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:
Raymond L. Gainey and Shawn M. Tiller, d/b/a Acoustic Cafe vs. SCDOR

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
Raymond L. Gainey and Shawn M. Tiller, d/b/a Acoustic Cafe

Respondents:
South Carolina Department of Revenue

Intervenors:
Jerry Donahue, Nancy Donahue, Mary Wells, William Chandler, Dorothy Chappell, Ron Chappell, Jean Calvert, Jay Jay Kirven, Linda Mathews, Ronny Mathews, Teague Armour, Lee Hewitt and Whitney Hewitt
 
DOCKET NUMBER:
97-ALJ-17-0421-CC

APPEARANCES:
Kenneth E. Allen, Esq. for Petitioner

Arlene D. Hand, Esq., for Respondent, Excused from Appearance

James H. Harrison, Esq., for Intervenors
 

ORDERS:

ORDER

I. Statement of the Case


The Petitioner, Raymond L. Gainey (Gainey) of 1013 Pineneedle Road, Hartsville, South Carolina, filed with the South Carolina Department of Revenue and Taxation (DOR), the Respondent, an application for an on-premises beer and wine permit and a sale and consumption ("minibottle") license for 4493 Business 17, Murrells Inlet, South Carolina. Several residents of the area filed protests seeking to prevent DOR from granting the permit and license. A motion to intervene was granted giving the protestants the status of party Intervenors. A hearing on the beer and wine application is required under 23 S.C. Code Regs. 7-90 (Supp. 1996). As to mini-bottles, a hearing is required under S.C. Code Regs. 7-3 (Supp. 1996). The Administrative Law Judge Division (ALJD) has jurisdiction to conduct the required hearings under the contested case provisions of S.C. Code Ann. §§ 1-23-600(B) and 1-23-310 (Supp. 1996). See § 61-2-260 (Supp. 1996). The relevant factors require denying the permit and license.

II. Issue


Does Gainey meet the requirements for an on-premises beer and wine permit and a minibottle license?

III. Analysis

1. Positions of Parties:

Gainey asserts he meets the requirements of the statutes. DOR states that due to the protest, no permit or license could be granted and it awaits the outcome of this hearing. The Intervenors assert that without restrictions the proposed location is not proper.

2. Findings of Fact:

I find, by a preponderance of the evidence, the following facts:

a. General

1. Gainey filed an application with the DOR for an on-premises beer and wine permit and a minibottle license.

2. The applications are identified by DOR as AI # 113594 and AI # 113595.

3. The proposed location of the business and the place where the beer and wine permit and the minibottle license will be utilized is 4493 Business 17, Murrells Inlet, South Carolina.

4. The nature of the business is that of a cafe and lounge.

5. Protests to the application were filed by several residents of the area.

6. Except for the unresolved issue of suitability of location, DOR would have issued the permit and license.

7. The hearing on this matter was held September 12, 1997, with notice of the date, time, place and subject matter of the hearing given to the applicant, DOR, and the intervenors.

b. Moral Character

8. The State Law Enforcement Division (SLED) completed a criminal background investigation of the applicant.

9. The SLED report revealed no criminal violations.

10. The applicant has not engaged in acts or conduct that imply the absence of good moral character.

11. The applicant is of good moral character.

c. Legal Resident and Principal Place of Abode

12. Gainey has resided in South Carolina since birth.

13. Gainey holds a valid South Carolina driver's license.

14. Gainey currently resides at 1013 Pineneedle Road, Hartsville, South Carolina, and resided in South Carolina for more than 30 days prior to filing the application for a beer and wine permit.

15. Gainey is both a legal resident of the United States and South Carolina and held such status for more than 30 days prior to the application, and has held a principal place of abode in South Carolina for more than 30 days prior to filing the application.

e. Prior Revocation Of Beer or Wine Permit

16. Gainey has never had a beer and wine permit revoked.

f. Age

17. Gainey's date of birth is October 7, 1943.

18. Gainey is over twenty-one years of age.

g. Proposed Location

19. The proposed location operated for a portion of 1995 and 1996 with an on-premises beer and wine permit and a minibottle license.

20. The previous permit and license at the proposed location were restricted to closing at 12:00 midnight, restricting use of side doors to emergencies, and preventing littering, loitering, and trespassing on property of residents.

21. Gainey presented no voluntary restrictions to DOR, and DOR has not imposed any mandatory restrictions.

22. At the proposed location, for approximately three miles on Highway 17, Murrells Inlet presents an almost continuous row of retail establishments providing restaurants and shops open to the public.

