South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
Joseph H. Moore, d/b/a Moore Oil Co., Inc. vs. SCDOR

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
Joseph H. Moore, d/b/a Moore Oil Co., Inc.

Respondents:
South Carolina Department of Revenue

Intervenors:
Town of Turbeville and Donald G. Coker
 
DOCKET NUMBER:
97-ALJ-17-0694-CC

APPEARANCES:
James Harrison, Esquire

For Petitioner

Arlene Hand, Esquire

For Respondent

Carl Holloway, Esquire

For Intervenors
 

ORDERS:

ORDER

STATEMENT OF THE CASE

In this matter, Petitioner Joseph H. Moore applied for an off-premises beer and wine permit for a location at the intersection of Highways 301 and 378 in Turbeville, South Carolina. The South Carolina Department of Revenue processed Petitioner's application and denied it on the basis that the location was unsuitable. As a result, Petitioner requested a contested case hearing, and Donald G. Coker and the town of Turbeville subsequently moved for Leave to Intervene. This tribunal granted both motions in an Order filed on December 19, 1997. A hearing was conducted on May 11, 1998 to determine whether a material change had occurred at the proposed location since Petitioner was denied a permit for this location in 1989, thus entitling Petitioner to a hearing on the merits of the suitability of the location.

PROCEDURAL HISTORY

In 1989, the Alcoholic Beverage Control Commission denied Petitioner's application for an off-premises beer and wine permit for the location in question. The Commission found the location unsuitable because of its proximity to a church and school and because of the strain the sale of alcohol would create on the town's part-time police officer. Reviewing the Commission's decision in 1992, the South Carolina Supreme Court held that the findings of fact in the Commission's Order were sufficient to support its conclusion to deny the permit. See Moore v. South Carolina Alcoholic Beverage Control Comm'n, 308 S.C. 160, 417 S.E.2d 555 (1992).

On May 10, 1996, the parties appeared before the Administrative Law Judge Division because of the Department's refusal to process another application submitted by Petitioner. This refusal was based on 23 S.C. Code Regs. 7-96, which provides that the ABC Commission may refuse to hear an application for a location previously deemed unsuitable unless material changes have occurred with respect to that location. The Honorable Ray Stevens, Administrative Law Judge, upheld the Department's decision not to process the second application. See Moore v. South Carolina Dep't of Revenue, 96-ALJ-17-0134-CC (May 22, 1996).

Petitioner appeared again before this Division in 1997, contesting the agency's disposition of another beer and wine application involving the same parcel of land as in the prior cases. The Department's transmittal letter stated that the Department had refused to process the application. However, the Department later stated that the transmittal letter was erroneous and the application should have been processed and denied as an improper location. Judge Stevens dismissed the case without prejudice and ordered that the Department decide whether it would process Petitioner's application. If the application was processed, the Department was to provide its decision and the basis for that decision to the parties involved by November 17, 1997. Moore v. South Carolina Dep't of Revenue, 97-ALJ-17-0536-CC (October 28, 1997)(1).

Subsequently, the Department decided to process the application, but denied it because of the protests and the unsuitability of the location. The Department found that no material change had occurred at the location, but that "based on the amount of time which had passed" since the ABC Commission's original denial of the application, the matter should proceed to a hearing on the merits. On November 24, 1997, Petitioner filed a request for a contested case hearing on the agency's denial of the permit, which was assigned to this tribunal.

On December 3, 1997, the Intervenors filed a Motion to Limit the Scope of the Hearing, a Motion to Dismiss, and a Motion to Stay the Proceedings. After holding a Motions Hearings on March 20, 1998, this tribunal ruled that the scope of review would be limited to determining if a material change had occurred. On May 11, 1998, this tribunal heard arguments on whether a material change had occurred at the location.

ANALYSIS

Because the issue of suitability of the location has previously been adjudicated by the ABC Commission and the Supreme Court, Intervenors contend that the doctrines of res judicata and collateral estoppel apply and that the scope of review in this matter should be limited to whether a material change has occurred at the proposed location.

