SC Administrative Law Court Decisions

2. Petitioner Zhong Yan Zheng seeks an on-premise beer and wine permit for OSAKA, located at 901 W. DeKalb Street, Kershaw County, Camden, South Carolina.

3. The qualifications set forth in S.C. Code Ann. § 61-4-520 (Supp. 2004) concerning the residency and age of Petitioner are properly established. Furthermore, Petitioner has not had a permit or license revoked within the last two (2) years and notice of the application was lawfully posted both at the location and in a newspaper of general circulation.

4. The proposed location is not unreasonably close to any school or playground. 5. On January 10, 2002, Petitioner committed Financial Transaction Card Fraud in the amount of $1,000. Financial Transaction Card Fraud is a felony offense in the State of South Carolina. See S.C. Code Ann. §16-14-60(a) (Supp. 2001). On May 23, 2002, Mr. Zheng was sentenced to 11 months and a $5,000 fine suspended upon 11 months or a $1,648 fine and 3 years probation. Accordingly, he finished serving that sentence in May 2005 upon completion of his probationary period.

6. In his application to obtain the beer and wine permit, Petitioner indicated that he had not been convicted of a crime.

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

2. A beer and wine permit is neither a contract nor a property right. It is, rather, a privilege granted in the exercise of the State's police power “to do what otherwise would be unlawful to do. . . .” Feldman v. South Carolina Tax Comm’n, 203 S.C. 49, 26 S.E.2d 22 (1943). S.C. Code Ann. §§ 61-4-520 and 61-4-540 (Supp. 2004) set forth the requirements for the issuance of a beer and wine permit. In particular, Section 61-4-520(6) vests the Administrative Law Court, as the trier of fact, with the authority to determine if the proposed place of the applicant’s business is a “proper” one. Although “proper location” is not statutorily defined, in making that determination, the Administrative Law Court may consider any evidence that is adverse to the community. Kearney v. Allen, 287 S.C. 324, 338 S.E.2d 335 (1985).

3. S.C. Code Ann. § 61-2-100(D) (Supp. 2004) provides that: “The department may not issue a license or permit under this title to any person unless the person and all principals are of good moral character.” See also S.C. Code Ann. § 61-4-520 (Supp. 2004) (“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.”) Title 61, however, does not define moral character. When there is no statute or regulation defining good moral character, there is no single criterion or standard for determining the meaning of the term and the licensing authority must judge whether the acts and/or conduct shown are sufficient in themselves or as an index to character to disqualify the applicant. 2709 S.C. Op. Atty. Gen. 159 (1969). Nevertheless, the South Carolina Supreme Court has held that the Court may deny a license or permit to “a person who has previously been convicted of a crime or crimes, particularly a violation of the liquor laws.” Wall v. South Carolina Alcohol Beverage Control Com'n., 269 S.C. 13, 16, 235 S.E.2d 806, 808 (1977).

Here, Petitioner was convicted in South Carolina for Financial Transaction Card Fraud (Card Fraud). Though he concedes he was convicted of Card Fraud, he argued that the conviction was merely the result of a clerical error on his part. He further argued that if he is granted the permit he seeks, he will not commit that offense again. A conviction of a criminal offense is conclusive as to the conviction. South Carolina State Bd. of Dental Examiners v. Breeland, 208 S.C. 469, 38 S.E.2d 644 (1946). Moreover, in making that determination, the Breeland Court queried, “what more conclusive evidence of the fact of [a criminal] violation can there be than a conviction duly had in one of the courts of the state?” Id. at 649, quoting Hawker v. People of New York, 170 U.S. 189, 18 S.Ct. 573, 576 (1898). Additionally, under the past evidentiary rules of South Carolina, a witness could be impeached by evidence of prior convictions for crimes of moral turpitude. However, the details of that crime, “whether the details could be considered mitigating or aggravating,” were not admissible. State v. Joseph, 328 S.C. 352, 361, 491 S.E.2d 275, 280 (Ct. App. 1997). Rather, the Court presumed that the witnesses had already been afforded the opportunity to defend themselves against that charge and consequently the conviction was conclusive. Id.

