SC Administrative Law Court Decisions

This matter comes before the Administrative Law Judge Division (Division) pursuant to S.C. Code Ann. § 61-2-90 (Supp. 2000), S.C. Code Ann. § 61-6-1825 (Supp. 2000) and S.C. Code Ann. §§ 1-23-310 et seq. (1986 and Supp. 2000) for a contested case hearing. The Petitioner, Maskarades, Inc., d/b/a Good Times Restaurant and Pub (Good Times), seeks an on-premise beer and wine permit and a restaurant sale and consumption license. The South Carolina Department of Revenue (Department) set forth in the Agency Transmittal to the Division that it would have issued both the license and permit to the Petitioner but for the protests it received from concerned citizens who raised the issue of suitability of location. Prior to the hearing into this matter, Protestants Kendall Dickert, Deborah Jolly and Beverly Porter filed Motions to Intervene as parties. These motions were granted at the hearing and the caption was amended to reflect their addition as Respondents. An expedited hearing was held on November 1, 2001, at the offices of the Division in Columbia, South Carolina.

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 Petitioner, the Respondents, and the remaining Protestant, I make the following Findings of Fact by a preponderance of evidence:

1. Notice of the time, date, place and subject matter of the hearing was given to the Petitioner, the Protestant, and the Respondents.

2. The Petitioner seeks an on-premise beer and wine permit and a restaurant sale and consumption license as a corporation doing business at 1001 Paris Avenue, Port Royal, South Carolina. This location has been previously and consistently permitted and licensed since at least 1996 under several different businesses not involving the Petitioner. None of the local residents appeared to protest the previous businesses receiving a permit or license at the location. Most recently, a business named "Good Times" has held a permit and license at the location. The Petitioner purchased that business and continued to operate under the name "Good Times" for approximately five months. Because the permit and license at the location did not lapse, the Petitioner was granted a temporary permit and license to operate pending the hearing into this matter.

3. The qualifications set forth in S.C. Code Ann. §§ 61-4-520 and 61-6-1820 (Supp. 2000) concerning the residency and age of the owner of the location, Guy Richardson, are properly established. Furthermore, Mr. Richardson has not had a permit or license revoked within the last two years and notice of the application was lawfully posted both at the location and in a newspaper of general circulation. The proposed location is also not unreasonably close to any school or playground.

4. Mr. Richardson has no criminal record and is of sufficient moral character to receive a beer and wine permit and sale and consumption license. Although evidence was presented that challenged the reputation of the location, as previously operated, for peace and good order in the community, the Petitioner did not have any involvement in the operation or management of that business. Additionally, Mr. Richardson also currently holds a beer and wine permit and a restaurant sale and consumption license for another location in Beaufort, South Carolina.

5. Good Times is situated on Paris Avenue in an area locally zoned as "Mixed Use 1," a designation that is both residential and commercial in the town of Port Royal. In addition to Good Times, other businesses are located on Paris Avenue as well as public parking. The Respondents/Protestant reside across the street from, directly behind and near Good Times. The hours of operation of Good Times are currently as follows:

a. 4:00 p.m. to 2:00 a.m., Monday through Friday;

b. 4:00 p.m. to 12:00 a.m. on Saturday; and

c. Closed on Sunday.

6. The Respondents/Protestant contend that the Petitioner's location is not suitable for the following reasons:

a. The music emanating from the location as previously and currently operated along with the noise generated by patrons and their cars outside the location when it closes at night;

b. The loitering of patrons outside the location when it closes at night;

c. Littering and destruction of public property around the location; and

d. The Petitioner is not primarily and substantially engaged in the service of food so as to qualify as a restaurant.

The previous business at the location played excessively loud music and attracted patrons whose behavior was disruptive to the community. Therefore, if this business is operated as the previous licensee managed the location, it would create an overall adverse impact on the community. However, the Petitioner is essentially operating a new business at Good Times. Additionally, though the Protestant and Respondents cite numerous problems with the previous location, no action has ever been brought against a previous permit or license holder at this location asserting that the location was a nuisance to law enforcement.

In order to deny this permit, direct evidence of an adverse impact on the community is necessary, particularly in light of the fact that the site of the proposed location has been previously permitted without any actions having been brought against the permittee. Though the location is in an area zoned for commercial businesses, the area surrounding the location has become more residential. After the Petitioner purchased this business, he made substantial improvements to the building and has additional plans for future improvements, including building an aesthetically pleasing fence around the property line of the location. However, the Petitioner's operation of the business at the location has resulted in some problems with excessive noise emanating from his sound system. Furthermore, the Petitioner's patrons have played loud music and urinated outside of the location. Those problems are not conducive to the nature of the community.

