ORDERS:
ORDER AND DECISION
This matter comes before me pursuant to S.C. Code Ann. §§ 61-5-20(3); 61-5-50(4);
61-9-340; and 1-23-310, et seq. (1986 & Supp. 1995) upon an application for an on-premises
beer and wine permit and club sale and consumption minibottle license filed with the South
Carolina Department of Revenue and Taxation (hereinafter referred to as "DOR") by John H.
Howard, for a location at 210 Black Oak Drive, Bonneau, South Carolina. The application was
opposed by Lois Malone. A hearing was held and evidence taken on June 6, 1996, and
subsequent information submitted by DOR was incorporated into the record without objection.
Based upon the relevant evidence and applicable law, the permit and license are denied.
STATEMENT OF THE CASE
Ms. Malone, a former partner and business associate of the Petitioner, alleges that
Petitioner is not authorized to seek a club sale and consumption minibottle license under the name
of "Paradise Cove, Inc.," as he is not an officer or authorized agent of that non-profit corporation.
DOR did not appear at the hearing, having been excused from participation upon motion granted. The evidence submitted at the hearing was: (1) insufficient to determine if Paradise Cove,
Inc. is a bona fide nonprofit corporation; and (2) inconclusive as to the identity of the present
officers of Paradise Cove, Inc.; and (3) inconclusive as to whether or not Petitioner has the legal
authority to act on the corporation's behalf. Accordingly, the Court issued an Interlocutory
Order dated June 11, 1996, requiring that DOR perform a more detailed review of the license
application and report its findings to the Court.
By letter dated July 8, 1996, DOR reported to the Court, Petitioner, and Protestant the
findings of SLED's investigation and DOR's position on the issues. Upon receipt of the DOR
memorandum, the Court issued a second Interlocutory Order, dated July 11, 1996, which
informed the parties and protestant that in light of DOR's memorandum, the hearing would be
reconvened upon request filed no later than July 26, 1996, to allow an opportunity for additional
evidence to be offered. Absent a request to reconvene the hearing, the parties and Protestant
were informed that the Court would incorporate DOR's memorandum into the record of the
hearing and consider it part of the transcript. No hearing request was received and there was no
objection to incorporating the memorandum into the record and considering it as evidence.
Paradise Cove, Inc. is a bona fide nonprofit organization, having been incorporated
November 12, 1993; however, the organization lacks officers or directors with the current
authority to act on behalf of the corporation. According to the by-laws of Paradise Cove, Inc.,
the terms of the initial officers expired November 1, 1994. There is no evidence that elections to
fill those vacancies have ever taken place. Additionally, 23 S.C. Code Ann. Regs. 7-17(A) (Supp.
1995) prohibits the licensing of an organization which is organized primarily to obtain an alcoholic
beverage license. Since Paradise Cove, Inc. has no current board members, officers, or members,
and Petitioner is presently operating the proposed location as a sole proprietor under a beer and
wine permit in his own name, it is clear that the nonprofit organization is being used solely to
procure a minibottle license.
FINDINGS OF FACT
By a preponderance of the evidence, I find:
(1) Petitioner John H. Howard, on behalf of Paradise Cove, Inc., seeks an on-premises
beer and wine permit and minibottle license for a location at 210 Black Oak Drive, Bonneau,
South Carolina.
(2) Notice of the time, date, place, and subject matter of the hearing was given to the
applicant, protestant, and DOR.
(3) The DOR file and memorandum dated July 8, 1996, was made a part of this record by
reference by consent of the parties and protestant.
(4) Petitioner currently operates the proposed location under an on-premises beer and
wine permit in his name individually.
(5) Petitioner plans to operate the business as a nonprofit corporation and private club.
(6) Paradise Cove, Inc, was incorporated as a nonprofit corporation, having been granted
a certificate of incorporation on November 12, 1993, and subsequently adopting by-laws.
(7) According to the by-laws of Paradise Cove, Inc., the terms of the initial officers
expired November 1, 1994. There is no evidence that elections to fill those vacancies have ever
taken place.
(8) Paradise Cove, Inc. has no current board directors, officers, or members.
(9) Paradise Cove, Inc. exists for the primary purpose of being a vehicle to obtain an
alcoholic beverage license.
(10) Petitioner's sole reason for attempting to act on behalf of and with the apparent
authority of Paradise Cove, Inc., is to obtain a club sale and consumption minibottle license for
the proposed location.
(11) It is undisputed that the proposed location is a suitable one for the sale of beer, wine,
and minibottles.
(12) Petitioner is over twenty-one years of age, is a citizen of the State of South Carolina,
and has maintained his principal residence in South Carolina for more than thirty days.
(13) Petitioner has not had a permit/license revoked in the last five years.
(14) Petitioner is of good moral character.
(15) Notice of the application appeared in a newspaper of general circulation in the area
of the proposed location for three consecutive weeks and was posted at the proposed location for
fifteen days.
CONCLUSIONS OF LAW
Based upon the foregoing Findings of Fact, I conclude as a matter of law the following:
(1) S.C. Code Ann. § 61-1-55 (Supp. 1995) provides that the South Carolina
Administrative Law Judge Division is empowered to hear this case pursuant to Chapter 23 of
Title I of the 1976 Code, as amended.
(2) S.C. Code Ann. § 61-9-320 (Supp. 1995) provides the criteria to be met by an
applicant for a beer and wine permit in South Carolina.
(3) S.C. Code Ann. §§ 61-5-50 and 61-3-440 (Supp. 1995) set forth the requirements for
a minibottle license.
(4) S.C. Code Ann. §§ 61-5-20(3); 61-5-50(4) (Supp. 1995) and 23 S.C. Code Ann.
Regs. 7-17 (Supp. 1995) set forth the criteria for a bona fide nonprofit corporation to be eligible
for a minibottle license.
(5) Paradise Cove, Inc. is a bona fide nonprofit organization; however, the organization
lacks officers or directors with the current authority to act on behalf of the corporation.
(6) Pursuant to 23 S.C. Code Ann. Regs. 7-17(A) (Supp. 1995), Paradise Cove, Inc. is
ineligible to hold a club sale and consumption minibottle license, as it is being operated primarily
to obtain or hold a license to sell alcoholic beverages.
ORDER
IT IS THEREFORE ORDERED that the club sale and consumption license and beer
and wine permit sought by John H. Howard on behalf of Paradise Cove, Inc., is denied.
AND IT SO ORDERED.
_____________________________
STEPHEN P. BATES
ADMINISTRATIVE LAW JUDGE
August 6, 1996
Columbia, South Carolina |
