SC Administrative Law Court Decisions

This matter comes before the Administrative Law Court (ALC or Court) pursuant to S.C. Code Ann. §§ 1-23-310 et seq. (2005), § 61-2-260 (Supp. 2004), § 61-4-520 (Supp. 2004), § 61-6-1820 (Supp. 2004), § 61-4-525 (Supp. 2004) and § 61-6-1825 (Supp. 2004) for a contested case hearing. JPK Restaurants of Charleston, d/b/a Scoreboard II (Petitioner), seeks an on-premises beer and wine permit and a nonprofit private club minibottle license for its location at 192 College Park Road, Ladson, South Carolina (location). Pastor Robert Gruber (Protestant) filed a protest to the application with the South Carolina Department of Revenue (Department). Because of the protest, the hearing was required.

A hearing in this matter was held before me on April 12, 2005 at the ALC in Columbia, South Carolina. Both parties and the Protestant appeared at the hearing. Evidence was introduced and testimony was taken. After carefully weighing all the evidence, I find that Petitioner’s request for an on-premises beer and wine permit and a nonprofit private club minibottle license should be granted with restrictions.

FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, and further taking into consideration the burden of persuasion by the parties, I make the following Findings of Fact by a preponderance of evidence:

1.The Court has personal and subject matter jurisdiction.

2.Notice of the time, date, place and subject matter of the hearing was timely given to all the parties and the Protestant.

3.Petitioner seeks an on-premises beer and wine permit and a nonprofit private club minibottle license for its location at 192 College Park Road, Ladson, South Carolina, which is located outside the city limits in Berkeley County.

4.Laurie JoAnn Kendall, aka Lori Kendall, testified at the hearing that she is the president and sole officer of JPK Restaurants of Charleston, a nonprofit corporation which is incorporated under the laws of South Carolina and is currently in good standing with the South Carolina Secretary of State. Articles of Incorporation and By-Laws, which define its offices, fiscal year, purposes, membership qualification, membership dues, personnel, officers with their functions and duties, its board of directors, meetings, amendments to the By-Laws, and procedures regarding the dissolution of the corporation, have been filed with the Secretary of State’s Office.

5.Ms. Kendall is over the age of twenty-one (21). She is a legal resident of the State of South Carolina and has maintained her principal place of abode in the State of South Carolina for at least thirty (30) days prior to making this application. Ms. Kendall is of good moral character, and neither Ms. Kendall nor JPK Restaurants of Charleston has had a permit or license revoked in the last two (2) years.

6.Notice of the application was lawfully posted both at the location and in a newspaper of general circulation.

7.The proposed location will operate as private club called “Scoreboard II,” which would only be open for use by its members and their bona fide guests. The proposed hours of operation will be Monday through Saturday from mid-afternoon until 2:00 a.m. each morning. In addition to providing alcoholic beverages to its members, food such as appetizers, sandwiches and hamburgers will be served at the location. Currently, the club does not have any members. Ms. Kendall believes that the club will draw members from the College Park Road area, North Charleston and Summerville.

8.The private club will operate as a sports bar where its members can socialize and view televised sporting events. Televisions, one juke box, several pool tables and approximately thirty (30) tables with chairs will be located inside the club. There is also a kitchen and a stage inside the location. The club may have karaoke and live bands perform. Ms. Kendall testified that she does not intend to have any live music or other activities outside on the grounds of the location.

9.There is a large parking area at the location which is partly paved and partly dirt. The parking area is also lighted at night.

10.Ms. Kendall has not yet hired any employees or engaged the services of any person to assist with the club’s management. Ms. Kendall’s husband, John Paul Kendall, owns and operates a sports bar (not a private club) at 7575 Rivers Avenue, North Charleston, South Carolina, which is called “Scoreboard I.” However, Ms. Kendall testified that she is unsure if her husband will become an officer of JPK Restaurants of Charleston or have any involvement in operating the private club.

11.Ms. Kendall is a registered nurse in South Carolina and works from 7:00 a.m. until 7:00 p.m. three to four days each week in this profession. She testified that she intends to continue her employment as a registered nurse while operating the location.

