ORDERS:
ORDER AND DECISION
STATEMENT OF THE CASE
This matter is before the Administrative Law Judge Division pursuant to
administrative violations written against the club sale and consumption license of the
respondent, Vivian A. Hite, d/b/a Knockers Oasis, Inc. The citation was issued to Ms.
Hite for two violations of Regulation 7-17(J) by permitting the consumption of alcoholic
beverages on the licensed premises by a nonmember. For the alleged violations, the
South Carolina Department of Revenue and Taxation ("department") seeks revocation of
the respondent's license for the sale and consumption of liquor, as they would constitute
the fourth and fifth violations written within three years. The alleged violations occurred
on May 7, 1994 and on or about June 2, 1994.
The respondent made a timely request for a hearing on these charges and a
hearing was held on November 1, 1994, at 10:00 a.m. at the Administrative Law Judge
Division hearing room, Columbia, South Carolina. (Notice was timely served upon the
parties for a hearing on October 19, 1994 and was rescheduled due to illness of the
respondent.) Timely notice of the time, place and nature of the hearing was given to all parties.
Prior to beginning the hearing, this Court advised the respondent of her right to be
represented by counsel, right to give testimony, right to cross examine and her appeal
rights. The respondent informed the Court that she understood her rights and wished to
proceed without an attorney. She was accompanied to the hearing by her husband, Mark
Renney, who assisted her in her defense.
I find the respondent guilty of the violations and revoke her minibottle license and
assess a fine of $500.00.
EXHIBITS
Without objection, the following were offered by the petitioner and made a part of the
record:
1. Order of the Honorable Stephen P. Bates, Administrative Law Judge, dated June
23, 1994, in the case captioned South Carolina Department of Revenue and Taxation vs. Vivian
A. Hite, President, Knockers Oasis, Inc. (ALJD Docket No. 94-ALJ-17-0082-CC).
2. By-laws of Knockers Oasis, Inc.
The respondent introduced and they were, without objection, made part of the record:
1. By-laws form
2. ABC Form #4 (Rev. 06/90 pls) entitled Instructions for Applying for a Club Sale
and Consumption License.
3. A "notice" form from the old South Carolina Alcoholic Beverage Control
Commission.
4. ABC Form #901 (03/94) entitled South Carolina Department of Revenue
Application Instructions.
5. Copy of letter from Vivian Hite, President, Knockers Oasis, Inc. to Nicholas P.
Sipe, Department of Revenue and Taxation, dated May 20, 1994.
SUMMARY OF THE EVIDENCE
Aaron David Jackson, an officer of the Alcohol Enforcement Unit of SLED, testified that
on May 7, 1994, he entered Knockers Oasis while waiting to have his car washed for free as part
of a promotion for the club. In that the front entrance was untended, he walked straight to the bar
where he ordered a rum and coke from the female bartender. After paying her $3.25 for the
drink, he consumed a small portion of the drink and saved the rest. At no time was he asked to
produce a membership card or otherwise explain his presence. He stated that he had never been a
member of the club, was not a guest of any member of the club on May 7, 1994, and had only
been to the club on that one visit.
Reyburn W. Lominack, an officer of the Alcohol Enforcement Unit of SLED, testified that
at approximately 9:55 p.m. on June 2, 1994 he entered Knockers Oasis. That as he entered, he
was asked if he was a member of the club. He replied that he wasn't and asked if that were a
problem. He was told it was not, was instructed to sign in a notebook that he was a guest and
pay a four-dollar fee. After signing and paying the fee, he stated he proceeded to the bar,
ordered, paid for, and consumed a portion of a bourbon and coke. He testified he knew no
members who were inside the club on that date.
Mark Renney, husband of the petitioner, testified next. He stated that he assists his wife in
operating the club, was at the club (Knockers Oasis) on May 7, 1994, that his wife was having a
membership drive on that date and having the drive advertised on radio station 93.5. He stated it
was an "open house" where anyone could come into the club and purchase a drink without being
checked to see whether or not they were a member. He testified that the bar has one to two
employees, but most of the workers are dancers who are contract labor and help out at the bar to
reduce their house rent charge.
Mr. Renney further testified that there was no membership drive on June 2, 1994. He
stated that the club had made an amendment to its bylaws between June and August 1994
whereby no applicant had to wait 24 hours to become a member. He stated such had not been
filed with the ABC section of the Department of Revenue and Taxation. The hearing was
adjourned briefly to allow him to call his wife's attorney to obtain copies and supplement the
record. He was unable to obtain them.
