SC Administrative Law Court Decisions

This matter comes before me pursuant to S.C. Code Ann. § 61-1-55 (Supp. 1995) and S.C. Code Ann. §§ 1-23-310, et seq. (1986 & Supp. 1995) regarding the renewal of a retail liquor license for 1485 G Highway 17 North, Mt. Pleasant, South Carolina, license number RL615314, held by Respondent Clyde J. Burris, Sr., d/b/a C. Joseph Burris Liquors. The South Carolina Department of Revenue and Taxation ("DOR") seeks denial of the renewal on the basis that Burris is ineligible to hold a retail liquor license under S.C. Code Ann. § 61-3-420(3) (Supp. 1995) because he is "not of good repute" as a result of his recent conviction for willful failure to file and pay federal income taxes. Respondent contends he is a person of good repute, notwithstanding the conviction. Alternatively, Respondent challenges DOR's construction of the term "good repute" and asserts the term is unconstitutionally vague. A hearing was held on June 19, 1996. Upon review of the relevant evidence and applicable law, Respondent is found to be "not of good repute," rendering him ineligible to hold a retail liquor license. Respondent's retail liquor license renewal application is therefore denied.

Burris is currently licensed to sell liquor at his retail store at 1485 G Highway 17 North, Mt. Pleasant, South Carolina, under license number RL615314. He has held a retail liquor license since October, 1992. Prior to 1992, Burris operated another retail liquor store in partnership with his father, who was the licensee.

On October 2, 1995, Burris pleaded guilty in U.S. District Court for the District of South Carolina, Charleston Division, for willful failure to file and pay 1991 federal income taxes, in violation of Title 26, United States Code, § 7206(1). The plea and conviction resulted from Burris' filing of his 1991 Individual Income Tax Return, Form 1040, reflecting taxable income of $13,733.00. Burris failed to report additional income of approximately $67,836.68 derived from retail liquor sales.

Respondent now seeks renewal of his retail liquor license, having filed a renewal application with DOR, dated January 15, 1996. By letter dated January 25, 1996, DOR notified Burris that his renewal application was denied because of his criminal record.⁽¹⁾ Through counsel, Burris requested a contested case hearing on the matter on March 7, 1996. The case was transmitted to the Administrative Law Judge Division on April 26, 1996, and a contested case hearing was conducted on June 19, 1996.

DOR originally sought revocation of Burris's existing license as well as denial of the renewal. During the pendency of this action, the current license expired; however, Burris is authorized by DOR to continue to operate his retail liquor store on a provisional basis until this issuance of a final administrative decision on the renewal application. Accordingly, the revocation action is moot. The license renewal is the only action before the Administrative Law Judge Division.

DOR believes Burris to be unsuitable to hold a retail liquor license, based upon his guilty plea and conviction in U.S. District Court for willful failure to file and pay federal income taxes, in violation of Title 26, United States Code, § 7206(1), on the basis that the crime is one of moral turpitude and prima facie evidence that Burris is not of good moral character or good repute. The indictment and guilty plea were admitted as exhibits.

Burris presented evidence attempting to prove that, in spite of the conviction, he is of good repute and suitable to hold a retail liquor license. The 1995 tax evasion conviction is the only blemish on his record. Testifying on behalf of Burris were Jules Days, Jr.,

Burwood Beebe, III, and Rebecca Park Powell, all residents of Mount Pleasant. The witnesses testified that they were aware of Burris's conviction, but thought him to be of good character and to have a good reputation in the community. Burris testified that he is a hard-working and honest person who has admitted wrongdoing and regrets his actions.

Good Repute

A retail liquor licensee is required to be "of good repute." S.C. Code Ann.

§ 61-3-420(3) (Supp. 1995). The parties have provided numerous dictionary and thesaurus definitions of "repute" and "reputation"; however, there is little relevant case law interpreting the terms. DOR relies upon the many South Carolina cases and Attorney General opinions defining "moral character" and "moral turpitude" in its case. Although "good moral character" is not specifically enumerated by statute as a requisite qualification for a retail liquor licensee,⁽²⁾ DOR contends that "good moral character" and "good repute" are essentially synonymous, as one's reputation is necessarily based upon one's character. Burris submits that there is a distinction, however, stating in his brief, at p. 10: "Character is what one is, while reputation is what he is thought to be."

Using the plain, ordinary, and common meaning of the phrase in question, one's reputation is the public perception, shaped by both established fact (matters of public record) and personal opinion, of one's character. Established fact and personal opinion are not necessarily synonymous, nor are they necessarily severable. Burris's reputation is the sum of the two perspectives: his criminal record and the personal opinions of those who know him and know of him. Thus, the Court must consider evidence of Burris's moral character in the form of a

conviction for a crime of moral turpitude, as well as opinion testimony regarding Burris's deportment, integrity, and community standing.