Nevertheless, the evidence did not establish that the granting of this permit for the operation of the location as the Petitioner proposes will augment the criminal activity in this area or have an overall adverse impact on the community if the business in operated as a local restaurant and bar rather than a night club. In fact, the area was originally developed with the concept that the proposed location would operate as a "pub" for the residential community that was to develop adjacent to the location. Furthermore, it appears that many of the previous problems at the location were a result of the management and the patrons that establishment attracted. Additionally, the current problems consisted primarily of complaints from the Respondents and Protestant regarding noise late at night. Although local law enforcement responded to these calls, most incidents were resolved by the time law enforcement arrived. There was also no evidence of any violations of the Petitioner's temporary license and permit. I find that the current problems can be rectified by insuring that any business at the location is in keeping with the character of the community.

The arguments of the Respondents and the Protestant appear to be based on a sincere concern for their community. However, if the Petitioner complies with the restrictions set forth below, the evidence did not establish that this business would change the integrity of the neighborhood or create an overall adverse impact on the community. If the Petitioner's business develops the problems of the past, the proposed location would no longer be suitable and the Department could properly bring an action to revoke the Petitioner's permit. Therefore, since it appears that this new business, if operated as a local restaurant and bar, would not change the integrity of the neighborhood or create an overall adverse impact on the community, the proposed location is suitable for an on-premise beer and wine permit and a sale and consumption license with the restrictions set forth below. To the contrary, the proposed location will not be suitable if:

a. The Petitioner does not comply with the restrictions below; and

b. The problems referred to above that existed at the previous establishment occur at the Petitioner's location after he receives a permit and/or license.

7. The Respondents also questioned whether the Petitioner is primarily and substantially engaged in the service of food. The testimony presented at the hearing established that Good Times does not serve a substantial amount of food to its patrons and that the location has a "nightclub" atmosphere. Although the location may have adequate seating for 40 people, Good Times has only a few items available each day and on a weekly basis food is served only about three times a week. Furthermore, the Petitioner is not making a meaningful effort to advertise its food services for the location. For these reasons, I find that though, as stated above, that Good Times is suitable to receive a restaurant sale and consumption license in the future, it is not currently, primarily and substantially engaged in the service of food. Therefore, I find that the proposed location does not currently meet the criteria for a restaurant sale and consumption license. The Petitioner will need to make a showing to the Department that it is engaged primarily and substantially in the preparation and serving of meals in order to receive the license.

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. 2000) grants jurisdiction to the Administrative Law Judge Division to hear contested cases under the Administrative Procedures Act.

2. S.C. Code Ann. § 61-2-260 (Supp. 2000) grants the Division the responsibilities to determine contested matters governing alcoholic beverages, beer and wine.

3. S.C. Code Ann. § 61-4-520 (Supp. 2000) sets forth the requirements for the issuance of an on-premise beer and wine permit.

4. A license for the sale and consumption of alcoholic beverages must not be granted unless the provisions of S.C. Code Ann. § 61-6-1820 (Supp. 2000) are met. That section requires that a mini-bottle license be granted only to a bonafide business engaged in either the business of primarily and substantially preparing and serving meals or furnishing lodging. Furthermore, not only must the principals and applicant be of good moral character but the business must also have a reputation for peace and good order.

5. S.C. Code Ann. § 61-6-20(2) (Supp. 2000) sets forth:

'Bona fide engaged primarily and substantially in the preparation and serving of meals' means a business which has been issued a Class A restaurant license prior to issuance of a license under Article 5 of this chapter, and in addition provides facilities for seating not less than forty persons simultaneously at tables for the service of meals.

Furthermore, 23 S.C. Code Ann. Regs. 7-19(A) (1976) states that in order to meet the requirements of S.C. Code Ann. § 61-6-20(2) (Supp. 2000) the location must:

a. Be equipped with a kitchen that is utilized for the cooking, preparation, and serving of meals;

b. Have readily available to its guests and patrons either "menus" with the listings of the various meals offered for service or a listing of available meals and foods, posted in a conspicuous place readily discernible by the guest or patrons;

c. Prepare for service to customers hot meals at least once each day the business establishment chooses to be open; and

d. If such establishment advertises, a substantial portion of its advertising must be devoted to its food services.

