South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
Ernest E. Haynes, d/b/a The Country Cupboards vs. SCDOR

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
Ernest E. Haynes, d/b/a The Country Cupboards

Respondents:
South Carolina Department of Revenue
 
DOCKET NUMBER:
96-ALJ-17-0138-CC

APPEARANCES:
For the Petitioner: William P. Walker, Jr., Esquire and S. Murray Kinard, Esquire

For the Respondent/ South Carolina Department of Revenue and Taxation: Carol I. McMahan
 

ORDERS:

ORDER AND DECISION

STATEMENT OF THE CASE


This matter comes before the Administrative Law Judge Division (Division) pursuant to S.C. Code Ann. §§61-9-320 (Supp. 1995), S.C. Code Ann. §§1-23-310 et seq. (Rev. 1986 and Supp. 1995), and S.C. Code Regs. 7-96 (1976) for a hearing pursuant to the application of Ernest E. Haynes, d/b/a The Country Cupboards, (Applicant or Petitioner) for an off-premise beer and wine permit (AI 105715) at 2408 Augusta Road, Lexington County, South Carolina (location).

Various members of the community filed protests to the application, contesting the processing, grant and issuance of the permit to Petitioner. Respondent South Carolina Department of Revenue and Taxation (Department) refused to process the application, relying on Regs. 7-96 which states that an application for a retail off-premise beer and wine permit at a location previously found unsuitable will not be processed until the Applicant can affirmatively show that some material change with respect to the location has occurred.

A hearing was held on June 13, 1996, at the Division offices, Columbia, South Carolina. On behalf of the issuance of the permit, Petitioner testified and presented the testimony of David Byrd, a private investigator. Also, Petitioner subpoenaed Matthew Ramsey Lifsey, an engineer with the South Carolina Department of Transportation (DOT) and presented him as a witness. The Department presented the testimony of a State Law Enforcement Division (SLED) agent. Testifying in opposition to the processing of the application and the issuance of the permit were Protestants Kenneth William Lake, Director of the Lexington Applied Technology Center (Vocational School); Allan Whitacre, Principal of Lexington High School; and Lexington County Deputy Sheriff Lisa Rinehart Throckmorton.

Prior to the taking of testimony, the Department moved that the Division limit its consideration to the issue of whether the application should be processed, and not take testimony or consider any evidence as to the suitability of the location. In the interest of judicial economy, with there being no prejudice to any party or to the Protestants, I denied the motion and received testimony on both issues. Having concluded that the location at issue is the same as a location previously found unsuitable, and having determined that no material changes have occurred at the location since the previous denial, only that issue is addressed below.

Having carefully reviewed all the documentary evidence, having given due consideration to the testimony of the witnesses, and having personally viewed the proposed location and the surrounding area, the request that the Department process the application is denied.

ISSUES

(1) Does Petitioner's application seek a beer and wine permit for a "location" that was previously found unsuitable by Order of Administrative Law Judge John D. Geathers on June 6, 1995?

(2) If the location is the same, have there been material changes with respect to the location since the prior decision of unsuitability?

POSITIONS OF THE PARTIES

The Department argues this application cannot be processed because the prior denial by Judge Geather's precludes its processing unless Petitioner can affirmatively demonstrate some material change has occurred since the Order in that case was issued. Petitioner argues that material changes have occurred since the prior Order, that the application should be processed by the Department, and that the off-premise beer and wine permit should be issued.

EVIDENCE

Without objection, those certified copies of documents forwarded to the Division by the Department from its file were made a part of the record. At the hearing, Petitioner placed into the record Exhibits #1A-D, all of which are photographs; Exhibit #2, which is the original sketch by SLED agent Ferrell of the community where the location is proposed; Exhibits #3A-E, photographs showing locations close to public schools which have been issued off premise beer and wine permits by the Department; Exhibit #4, an aerial photograph; Exhibit #5, a photocopy of a video identification system; and Exhibit #6, a photocopy of a letter by Petitioner's counsel to the Department dated February 6, 1996, with an attached amended affidavit.

The Department placed into the record as its Exhibit #1 a letter from Lexington State Bank, dated October 2, 1995, acknowledging receipt of the offer to purchase the property of the proposed location from Petitioner; Exhibit #1A, the offer to purchase by Petitioner dated September 26, 1995, containing certain contingencies; and Exhibit #3, a certified copy of the permit to sell beer and wine issued by the Department on May 12, 1996, to John R. Roof, President of the Wrightway Store located on Highway 378 in Lexington County South Carolina.

Protestant Kenneth William Lake moved for the introduction into evidence, without objection, Exhibits #1-4, photographs depicting the location, the roadway, and the Lexington Applied Technology Center. The pictures were taken from the approximate position of the proposed location. The Division, at the request of the Department, takes judicial notice of the Order of the Honorable John D. Geathers, dated June 6, 1995, and the location sketch/map, prepared by SLED agent Ferrell, dated May 10, 1995, both of which are contained in Division file number 95-ALJ-17-0209-CC.