Moral Character

DOR asserts that a conviction of a crime of moral turpitude renders Burris ineligible for the license sought, as he lacks good repute and good moral character. Although there is no single criterion by which to determine if a person is of good moral character, commission of a crime involving moral turpitude implies the absence of good moral character. 1969 Op. S.C. Att'y Gen. No. 2709 at 159; 1989 S.C. Op. Att'y Gen. No. 89-89 at 237. A crime involving fraud is a crime of moral turpitude. In the Matter of Parker, 313 S.C. 47, 437 S.E.2d 37 (1993). A violation of Title 26, United States Code, § 7206(1), the crime to which Burris confessed guilt, is an offense involving moral turpitude. 1978 S.C. Op. Att'y Gen. No. 178.

Furthermore, to ignore evidence of bad moral character of a liquor licensee would be contrary to the intent of the Alcoholic Beverage Control Act. Accepting Burris's assertion that distinguishes reputation from character would allow an arbitrary and illogical result. An applicant prohibited from selling liquor in minibottles or from selling beer and wine because he possesses bad moral character could nonetheless be licensed to sell liquor in larger bottles if his reputation is not sullied.

Constitutionality of "Good Repute" Licensing Qualification

Burris asserts that the phrase "good repute" used in S.C. Code Ann. § 61-3-420(3) is so vague as to deny reasonable notice of prohibited conduct, and thus its application in the present case violates his due process rights. "The constitutional standard for vagueness is the practical criterion of fair notice to those to whom the law applies." Huber v. State Board of Physical Therapy Examiners, ___ S.C. ___, 446 S.E.2d 433 (1994); Toussaint v. State Board of Medical Examiners, 303 S.C. 316, 400 S.E.2d 488 (1991). Where a statute provides controlling principles, an administrative agency may exercise a large measure of discretion within those principles. 1 Am. Jur. 2d Administrative Law § 118 (1962). The term "good repute," as used in the statute, is not unconstitutionally vague. Its utilization as a criterion for licensure provides reasonable notice to an applicant of the controlling principle and allows for a reasonable possibility of compliance with the principle by the applicant.

Burris Ineligible for License

Conviction for a crime of moral turpitude is prima facie evidence of bad moral character. It is also prima facie evidence of bad repute. A conviction for a crime involving fraud or moral turpitude is not an insurmountable obstacle to establishing good moral character or good reputation, however. "Conviction of a crime does not, under all circumstances, constitute ineligibility for a license. . . . In evaluating an applicant's fitness, consideration must be given to the circumstances of any conviction record as well as to the extent to which rehabilitation has occurred." 48 C.J.S. Intoxicating Liquors §105 (1981 & Supp. 1995).

A guilty plea is a public admission of wrongdoing and the resulting criminal conviction is, by its very essence, an official and public decree of judgment against the accused. As a matter of public record, Burris has admitted to and been publicly condemned for an act of fraud involving moral turpitude. Through the testimony of neighbors, friends and family, Burris established that some members of his community hold him in esteem despite his conviction. While one convicted of a crime of moral turpitude may offer evidence in mitigation or of rehabilitation which may offset or overcome the negative implication of the conviction, such evidence does not erase the public declaration of guilt nor render it irrelevant.

The conviction for failure to file and pay income taxes is prima facie evidence that Burris lacks good moral character. He offered evidence in mitigation, but did not meet his burden in overcoming the prima facie case against him. The few months that have elapsed since Burris's conviction in October, 1995, do not provide a sufficient basis to judge whether he has morally redeemed himself. I am convinced that Burris regrets his actions leading to his conviction and will attempt to avoid participating in future illegal activity. Burris's efforts to rehabilitate himself and to re-establish his moral character appear sincere, but this Court is reluctant to find that his recent transgression has been completely exculpated. The illegal act and conviction are still relatively fresh. If, however, Burris reapplies for a license after a greater lapse of time with no

intervening convictions or other malfeasances, he may be able to prove that his character and reputation have truly been rehabilitated.

FINDINGS OF FACT

By a preponderance of the evidence, I find:

1. Respondent seeks renewal of a retail liquor license for a location at 1485 G Highway 17 North, Mt. Pleasant, South Carolina, license number RL615314, having filed a renewal application with the South Carolina Department of Revenue and Taxation dated

January 15, 1996.

1. Burris has held a retail liquor license since October, 1992.
2. Prior to 1992, Burris operated another retail liquor store in partnership with his father, who was the licensee.
3. Notice of the time, date, and location of the hearing was given to Burris and DOR.
4. Without objection, the DOR file was made a part of the record.
5. On October 2, 1995, Burris pleaded guilty in U.S. District Court for the District of South Carolina, Charleston Division, for willful failure to file and pay federal income taxes, in violation of Title 26, United States Code, § 7206(1).
6. The plea and conviction resulted from Burris filing his 1991 Individual Income Tax Return, Form 1040, reflecting taxable income of $13,733.00, but failing to report additional income of approximately $67,836.68.
7. Burris's additional unreported income was derived from retail liquor sales.
8. Burris is not of good moral character.
9. Burris is not of good repute.
10. Burris 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 one year.
11. Burris has not had a permit/license revoked in the last five years.