Furthermore, though no South Carolina case directly addresses whether Card Fraud reflects a lack of moral character, there are an abundance of analogous authorities. “Decisions of the South Carolina courts generally define moral character by identifying those traits that represent a deficiency of moral character. The South Carolina Court recognizes that acts or conduct that demonstrate moral turpitude imply the absence of good moral character and thus the absence of qualities which are required for positions of trust and confidence, such as the holding a liquor license.” 1989 S.C. Op. Atty. Gen. 237, 1989 S.C. Op. Atty. Gen. No. 89-89, 1989 WL 406179 (S.C.A.G.) September 8, 1989.^[2] “An act in which fraud is an ingredient involves moral turpitude.” State v. Horton, 271 S.C. 413, 248 S.E.2d 263 (1978). Furthermore, the offense of breach of trust accompanied by fraud is analogous to Card Fraud and is a crime evidencing moral turpitude. Matter of Sipes, 297 S.C. 531, 377 S.E.2d 574 (1989). Likewise, the crime of obtaining property under false pretenses involves moral turpitude. 1974 WL 27193 (S.C.A.G.) March 11, 1974.

In addition to Petitioner's criminal record, he also failed to provide truthful information about his conviction on the permit application. S.C. Code Ann. § 61-4-540 (Supp. 2004) provides that “[a] misstatement or concealment of fact in an application is a sufficient ground for the revocation of the permit.” Therefore, failure to provide truthful information about a conviction on a permit application is a sufficient ground, in itself, for the denial of a permit. Obviously, if the Department possesses the authority to revoke a permit based upon a misstatement or concealment, it likewise possesses the power to deny a permit because false information was provided in the permit application. Here, Petitioner acknowledges that he provided false information regarding his criminal history. However, he contends that his misstatement stemmed from a lack of understanding of the English language. Nevertheless, his “misstatement or concealment” of his criminal record in his application is a ground, in and of itself, for the denial of the requested permit.

Furthermore, Petitioner’s failure to provide truthful information in the permit application is also a reflection of a lack of good moral character. In 1990 S.C. Op. Atty. Gen. 152, 1990 S.C. Op. Atty. Gen. No. 90-51, 1990 WL 482438 (S.C.A.G.) August 31, 1990, the Attorney General explained the implication of making false statements:

Making a false statement has been declared to be a crime involving moral turpitude. Hackman v. Commonwealth, 220 Va. 710, 261 S.E.2d 555 (1980). Making a false statement, knowing it to be false, to support a claim for unemployment benefits, was found to involve moral turpitude in Chesapeake and Ohio Railway Company v. Hanes, 196 Va. 806, 86 S.E.2d 122 (1955). Likewise, making a false affidavit to secure monetary benefits to which one was not entitled involved moral turpitude in American Motorists Insurance Company v. Evans, 577 S.W.2d 514 (Tex.Civ.App.1979). Similarly, opinions rendered by this Office have deemed criminal offenses concerning the making of false statements to involve moral turpitude. Ops. Atty. Gen. dated March 11, 1988 (making a false statement or concealing material facts on an application for certificate of title or registration for a motor vehicle); April 30, 1982 (making a false statement on a United States Department of Agriculture form); December 18, 1975 (submitting false statements to the United States Department of Agriculture); June 13, 1989 (making false statements to a federally insured financial institution with respect to a loan application); March 6, 1990 (making false statements to obtain unemployment benefits); October 25, 1978 (filing false statements in violation of the Internal Revenue Code); and April 3, 1979 (filing false statements, relative to Certificate of Eligibility-- Public Service Employment).

See also Duren, Inc. v. City of Lakewood, 709 P.2d 74 (Colo. Ct. App. 1985) (False statements by liquor licensee principals were pertinent facts to support a finding that the principals were not persons of good moral character as basis for refusal to renew the license.).

4. Mr. Zheng made a false statement on his application and committed a criminal offense that exhibited moral turpitude. Moreover, he only finished serving the sentence for that crime in May 2005. Therefore, I find that Petitioner is not currently of sufficient moral character to hold an on-premise beer and wine permit. Nevertheless, that finding is limited solely to the sufficiency of Mr. Zheng's character on the date of the hearing into this matter. If Petitioner continues to uphold the laws of this State, I believe that his character will be rehabilitated in the not so distant future.^[3]

ORDER

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

ORDERED that the Petitioner's application for an on-premise beer and wine permit be denied.

AND IT IS SO ORDERED.

_________________________________

Ralph King Anderson, III

Administrative Law Judge

June 23, 2005

Columbia, South Carolina