FINDINGS OF FACT

After consideration and review of all the evidence and testimony and having judged the credibility of the witnesses, by a preponderance of the evidence, I make the following findings:

1. This Division has personal and subject matter jurisdiction.

2. Notice of the date, time, place and nature of the hearing was timely given to all parties, including the Protestants.

3. Applicant/Ernest E. Haynes, d/b/a The Country Cupboards, filed an application with the Department on October 30, 1995 for an off-premise beer and wine permit for a convenience store located at 2408 Augusta Road, Lexington County, South Carolina. The applicant and his wife, Loretta K. Haynes, each own fifty percent of the stock of Haynes Food Stores, Inc., the corporate owner of The Country Cupboards. Applicant operates four convenience stores in the greater Lexington area and has been issued a permit for the sale of beer and wine at each store for off-premise consumption.

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

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

6. The applicant is 51 years of age.

7. The applicant has been a legal resident of South Carolina for over thirty days and has maintained his principal place of abode in South Carolina for over thirty days prior to the filing of the application. Applicant's principal place of abode is in South Carolina. Further, he holds a valid South Carolina drivers license.

8. Both the applicant and his wife possess good moral character.

9. The applicant has not had a beer or wine permit revoked within two years of the date of this application. Further, no evidence was shown to the Division that the applicant has ever had a beer or wine permit revoked.

10. On March 1, 1995, Gary D. Renaud, as President of Renaud's Country Mart, Inc. (Renaud), applied for an off-premise beer and wine permit for a convenience store which he proposed to open at 2604 Augusta Highway, Lexington County, South Carolina.

11. Sketches of the general vicinity and the proposed location for both the convenience store planned by Renaud and the convenience store planned by the applicant, were prepared by SLED agent Heyward Ferrell, dated April 10, 1995 and November 13, 1995, respectively. Each sketch shows the proposed locations by each applicant situated in the same place on that vacant parcel of land located at the southwest corner of the intersection of Augusta Road (Highway 378) and Charter Oak Road. The locations of all nearby residences, schools, churches, commercial properties and playgrounds (ball fields) are identical on each sketch.

12. Augusta Highway consists of four traffic lanes. There is a traffic signal at the intersection of Augusta Road and Charter Oak Road. Traveling east on Charter Oak Road from its intersection with Augusta Road, the name of the road changes to Pisgah Church Road and, approximately five miles further along Pisgah Church Road to the east is Interstate 20. The intersection at the proposed location is approximately three miles from the city limits of Lexington.

13. Renaud's application was protested by Allan Whitacre, Kenneth W. Lake, and Joe H. Bedenbaugh, the Assistant Superintendent of Lexington County School District One. A contested case hearing on the merits was conducted by The Honorable John D. Geathers on May 25, 1995. The issues considered by Judge Geathers were the eligibility of Mr. Renaud, the suitability of the proposed location and the nature of the proposed business activity.

14. In his Order dated June 6, 1995, Judge Geathers denied the application request by Renaud, stating that "the proposed location is improper and unsuitable for the issuance of a beer and wine permit because of its proximity to the schools." See Renaud v. S.C. Dep't of Revenue and Taxation, 95-ALJ-17-0209-CC.

15. On May 12, 1995, just prior to the Renaud hearing, the Department issued an off- premise beer and wine permit to John R. Roof, President of Wrightway Stores, Inc., for an Exxon convenience store (Wright Way). This store is located approximately one mile from the two schools and the proposed location.

16. Subsequent to the issuance of the Renaud Order, the DOT announced that a highway bypass around the city of Lexington would be constructed. At the present time, DOT is considering constructing a terminus of the bypass approximately one-half mile from the intersection of the Augusta Highway and Charter Oak Road. The aerial photograph placed into evidence shows the planned location of the bypass. Increased traffic flow in this area of Lexington County mandates the construction of a bypass to alleviate congestion. However, any construction of a bypass is approximately three years away. DOT must still complete design and engineering studies and acquire the necessary land. The construction of the bypass will ultimately lead to increased traffic at the proposed location.

DISCUSSION

I. The Proposed Location is the Same Location Previously Determined to be Unsuitable.

Applicant has requested a beer and wine permit for a convenience store to be located at 2408 Augusta Road, Lexington, South Carolina. Renaud requested a permit for a convenience store to be located at 2406 Augusta Road. After examining the sketches of Agent Ferrell, the Department's Exhibits #1 and #2, it is clear that the permits sought are for the same location. The difference in the address reflects a difference in Applicant's and Renaud's placement of the front door to the premises. Applicant argues that because the property consists of two acres, and because he will place his store on the acre opposite the one Renaud would have built on, the location of his establishment is different from Renaud's. To the contrary, the fact that the tract of land consists of two acres, and that Applicant's store would be located on a different portion of the property, is of no legal consequence. See Moore v. S.C. Dep't of Revenue and Taxation, 96-ALJ-17-0134-CC.

