SC Administrative Law Court Decisions

This matter is before the Administrative Law Judge Division ("ALJD" or "Division") pursuant to the request of the Latin American Club ("Respondent" or "club") for a contested case hearing pursuant to four administrative violations regarding its on-premise beer and wine permit and mini-bottle license for the premises at 91-33 D Fairforest Road, Spartanburg, Spartanburg County, South Carolina 29301 ("location"). Respondent was cited for a violation of: (1) 23 S.C. Code Ann. Regs. 7-9 (B) (1976) for allegedly permitting or knowingly allowing a person under the age of twenty-one (21) years to purchase a beer on October 20, 2000; (2) 23 S.C. Code Ann. Regs. 7-17 (J) (1976) for permitting consumption of liquor by a nonmember on March 10, 2001; (3) 23 S.C. Code Ann. Regs. 7-9 (A) (1976) for permitting possession of liquor by a person under the age of twenty-one on October 20, 2000; and (4) S.C. Code Ann. § 61-6-2200 (Supp. 2000) for employing a bartender under the age of twenty-one on October 20, 2000. Based upon these alleged violations and one prior violation of the liquor laws at this location against the mini-bottle license held by Respondent, the South Carolina Department of Revenue ("Department") is seeking to impose a fine of $500.00 for the alleged violation of 23 S.C. Code Ann. Regs.7-9 (B) (1976) and revocation of the mini-bottle license for the two alleged liquor violations on October 20, 2000 and the one alleged liquor violation on March 10, 2001.

After notice to the parties, a contested case hearing was held at the offices of the Division in Columbia, South Carolina, on Wednesday, September 26, 2001. After a thorough review of the file and the evidence presented at the hearing, I find and conclude that a $400.00 fine for the violation of 23 S.C. Code Ann. Regs. 7-9 (B) (1976) is appropriate and that a suspension of the mini-bottle license for a period of 180 days for the violations of 23 S.C. Code Ann. Regs. 7-9 (A) and § 61-6-2200 (Supp. 2000) on October 20, 2000 and the violation of 23 S.C. Code Ann. Regs. 7-17 (J) (1976) on March 10, 2001 is the appropriate penalty.

Any issues raised in the proceedings or hearing of this case but not addressed in this order are deemed denied. ALJD Rule 29(B). Furthermore, the filing of a motion for reconsideration is not a prerequisite to any party filing a notice of appeal of this order. ALJD Rule 29(C).

EXHIBITSCertified copies of documents forwarded to the Administrative Law Judge Division from the Department are made a part of the record. At the hearing the Department placed into the record exhibits 1-1 through 1-5, 2-1 through 2-2, 3-1 through 3-3, 4-1, 5-1, 6-1, 7-1, 8-1, 9-1, 10-1 through 10-2 and 11. The club placed into the record one exhibit. Several exhibits were released by Order to SLED for safekeeping.

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 the evidence:

