SC Administrative Law Court Decisions

This matter comes before this tribunal pursuant to S.C. Code Ann. § 61-2-260 (Supp. 2004) and S.C. Code Ann. §§ 1-23-310 et seq. (1986 & Supp. 2004) for a contested case hearing. M Management, LLC, d/b/a Limelight, (Petitioner), seeks an on-premise beer and wine permit and a minibottle license for a comedy club to be located at 2600 E. Main Street, Spartanburg , South Carolina.

Respondent South Carolina Department of Revenue (Department) denied Petitioner’s application for the permit and license based on the protest filed by Pastor Keith Davis pursuant to S.C. Code Ann. § 61-4-525 (Supp. 2004). A hearing in this matter was held on November 16, 2005, at the offices of the Administrative Law Court in Columbia, South Carolina.

Ashea Scott, sole owner of Petitioner, did not appear at the November 16, 2005 hearing. Her mother and agent, Willette Prioleau, appeared in her stead.

Ruling in this case was delayed, and the record left open, until the record could be supplemented with a SLED background check for Willette Prioleau. Based upon the information discovered in the background check, the hearing in this matter was reconvened on December 7, 2005. Ashea Scott and Willette Prioleau were both present at the reconvened hearing. Pastor Keith Davis, the sole protestant in this case, was present at both hearings.

After listening to the testimony and weighing all evidence presented at the hearing, this Court finds that Petitioner’s on-premises beer and wine permit and Petitioner’s minibottle license should be granted with restrictions after certain requirements are met.

ISSUES

The question of granting or denying the permit and license herein sought depends upon the answer to three questions.

1. Whether the location is suitable for an on-premises beer and wine permit and minibottle license. The answer to this is yes, the location is suitable.

2. Whether the false statement to the Court by Petitioner’s agent, Ms. Willette Prioleau, as to her criminal convictions is sufficient grounds to deny the permit and license. The answer to this is no, so long as Ms. Willette Prioleau henceforth from the date hereof is absolutely and completely divorced from the management of Petitioner’s business at 2600 E. Main St., Spartanburg, S.C. in accord with the restriction set out hereinafter.

3. Whether the equivocation by Ms. Ashea Scott, owner of Petitioner, as to her income for the years 2004 and 2005 is a sufficient ground to deny the permit and license. The answer to this is also no, provided that all required returns be filed and all taxes due be paid in accord with the restriction set out hereinafter.

FINDINGS OF FACT

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

1. The ALC has personal and subject matter jurisdiction.

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

3. The content of the Statement of the Case, to the extent that it constitutes findings of fact, is incorporated herein verbatim.

4. The Petitioner, M Management, LLC, d/b/a Limelight (Petitioner), seeks an on-premise beer and wine permit and minibottle license for a comedy club to be located at 2600 E. Main Street, Spartanburg, South Carolina (“location”). The location is primarily commercial. A bowling alley is across the street from the location. A gas station and liquor store are next door.

5. Ashea Scott, the Petitioner’s sole owner, is over the age of twenty-one. She is a legal resident of the State of South Carolina, residing in Columbia, South Carolina. She plans to operate a comedy club and restaurant at the location. The location consists of approximately 12,000 square feet. The club will host nationally known comedy acts. Food service will be a substantial portion of the business and income at the location. The location has a full service kitchen. The menu will consist of finger foods such as burgers, hot dogs, and French fries. The location will be open for business primarily Thursday through Saturday of each week from 7:00 p.m. until 2:30 a.m., hosting three shows a night in two hour increments with breaks between acts. Music and dancing will be provided between acts. The location may open on other nights of the week as comedy acts are available.

6. The location previously held a beer and wine permit and minibottle license from 1980 until 1999 or 2000. The location was vacant until Petitioner moved in.

7. Notice of Petitioner’s application was published in a newspaper of local circulation once a week for three consecutive weeks, and proper notice of the application was posted at the proposed location for fifteen days.

8. Pastor Keith Davis is a former police officer who served on the DUI Task Force in Spartanburg. Pastor Davis is concerned with the increased level of entertainment causing parking problems. He is also concerned with an increased probability of people driving under the influence. Pastor Davis requests, at a minimum, that sexually explicit material be prohibited at the comedy club planned for the location.

9. Pastor Davis is the pastor at Zion Hill Baptist Church, which is one block away from the location. Zion Hill Baptist Church is approximately nine hundred feet from the location. Amazing Grace Baptist Church is greater than four hundred feet from the location. The pastor at Amazing Grace Baptist Church is not a protestant in this case. Amazing Grace Baptist Church moved into its present location within the last year.

10. The location is not within three hundred feet of a church, school, or playground.

11. Pastor Davis was contacted several times by Mr. Ronica Keith Scott, Ashea Scott’s father, who claimed he was also her business partner. Ashea Scott has had very little contact with her father in the last fifteen years. Petitioner stipulates that Mr. Scott will not have any involvement in the business.