The definition of "meal" is limited by the regulation as not including "[s]andwiches, boiled eggs, sausages and other snacks prepared off the licensed premises but sold thereon . . . ." 23 S.C. Code Ann. Regs. 7-19 (B)(1)(Supp. 2000). Additionally, "primarily" is defined by the regulation as:

[T]he serving of meals by a business establishment constitutes a regular and substantial source of business to the licensed establishment and that meals shall be served upon the demand of guests and patrons during the normal "mealtimes" which occur when the licensed business establishment is open to the public and that an adequate supply of food is present on the licensed premises to meet such demand.

23 S.C. Code Ann. Regs. 7-19(B)(3) (1976).

6. S.C. Code Ann. § 61-6-1820 (Supp. 2000) provides that a sale and consumption license shall not be granted unless the proposed location meets the minimum distance requirements from churches, schools, or playgrounds as set forth in S.C. Code Ann. § 61-6-120 (Supp. 2000). This location meets these requirements.

7. Although "proper location" is not statutorily defined, the Administrative Law Judge Division 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 operations 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 the adverse effect the proposed location will have on the community. Palmer v. S.C. ABC Comm'n, 282 S.C. 246, 317 S.E. 2d 476 (Ct. App. 1984). 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. 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).

8. Without 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).

9. Permits and licenses issued by this state for the sale of liquor, beer and wine are not property rights. They are, rather, 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 Judge Division, as the tribunal authorized to grant the issuance of a permit, may likewise place restrictions or conditions on the permit or license. See Feldman v. S.C. Tax Commission, 203 S.C. 49, 26 S.E.2d 22 (1943). Furthermore, 23 S.C. Code Ann. Regs. 7-88 (1976) authorizing the imposition of restrictions on permits, provides:

Any stipulation and/or agreement which is voluntarily entered into by an applicant in writing for a beer and wine permit between the applicant and the South Carolina Alcoholic Beverage Control Commission, if accepted by the Commission, will be incorporated into the basic requirements for the enjoyment and privilege of obtaining and retaining the beer and wine permit and which shall have the same effect as any and all laws and any and all other regulations pertaining to the effective administration of beer and wine permittees.

In the event that evidence is presented to this Commission that any part of the stipulation or agreement is or has been knowingly broken by the permittee will be a violation against the permit and shall constitute sufficient grounds to suspend or revoke said beer and wine permit.

10. The evidence did not establish that the location is any less suitable for the sale of beer, wine and alcohol with the restrictions set forth below than during the prior years of being licensed and permitted. Therefore, the Petitioner meets the statutory requirements for holding a beer and wine permit. However, as the location is currently being operated regarding the preparation and service of food, it does not meet the requirements for holding a restaurant sale and consumption license.

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

ORDERED that the on-premise beer and wine permit application of Maskarades, Inc., d/b/a Good Times Restaurant and Pub, be granted upon the Petitioner signing a written Agreement with the South Carolina Department of Revenue agreeing to the restrictions that are set forth below and the payment of the required fees and costs:

1. The Petitioner shall contract with a bonded security company or an off-duty law enforcement officer, as permissible under the law, to employ a security guard to patrol the inside and the area immediately surrounding the proposed location. The security guard shall prohibit a public disturbance of any kind at the location. The guards shall also monitor the outside of the location to prohibit the consumption of any alcohol or the use of any drugs. Loitering in the parking lot area shall also be prohibited. The guard should be at the location during its peak hours of operation on Thursday, Friday and Saturday nights.

2. The Petitioner shall not allow excessive noise to emanate from Good Times. Any noise that is noticeably audible within any local residence with closed doors and windows after 10:00 p.m. shall be considered excessive. Furthermore, for the purposes of this restriction, any conviction for the violation of the local noise ordinance shall be considered prima facie evidence of a violation of this provision.

3. Within sixty (60) days from the date of this Order, the Petitioner shall erect a privacy fence of at least six feet around the property lines of the location to ensure that patrons are unable to wander onto adjacent properties.

4. The trash dumpster behind the location shall be removed.

5. The hours in which Good Times can sell beer, wine or alcohol shall be as follows:

a. No later than 11:00 p.m., Monday through Wednesday; and

b. No later than 12:00 a.m., Thursday, Friday and Saturday;

IT IS FURTHER ORDERED that the Department of Revenue issue the Petitioner a Restaurant mini bottle license for Maskarades, Inc., d/b/a Good Times Restaurant and Pub, upon the Petitioner signing a written Agreement with the Department agreeing to the restrictions that are set forth above, the payment of the required fees and costs by the Petitioner, and the Petitioner establishing to the Department that Good Times is engaged "primarily and substantially in the preparation and serving of meals" as provided by the law set forth above.

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

AND IT IS SO ORDERED.

_________________________________

Ralph King Anderson, III

Administrative Law Judge

November 8, 2001

Columbia, South Carolina