• The Division has personal and subject matter jurisdiction.
• Notice of the date, time, place and nature of the hearing was timely given to all parties.
• The Respondent holds an off-premise beer and wine permit and a private club sales and consumption (mini-bottle) license for the club located at 91-33 D Fairforest Road, Spartanburg, Spartanburg County, South Carolina 29301.
• On August 4, 2000, the club was charged with an administrative violation of S.C. Code Ann. § 61-6-2600 (Supp. 2000) for "possession of liquor in containers larger than 2 oz." The club paid a fine of $400.00 on September 29, 2000 to the Department for that violation. See Department's Exhibit 10-1.
• At approximately 9:05 p.m. on October 20, 2000, an eighteen-year-old female, UCI Lacey Japart, in conjunction with several SLED agents, went to the location. Prior to entering the club, the UCI was checked by SLED agent Milton Robert Jones who determined that she had a small amount of cash ($20.00) on her person as well as her South Carolina driver's license. As she went inside, she signed the membership book and the security guard asked her for her S.C. Drivers license. After looking at it, he stamped her hand "Latin Club-over 21." She was not asked by the bartender if she was a member or a guest of a member.
• The UCI went inside the club and ordered a Bud Light in a 12-ounce size. When served the beer, the UCI handed the $20.00 bill to the individual behind the bar, Ms. Alma Meraz. Ms. Meraz did not request identification or the age of the UCI. The UCI received her change ($3.00) and sat down. She did not drink any of the beer. Shortly thereafter SLED agent Jones entered, went to the UCI and took custody of the Bud Light beer. While inside the location, both the UCI and Agent Jones saw Ms. Meraz take orders for alcoholic beverages from other customers, prepare mixed drinks, serve the drinks, collect payment for the drinks, put it into the cash register and provide change to the customers.
• The birth date of the UCI is January 25, 1982. She was 18 years of age on the day she went into the club and purchased the beer. See Department's Exhibit 5-1.
• After Agent Jones went inside the club, he observed a youthful looking male seated at a table approximately 10 feet from the bar. The male was dressed like a school kid, had no facial hair and was wearing a ball cap on his head. He appeared to have a mixed alcoholic drink in his possession. Agent Jones saw the male take a sip from the drink in front of him. Agent Jones approached the male and ascertained from his identification that his name was Antonio Orozco and that he was 18 years of age. His birth date was January 20, 1982. Agent Jones charged Mr. Orozco with violating S.C. Code Ann. § 20-7-8925 (Supp. 2000) or "possession of liquor by a person under the age of 21 years." Mr. Orozco did not appear at the subsequent hearing before the magistrate and he forfeited his $50.00 bond. See Department's Exhibits 7-1 and 9-1.
• At the same time, Agent Jones wrote a violation charge against Ms. Alma R. Meraz for violating S.C. Code Ann. § 61-4-90 or "transferring beer to a person under the age of 21 years." Ms. Meraz appeared at the scheduled hearing before the magistrate and paid a $125.00 fine. See Department's Exhibits 8-1 and 9-1.
• On the same evening, Agent Jones wrote an administrative violation against the club for "employing person under 21 as bartender." See S.C. Code Ann. § 61-6-2200 (Supp. 2000). The birth date of Ms. Meraz is September 21, 1980. She was under 21 years of age on October 20, 2000. See Department's Exhibit 3-2 and 8-1. SLED agent Asbill was also inside the club at the same time and saw two individuals behind the bar, one of which was Ms. Meraz.
• On March 10, 2001, SLED agent B. A. Asbill went to the club. When he arrived at the entrance, the doorman stopped him and told him to sign the membership notebook and to pay a $15.00 cover charge. Agent Asbill paid the $15.00 charge and signed the notebook. Agent Asbill was not a member of the club nor was he a guest of a member on that date. He was not asked if he was a member or a guest of a member. He went to the bar and ordered a Crown Royal and coke mixed drink from the bartender. He observed the bartender break the seal on the mini-bottle, pour the alcohol into a glass and mix it with coke. After paying for the drink, he consumed a small portion. The bartender did not ask him if he was a member or a guest of a member. Agent Asbill kept a sample of the mixed drink and brought it to the hearing.
• Thereafter, several other SLED agents came inside the club and an administrative violation was written against the club for violating 23 S.C. Code Ann. Regs. 7-17 (J) (Supp. 2000).
• Luis Ramirez is the manager at the club. He is the brother of Antonio Ramirez who is the "owner" of this private club. He testified that the club has been open for three years and that he went to the club on the night of October 20, 2000. He signed for the administration violations that night.
• Mr. Ramirez testified that he has fired the doormen who were employed on the evenings of October 20, 2000 and March 10, 2001. Further, he testified that it is the policy at the club since these violations have been made to (1) require all members to have a membership card, (2) require all members to provide government identification or driver's license identification and (3) to keep copies of each member's identification in a notebook which is kept at the entrance doorway. Members must sign in and cannot bring any weapons into the club. Further, their membership is checked at two entrance doors.
• The club has approximately 350 members. The membership is composed of Latin Americans. There are no other clubs for Latin Americans in either Spartanburg or Cherokee counties. The membership dues are $5.00 annually. All proposed individuals for membership are on probation for two weeks before they can become a member.
• Mr. Ramirez testified that on the evening of October 20, 2000 both he and Carlos Hernandez were the bartenders. He took a break to go to the bakery store (which also is a grocery store and sells different Central American foods) which is in an adjacent building fronting on Fairforest Road. At that time Ms. Meraz was his girlfriend and he asked her to watch the employees. He stated that she was not an employee.
• The club offers authentic Latin American food to its members, both at lunch and for dinner. The owner, Antonio Ramirez, cooks and bakes in the grocery/bakery store. Also, he caters private parties and prepares wedding cakes.
• Mr. Ramirez testified that he works seven days a week and works 16-20 hours each Friday. He testified that Ms. Meraz was only controlling the music but was not an employee.