12. Ms. Willette Prioleau, Ashea Scott’s mother and agent, who appeared in her stead at the November 16, 2005 hearing, indicated at that hearing that as agent she would be actively involved and spend one hundred percent of her time there. Ms. Prioleau testified at the hearing that the only item on her criminal record was a conviction for one fraudulent check approximately ten years ago. The record in this case was left open for the Department to supplement the record with a SLED background check on Ms. Prioleau. Ms. Prioleau was found to have been convicted of two fraudulent check charges in August of 1996 as well as two convictions for making false statements in November of 1999. Her entire record is voluminous, stretching back to 1982, and consists mostly of fraudulent check charges.

13. Ms. Willette Prioleau is not a suitable person to be employed by an establisment holding a beer and wine permit or a minibottle license under the Laws of the State of South Carolina.

14. Ms. Willette Prioleau is listed on the application as the agent for service of process and nothing further. The Articles of Organization list her as Organizer and Agent for service of process.

15. Ashea Scott was not aware of her mother’s criminal record. Ms. Scott stipulated that her mother, Ms. Willette Prioleau, will not be involved in the business in any way. Ashea Scott also stipulated that Willette Prioleau will not be allowed to come on the premises.

16. Ashea Scott failed to file U.S. and S.C. income tax returns for the years 2001, 2003 and 2004. The evidence is equivocal as to whether she had income of approximately $16,000.00 in the year 2004 or 2005 from some enterprise at the Township Auditorium in Columbia. The Court is inclined to accept Petitioner’s final statement (through her attorney) that the $16,000.00 income was in 2005. If she is in error, and has failed to file a required return for 2004, she must be prepared to accept the consequences.

CONCLUSIONS OF LAW

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

1.         Jurisdiction over this case is vested with the South Carolina Administrative Law Court pursuant to S.C. Code Ann. § 61-2-260 (Supp. 2004), S.C. Code Ann. § 1-23-600(B) (Supp. 2004), and S.C. Code Ann. §§ 1-23-310 et seq. (1986 & Supp. 2004).

2. 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).

3. 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).

Suitability of Location

4.         S.C. Code Ann. § 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. S.C. Code Ann § 61-4-520 (6) (Supp. 2005).

5.         S.C. Code Ann. § 61-6-1820 sets forth the basic criteria for the issuance of a minibottle license. Although the suitability of the proposed location is not listed in Section 61-6-1820 as a condition of licensing, such a consideration is proper. See Schudel v. S.C. Alcoholic Beverage Control Comm’n, 276 S.C. 138, 276 S.E.2d 308 (1981).

6.         Although “proper location” is not statutorily defined, 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).

 7.         The determination of suitability of location is not necessarily a function solely 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 v. Allen, 287 S.C. 324, 338 S.E.2d 335 (1985); Schudel v. S.C. Alcoholic Beverage Control Comm’n, 276 S.C. 138, 276 S.E.2d 308 (1981).

8.         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, 338 S.E.2d 335 (1985); Palmer v. S.C. ABC Comm'n, 282 S.C. 246, 317 S.E.2d 476 (Ct. App. 1984) (citing Smith v. Pratt, 258 S.C. 504, 189 S.E.2d 301 (1972)). 

9. As the trier of fact, an administrative law judge is authorized to determine the fitness or suitability of the proposed business location of an applicant for permits and licenses to sell alcoholic beverages 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). In considering suitability of location, it is relevant to consider the previous history of the location and to determine whether the testimony in opposition of a permit is based on opinions and conclusions or is supported by facts. Taylor v. Lewis, 261 S.C. 168, 198 S.E.2d 801 (1973).

10. The objections interposed by Pastor Keith Davis do not constitute sufficient grounds for the denial of the permit and license here sought. The location is not within three hundred feet of a church, school, or playground. The location is in an area that is primarily commercial. Therefore, the location is suitable for a beer and wine permit and minibottle license.

The Court denied Pastor Davis’ request for prohibition of sexually explicit material being used at the comedy club planned for the location. This denial is, emphatically, not because the Court favors such. Instead it was denied for the very practical reason that it creates a restriction that is vague and subject to constant definition and challenge. If the Petitioner crosses the threshold for obscenity set by the local authorities, then they can take action under such ordinances or statutes as then apply.

Suitability of Applicant

11. S.C. Code Ann. § 61-4-540 provides that a beer and wine permit should not be issued unless “the applicant is a fit person to sell beer and wine.” S.C. Code Ann. § 61-4-540 (Supp. 2004).

12. S.C. Code Ann. § 61-2-160 provides:

A license or permit pursuant to the provisions of this title must not be issued, renewed, or transferred unless the department determines that the applicant does not owe the State delinquent taxes, penalties, or interest. If the department determines that delinquent taxes, penalties, or interest are due, the department shall notify the applicant of the necessary requirements to comply with this section.

S.C. Code Ann. § 61-2-160 (eff. June 9, 2005).

13. Ashea Scott failed to file U.S. and S.C. income tax returns for the years 2001, 2003 and 2004. While this fact does not render her an unfit person to sell beer and wine, it is an issue that must be resolved before a beer and wine permit and minibottle license may be issued to her.

