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), S.C. Code Ann. § 1-23-600(B) (Supp. 2005), and S.C. Code Ann. § 61-2-260 (Supp. 2005). The petitioner, Don C. Williams (“Williams”), applied for a permit to sell beer and wine for on-premises consumption pursuant to §§ 61-4-500 et seq. and for a license to sell liquor by the drink pursuant to §§ 61-6-1600 et seq. for the location at 608 Freemont Road in Horry County near the community of Longs, South Carolina. The Horry County Police Department filed a written protest to Williams’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 Horry County Police Department’s valid public protest. It also denied the application because it found that the proposed location was not proper pursuant to §§ 61-4-520, -540.

After timely notice to the parties and the Protestants, the court held a hearing on this matter on August 3, 2006, at the ALC in Columbia, South Carolina. Both parties and two representatives of the Protestant Horry County Police Department, Lance Corporal Thomas McMillan and Captain Dale Buchanan, appeared at the hearing. Evidence was introduced and testimony presented. After carefully weighing all of the evidence, the court finds that Williams’s application for this location should be denied.

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 timely given to all parties and Protestants. Williams seeks a permit for the retail sale of beer and wine for on-premises consumption and a license to sell liquor by the drink for the location at 608 Freemont Road, Longs, South Carolina 29568. The proposed location is not inside incorporated municipal limits. Notice of the application was lawfully posted at the location and published in a newspaper of general circulation.

Williams is the sole proprietor of the business for which he seeks the requested permit and license. Williams is over the age of twenty-one. He is a legal resident of the State of South Carolina and has maintained his principle place of abode in South Carolina for at least thirty days prior to the date of the application. He is of good moral character and has never had revoked a license regulating the manufacture or sale of alcoholic liquors. He has no criminal record and does not owe the state or federal government any delinquent taxes, penalties, or interest.

The only issue in this matter is the suitability of the proposed location. The neighborhood immediately surrounding the proposed location is primarily residential. A nightclub operates directly across the street from the proposed location and a restaurant serving alcoholic beverages operates next door. Along with Williams Arcade, these three restaurant/clubs appear to be the only commercial establishments in this residential section along Freemont Road. Two convenience stores are currently licensed to sell beer and wine elsewhere in the Longs area.

The proposed location is not within 500 feet of any church, school, or playground. Freemont Missionary Baptist Church is located approximately two-tenths of a mile from the proposed location. Families with children live in the neighborhood of the proposed location. Four daycare centers are located within an approximate one-mile radius of Williams Arcade, two of which are located within a half mile of the club.

Members of the Williams family have operated Williams Arcade since the early 1990s. Williams’s father operated the restaurant/club for approximately ten years. Williams’s brother then took over the operation of the business for approximately four years. During that time, Williams assisted his brother in the operation of the business. Williams has operated the business as the sole owner for approximately the last year and a half. Williams testified that the club has been licensed for the sale of alcoholic beverages since its inception, and that the instant application was filed due to the change in ownership from his brother to him. Although Williams leases the building from his father, he is currently the sole proprietor of the business.

Williams’s father also operates a nightclub known as Club 13 directly across the street from the proposed location. A third restaurant/club, Davis Seafood, is located next door to Williams Arcade. Both of these clubs serve alcoholic beverages.

Williams works at another job during the day and generally opens the restaurant for dinner from 6:00 p.m. to midnight on the nights when his schedule permits him to do so. The restaurant serves short-order fare such as burgers, chicken, chicken wings, and hotdogs. On Friday nights there is live music at the restaurant. The restaurant also contains a pool table, arcade games, and a dance floor. Williams sometimes holds parties for children at the restaurant, and the evidence shows that children play arcade games there.