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

• S.C. Code Ann. § 1-23-600 (Supp. 2000) grants jurisdiction to the Administrative Law Judge Division to hear contested cases under the Administrative Procedures Act.
• S.C. Code Ann. § 61-2-260 (Supp. 2000) provides that contested case hearings arising under the provisions of Title 61 must be heard by an Administrative Law Judge with the Division.
• 23 S.C. Code Ann. Regs. 7-9 (B) (1976) prohibits a permittee from permitting or knowingly allowing a person under twenty-one years of age to purchase, possess or consume beer or wine in or on the licensed premises. Such an act is a violation against the permit and constitutes grounds for the suspension or revocation of the beer and wine permit.
• 23 S.C. Code Ann. Regs. 7-9 (A) (1976) prohibits a licensee from permitting or knowingly allowing a person under twenty-one (21) years of age to purchase or possess or consume alcoholic beverages in or upon a licensed establishment for the sale and consumption of alcoholic beverages in sealed containers of two ounces or less. Such an act is a violation against the license and constitutes grounds for its suspension or revocation.
• A permit is subject to revocation or suspension if the holder or an employee on the permitted premises knowingly sells beer or wine to a person under the age of twenty-one years. S.C. Code Ann. § 61-4-580(1) (Supp. 2000).
• 23 S.C. Code Ann. Regs. 7-17 (A) (1976) states that it is the "intent of § 61-5-20 (3) that a [sale and consumption] license shall not be granted to or held by an organization which is, or has been, organized and operated primarily to obtain or hold license to sell alcoholic beverages." "The bona fide non-profit organization must have a definite fixed method of electing persons on an individual basis to membership in the organization; such method . . . must bear some reasonable relation to the object and purpose of the organization. 23 S.C. Code Ann. Regs. 7-17 (B) (1976).
• 23 S.C. Code Ann. Regs. 7-17 (J) (1976) provides that "[o]nly bona fide members and bona fide guests of members of [private club] may consume alcoholic beverages sold in [minibottles] upon the licensed premises."
• For a violation of any provision contained in Chapter 4 (beer, ale, porter and wine) of Title 61 or for a violation of any regulation pertaining to beer or wine, S.C. Code Ann. § 61-4-250 (Supp. 2000) authorizes discretion in the trier of fact to impose a monetary penalty on the holder of a beer or wine permit in lieu of suspension or revocation. The penalty for a violation of a retail beer and wine licensee is subject to a penalty of not less than $25.00 nor more than $1,000.00. Discretion is give to suspend payment of a fine or a monetary penalty imposed under this section.
• All regulations promulgated by the Commission (now Department), effective on the date of the Government Restructuring Act of 1993, remain in force until modified or rescinded by the Department or SLED. 1993 S.C. Acts 181, § 1604.
• Permits and licenses issued by the State of South Carolina for the sale of liquor, beer, and wine are not rights or property, but are privileges granted in the exercise of the police power of this state to be used and enjoyed only so long as the restrictions and conditions governing them are complied with. The Administrative Law Judge Division, 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 Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943).
• A party manifests consent and knowledge to allowing a person under twenty-one years of age to purchase beer if, from the appearance of the person or otherwise, the party had sufficient information that would lead a prudent man to believe the person was under twenty-one, especially where simple inquiry would have confirmed such fact. Feldman, supra; S.C. Atty. Gen. Op. 3395 (1972); see 58 Am.Jur.2d Notice § 14 (1989). A person has no right to shut his eyes to avoid information clearly before him. 58 Am.Jur.2d Notice § 13 (1989).
• A licensee may be held liable for violations of liquor statutes and regulations committed by his agent while pursuing the ordinary business entrusted to him. The licensee is liable even though the violations are committed in his absence and without his knowledge, consent, or authority. See 48 C.J.S. Intoxicating Liquors § 276 (1981).
• If an agent is doing some act in furtherance of the principal's business, he will be regarded as acting within the scope of his authority. On the other hand, a principal generally is not liable when an agent is acting for his own independent purposes, wholly disconnected from furtherance of his employer's business; such conduct falls outside the scope of his employment. Crittenden v. Thompson-Walker Co., 288 S.C. 112, 341 S.E.2d 385 (Ct. App. 1986).
• The record is clear that the UCI purchased a beer from Ms. Meraz on the evening of October 20, 2000 at the location. Such constitutes a violation of Regs. 7-9 (B) against the beer and wine permit since the purchase was "allowed" by the club. It has been held that a statute may validly impose liability upon the license holder even when the license holder has no knowledge that prohibited activities are occurring on the license premises. Mazza v. Cavicchia, 105 A.2d 5454 (N. J. 1954).