12.This location was licensed for the sale of alcoholic beverages when it was formerly operated as a Latino discotheque. Ms. Kendall had no affiliation with the former operation of the location.

13. The location is in a primarily commercial area in Berkeley County. It is bounded by College Park Road, a four-lane road close to Interstate 26. There are no schools, playgrounds, or residences within five hundred (500) feet of the location. However, Faith Worship Center is located approximately three hundred and ninety-two (392) feet from the location.

14.South Carolina Law Enforcement Division (SLED) Agent Wallace W. Scott, III, conducted the required SLED investigation at the location and prepared a report dated October 4, 2004. As part of the report, Agent Scott prepared a sketch of the general area surrounding the proposed location. He measured the distance from the proposed location to the nearest church, Faith Worship Center, in accordance with the requirements of S.C. Code Ann. § 61-6-120 and S.C. Code Ann. Regs. § 7-303. He found the distance to be three hundred and ninety-two (392) feet. The minimum allowable distance is five hundred (500) feet.

15.Andrew Cleveland Jailette, Jr., an employee of Trico Engineering Consultants, Inc., of North Charleston, testified that his company was retained by Petitioner to survey the location and prepare a map showing proposed distances between the location and Faith Worship Center with the construction of a circular fence and roadway enclosing the parking lot outside of the location. He prepared a drawing which outlined the location of the building on the property, including a parking area which would be enclosed by a four (4) feet high permanent split rail fence. See Petitioner’s Exhibit 1. The fence would separate the parking area from a proposed circular roadway. According to the drawing and as testified to by Mr. Jailette, if the parking area, the fence, and roadway were installed and constructed, the distance between the entrance to the location and Faith Worship Center would be increased from its present three hundred and ninety-two (392) feet to a distance of five hundred and twenty-five (525) feet. This distance would be sufficient to meet the statutory distance requirement. Mr. Jailette also testified that he has staked off the proposed fence location. However, his company would not construct the fence.

16.Protestant Reverend Robert Gruber, pastor of Faith Worship Center, testified at the hearing. He expressed concerns about safety, loud music and other noise, litter and parking problems. Reverend Gruber has been the pastor at Faith Worship Center for approximately five (5) years. He testified that church services are held each Sunday morning and Wednesday evening, as well as on other weeknights from time to time. Reverend Gruber also testified that the church experienced numerous problems when the location was operating under the prior owner. He testified that noise and loud music from the previous club would interfere with services at the church and prevent their public address (PA) system from working. He also testified that fights were a regular occurrence at the location and that patrons of the location would park in the church parking area and leave litter such as beer cans and bottles in the parking lot. He also noted that there is a mobile home close to the location and a residential area nearby.

17.I find that the proposed location is suitable for the issuance of an on-premises beer and wine permit and a nonprofit private club minibottle license upon compliance by Petitioner with the restrictions set forth below.

CONCLUSIONS OF LAW

Based upon the above Findings of Fact, I conclude the following as a matter of law:

1.S.C. Code Ann. § 1-23-600 (2005) grants jurisdiction to the Administrative Law Court to hear contested cases under the Administrative Procedures Act.

2.S.C. Code Ann. § 61-2-260 (Supp. 2004) grants the Administrative Law Court the responsibilities to determine contested matters governing alcoholic beverages, beer and wine.

3.S.C. Code Ann. § 61-4-520 (Supp. 2004) sets forth the requirements for the issuance of a beer and wine permit as follows:

No permit authorizing the sale of beer or wine may be issued unless:

(1) The applicant, any partner or co-shareholder of the applicant, and each agent, employee, and servant of the applicant to be employed on the licensed premises are of good moral character.

(2) The retail applicant is a legal resident of the United States, has been a legal resident of this State for at least thirty days before the date of application, and has maintained his principal place of abode in the State for at least thirty days before the date of application.

(3) The wholesale applicant is a legal resident of the United States and has been a legal resident of this State for at least thirty days before the date of application and has maintained his principal place of abode in the State for at least thirty days before the date of application or has been licensed previously under the laws of this State.