23. The employees of these retail outlets do not generally leave their employment until 11:00 p.m.

24. The applicant will use his permit and license to solicit business from the service employees of the area.

25. Gainey seeks to cater to this audience by providing live musical entertainment beginning at midnight and lasting until approximately 2:00 a.m or 3:00 a.m.

26. Bands will perform at least twice a week and Gainey plans to have the bands perform more often during the spring and summer.

27. The area is a mixed community of residential and commercial establishments.

28. Permits for beer and wine and licenses for minibottles exist in the area for commercial establishments.

29. The area behind the proposed location is residential.

30. The intervenors are residents of the area.

31. One residence is within 300 feet of the proposed location.

32. The music will be heard by the residents since at least the bass tones will be audible at significant distances.

33. Gainey's business concept creates the likelihood of drawing large crowds during the early morning hours.

34. Under Gainey's marketing plan, the sale of beer and wine and minibottles will most likely be greatest from midnight until the early morning hours around 2:00 a.m., with the crowd the largest at these times, and the noise generated from live music and patrons the greatest.

35. Gainey's approach to his establishment and the presence of beer, wine, and minibottles will impose a negative impact upon the community.

h. Notice

36. Notice of the Gainey application was published in The Georgetown Times, a newspaper published and distributed in Georgetown County, with notice published on February 27, March 6, and March 13, 1997.

37. Notice of the Gainey application appeared at least once a week for three consecutive weeks in a newspaper most likely to give notice to interested citizens of Murrells Inlet.

38. Gainey gave notice to the public by displaying a sign for fifteen days at the site of the proposed business.

39. Gainey gave notice of the application by way of required advertising by newspaper and display of signs.

3. Discussion

a. Restrictions in General

The intervenors seek not to deny the permit and license but rather to place significant restrictions on the issuance of the permit and license. While perhaps a technical distinction, the issue before the ALJ is whether the statutory requirements for a permit or license are met, not whether restrictions must be imposed to transform an otherwise improper application into a proper one. In fact, if the applicant is concerned that his application may be deficient, to bolster its application, the applicant may propose through an agreement with DOR that restrictions be placed on its permit and license. Such a procedure of placing restrictions on the permit or license is a voluntary decision made by the applicant and agreed to by DOR. 23 S.C. Code Regs. 7-88 (1976). On the other hand, upon review of an application, DOR may place mandatory restrictions on the issuance of a permit or license since DOR is authorized by statute to impose "restrictions which the department considers necessary before issuing . . . a license or permit." S.C. Code Ann. § 61-2-80 (Supp. 1996).

In the instant case, no voluntary restrictions were presented to DOR by Gainey, and DOR has not imposed any mandatory restrictions. Thus, the issue is whether the statutory requirements for a permit or license are met or not met. When an applicant meets the requirements, an issuance of the permit or license follows. See § 61-4-540 (when the requirements of the of statute are met, the permit must be granted.) In short, on one hand, the ALJ has no authority to add additional obligations via restrictions if those restrictions exceed the requirements of the law, and, on the other hand, the ALJ has no duty to add restrictions that will enable the applicant to met the statutory requirements. Rather, either the applicant meets the requirements and gets the permit and license or the applicant does not meet the requirements and the permit and license are denied. (1) Against this backdrop, the Gainey application must be reviewed.

b. Factors Requiring Denial of the Permit and License

In the instant case, DOR has not imposed any restrictions. Further, the applicant has not voluntarily agreed with DOR to impose restrictions. The intervenors, however, assert that without restrictions, the location is not proper.

Under S.C. Code Ann. § 61-4-520(6) (Supp. 1996), no beer and wine permit may be granted unless the location of the place of business is a proper location. Likewise, even if the distances required by the "no-alcohol-zone" statutes are satisfied, a location may still be required to satisfy the criteria of being a proper location before the issuance of a minibottle license is allowed. Schudel v. S.C. ABC Comm'n, 276 S.C. 138, 276 S.E.2d 308 (1981).

To decide what is a "proper location," in general terms, the fact-finder has "broad discretion . . . to determin[e] the fitness or suitability of a particular location." Fast Stops, Inc. v. Ingram, 276 S.C. 593, 281 S.E.2d 118 (1981). In general, consideration may be given to any factors that demonstrate 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). Geography alone is not the sole consideration of suitability, but rather any impact on the community must be considered. Kearney v. Allen, 287 S.C. 324, 338 S.E.2d 335 (1985).

