South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
Mary Hughes, d/b/a Diamond's vs. SCDOR, et al

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
Mary Hughes, d/b/a Diamond's

Respondents:
South Carolina Department of Revenue, Tabernacle Baptist Church and Welcome Avenue Church of God
 
DOCKET NUMBER:
94-ALJ-17-0257-CC

APPEARANCES:
For the Petitioner: Suzanne E. Coe, Esquire

For the Respondent/South Carolina Department of Revenue and

Taxation: Nicholas P. Sipe, Esquire (unrepresented at hearing)

For the Respondent/Tabernacle Baptist Church: Orin Briggs, Esquire and Rex Carter, Esquire

For the Respondent/Washington Avenue Church of God: Pro Se
 

ORDERS:

ORDER AND DECISION

STATEMENT OF THE CASE


This matter is before the Administrative Law Judge Division pursuant to S.C. Code Ann.

§ 1-23-310 et. seq. (1986 and Supp. 1993) for a hearing on the application of Mary Hughes ("applicant") for a permit to sell beer and wine on-premises at an establishment located at 1707 Easley Bridge Road, Greenville, South Carolina, called Diamond's ("location" or "Diamond's").

A hearing was held on November 30, 1994, at the Greenville County Courthouse, Greenville, South Carolina. Notice of the time, date, place and nature of the hearing was given to the parties and protestants. The permit application was protested by Tabernacle Baptist Church, Welcome Baptist Church, Washington Avenue Church of God, Washington Avenue Baptist Church, all members of the Greenville County Council and all members of the Greenville County Legislative Delegation as to the suitability of the location and nature of the proposed business activity. Tabernacle Baptist Church and Washington Avenue Church of God petitioned to intervene and were orally added as parties in interest at the hearing. The Respondent, The South Carolina Department of Revenue and Taxation ("Department"), has investigated the application and has made no recommendation.

After hearing all witnesses presented by the parties/protestants, examining the evidence and exhibits submitted, and personally viewing the sought location, I find that the proposed location is unsuitable for a permit for on-premise consumption of beer and wine and deny the application request.





STIPULATIONS

Applicant and Tabernacle Baptist Church stipulated to the Presiding Judge examining the premises either by himself or in the presence of both counsel. Additionally, the parties stipulated to signed petitions, both for and against the permit issuance. Most of the documents contained in the Department's file were stipulated to, also.



EVIDENCE OF THE CASE

Applicant presented testimony of several persons who either reside or have businesses near the proposed location. Nolan Gilbert testified he recently purchased the residence closest to the proposed location and has no objection to Diamond's obtaining an alcohol permit. He testified he had no problems with patrons of Diamond's and management appeared to run it in an orderly manner. Jimmy Mantekas, owner of The Clock restaurant and the premises in which Diamond's is located, testified he saw no reason Diamond's should not have a permit. The Clock restaurant is located next to Diamond's, separated by a street. Mr. Mantekas testified the area was primarily commercial.

Applicant testified she is fifty-two (52) years old, has no criminal record, grew up in Greenville County, has extended family there, worked at Fluor Daniel for eleven (11) years and has assisted her husband in managing a construction company for the last ten (10) years. She testified she spends a great deal of time at Diamond's and has taken steps to insure the club is safe for patrons and residents in the community. She testified that prior to opening Diamond's, the location was deserted with an unlighted parking lot and vagrants apparently lived at the rear, as evidenced by clothes, beer and wine bottles and other discarded items found there. Ms. Hughes testified she and her husband remodeled the club, set up outside lighting for safety reasons and significantly improved the premises.

Applicant also presented testimony of Lee Stanley Smith, who testified he assists the club with its bookkeeping, business strategies and marketing. Mr. Smith testified that he is present at the establishment on a regular basis and assisted applicant in setting up the business. He testified the proposed location is bounded by a Laundromat and ceramics store on one side, The Clock restaurant on the other, and is faced across the street with an Amoco station where beer and wine is sold. Poor Richard's, Texaco and Ambers are other businesses located in the immediate area (on the same street within immediate distance) and each establishment sells beer and wine. A pawn shop is located across the street. The road in front of Diamond's is heavily traveled and the area is commercial in nature. Mr Smith testified to the massive clean-up efforts which applicant made to ensure the proposed location is safe for its patrons and for the residents of the community. He also testified as to the extensive security staff Diamond's maintains, the lack of residences close to Diamond's and referred to an exhibit prepared by applicant which depicts the area, nearby establishments, location of residences and churches. He placed the nearest church at approximately 550 feet "as the crow flies." The Welcome Baptist Church, which opened after Diamond's, is located in a strip mall next door to Poor Richard's, a location which sells alcohol. Mr. Smith testified that prior to Diamond's opening, its building was dilapidated.