(4) The applicant, within two years before the date of application, has not had revoked a beer or a wine permit issued to him.

(5) The applicant is twenty-one years of age or older.

(6) The location of the proposed place of business of the applicant is in the opinion of the department a proper one.

(7) The department may consider, among other factors, as indications of unsuitable location, the proximity to residences, schools, playgrounds, and churches. This item does not apply to locations licensed before April 21, 1986.

(8) Notice of application has appeared at least once a week for three consecutive weeks in a newspaper most likely to give notice to interested citizens of the county, city, or community in which the applicant proposes to engage in business. The department shall determine which newspapers meet the requirements of this section based on available circulation figures. However, if a newspaper is published in the county and historically has been the newspaper where the advertisements are published, the advertisements published in that newspaper meet the requirements of this section. The notice must:

(a) be in the legal notices section of the newspaper or an equivalent section if the newspaper has no legal notices section;

(b) be in large type, covering a space of one column wide and at least two inches deep; and

(c) state the type license applied for and the exact location of the proposed business. An applicant for a beer or wine permit and an alcoholic liquor license may use the same advertisement for both if the advertisement is approved by the department.

(9) Notice has been given by displaying a sign for fifteen days at the site of the proposed business. The sign must:

(a) state the type of permit sought;

(b) state where an interested person may protest the application;

(c) be in bold type;

(d) cover a space at least eleven inches high and eighteen inches wide;

(e) be posted and removed by an agent of the division.

4.S.C. Code Ann. § 61-6-1820 (Supp. 2004) sets forth the requirements for the issuance of a minibottle license as follows:

The department may issue a license under subarticle 1 of this article upon finding:

(1) The applicant is a bona fide nonprofit organization or the applicant conducts a business bona fide engaged primarily and substantially in the preparation and serving of meals or furnishing of lodging.

(2) The applicant, if an individual, is of good moral character or, if a corporation or association, has a reputation for peace and good order in its community, and its principals are of good moral character.

(3) As to business establishments or locations established after November 7, 1962, Section 61-6-120 has been complied with.

(4) Notice of application has appeared at least once a week for three consecutive weeks in a newspaper most likely to give notice to interested citizens of the county, municipality, or community in which the applicant proposes to engage in business. The department shall determine which newspapers meet the requirements of this section based on available circulation figures. However, if a newspaper is published in the county and historically has been the newspaper where the advertisements are published, the advertisements published in that newspaper meet the requirements of this section. The notice must:

(a) be in the legal notices section of the newspaper or an equivalent section if the newspaper has no legal notices section;

(b) be in large type, covering a space of one column wide and at least two inches deep; and

(c) state the type license applied for and the exact location of the proposed business.

An applicant for a beer or wine permit and an alcoholic liquor license may use the same advertisement for both if it is approved by the department.

(5) Notice has been given by displaying a sign for fifteen days at the site of the proposed business. The sign must:

(a) state the type of license sought;

(b) state where an interested person may protest the application;

(c) be in bold type;

(d) cover a space at least eleven inches high and eighteen inches wide;

(e) be posted and removed by an agent of the division.

(6) The applicant is twenty-one years of age or older.

(7) The applicant is a legal resident of the United States, has been a resident of this State for at least thirty days before the date of application, and has maintained his principal place of abode in this State for at least thirty days before the date of application.

(8) The applicant has not been convicted of a felony within ten years of the date of application.

5.S.C. Code Ann. § 61-6-20(6) (Supp. 2004) establishes that a nonprofit organization is not open to the general public and only the members and guests of the nonprofit organization may consume alcoholic beverages upon the premises. Section 61-6-20(6) (Supp. 2004) further defines a “nonprofit organization” as “an organization not open to the general public, but with a limited membership and established for social, benevolent, patriotic, recreational, or fraternal purposes.”