While counsel for Petitioner and counsel for Intervenors presented opposing arguments on whether this matter should proceed to a hearing on the merits, both arguments were predicated on the premise that the Department had the authority to make the "material change" determination and then to process or refuse to process the application. 23 S.C. Code Ann. Regs. 7-96 sets forth the material change requirement and encompasses the principles of res judicata and collateral estoppel.

The Alcoholic Beverage Control Commission will not hear an application for a retail beer and wine permit or an application for a retail off-premises beer permit when the location involved has been declared by the Alcoholic Beverage Control Commission to be improper unless and until the applicant can affirmatively show that some material change with respect to the location has occurred, or unless otherwise ordered by the Alcoholic Beverage Control Commission.

23 S.C. Code Ann. Regs. 7-96 (Supp. 1997) (emphasis added). The essential purpose of Regs. 7-96 is to preclude the relitigation of the same issues in a case already adjudicated. Therefore, the ABC Commission, as the trier of fact, would not hear an application for a location that the Commission had declared improper. The authority vested in the Commission in Regs. 7-96 is now to be exercised by the ALJD and not by the Department, as suggested by counsel.

The South Carolina Administrative Law Judge Division was created as part of 1993 S.C. Act No. 181 ("Restructuring Act"). The Restructuring Act fundamentally altered the organization and operation of the executive branch of state government. The ALJD was established as an autonomous governmental entity to conduct and render decisions in contested case hearings involving state agencies. See S.C. Code Ann. § 1-23-500, et seq. (Supp. 1997). The General Assembly vested the ALJD with the authority to promulgate its own rules of practice and procedure. S.C. Code Ann. § 1-23-650 (Supp. 1997). The ABC Commission was abolished, and its authority devolved upon the ALJD. S.C. Code Ann. § 61-1-55 (Supp. 1996) (repealed by 1996 Act No. 415 §5 (after transfer of power effectuated)). The Commission formerly was responsible for adjudicating alcoholic beverage license and permit disputes. This authority now rests with the ALJD. See § 61-2-260 (cases arising under Title 61 must be heard by ALJD).

While this tribunal is cognizant that the ABC Commission performed the dual role as the processor of applications and the trier of fact in contested case hearings, it appears that its utilization of Regs. 7-96 was an exercise of authority as a trier of fact. Hence, as successor to the ABC Commission's role as trier of fact, it is logical that the ALJD, rather than the Department, would administer Regs. 7-96.

FINDINGS OF FACT

As a result of the Motions Hearing conducted on May 11, 1998, this tribunal finds the following facts by a preponderance of the evidence. On June 5, 1989, the ABC Commission denied an off-premises beer and wine permit for a location at the intersection of Highways 301 and 378, Turbeville, South Carolina. The Commission denied the permit based upon the proposed location's proximity to Southern Methodist Church (within .3 of a mile) and East Clarendon High School (within .5 of a mile). Also, the permit was denied because the Commission found that the addition of beer sales in Turbeville would put a strain upon the town's lone, part-time police officer. The South Carolina Supreme Court found that the findings of fact in the Commission's Order were sufficient to support its conclusion to deny the permit. Moore v. South Carolina Alcoholic Beverage Control Comm'n, 308 S.C. 160, 417 S.E.2d 555 (1992).

Pursuant to Petitioner's 1995 application for an off-premises beer and wine permit for the same location in question, Administrative Law Judge Stevens conducted a hearing to determine if a material change had occurred at the location since 1989. Judge Stevens found that no change had occurred with respect to either the proximity of the church or school or the inadequacy of police protection. Additionally, Judge Stevens found that no other relevant factors changed such to warrant a reexamination of the suitability of location issue. Moore Oil v. South Carolina Dep't of Revenue, 96-ALJ-17-0134-CC, (May 22, 1996).