However, the testimony and the record is also clear and uncontroverted that Ms. Meraz was not acting as an employee or agent of the club when she sold the beer to the UCI; she had no authority to do such. Although Ms. Meraz was charged with violating S.C. Code Ann. § 61-4-90 (Supp. 2000) for transferring a beer to a person under the age of twenty years for the purpose of consumption and later paid a fine of $125.00 for such violation in the local magistrate's court, the court finds that such admission of guilt for the transfer is not imputed to the club as a knowing sale by the holder of the permit or an employee or agent thereof since Ms. Meraz was not acting within the authority of the club when she transferred the beer. The court does not find that she was an employee or a bartender and thus her own independent action is not imputed to the ownership of the club. Thus, the court finds no violation of S.C. Code Ann. § 61-5-581 (1) (Supp. 2000).

• The record and the testimony is uncontroverted that on the evening of October 20, 2000, Antonio Orozco was allowed to have possession of and to consume a portion of a mixed alcoholic drink inside the club. Accordingly, such act constitutes a violation against the sales and consumption [minibottle] license of the club pursuant to 23 S.C. Code Ann. Regs. 7-9 (A) (1976).
• On the evening of March 10, 2001, SLED agent Asbill went to the club, signed in the membership register, went inside and purchased a mixed alcoholic beverage. He then sat down and drank a small portion of the drink. He was not a member of the club nor was he a guest of a member. Based on the testimony and the facts, it is clear and the evidence is uncontroverted that such action constituted a violation against the sales and consumption [minibottle] license issued to the club by the Department.
• It is a generally recognized principle of administrative law that the fact finder has the authority to impose an administrative penalty, as established by the legislature, after the parties have had an opportunity to have a hearing and be heard on the issues. Walker v. S.C. ABC Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991); see also City of Louisville v. Milligan, 798 S.W.2d 454 (Ky. 1990); Matter of Henry Youth Hockey Ass'n, 511 N.W.2d 452 (Minn. Ct. App. 1994); Shadow Lake of Noel, Inc. v. Supervisor of Liquor Control, 893 S.W.2d 835 (Mo. Ct. App. 1995); Ohio Real Estate Comm'n v. Aqua Sun Inv., 655 N.E.2d 266 (Ohio 1995); State Police v. Cantina Gloria's, 639 A.2d 14 (Pa. 1994); Vermont Agency of Natural Resources v. Duranleau, 617 A.2d 143 (Vt. 1992).
• Based upon the evidence presented and after considering the credibility of the witnesses, the Respondent's policies regarding the adherence to ABC statutes, and the Respondent's efforts to comply with the laws regulating the sale of beer and wine, I conclude that a penalty of $400.00 for allowing the purchase of a beer by the UCI is appropriate. I further admonish the management at the club to be more careful in defining the responsibilities of its employees and friends.

As to the violation by the club of the statutes and regulations applicable to liquor licenses in this state, this court finds that three separate violations have now occurred (August 7, 2000, October 20, 2000 and March 10, 2001). These separate actions indicate a lack of control by management at the club and are indicative of its failure to abide by the laws and rules of this state. A license to sell liquor is not a right but a privilege. The club has abused this privilege. Based upon S.C. Code Ann. § 61-6-2600 (3) (Supp. 2000), the court having found that two offenses having occurred within three years of the first offense, a suspension of the sales and consumption [minibottle] license for one hundred eighty (180) days is appropriate and necessary under the circumstances. Agents of SLED are authorized to proceed to the club location and take possession of the sales and consumption license. The court finds that no fine is required against the sales and consumption license resulting from these two violations since the license is being suspended for the full amount allowed by statute.

Based upon the foregoing Findings of Fact and Conclusions of Law,

IT IS HEREBY ORDERED that the Respondent, Latin American Club is in violation of 23 S.C. Code Ann. Regs 7-9 (A) (1976) and 23 S.C. Code Ann. Regs. 7-9(B) (1976) on October 20, 2000 and is in violation of 23 S.C. Code Ann. Regs. 7-17 (1976) on March 10, 2001, as outlined in the findings of fact contained in this order.

IT IS FURTHER ORDERED that the Latin American Club is fined an amount of $400.00 for the violation of allowing a UCI under the age of 21 years to purchase a beer on October 20, 2000.

IT IS FURTHER ORDERED that the sales and consumption license of the Latin American club is suspended for a period of one hundred (180) days, the suspension to begin on November 1, 2001.

AND IT IS SO ORDERED.

__________________________________

MARVIN F. KITTRELL

Chief Administrative Law Judge

October 22, 2001

Columbia, South Carolina