Williams testified that over the last eighteen months, he has held “parties” at the restaurant during which alcoholic beverages are served for free upon payment of a cover charge. These “parties” are open to any member of the public aged eighteen and over who pays the cover charge, but Williams does not utilize a wristband system, does not usually verify identification, and does not take any other measures to ensure that customers aged eighteen to twenty are not served alcoholic beverages. Instead, he relies solely on their appearance as to age and his familiarity with most of the local customers. However, he also testified that as much as one-third of the typical crowd at his restaurant consists of strangers who do not live in the Longs community.

Testimony from all of the witnesses demonstrated that the surrounding area is a poor neighborhood with a high crime rate. LCpl. McMillan and Cpt. Buchanan expressed many concerns with the suitability of the proposed location, including past criminal activity both at the proposed location and the surrounding area, and the lack of adequate police protection for the neighborhood. The court noted that these witnesses seemed to be very familiar with this area and were knowledgeable about the incidents that have occurred there. The court therefore found their testimony to be credible and reliable.

Based upon the evidence and testimony submitted by the Department, as well as from Williams himself, the court finds that the area around Williams Arcade suffers from many problems, including drug crimes, theft, assaults, shootings, and murders. These incidents have occurred both at the Williams Arcade location and in the immediate surrounding area. The officers testified, and this court finds, that these problems are exacerbated by the close proximity of the three restaurants and clubs − including Williams Arcade − which serve alcohol, and by the large crowds they generate.

The court also finds, based upon the testimony of Cpt. Buchanan, that the uniform patrol division of the Horry County Police Department does not have sufficient manpower to patrol the area surrounding Williams Arcade. Cpt. Buchanan is in charge of day-to-day operations of the uniform patrol division. The Horry County Police Department recently divided Horry County, which covers 1200 square miles, into law enforcement precincts. The northern precinct where Williams Arcade is located contains three sectors. Only one uniform patrol officer is assigned to each sector for each twelve-hour shift. While a Community Outreach Team (“COT”) consisting of six officers (including LCpl. McMillan) assists the uniform patrol division, the COT officers are a proactive group and do not generally respond to calls. Consequently, oftentimes only one patrol officer is available to respond to calls in that sector of the northern precinct.

Based on Cpt. Buchanan’s testimony, the court also finds that the area surrounding Williams Arcade presents a threat to the safety of the police officers and that, as a result, they cannot respond to calls from that area alone. Cpt. Buchanan stated that in the past officers responding by themselves to calls in the area of the three clubs have been pelted by the crowds with rocks, bottles, and other objects. Although Williams stated that he himself has never witnessed the crowds throwing objects at a police officer, he did not offer any specific evidence refuting Cpt. Buchanan’s testimony on this point. The court therefore finds Cpt. Buchanan’s testimony as to the threat to officer safety to be credible.

As discussed above, the criminal activity in the area at issue includes drug-related crimes and violence, including assault and murder. Cpt. Buchanan stated that the problems have existed since the inception of Williams Arcade and that they have continued during the last eighteen months during Williams’s ownership of the club. The Department introduced evidence regarding fifty-one calls to the police made between May 2002 and November 2005 either from or concerning the location. Cpt. Buchanan offered a sampling of incident reports pertaining to twelve of these calls. Of this sample, two of the incidents occurred within Williams Arcade, four of the incidents occurred in or around the neighboring clubs, and the remaining six involved disputes in and around the nearby neighborhood. They included various reports of assault, theft, and a shooting.

The undisputed evidence also shows that the volume of calls reporting crimes or incidents is higher when the clubs are open. Cpt. Buchanan stated that the police had received complaints about the clubs from nearby residents.

On June 24, 2006, approximately six weeks before the contested case hearing in this matter, a shooting occurred inside Williams Arcade while it was open for business and alcohol was being served. The shooting resulted in the death of an eighteen-year old girl. Additionally, at least two other people were injured in the shooting, and bullets struck the residence next door to Williams Arcade and penetrated the walls of the home.