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. Licenses issued by the State for the 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. The tribunal authorized to grant the issuance of a license is also authorized, for cause, to revoke or deny it. Feldman v. South Carolina Tax Commission, 203 S.C. 49, 26 S.E.2d 22 (1943).
3. An applicant for a retail liquor license is required, among other things, to be of good repute and be a suitable person to sell liquor. S.C. Code Ann. §§ 61-3-420, 61-3-730, and 61-3-740 (Supp. 1995).
4. Chapters 3 and 7, and Article 3 of Chapter 13 of Title 61 are complementary to and not in conflict with the laws providing for the legal sale of beers, wines, and liquors. S.C. Code Ann. § 61-3-40 (Supp. 1995).
5. Words used in a statute should be given their ordinary and popular meaning, unless there is something in the statute which requires a different interpretation. Hughes v. Edwards, 265 S.C. 529, 220 S.E.2d 231 (1975).
6. The phrase "good repute," as used in S.C. Code Ann. § 61-3-420(3) is not unconstitutionally vague or violative of an applicant's due process rights. "The constitutional standard for vagueness is the practical criterion of fair notice to those to whom the law applies." Huber v. State Board of Physical Therapy Examiners, ___ S.C. ___, 446 S.E.2d 433 (1994); Toussaint v. State Board of Medical Examiners, 303 S.C. 316, 400 S.E.2d 488 (1991).
7. Where a statute provides controlling principles, an administrative agency may exercise a large measure of discretion within those principles. 1 Am. Jur. 2d Administrative Law

§ 118 (1962). The term "good repute" as used in S.C. Code Ann. § 61-3-420(3) is utilized as a criterion for licensure. It provides reasonable notice to an applicant of the controlling principle and allows for a reasonable possibility of compliance with the principle by the applicant.

1. Moral character is one component of reputation, while the collective opinion of one's peers regarding one's deportment, integrity, and community standing is another component. Evidence relating to each component is relevant and probative.
2. Although there is no single criterion by which to determine if a person is of good moral character, commission of a crime involving moral turpitude implies the absence of good moral character. 1969 Op. S.C. Att'y Gen. No. 2709 at 159; 1989 S.C. Op. Att'y Gen. No. 89-89 at 237.
3. "Moral turpitude" is that which one does against justice and honesty, good morals, or willful dishonesty for one's own gain. State v. Morris, 289 S.C. 294, 345 S.E.2d 477 (1986).
4. A crime which involves an element of fraud is a crime of moral turpitude. In the Matter of Parker, 313 S.C. 47, 437 S.E.2d 37 (1993).
5. A violation of Title 26, United States Code, § 7206(1), the crime to which Burris confessed guilt, is an offense involving moral turpitude. 1978 S.C. Op. Att'y Gen. No. 178.
6. "Conviction of a crime does not, under all circumstances, constitute ineligibility for a license. . . . In evaluating an applicant's fitness, consideration must be given to the circumstances of any conviction record as well as to the extent to which rehabilitation has occurred." 48 C.J.S. Intoxicating Liquors §105 (1981 & Supp. 1995).
7. Based upon the conviction of a crime of moral turpitude, Burris does not possess good moral character.
8. Notwithstanding the evidence offered in mitigation of the conviction, Burris is not of good repute.
9. The ten-month period which has elapsed since Petitioner completed service of his sentence does not provide an adequate basis for judgment of whether Petitioner has reformed. A

greater period of time with no intervening convictions or other malfeasance is necessary to determine whether his character and reputation have truly been rehabilitated.

1. Based upon the record at this time, Burris lacks the requisite good repute and is therefore unsuitable for issuance of a retail liquor license.
2. Any motions or issues raised in the proceedings but not addressed at the hearing or in this Order are deemed denied. ALJD Rule 29(B).

ORDER

IT IS THEREFORE ORDERED that the retail liquor license renewal sought by

Clyde J. Burris, Sr. is denied.

______________________________________

STEPHEN P. BATES

ADMINISTRATIVE LAW JUDGE

July 24, 1996

Columbia, South Carolina

f:\960201.wpd

1. DOR's determination was actually issued March 19, 1996.

2. The three most common types of retail licenses issued to persons wishing to sell intoxicants in South Carolina are: beer and wine permits; sale and consumption minibottle licenses; and retail liquor licenses. An applicant for each must meet certain qualifications to be eligible for licensure. An applicant for a beer and wine permit is required, among other things, to be of "good moral character" and a "fit" person to sell beer and wine. S.C. Code Ann. §§ 61-9-320 and 340 (Supp. 1995). An applicant for a minibottle license must also be of "good moral character" and without a felony conviction in the ten years preceding application. S.C. Code Ann. § 61-5-50(2) (Supp. 1995); S.C. Code Ann. § 61-5-60 (Supp. 1995). An applicant for a retail liquor store license is not eligible if the person "is not of good repute." S.C. Code Ann. § 61-3-420(3) (Supp. 1995). "Moral character" is not mentioned in the retail liquor license statute.