I find that no material change has occurred at the proposed location since Judge Stevens' 1996 Order. The church and school have not been relocated. Further, the town still has the identical lone, part-time police officer. Finally, the nature of the area surrounding the proposed location is virtually the same as it was in 1996 when Judge Stevens adjudicated this matter.

CONCLUSIONS OF LAW

Under Regs. 7-96, no material change has occurred at the proposed location with regard to the three relevant factors on which the Commission based its decision in 1989. That is, the facts are identical as to the proximity of the church and school and to the level of police protection. Further, there are no other relevant factors which would warrant the relitigation of this matter. Even if one argues that this regulation was rendered null and void with the abolishment of the ABC Commission, absent some exception to the rule, this tribunal is still bound by the principles of res judicata and collateral estoppel.

The doctrine of res judicata bars relitigation of the same cause of action between the same parties where final judgment was issued previously. "To establish res judicata, three elements must be shown: (1) the identities of the parties is [sic] the same as a prior litigation(2); (2) the subject matter is the same as the prior litigation; and (3) there was a prior adjudication of the issue by a court of competent jurisdiction." Pye v. Aycock, 325 S.C. 426, 432, 480 S.E.2d 455, 458 (Ct. App. 1997) (citing Johnson v. Greenwood Mills, Inc., 317 S.C. 248, 452 S.E.2d 832 (1994)). Further, the doctrine bars litigants from raising those issues which were adjudicated and those issues which might have been litigated. Hilton Head Ctr. v. Public Serv. Comm'n, 294 S.C. 9, 362 S.E.2d 176 (1987). In the case at bar, (1) the parties are identical, (2) the subject matter is the same, and (3) there was a prior adjudication of the matter by a court of competent jurisdiction. Therefore, res judicata clearly applies.

A party asserting collateral estoppel seeks to prevent relitigation of facts or issues which were adjudicated in the first cause of action even though the second action is based on a different claim than the first. "The party seeking issue preclusion must show that the issue was actually litigated and directly determined in the prior action and that the matter or fact directly in issue was necessary to support the first judgment." Pye, 325 S.C. at 436, 480 S.E.2d at 459 (citing Beall v. Doe, 281 S.C. 363, 315 S.E.2d 186 (Ct. App. 1986)). Other factors to consider are "whether the doctrine is used offensively or defensively, and whether the party adversely affected had a full and fair opportunity to litigate the relevant issue in the prior action." Pye, 325 S.C. at 436, 480 S.E.2d at 460 (quoting Graham v. State Farm Casualty & Ins., 277 S.C. 389, 390-91, 287 S.E.2d 495, 496 (1982)).

Given the facts of this case, the doctrine of collateral estoppel also applies. The facts litigated in the prior action included suitability of location. Petitioner asserts no facts which are different than those in the first action. Thus, the facts necessary to determine suitability of location are the same. The facts which were considered in determining the unsuitability of the location were by their very nature essential to the judgment. Unless Petitioner can show a lack of full and fair opportunity to litigate the issues in the prior action, the doctrine of collateral estoppel bars relitigation of those same issues.(3)









ORDER

Accordingly, based on the foregoing analysis, this matter is hereby DISMISSED.

AND IT IS SO ORDERED.

JOHN D. GEATHERS

ADMINISTRATIVE LAW JUDGE

June 29, 1998

Columbia, South Carolina

1. Intervenors objected to the case's disposition and filed a Motion for Reconsideration dated October 28, 1997. This motion was denied. See Moore v. South Carolina Dep't of Revenue, 97-ALJ-17-0536-CC (November 14, 1997).

2. The doctrine has been expanded to include privies. See Pye, 325 S.C. at 437, 480 S.E.2d at 460.

3. The Court of Appeals adopted the five exceptions to the doctrine of collateral estoppel found in the Restatement (Second) of Judgments § 28 (1982). However, none of the five exceptions apply in this case. For a discussion of the five exceptions, see Pye, 325 S.C. at 437, 480 S.E.2d at 460.


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