In more specific terms, at least as to beer and wine, the proximity of a location to residences is a proper ground by itself for a denial. Byers v. S.C. ABC Comm'n, 305 S.C. 243, 407 S.E.2d 653 (1991); Moore v. S.C. ABC Comm'n, 308 S.C. 160, 417 S.E.2d 555 (1992). Specifically, a location is improper if the establishment will adversely affect the public interest, the welfare of the inhabitants of the area, or the nature of the neighborhood due to the manner in which the establishment will conducts its activities. 48 C.J.S. Intoxicating Liquors § 121 at 501 (1981). Here, considering the case as whole, the combination of the presence of the residences and the nature of the business Gainey seeks to operate will create an establishment unacceptable to the general welfare of the community.

c. Application of Factors To Facts

Here, the applicant will use his permit and license to solicit business from the service employees of the area. For approximately three miles on Highway 17, this section of Murrells Inlet presents an almost continuous row of retail establishments providing restaurants and shops open to the public. The employees of these retail outlets do not generally leave their employment until 11:00 p.m. The applicant wishes to cater to this audience by providing live musical entertainment beginning at midnight and lasting until approximately 2:00 a.m or 3:00 a.m.

Under Gainey's approach to the establishment, the presence of beer, wine, and minibottles will by necessity have a negative impact upon residential living in the community. In the instant case, the area behind the proposed location is residential and the intervenors are residents of the area. The testimony identifies the closest resident as being within 300 feet of the proposed location.

Under the facts of this case, the intervenors concerns of the impact to the community are supported by the evidence presented. The applicant's business concept creates the likelihood of drawing large crowds during the early morning hours and promises to create the exact scenario to which the intervenors object. The General Assembly has made it clear that a significant factor in weighing whether to grant the privilege to sell beer, wine, and alcohol is the proximity of the location to residences in the area. While the proximity to residences does not require that a permit or license be denied, in weighing whether a permit should be granted, proximity is enough of a factor "by itself, on which [to] find the location to be unsuitable." Byers v. S.C. ABC Comm'n, 305 S.C. 243, 407 S.E.2d 653 (1991). Reh'g denied Sept. 4, 1991.

The intervenors argue the location will disturb the residents of the area with live music at 2:00 a.m. The testimony demonstrates the bands will perform at least twice a week and more often during the spring and summer. The live music will begin near midnight and continue until 2:00 a.m. The testimony confirms the music will be heard by the residents since at least the bass tones will be audible at significant distances.

Accordingly, considering the case as a whole, under Gainey's marketing plan, the sale of beer and wine and minibottles will most likely be greatest from midnight until the early morning hours around 2:00 a.m., the crowd the largest at these times and the noise generated from live music and patrons the greatest. These negative factors impacting the community justify denying the beer and wine permit and minibottle license. Kearney v. Allen, supra. (a building converted to a country-western, lounge-restaurant was denied a permit and license due to operating at 2:00 a.m. with live music near residences.)

Finally, due consideration has been given to the presence of existing beer and wine and minibottles in the area along with the general commercial nature of the vicinity. See Taylor v. Lewis, 261 S.C. 168, 198 S.E.2d 801 (1973) (commercial nature and existing permits are factors weighing in favor of granting additional permits and licenses). The presence of such factors, however, does not allow Gainey's application to be approved. The area is decidedly a mixed community of residential and commercial establishments. The factor which diminishes the importance of the presence of numerous other permits and licenses is the use of live music in the early morning hours near residences. Considering and weighing all relevant factors requires a denial of the permit and licensed requested.

4. Conclusions of Law

Based on the foregoing Findings of Fact and Discussion, I conclude the following as a matter of law:

1. The applicant seeks to operate a business bona fide engaged primarily and substantially in the preparation and serving of meals. S.C. Code Ann. §§ 61-6-1820(1), 61-6-20(2) (Supp. 1996); Regs. 7-19.

2. The applicant possesses good moral character. S.C. Code Ann. § 61-4-520(1) (Supp. 1996); S.C. Code Ann. § 61-6-1820(2) (Supp. 1996).

3. The applicant is a legal resident of the United States and has been a legal resident of South Carolina for 30 days prior to filing the application and has his principal place of abode in South Carolina. S.C. Code Ann. § 61-4-520(2) (Supp. 1996); S.C. Code Ann. § 61-6-1820(7) (Supp. 1996).

