 (Supp. 2004); 23 S.C. Code Regs. 7-88 (1976).

Here, the restrictions addressed above must be imposed on the permit and license issued here.

B. Ultimate Conclusion as to Location

I have considered all of the factors relevant to the proposed location and have given due weight to the evidence presented at the hearing. The proposed location is not within an improper proximity or measured distances to residences, schools, churches, and playgrounds. Further, other location factors do not violate the statutory requirements for a beer and wine permit and a minibottle license. Accordingly, Club Caliente's application seeks an on premises beer and wine permit and minibottle license for a location that is a proper location when appropriate restrictions are imposed.

IV. Order

Based upon the Findings of Fact and Conclusions of Law, it is hereby ordered:

DOR is ordered to grant Caliente Private Club's application for an on premises beer and wine and minibottle license at 1121 Cedar Lane Road, Greenville South Carolina only upon Club Caliente and DOR imposing the following restrictions upon both the beer and wine permit and the minibottle license:

1. No audio equipment of any kind shall be located on or beyond the exterior of the building.

2. No entertainment or performances of any kind shall be allowed at the location except in the interior of the building.

3. The location must be sound proofed so that at no time will any sound emanating from any point in the interior of the building be audible to the normal human ear at a distance of 75 feet in any direction from any exterior wall of the building.

AND IT IS SO ORDERED.

_________________________________

RAY N. STEVENS

Administrative Law Judge

Dated: April 26, 2005

Greenville, South Carolina