SC Administrative Law Court Decisions

The South Carolina Department of Revenue (DOR) seeks to impose a $400 fine against Danmark, Inc. (Danmark). Danmark opposes DOR's position and asserts no fine should be imposed since no violation occurred. The disagreement places jurisdiction in the Administrative Law Judge Division (ALJD) with a hearing on this matter held on November 21, 2000. S.C. Code Ann. § 61-2-260 (Supp. 1999); S.C. Code Ann. Sec. 1-23-310 et. seq. (Rev. 1986 and Supp. 1999). The evidence and the argument presented at the hearing requires the imposition of a fine of $400 against Danmark.

Did Danmark or one of its employees unlawfully possess liquor in containers larger than two ounces in violation of S.C. Code Ann. § 61-6-2600 (Supp. 1999)? ⁽¹⁾

III. Analysis

1. Positions of Parties

DOR asserts that on February 9, 2000, at least ten bottles of liquor in containers larger than two ounces were stored on the premises of Danmark and that such an act is a violation of S.C. Code Ann. § 61-6-2600 (Supp. 1999).

Danmark does not dispute the fact that ten bottles of liquor were found in a second floor office of the building occupied by Danmark. However, Danmark argues the bottles do not belong to Danmark. Rather, the bottles were all owned by individuals who had previously held private parties at the location. Such individuals having left the premises without taking the bottles with them, Danmark argues that on February 9, 2000, the bottles were being held for those rightful owners until those owners could return to retrieve the liquor. ⁽²⁾

2. Findings of Fact

Based on the preponderance of the evidence, the following findings of fact are entered:

Danmark holds a liquor license allowing the consumption of liquor pursuant to a minibottle license. To determine compliance with applicable liquor laws, on February 9, 2000, SLED Agents conducted an inspection of the building occupied by Danmark Inc., d/b/a Aiken Brewing Company at 140 Laurens Street, Aiken, South Carolina.

The inspection by SLED examined a building that has a dining area and two separate bars. One bar is upstairs and the second is downstairs. During the inspection the SLED Agents found ten bottles of liquor in a private office on the second floor of the building. The ten liquor bottles were in a part

of the building also used to store minibottles.

The ten liquor bottles came to be in the office as the result of actions of either an owner or employee of Danmark. The bottles first arrived on the licensed premises by individuals bringing the bottles to the location for private parties. Even though the individuals holding the private parties were instructed by Danmark employees to remove the bottles at the end of the party, some bottles were not removed.

When liquor bottles were not removed by the individuals giving the private party, Danmark, through one of its owners or through an employee, chose not to dispose of the bottles. Rather, Danmark chose to keep the bottles and reasoned that the owners of the bottles could come back to claim them. Thus, the bottles were stored in the second floor office. In fact, some of the bottles had been on the premises for three years.

3. Conclusions of Law

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

The issue here is whether Danmark may hold a minibottle license and at the same time possess on the premises liquor in containers larger than two ounces. See S.C. Code Ann. § 61-6-2600 (a fine may be imposed on "a person licensed to sell alcoholic liquors pursuant to the provisions of this article who has in his possession on his licensed premises alcoholic liquors in containers other than minibottles."). Thus, the question is one of deciding whether the liquor in the large bottles was in Danmark's possession ⁽³⁾ and whether the liquor was on Danmark's premises.

Here, Danmark possessed the ten large liquor bottles. To possess "means to have the actual dominion, control, care, and management of the liquor." 48 C.J.S. Intoxicating Liquors § 266 at 783 (1981). Under the facts of this case, Danmark physically placed the bottles in a space under Danmark's control and admits that it was caring for the bottles until the owner returned. Indeed, the bottles had in some cases been in Danmark's control for up to three years.

Finally, the bottles were on Danmark's premises. Regulation 7-2(E) requires identifying the premises for a minibottle license and includes in the term any area "upon which the licensee shall store, sell and serve alcoholic beverages in sealed containers of two (2) ounces or less." Here, the facts show that the second floor office was used not only to store the large liquor bottles but also to store minibottles. Thus, the office is plainly a part of the licensed premises.

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

Danmark, Inc. is liable for and shall pay a $400 fine for violating S.C. Code Ann. § 61-6-2600 (Supp. 1999).

AND IT IS SO ORDERED.

____________________________

RAY N. STEVENS

Administrative Law Judge

Dated: November 28, 2000

Columbia, South Carolina

1. Danmark argues that the section under review is S.C. Code Ann. § 61-6-1620 and not § 61-6-2600. I disagree. Section 61-6-1620 is simply an expression of legislative intent explaining that "[t]his article must not be construed to authorize the possession or consumption of alcoholic liquors in containers other than minibottles on premises open to the general public for which a license has been obtained pursuant to Sections 61-6-1600 or 61-6-1610." Thus, § 61-6-1620 is not the statute under review here.

2. Danmark also argues SLED's citation was improperly served, the citation was inaccurate, and SLED failed to follow procedures both during and after the inspection. These arguments are not addressed in detail since Danmark has not shown any prejudice resulted from SLED's action. See Palmetto Alliance, Inc. v. South Carolina Public Service Comm'n, 282 S.C. 430, 319 S.E. 2d 695 (1984) (the party complaining of procedural irregularities must show that prejudice resulted from the manner in which the administrative process was handled). Here no prejudice is shown.

Rather, the evidence establishes that Danmark had notice no later than the end of March 2000 that a civil citation had been issued to Danmark and that Danmark was charged with violating S.C. Code Ann. § 61-6-2600. Thus, Danmark had ample time to prepare its case for presentation. Further, no proof has been shown of evidence lost or testimony impeded by the alleged irregularities. Accordingly, any purported errors in SLED's service or procedure did not prejudice Danmark and cannot now serve to dismiss the violation charged.

3. Possession, not ownership, is the controlling factor. See e.g., State v. Stone, 320 S.C. 395, 465 S.E.2d 576, 577 (Ct. App. 1995) (where the court explained that even establishing that the beer was owned by a person over twenty-one was no defense to illegal possession of beer by a person under twenty-one when "[a] police officer observed each defendant toting either a twenty-four pack or two twelve-packs of beer as they walked through a parking lot on Clemson University property."). Thus, the fact that a third party is the purported owner of the liquor bottles is no defense.