4. The applicant has not had a beer or wine permit revoked within two years of the date of the current application. S.C. Code Ann. § 61-4-520(4) (Supp. 1996).

5. The applicant is at least twenty-one years old. S.C. Code Ann. § 61-4-520(5) (Supp. 1996); S.C. Code Ann. § 61-6-1820(6) (Supp. 1996).

6. An applicant may voluntarily seek from DOR restrictions on the permit or license. 23 S.C. Code Regs. 7-88 (1976).

7. DOR may place mandatory restrictions on the issuance of a permit or license since DOR is authorized by statute to impose "restrictions which the department considers necessary before issuing . . . a license or permit." S.C. Code Ann. § 61-2-80 (Supp. 1996).

8. When an applicant meets the requirements of the of statute, an issuance of the permit or license must follow. See § 61-4-540.

9. No beer and wine permit may be granted unless the location of the place of business is a proper location. S.C. Code Ann. § 61-4-520(6) (Supp. 1996).

10. Even if the distances required by the "no-alcohol-zone" statutes are satisfied, a mini-bottle license may still be required to satisfy the criteria of being a proper location. Schudel v. S.C. ABC Comm'n, 276 S.C. 138, 276 S.E.2d 308 (1981).

11. To decide what is a "proper location," in general terms, the fact-finder has "broad discretion . . . to determin[e] the fitness or suitability of a particular location." Fast Stops, Inc. v. Ingram, 276 S.C. 593, 281 S.E.2d 118 (1981).

12. Consideration may be given to any factors that demonstrate 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).

13. Geography alone is not the sole consideration of suitability, but rather any impact on the community must be considered. Kearney v. Allen, 287 S.C. 324, 338 S.E.2d 335 (1985).

14. At least as to beer and wine, the proximity of a location to residences is a proper ground by itself for a denial. Byers v. S.C. ABC Comm'n, 305 S.C. 243, 407 S.E.2d 653 (1991); Moore v. S.C. ABC Comm'n, 308 S.C. 160, 417 S.E.2d 555 (1992).

15. A location is improper if the establishment will adversely affect the public interest, the welfare of the inhabitants of the area, or the nature of the neighborhood due to the manner in which the establishment will conducts its activities. 48 C.J.S. Intoxicating Liquors § 121 at 501 (1981).

16. The combination of the presence of the residences and the nature of the business Gainey seeks to operate will create an establishment unacceptable to the general welfare of the community.

17. Consideration must be given to the presence of existing beer and wine and minibottles in the area along with the general commercial nature of the vicinity. See Taylor v. Lewis, 261 S.C. 168, 198 S.E.2d 801 (1973)

18. The presence of existing beer and wine and minibottles in the area along with the general commercial nature of the vicinity, however, do not allow Gainey's application to be approved.

19. Considering all relevant factors, the proposed location is not a proper location for a beer and wine permit or for a mini-bottle license. S.C. Code Ann. § 61-4-520(6) (Supp. 1996); S.C. Code Ann. § 61-6-1820(3) (Supp. 1996).

20. The applicant gave proper notice of the application by way of newspaper and the display of signs. S.C. Code Ann. § 61-4-520(8) and (9) (Supp. 1996); S.C. Code Ann. § 61-6-1820(4) and (5) (Supp. 1996).

21. The application does not qualify for a beer and wine permit and does not qualify for a minibottle license. S.C. Code Ann. § 61-4-520 (Supp. 1996); S.C. Code Ann. § 61-6-1820 (Supp. 1996).

IV. ORDER


DOR is ordered to deny Gainey's application for an on-premises beer and wine permit and a sale and consumption license at 4493 Business 17, Murrells Inlet, South Carolina.









IT IS SO ORDERED.



____________________________

RAY N. STEVENS

Administrative Law Judge

This 7th day of October, 1997.

Columbia, South Carolina

1. As a practical matter, certainly the ALJ may deny a permit or license but then add language explaining that the applicant can meet the requirements of the statute upon "signing an agreement with DOR adhering to the restrictions set forth in this Order." Thus, the ALJ can deny the permit but tell the applicant what conditions must be met in order to have the application approved. While the ALJ may follow such a course, no duty exists for the ALJ to fashion restrictions that will transform an otherwise deficient application into an acceptable application.


Brown Bldg.

 

 

 

 

 

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