Officers McMillan and Buchanan also testified that another homicide occurred at the location approximately two years ago. Williams, however, testified that the murder occurred nearby and that the victim ran to his location before he died. One of the incident reports introduced into evidence describes an altercation which resulted in a shooting death in 2004. The report indicates that the altercation commenced outside Williams Arcade. Accordingly, the court finds that at least two shooting deaths have occurred at or near Williams Arcade within the last two and half years.

LCpl. McMillan and Cpt. Buchanan also testified as to parking and traffic problems at the location. Only about fifteen parking spaces are available at the proposed location. Williams testified that the building capacity is approximately 300 people, although he testified that typically on a busy night approximately 100-150 patrons are present in the restaurant. Representatives from law enforcement testified that the capacity of the building is only 75 persons, and that on busy nights the crowds both inside and outside the club will number close to 300. Even accepting Williams’s estimate, it is clear that large crowds gather at and outside the restaurant. Due to these large crowds and the limited available parking, patrons often park their cars in the street and on adjacent properties owned by members of Williams’s family. LCpl. McMillan testified that on weekend evenings as many as 75-100 cars are present at or near the location and on the street, and that law enforcement has been forced to tow cars from the roadway in the past. The speed limit on Freemont Road is 35 miles per hour.

Loitering is also a problem at the proposed location. Williams testified that he attempts to prevent loitering, but that his efforts are successful only for a short time and then the crowd will return and congregate again. His testimony further indicated that while family members periodically assist him in the restaurant, he does not employ a full staff and attends to the duties inside the building, such as bartending, himself. The court finds that as a result, Williams cannot adequately address problems arising outside his restaurant. Williams does not employ licensed security officers at the club.

Williams testified that he is respectful of law enforcement and cooperates with the police, trying to help the officers when he can. No evidence was presented to the contrary. Williams also testified that a public payphone is present on the property of the proposed location, and that the payphone is often utilized to report crimes that do not necessarily occur at his location.

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 v. S.C. Alcoholic Beverage Control Comm’n, 276 S.C. 138, 276 S.E.2d 308 (1981). Therefore, either a permit or 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 § 121 at 501 (1981).

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. § 61-6-1820(3); § 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 fact 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).

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 § 119 (1981). 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.

3. Conclusions

The court finds that Williams has met many of the statutory requirements contained in §§ 61-4-500 et seq. to obtain a permit for beer and wine and in §§ 61-6-1600 et seq. for a license to sell liquor by the drink. Nonetheless, for a variety of reasons as discussed more fully below, the court concludes that Williams Arcade is not a proper or suitable location for the sale of beer, wine, or liquor.

First, the immediate surrounding area has been plagued by crime, including such serious offenses as assault and murder. Williams Arcade itself has had numerous incidents of crime, including the recent murder. The court recognizes that not all of the problems described by the law enforcement witnesses have occurred at the specific site of Williams Arcade and that not all of the problems can be localized to that particular restaurant. However, in determining the suitability of a location, the law permits the court to consider criminal activity in the surrounding area. See Palmer, 282 S.C. at 250, 317 S.E.2d at 478 (holding whether the location is near other locations that have been a constant source of law enforcement problems is a relevant factor). The court finds that the extent and nature of the criminal activity, both at Williams Arcade itself and in the immediate surrounding area, make it unsuitable for the permit and license sought.

Additionally, the court finds that the granting of the requested permits would place an additional strain on law enforcement. See Roche, 263 S.C. at 455, 211 S.E.2d at 245 (holding that consideration can be given to the impact issuing the permit or license will have on law enforcement). One uniformed officer per shift for the sector where Williams Arcade is located simply cannot adequately address the high volume of crime in that area, especially when sole officers cannot respond to calls from that area due to concerns for their safety.