He further testified that the club "suspended" the constitution and bylaws three times a
year for membership drives. He stated that the club should be able to rely upon the honesty and
integrity of those entering the club not to violate its rules. Mr. Renney brought a computerized
listing of members to the hearing. He stated that it's difficult to keep it updated and the
membership is hard to control with members giving their cards to nonmembers. However, he
stated the club does try hard to check patrons carefully to ensure underage drinking doesn't occur.
FINDINGS OF FACT
Based upon the testimony, credibility of the witnesses and the evidence submitted, I find
by a preponderance of the evidence the following:
1. This Division has personal and subject matter jurisdiction.
2. Vivian Hite holds a sale and consumption license and a beer and wine permit at
115 Overland Drive, West Columbia, South Carolina at a private club and nonprofit organization
known as Knockers Oasis, Inc.
3. On May 7, 1994, SLED agent Aaron David Jackson entered the licensed premises,
walked to the bar and ordered a drink. He was not a member of the club nor was he asked if he
would like to fill out an application to become a member. He was not a guest of a member either.
4. On June 2, 1994, at approximately 9:55 p.m., SLED agent Reyburn W. Lominack,
entered the licensed location. He was questioned as to his membership status. He said he was not
a member but was allowed to sign a notebook as a guest, pay a four-dollar fee and enter the bar.
He proceeded to the bar, ordered a mixed drink poured from a minibottle, paid for it and drank a
portion. He was not a member of the club.
5. Knockers Oasis is a private club for the social and recreational purposes of its
members and their legitimate guests. The Constitution and bylaws of the club were submitted to
the South Carolina Alcoholic Beverage Commission on June 7, 1994. The Constitution has not
been formally changed since then. While Mr. Renney originally testified that changes to the
Constitution had been made, he later abandoned this testimony when he was unable to secure
copies of the changes from his attorney. It is undisputed that no changes to the Constitution have
been received, much less approved by the Department.
6. Article III, Section 5 of the bylaws say that "No candidate for membership,
whether resident or nonresident shall be granted membership within twenty-four (24) hours of the
time application is made."
7. Pursuant to the certified records of the Department, there are three previous
violations issued against Knockers Oasis within the previous three years (actually within the
previous one year), including similar violations involving the service of alcoholic beverages to
nonmembers, namely September 9, 1993 (when a SLED agent was permitted to pay the $20.00
initiation fee and immediately enter the club and purchase and consume a drink without having to
wait the minimum twenty-four (24) hour period specified in Article III, Section 5 of the club's
Constitution); and on November 3, 1993 (after one paid the $20.00 initiation fee and the other
paid the $4.00 guest fee and one was able to purchase and consume a drink without having to
wait the minimum twenty-four (24) hour period specified in Article III, Section of the club's
Constitution).
8. Petitioner seeks revocation of Respondent's sale and consumption license and a
monetary fine of $500.00
CONCLUSIONS OF LAW
Based upon the foregoing Findings of Fact, I conclude, as a matter of law, the following:
1. Pursuant to S.C. Code Ann. § 61-1-55 (Supp. 1993) and Chapter 23 of Title I of
the 1976 Code, as amended, the South Carolina Administrative Law Judge Division has
jurisdiction in this matter.
2. Knockers Oasis, Inc., operates as a nonprofit organization with a limited
membership, not open to the general public, serving alcoholic beverages to its members and
guests pursuant to S.C. Code Ann. § 61-5-20(3) (Supp. 1993) as the holder of a sale and
consumption license.
3. S.C. Code § 61-5-20 establishes when the consumption of alcoholic beverages is
lawful and, therefore, by the inverse, when it is not. Subsection (3) permits service by the kind of
nonprofit organization which the Respondent is licensed as. Only members and their guests are
permitted to consume alcoholic beverages on the premises.
4. S.C. Code § 61-5-190 grants to the Department of Revenue, previously the
Alcoholic Beverage Commission, the authority to "establish such conditions or restrictions which
the department in its discretion deems necessary . . . "
5. Commission Regulation 7-17(J) provides: "Only bona fide members and bona fide
guests of members of such organizations may consume alcoholic beverages sold in sealed
containers of two ounces or less on the licensed premises."