Misstatement or Concealment of Fact

14. S.C. Code Ann. § 61-2-100(J) provides that “A misstatement or concealment of fact on an application for a license or permit pursuant to this title is sufficient grounds for the department to deny the application…” S.C. Code Ann. § 61-2-100(J) (eff. June 9, 2005).

15. S.C. Code Ann. § 61-2-100(H)(2) defines “Principal” as such:

(2) "Principal" of a business or entity means a person who is described in any one or more of the following terms:

(a) an officer of the business or entity which owns the business;

(b) a partner other than a limited partner who cannot exercise any management control;

(c) a manager of the limited liability company which is managed by managers;

(d) a member of the limited liability company which is not managed by managers;

(e) a fiduciary, including personal representatives, trustees, guardians, committees, and receivers, who manage, hold, or control title to or who is otherwise in direct or indirect control of the business;

(f) a person who owns twenty-five percent or more of the combined voting power of the business or entity;

(g) a person who owns twenty-five percent or more of the value of the business entity; or

(h) an employee who has day-to-day operational management responsibilities for the business or entity.

(i) a license or permit may be issued to a publicly held corporation, which is deemed the applicant under Section 61-2-160 and the corporation shall designate an officer or other employee of good moral character, over the age of twenty-one and a resident of this State in whose name the permit or license must be held on behalf of the corporation and the corporation may substitute an officer or employee if the individual is of good moral character, over the age of twenty-one, and a resident of this State, and upon notice in writing of the substitution to the department.

S.C. Code Ann. § 61-2-100(H)(2) (eff. June 9, 2005).

16. There was no misstatement or concealment of material fact by Ashea Scott on the application. Ms. Willette Prioleau is listed on the application as the agent for service of process and nothing further. The Articles of Organization list her as Organizer and Agent for service of process. Ms. Willette Prioleau does not qualify as a principal, and was not listed as such on the application. Ms. Willette Prioleau is not a suitable person to be employed by an establisment holding a beer and wine permit or a minibottle license under the Laws of the State of South Carolina.

Conclusion

17. Based on the findings of fact and conclusions of law stated above, the location is suitable for a beer and wine permit and minibottle license. Ms. Ashea Scott is a fit person to sell beer and wine. However, her tax issues must be settled with the Department before a permit and license may be issued. Mr. Ronica Keith Scott, Ashea Scott’s father, will have no involvement with the business conducted at the location. Ms. Willette Prioleau, Ashea Scott’s mother, is not a suitable person to be employed by an establishment holding a beer and wine permit or a minibottle license under the Laws of the State of South Carolina. Therefore, Ms. Prioleau cannot be employed at the location. As a further precaution, Ms. Willette Prioleau is to be prohibited from coming upon the premises entirely.

ORDER

IT IS THEREFORE ORDERED that the beer and wine permit and minibottle license herein sought be granted, subject and subordinate to the satisfaction of the following conditions, to wit:

1. Mr. Ronica Keith Scott, Ashea Scott’s father, shall not, at any time, come upon the premises (including but not limited to hours when the business is closed, and including but not limited to the parking lot and other exterior portions thereof) at 2600 E. Main Street, Spartanburg, South Carolina.

Further Mr. Ronica Keith Scott shall not at any time, be employed by Petitioner in any capacity, whether as a paid or unpaid employee of any kind and, specifically shall not have anything whatsoever to do with the books and financial records of the business. Moreover Mr. Ronica Keith Scott shall not render free or gratuitous assistance to Petitioner in the operation of the business at 2600 E. Main Street, Spartanburg, South Carolina, even if to be conducted away from the premises.

Violation of this restriction shall be grounds for revocation of both beer and wine permit and minibottle license.

2. Ms. Willette Prioleau shall not, at any time, come upon the premises (including but not limited to hours when the business is closed, and including but not limited to the parking lot and other exterior portions thereof) at 2600 E. Main Street, Spartanburg, South Carolina.

Further Ms. Willette Prioleau shall not at any time, be employed by Petitioner in any capacity, whether as a paid or unpaid employee of any kind and, specifically shall not have anything whatsoever to do with the books and financial records of the business. Moreover Ms. Willette Prioleau shall not render free or gratuitous assistance to Petitioner in the operation of the business at 2600 E. Main Street, Spartanburg, South Carolina, even if to be conducted away from the premises.

Violation of this restriction shall be grounds for revocation of both beer and wine permit and minibottle license.

3. Ms. Ashea Scott, shall, as a condition of the granting of the beer and wine permit and minibottle license herein sought, first give proof to the Department that she has filed all required U.S. and State of South Carolina income tax returns and that all taxes due theron through the date hereof have been paid in full; or, if no return was required for a particular year, she shall make an affidavit in confirmation thereof and file the same with the Department.

4. The location must receive a Grade A certificate by the Division of Food Protection of the Bureau of Environmental Health in the South Carolina Department of Health and Environmental Control and a final inspection of the location must be conducted by the South Carolina Law Enforcement Division.

AND IT IS SO ORDERED.

__________________________________

JOHN D. MCLEOD

Administrative Law Judge

December 14, 2005

Columbia, South Carolina