II. No Material Change has Occurred at the Proposed Location Since June 6, 1995.

Regs. 7-96 (1976) provides that an application for a location previously found unsuitable for a permit will not be processed unless and until the applicant can show that some material change with respect to the location has occurred. Because I have determined this location is the same as the one deemed unsuitable in Renaud, Applicant must meet the requirements of the regulation in order for his application to be processed. Although the definition of "material change" as used in the regulation has not been addressed by courts of this state, the Division recently addressed these terms in Judy A. Haigler, d/b/a Club 21 v. S.C. Dep't of Revenue and Taxation, 96-ALJ-17-0100-CC. In his Order of May 20, 1996, Judge Stevens stated that "[a] material change with respect to a location is a change of a meaningful nature to a factor that was relevant to the original decision finding the location unsuitable for a beer and wine permit." S.C. Code Ann. §61-9-320(6) (Supp. 1995); S.C. Code Regs. 7-96 (1976).

By the above definition, no material change has taken place. In Renaud, Judge Geathers based his decision on the fact that the vocational school and the high school are directly across the street from the proposed location. The schools are still located directly across the street from the proposed location.

Applicant has offered two events as evidence that a material change has taken place since June 5, 1995. First, Applicant points out that a bypass will intersect with Augusta Highway approximately one-half mile from the proposed location. Second, Applicant informed the Division that Wright Way has received a beer and wine permit approximately one mile from the proposed location.

Neither of the events introduced by Applicant constitute a material change under the above definition. The planned construction of the bypass does not change the fact that the proposed location is located directly across from the schools. In addition, because the construction of the bypass is still three years away, any affect it will have on the character of the area is too speculative to be contemplated at the present time.

The granting of a beer and wine permit to Wright Way on May 12, 1995 is not a material change for two reasons. Wright Way obtained its permit prior to the Renaud hearing of May 25, 1995 and prior to Judge Geathers' Order of June 6, 1995. Second, the Wright Way location is not located in close proximity to the schools. The granting of the permit to Wright Way does not change the fact that the proposed location is still located directly across the street from the schools.

CONCLUSIONS OF LAW

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

1. The South Carolina Administrative Law Judge Division is empowered to hear this case pursuant to S.C. Code Ann. §61-1-55 (Supp. 1995) and Chapter 23 of Title 1 of the 1976 Code of Laws, as amended.

2. S.C. Code Ann. §61-9-320 (Supp. 1995) sets forth the criteria for the issuance of a beer and wine permit.

3. S.C. Code Ann. §61-3-440 (Supp. 1995) states that the Department shall not issue certain licenses to a place of business within a specific distance of a church, school or playground. Locations for which beer and wine permits are requested are not subject to those specific restrictions. Even so, the Court may consider the proximity to them in making its decision.

4. 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 a permit to sell beer and wine using broad but not unbridled discretion. Ronald F. Byers v. S.C. Alcoholic Beverage Control Comm'n, 281 S.C. 566, 316 S.E.2d 705 (Ct. App. 1984).

5. Although "proper location" is not statutorily defined, broad discretion is vested in the trier of fact in deciding the fitness or suitability of a particular location. Fast Stops, Inc. v. Ingram, 276 S.C. 593, 595, 281 S.E.2d 118 (1981).

6. The determination of suitability of a location for issuance of a permit 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.2d 335 (1985). The proximity of the location to residences, churches, schools and playgrounds can be a proper ground by itself to deny a permit. Moore v. S.C. Alcoholic Beverage Control Comm'n, 208 S.C. 167, 417 S.E.2d 555 (1992).

7. On June 6, 1995, Administrative Law Judge John Geathers rendered an Order denying Renaud's application for a beer and wine permit on the ground that the location was unsuitable. The decision was based solely on the fact that the vocational school and the high school are directly across the street from the proposed location.

8. The proposed location is the same location found unsuitable by Judge Geathers in Renaud. See Moore v. South Carolina Dep't of Revenue and Taxation, 96-ALJ-17-0134-CC.

9. Where a proposed location has previously been determined to be unsuitable for the issuance of a permit, a future applicant must affirmatively demonstrate that a material change has occurred with respect to the location in order to be granted a permit. S.C. Code Regs. 7-96 (1976).

10. A material change with respect to a location is a change of a meaningful nature to a factor that was relevant to the original decision finding the location unsuitable for a beer and wine permit. Judy A. Haigler, d/b/a Club 21 v. S.C. Dep't of Revenue and Taxation, 96-ALJ-17-0100-CC.

11. Applicant's two assertions of "material change" do not alter the basis for the decision in Renaud.

ORDER

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

ORDERED that Applicant's request that his application for an off-premises beer and wine permit be processed is denied, and that a permit is not to be issued for this location.

AND IT IS SO ORDERED.

_______________________________

Marvin F. Kittrell

Chief Judge

Columbia, South Carolina

July 25, 1996


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