William McCue, an employee of Diamond's since its opening, testified that its hours of operation are from 6:00 p.m. until 2:00 a.m. Monday through Friday; that it opens on Saturday at 6:00 p.m. and closes Sunday morning at 3:00 a.m. He testified that the applicant is present at the club a lot and he discusses management concerns with her. He said the club has thirty-five (35) dancers who dance topless. Further, he testified that since no alcoholic permit or license has been issued to Diamond's by the Department, it is not limited by the Department's regulations and, if no permit is granted, the dancers at Diamond's may dance totally nude. He stated that customers go to the parking lot and chit-chat, and the parking lot is policed by its seven (7) security guards. He further stated that Diamond's has free draft beer from 6:00 p.m. to 7:00 p.m. and after 7:00 p.m. customers bring their beer and wine inside, the club furnishing free buckets of ice.

Applicant also presented the testimony of Casey and Crystal Byers. Mr. Byers works security for Diamond's and testified that applicant called in law enforcement officials to train the staff and all new personnel are shown a film of this training seminar. He also stated that all employees working security have prior experience in either law enforcement, military law enforcement or security employment. He also testified that security personnel prevent loitering and safeguard the exterior by walking around the buildings. He said the entire area around Diamond's is patrolled and kept clean from vagrants by its staff. He also testified that since Diamond's has been open, allowing patrons to bring inside and consume alcoholic beverages, no events have occurred requiring police assistance or intervention. His wife, Crystal, who is twenty-one (21) years of age and a dancer at Diamond's, testified to the atmosphere inside being "classy," the absence of any altercations or incidents at Diamond's, rules applicable to employees and patrons ("no touching, only talking"), and the orderly atmosphere in which Diamond's is operated. She had previously entertained at the Gold Nugget Club in Spartanburg, South Carolina.

Eddie Michael Cannon, owner of a video poker company, testified he invested $75,000 in Diamond's, primarily through the placement of video poker machines therein, the profits from which he and applicant share equally. He hopes to purchase stock in Diamond's if it is incorporated. He admitted on cross-examination of having served a one year probationary sentence for housebreaking and larceny and to writing fraudulent checks. He stated he grew up in the area where Diamond's is located but that the general area is in a decline now. He said that the situation three blocks away is "scary," that one to two miles away there are crack houses and bookie joints, and that he wouldn't drive through that area at night. He does not live in the area where Diamond's is located.

Tabernacle Baptist Church presented testimony of Jim Murphee, a resident all his life in the community , who owns and operates an automobile garage behind Diamond's. Mr. Murphee is a member of the Tabernacle Baptist Church and testified he objects to any person consuming alcohol at any time. He stated that littering of beer cans and liquor bottles as well as trespassing by patrons of Diamond's was occurring on his premises and generally blamed the Diamond's for these concerns. He testified he had never related to the applicant or any of her agents his concerns. Mr. Murphee testified he did not believe the site was "suitable" for alcohol sales and was concerned about the safety of children under twelve years of age walking through Diamond's parking lot to The Clock restaurant.

Tabernacle Baptist Church then presented testimony from James H. Sorenson, a machinist from Easley who, at the request of an attorney for Tabernacle Baptist Church, entered Diamond's the Friday and Saturday evenings prior to the hearing. He was not paid any remuneration for this act. Mr. Sorenson testified that Diamond's appeared well-run and orderly, he did not witness any disturbances while there and the events at Diamond's seemed to operate on a routine. Further, he stated that the dancers entertained topless, usually one girl on stage at a time for a two song duration, while other dancers would, for a ten dollar ($10.00) fee, dance on a table and/or in a patrons lap, brushing her breasts against the patron's face. He also said there was a "sofa dance" where a dancer, for twenty dollars ($20.00), would lead the patron to a sofa, undress to a G-string, dance for and on this person.

Tabernacle Baptist Church presented two of its ministers as witnesses, Reverend Steve C. Crout and Dr. Douglas A. Cannaday. Rev. Crout testified he and Tabernacle Baptist Church are opposed to topless dancing and alcohol consumption of any kind. Dr. Cannaday testified that Tabernacle Baptist Church has over 3500 members with 400 students in its elementary and secondary schools and 100 in its Bible College, all classes meeting Monday through Friday. He stated Tabernacle Baptist Church also operates a day care facility that closes at 6:00 p.m. each day. He testified that the front door of Tabernacle Baptist Church is 1/2 mile from Diamond's. Tabernacle Baptist Church has concerns about the effect alcohol consumption will have on patrons who go to Diamond's and the danger it poses to children and elderly people who live in the neighborhood while walking, at their homes or nearby churches or while driving. He stated he is personally opposed to alcohol.