6.23 S.C. Code Ann. Regs. 7-401.4 (Supp. 2004) sets forth additional requirements for nonprofit organizations seeking a minibottle license. Regulation 7-401.4(D) (Supp. 2004) also requires that "[t]he affairs and management of such nonprofit organization shall be conducted by a board of directors, executive committee or similar governing body chosen by the members at a regular meeting held at some periodic interval but at least on an annual basis." Here, Ms. Kendall is the organizing officer of JPK Restaurants of Charleston, with the proper Articles of Incorporation and by-laws filed with the South Carolina Secretary of State’s office. Furthermore, the by-laws properly set forth how the election of the Board of Directors, Officers, and Members are to take place annually. Therefore, JPK Restaurants of Charleston meets the requirements of Regulation 7-401.4(D).

7.S. C. Code Ann. § 61-6-120 (Supp. 2004) provides that a liquor license shall not be issued to a place of business if:

the place of business is …within five hundred feet of any church, school, or playground situated outside of a municipality. Such distance shall be computed by following the shortest route of ordinary pedestrian or vehicular travel along a public thoroughfare from the point of the grounds in use as part of such church, school, or playground…

23 S.C. Code Ann. Regs. 7-303 further clarifies how distances from the location to schools, churches, and playgrounds are measured.

8.The factual determination of whether or not an application is granted or denied is usually the sole prerogative of the executive agency charged with rendering that decision. Palmer v. S.C. ABC Comm’n, 282 S.C. 246, 317 S.E.2d 476 (Ct. App. 1984). As the trier of fact, an administrative law judge is authorized to determine the fitness of an applicant for alcohol permits and licenses using broad but not unbridled discretion. Byers v. S.C. ABC Comm’n, 281 S.C. 566, 316 S.E.2d 705 (Ct. App. 1984).

9.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, 417 S.E.2d 586 (1992); see also Doe v. Doe, 324 S.C. 492, 478 S.E.2d 854 (Ct. App. 1996) (holding that a trial judge, when acting as a finder of fact, “has the authority to determine the weight and credibility of the evidence before him”). 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 Woodall v. Woodall, 322 S.C. 7, 471 S.E.2d 154 (1996).

10.Although "proper location" is not statutorily defined, the Administrative Law Court is vested, as the trier of fact, with the authority to determine the fitness or suitability of a particular location. Fast Stops, Inc. v. Ingram, 276 S.C. 593, 281 S.E.2d 181 (1981). The determination of suitability of location is not necessarily a function solely of geography. It involves an infinite variety of considerations related to the nature and operation of the proposed business and its impact upon the community within which it is to be located. Kearney v. Allen, 287 S.C. 324, 338 S.E.2d 335 (1985). In determining the suitability of a location, it is proper for this Court to consider any evidence that demonstrates any adverse effect the proposed location will have on the community. Palmer, supra. It is also relevant to consider the previous history of the location. Smith v. Pratt, 258 S.C. 504, 189 S.E.2d 301 (1972); Taylor v. Lewis, et al., 261 S.C. 168, 198 S.E.2d 801 (1973). Furthermore, in considering the suitability of a location, it is relevant to consider whether the testimony in opposition to the granting of a license is based on opinions, generalities and conclusions, or whether the case is supported by facts. Id.

11.Unless there is sufficient evidence of an adverse impact on the community, the application must not be denied if the statutory criteria are satisfied. The fact that a Protestant objects to the issuance of a permit is not a sufficient reason by itself to deny the application. See 45 Am.Jur. 2d Intoxicating Liquors §162 (Supp. 1995); 48 C.J.S. Intoxicating Liquors §119 (1981).

12.Permits and licenses issued by this State for the sale of liquor, beer and wine are not property rights. Rather, they are privileges granted in the exercise of the State’s police power to be used and enjoyed only so long as the holder complies with the restrictions and conditions governing them. The Administrative Law Court, as the tribunal authorized to grant the issuance of a permit, is likewise authorized to revoke or suspend the permit for cause. See Feldman v. S.C. Tax Commission, 203 S.C. 49, 26 S.E.2d 22 (1943).