6. The "Government Restructuring Act of 1993" provides that all regulations
promulgated by the Alcoholic Beverage Commission effective on the date of the act remain in
force until modified or rescinded by the Department of Revenue or the State Law Enforcement
Division (SLED). 1993 Act No. 181 § 1604.
7. A violation of any regulation or code section of the Alcoholic Beverage Control
Act is punishable by revocation or suspension of the license pursuant to S.C. Code Ann. § 61-5-60 (Supp. 1993).
8. Liquor licenses are neither contracts nor property rights. They are mere permits,
issued or granted in the exercise of the State's police power and to be enjoyed only so long as the
restrictions and conditions governing their continuance are complied with. The tribunal
authorized to grant the issuance of a license is likewise authorized, for cause, to revoke it.
Feldman v. S.C. Tax Commission, 203 S.C. 49, 26 S.E. 2d 22 (1943).
9. For the third offense of a provision of Article I, Chapter 5, Title 61, within three
years of the first offense, a person shall be fined not less than five hundred dollars and have his
license revoked permanently pursuant to S.C. Code Ann. § 61-5-110 (Supp. 1993).
10. Pursuant to S.C. Code Ann. § 61-1-80 (Supp. 1993), a monetary penalty may be
imposed as an alternative to revocation or suspension in all cases in which revocation or
suspension is authorized. Payment of the monetary fine may be suspended in the discretion of the
court.
11. Respondent's bylaws specify the procedure for gaining membership to Knockers
Oasis, Inc.
12. ABC Regulation 7-17(J) and Respondent's bylaws were violated on May 7, 1994,
when Agent Aaron David Jackson was allowed to enter the licensed premises and was served an
alcoholic beverage from a minibottle.
13. ABC Regulation 7-17(J) and Respondent's bylaws were violated on June 2, 1994,
when Agent Reyburn W. Lominack was allowed to enter the licensed premises and was served an
alcoholic beverage from a minibottle.
14. Mr. Renney's testimony that the club "suspended" the Constitution during the
three-times-a-year membership drives only confirms the intentional nature of the May 7, 1994
violation. There is nothing in the club's Constitution or, more importantly, in the statutes or
regulations which permit a private club to suspend its rules when it comes to who may be lawfully
served alcoholic beverages. His assertion that the club should be able to rely on the honesty and
integrity of those entering the club not to violate the rules or the club's Constitutions only
confirms the dereliction of the club's responsibilities to ensure that the rules and statutes were not
violated.
15. Mr. Renney's testimony that it is difficult to keep the membership roles up to date,
that members can easily give their membership cards to nonmembers, and that the club is very
careful about checking for underage drinkers is interesting, but irrelevant. In the first place, the
club applied for this type of license. With that application went all the disadvantages as well as
the advantages of a private club license. Secondly, the agents did not gain access to the club
through subterfuge or confusion. The first was admitted when the club deliberately chose not to
enforce the membership rules "in order to increase membership." The second was admitted
despite his acknowledgement that he was not a member. Finally, the fact that the club checks
carefully to insure that there are no underage drinkers is no more than the law expects of each
business which sells alcoholic beverages.
ORDER
Based upon the Findings of Fact and the Conclusions of Law, Vivian Hite, d/b/a Knockers
Oasis violated the provisions of Regulation 7-17(J) on May 7 and June 2, 1994. These violations
constitute, respectively, the third and fourth offenses within a three year period for violating
Regulation 7-17(J). It is therefore
ORDERED that the sale and consumption of liquor license, (#SC-427194) held by Vivian
Hite, d/b/a Knockers Oasis, be revoked pursuant to S.C. Code Ann. § 61-5-110(3) (Supp. 1993).
It is further
ORDERED that the respondent Vivian Hite shall pay to the Department of Revenue and
Taxation the statutorily mandated fine of $500.00, said fine to be paid within ten (10) days of the
date of service of this order by a SLED agent. It is further
ORDERED that a SLED agent shall serve a copy of this order on the Respondent and
take possession of the license cited above. Respondent is ordered to post a copy of this order at a
visible location at the licensed premises and to cease and desist all liquor sales.
AND IT IS SO ORDERED.
________________________________________
Marvin F. Kittrell
Chief Administrative Law Judge
Columbia, South Carolina
November 21, 1994 |