Reverend Grady Barrett, pastor of Washington Avenue Church of God also testified, protesting the issuance of the permit, incorporating the concerns of Dr. Cannaday as his concerns. Also, he testified about general problems his church had with crime in the community. His primary concern is the after effect of drinking.

Greenville Deputy Wort Kotter testified that he is assigned to the area where Diamond's is located, known generally as the west side of Greenville, and is familiar with the growing crime problem in that area of the county. He also testified that the west side and, in particular that part where Diamond's is located, are inadequately staffed by law enforcement. This patrol area contains thirty-four (34) square miles and, while it contains only 15% of the county's total population, it accounts for more than 25% of all reported crime and 37% of all DUI's registered in the county. Deputy Kotter also testified that the operation of an adult entertainment club almost always brought with it additional law enforcement problems, which the under-staffed sheriff's office could not be expected to control or manage.



FINDINGS OF FACT

By a preponderance of the evidence, I make the following findings:

1. This Division has personal and subject matter jurisdiction.

2. The applicant is seeking an on-premise beer and wine permit for Diamond's, an adult entertainment club, located at 1707 Easley Bridge Road, Greenville, Greenville County, South Carolina.

3. The applicant is over twenty-one (21) years of age and has not had an application revoked within the two (2) years preceding the date of the filing of this application.

4. Notice of the application has appeared at least once a week for three (3) consecutive weeks in The Greenville News, a newspaper of general circulation in the local area where the applicant proposes to engage in business.

5. Notice of the application has been given by displaying a sign for a minimum of fifteen (15) days at the site of the proposed location.

6. The applicant has been a legal resident of South Carolina for over thirty days and maintained her principal place of abode in South Carolina for over thirty days.

7. The applicant is of good moral character, has no criminal record and has resided in Greenville County for the majority of her life.

8. The applicant intends to own, operate and manage Diamond's. For the past few months, Diamond's has been operational by allowing patrons to bring their own beer or wine with the club supplying ice, containers and soft drinks. It proposes to operate between the hours of 6:00 p.m. to 2:00 a.m. Monday through Friday, and 11:00 a.m. to 12:00 a.m. on Saturdays.

9. Diamond's is located in a rather large building which was formerly used as a grocery store of some sort and subsequently as a bingo parlor. It is surrounded by commercial establishments on the highway but there is a residential community with churches and a playground in the area behind it. One church is approximately five hundred feet (500') away. There are several other bars/clubs nearby.

10. The proposed location is not within any municipal boundaries.

11. The area in which Diamond's is located is generally a high-crime area producing a higher percentage of crime than the proportion of the citizens located in the area. The Greenville County Sheriff's Department is inadequately staffed to handle the crime at its present level.

12. The applicant is associated with one Mike Cannon. While he is not technically a co-applicant or partner with the applicant, it is clear from his testimony that he has a financial interest in Diamond's, he helped supply the financing to begin the applicant's business and anticipates having a financial interest in Diamond's.



CONCLUSIONS OF LAW

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

1. S.C. Code Ann. § 1-23-600 (Supp. 1993) grants jurisdiction to the Administrative Law Judge Division to hear contested cases under the Administrative Procedures Act.

2. S.C. Code Ann. § 61-1-55 (Supp. 1993) grants to the Administrative Law Judge Division the powers, duties and responsibilities as a hearing officer in protested and contested matters governing alcoholic beverages, beer and wine.

3. S.C. Code Ann. Section 61-9-320 (Supp. 1993) sets forth the requirements for the issuance of a beer and wine permit which provides in part:



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.

2. The retail applicant is a legal resident of the United States and has been a legal resident of this Sate for at least thirty days before the date of application and has maintained his principal place of abode in South Carolina for at least thirty days before the date of application.

3. The wholesale applicant is a legal resident of the United States and has been a legal resident of the United States and has been a legal resident of this State for at least thirty days before the date of application or has been licensed previously under the laws of this State.

4. The applicant, within two years before the date of application, has not had revoked a beer or a wine permit issued to him.

5. The applicant is twenty-one years of age or older.

6. The location of the proposed place of business of the applicant is in the opinion of the department a proper one. The department may consider, among other factors, as indications of unsuitable location the proximity to residences, schools, playgrounds and churches.