13.Furthermore, 23 S.C. Code Ann. Regs. 7-200.1(I) (Supp. 2004) authorizing the imposition of restrictions on permits, provides:

Any written stipulation and/or agreement which is voluntarily entered into by an applicant for a permit or license between the applicant and the Department, if accepted by the Department, will be incorporated into the basic requirements for the enjoyment and privilege of obtaining and retaining the permit or license and shall have the same effect as any and all laws and any and all other regulations pertaining to the permit or license.

Knowing violation of the terms of the stipulation or agreement shall constitute sufficient grounds to revoke said license.

14.I find that the location will not have an adverse impact on the surrounding community if certain restrictions are placed upon the permit and license. However, the Court is concerned about the lack of attention to detail by Petitioner in this application process, especially since Petitioner has not hired managers and employees who can operate the private club in accordance with the laws and regulations in this State which govern the applicable permit and license. Accordingly, Petitioner is required to sign an agreement with the Department to bind both herself and the corporation to each of the restrictions contained therein. Failure to comply with the restrictions may be grounds for revocation of either the permit and license, or both. Petitioner is also reminded that any person who is issued a permit or license in this State must adhere strictly to the laws and regulations applicable to the sale of alcoholic beverages.

ORDER

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

ORDERED that the application for an on-premises beer and wine permit and minibottle license by JPK Restaurants of Charleston, d/b/a Scoreboard II, 192 College Park Road, Ladson, South Carolina, is GRANTED upon Laurie JoAnn Kendall, aka Lori Kendall, as president of JPK Restaurants of Charleston, d/b/a Scoreboard II signing a written agreement with the South Carolina Department of Revenue agreeing to the restrictions set forth below:

RESTRICTIONS

1.Petitioner shall provide the Department with the names of any manager(s) employed to assist in the operation of the Scoreboard II and any officer(s) that may be named and may work at the location. A SLED background check, the results of which meet the approval of the Department, must be performed on any manager(s) or officer(s) prior to their becoming a manager or officer and working at the location.

2.Petitioner must undergo a final inspection by SLED and the Department must receive a written affirmation from SLED that the proposals outlined on the drawing by Trico Engineering Consultants, Inc., as shown on Petitioner’s Exhibit 1, and as testified to at the hearing, (i.e. construction of a permanent circular driveway and entrance from College Park Road into the property at the location, construction of a permanent parking area as outlined and marked on the drawing, construction of a permanent split rail fence four (4) feet high separating the parking area from the circular driveway, as well as the construction of a four (4) feet high fence constructed of railroad ties across the front of the parking area which will constitute a strong barrier) are complied with and meet the minimum statutory distance requirements.

3. Petitioner shall only allow members and their bona fide guests into the location.

4.Petitioner and its employees shall prohibit loitering and the consumption of beer, wine or liquor in the parking lot area of the proposed location.
5.Petitioner shall have at least one security guard present at the location at all times of operation. The security guard must patrol the inside and the exterior of the location, including the parking lot, at least once each hour to ensure that no public disturbance is created. The guard(s) shall also monitor the outside of the location to prohibit the consumption of any alcohol.

6.Petitioner and its employees shall not allow excessive noise to emanate from Scoreboard II. Any noise that is noticeably audible within any local residence or church with closed doors and windows shall be considered excessive. Furthermore, if live bands and/or disc jockeys perform at the location, all exterior doors must remain closed and the music must be minimized so it will not be heard at the Faith Worship Center. For the purposes of this restriction, any conviction for the violation of the county noise ordinance shall be considered prima facie evidence of a violation of this provision.

7.No music of any kind is permitted outside the building at the location.

8.Petitioner must maintain proper lighting around the exterior of the location and must ensure that litter is collected frequently each day the location is open.

9.The location shall only operate from 5:00 p.m. until 12:00 a.m. Monday through Thursday and from 5:00 p.m. until 2:00 a.m. on Friday and Saturday nights.

IT IS FURTHER ORDERED that a violation of any of the above restrictions shall be considered a violation against the permit and license and may result in a fine, suspension, or revocation of the permit and license.

AND IT IS SO ORDERED.

__________________________________

MARVIN F. KITTRELL

Chief Administrative Law Judge

April 27, 2005

Columbia, South Carolina