Furthermore, the neighborhood is primarily residential. The court finds that the crowds generated by the three clubs − including Williams Arcade − and the crime associated with those crowds present a danger to the nearby residents. In June 2006, shots fired within Williams Arcade penetrated the walls of the home next door. Children live in the nearby area. Youth congregate at the club to play games. See Palmer, 282 S.C. at 249-50, 317 S.E.2d at 478 (stating a consideration can be whether the proposed location is near other locations where young people congregate and loiter). The proximity of this club to the residences nearby renders it an unsuitable location. See § 61-4-520(6) (permitting the department to consider, among other factors, as indications of unsuitable location, the proximity to residences, schools, playgrounds, and churches). Although no churches, schools, or playgrounds are located within 500 feet of the location in violation § 61-6-1820(3) and § 61-6-120, homes are located next door and across Freemont Road, and four daycare centers are within a mile of the club − two within a half mile. All of these factors make the proposed location unsuitable for the sale of beer, wine, and liquor. See § 61-4-520(6); Schudel, 276 S.C. at 138, 276 S.E.2d at 308.

The court also finds that parking at the location is inadequate. Fifteen parking spaces are simply insufficient for the crowds patronizing the restaurant, which often number from between 100 to 300. Overflow parking has caused traffic problems on Freemont Road and law enforcement has had to tow vehicles from the roadway in the past. The court finds that these parking and traffic problems also make the location not a proper one. Palmer v. S.C. Alcoholic Beverage Control Comm’n, 282 S.C. 246, 248, 317 S.E.2d 476, 477 (Ct. App. 1984) (holding that consideration can be given to the extent to which the highway traffic creates a traffic danger).

Furthermore, the court finds that Williams’s management practices in conducting his business during the eighteen months he has owned it do not lend themselves to the issuance of a beer and wine permit or liquor license. Williams does not have a reliable policy in place to ensure that underage drinking does not occur in his restaurant, nor does he appear to have sufficient staff or security to assist him in controlling the crowds that congregate inside and outside his club. Moreover, the evidence shows that he has served alcoholic beverages at the restaurant during the last eighteen months after taking over the business from his brother without a permit or license having been issued to him by the Department of Revenue. See § 61-2-100 (stating that licenses and permits may be issued only to the person who is the owner of the business); § 61-2-140 (stating that licenses and permits are the property of the department and are not transferable);[1] see also Kearney v. Allen, 287 S.C. 324, 338 S.E.2d 335 (1985) (holding that it is proper to consider the nature and operation of the proposed business).

Additionally, although Williams pointed out that Williams Arcade has been licensed for the sale of beer, wine, and liquor for many years under its prior ownership, the court finds based upon the totality of the evidence presented that the location is less suitable than in the past. Two shooting deaths have taken place either inside or nearby the premises in recent years. The Horry County Police Department has been recently reorganized, and Cpt. Buchanan’s testimony demonstrates a strain on existing law enforcement resources. The undisputed evidence shows that this strain is increased when the clubs are in operation and beer, wine, and liquor is being sold.

In short, after considering the individual and combined effect of all of these factors and reviewing the totality of the circumstances, the court finds that granting the requested permit and license for the sale of beer, wine, and liquor would have an adverse effect on the community.[2] The proposed location is therefore not a proper one and is unsuitable. See §§ 61-4-520(5)-(6); Schudel v. S.C. Alcoholic Beverage Control Comm’n, 276 S.C. 138, 276 S.E.2d 308 (1981). Accordingly, Williams has not met all of the requirements for the issuance of a beer and wine permit and a license to sell liquor by the drink. See §§ 61-4-500 et seq., 61-6-1600 et seq.

ORDER

Based upon the findings of fact and conclusions of law stated above, it is hereby

ORDERED that the Department shall DENY Petitioner’s application for an on-premises beer and wine permit and a license to sell liquor by the drink for the premises located at 608 Freemont Road, Longs, South Carolina 29568.

IT IS SO ORDERED.

______________________________

PAIGE J. GOSSETT

Administrative Law Judge

August 17, 2006

Columbia, South Carolina