7. Notice of application has appeared at least once a week for three consecutive weeks in a newspaper most likely to give notice to interested citizens of the county, city, or community in which the applicant proposes to engage in business.

8. Notice has been given by displaying the required sign for fifteen days at the site of the proposed business.

4. S.C. Code Ann. § 61-3-440 (Supp. 1993) prohibits the issuance of a liquor license for on-premise consumption to an applicant if the place of business (location), if located outside a municipality, is within five-hundred feet (500') of a church, school or playground; however, locations for which beer and wine permits are requested are not subject to these restrictions.

5. Both sides presented signed petitions. Little weight was given to them in that the individuals whose signatures were thereon were unavailable to offer testimony to their reasons for their protests or support for the permit and were not available for cross examination. The decision made today is based solely on the testimony provided to the Court, the documents in the Department file which were stipulated to, the evidence presented (excluding petitions) and the actual physical viewing of the site.

6. Although "proper location" is not statutorily defined, broad discretion is vested in the Division in determining the fitness or suitability of a particular location. Fast Stops, Inc. v. Ingram, 276 S.C. 593, 281 S.E.2d 181 (1981). As trier of fact, an administrative law judge is authorized to determine the fitness or suitability of the proposed business location of an applicant for a permit to sell beer and wine using broad but not unbridled discretion. Ronald F. Byers v. S.C. ABC Commission, 316 S.E. 2d 705 (S.C. App. 1984). The determination of suitability of a location is not necessarily a function solely of geography. 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. 335 (1985).

7. The South Carolina Appellate Courts have given substantial guidance as to when it is appropriate to deny a permit based on the factors considered in the present case. See Moore v. S.C. Alcoholic Beverage Control Commission, ______ S.C. ____, 417 S.E. 2d 555 (1992)(School and church located within one-half mile of proposed location); Byers v. S.C. Alcoholic Beverage Control Commission, 305 S.C. 243, 407 S.E. 2d 653 (1991) (Both residences and a church were located within one mile of the applicant's store); Roche v. S.C. Alcoholic Beverage Control Commission, 263 S.C. 451, 211 S.E. 2d 243 (1975) (Noting that the neighborhood was "predominately residential in nature", that a church was approximately "100 feet from applicant's store," and "law enforcement officers in the area had constant problems with public intoxication."); Kearney v. Allen, 287 S.C. 324, 338 S.E. 2d 335 (1985) (Where the court considered the "residential character of a surrounding area" and that the site was within .2 miles of a local high school."); Palmer v. S.C. Alcoholic Beverage Control Commission, 282 S.C. 246, 317 S.E.2d 476 (Ct. App. 1984) (Noting that "this location is situated in a rural residential area, in close proximity to other residences" and that "there have been law enforcement problems in the area."); and Fast Stops, Inc. v. Ingram, 276 S.C. 593, 281 S.E. 2d 181 (1981) (Noting that the location was "directly across from an elementary school and playground area" and that granting the permit "would aggravate the drinking - related problems in the public area.").

8. Although the Supreme Court noted in Taylor v. Lewis, 198 S.E.2d 801 (SC 1973), that opinions of citizens alone would not justify a permit denial, the instant facts can easily be distinguished because, in addition to citizen concerns, there is a proximity to schools, churches, and playgrounds, and also documented concerns about inadequate law enforcement man-power by the Sheriff's Office.

9. Permits and licenses issued by the State for sale of liquor, beer, and wine are not rights or property, but are rather privileges granted in the exercise of the police power of the State to be used and enjoyed only so long as the restrictions and conditions governing them are complied with. As the tribunal authorized to grant the issuance of a permit is also authorized, for cause, to revoke it, that tribunal is likewise authorized to place restrictions or conditions on the permit or license. See Feldman v. South Carolina Tax Commission, 203 S.C. 49, 26 S.E. 2d 22 (1943).

10. It is concluded that the location is not a proper one for the issuance of an on-premises beer and wine permit for a variety of reasons, including its close proximity to schools, churches, playgrounds and a residential area together with legitimate concerns by the Greenville County Sheriff's Office about inadequate manpower to police the area where the business is located and increased stress in terms of nearby residents' and pedestrians' safety



ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law, It is hereby:

ORDERED that the application of Mary Hughes for an on-premises beer and wine permit at 1707 Easley Bridge Road, Greenville, Greenville County, South Carolina be denied.

AND IT IS SO ORDERED.



________________________________________

Marvin F. Kittrell

Chief Administrative Law Judge

Columbia, South Carolina

March 1, 1995


Brown Bldg.

 

 

 

 

 

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