SC Administrative Law Court Decisions

This matter comes before me for a hearing pursuant to S.C. Code Ann. § 61-1-55 (Supp. 1994) and S.C. Code Ann. § 1-23-310, et seq. (Supp. 1994). Petitioner seeks a thirty (30) day suspension of the beer and wine permit of Gwendolyn Evans, d/b/a Campbell's Country Store. Petitioner alleges that respondent or her employee violated 23 S.C. Code Ann. Reg. 7-9(B) (Supp. 1994) by "permitting" the consumption of beer by a person under twenty-one (21) years of age on or about January 26, 1995. After timely notice to the parties, a hearing was conducted at the Administrative Law Judge Division Hearing Room, Columbia, South Carolina. Based upon the testimony and evidence presented, petitioner's request that respondent's beer and wine permit be suspended for thirty (30) days is hereby denied.

FINDINGS OF FACT

Having carefully considered all testimony, exhibits, and arguments presented at the hearing of this matter, and taking into account the credibility and accuracy of the evidence, I make the following Findings of Fact by a preponderance of the evidence:

1. Respondent holds a beer and wine permit for a location at 4801 Bluff Road, Columbia, South Carolina, d/b/a Campbell's Country Corner.

2. On January 26, 1995 at approximately 8:40 p.m., South Carolina Law Enforcement Division ("SLED") Special Agent Keith B. Stokes and Agent Gary Reinhart entered Campbell's Country Corner and observed Brandi Felder in possession of a Zima (alcoholic beverage).

3. Agents Stokes and Reinhart observed Brandi Felder in possession of the Zima at a picnic table inside the permitted premises. The picnic table was located approximately ten (10) feet from the bar. Between the picnic table and the bar, there were approximately nine (9) bar stools: three (3) patrons were sitting on stools near the juke box and three (3) were seated on stools in front of the cash register. There were patrons seated and standing around the picnic table drinking. Brandi Felder was also standing near the picnic table. There were patrons standing between the bar and the picnic table. Beyond the picnic table, there were three pool tables. The area of the licensed premises described above is two (2) times the size of the Administrative Law Judge Division Courtroom #3, based on credible testimony. This court room is approximately 600 square feet. Therefore, the area of the licensed premises in question is approximately 1200 square feet. The bartender was responsible for overseeing the entire area of the permitted premises.

4. On January 26, 1995, respondent did not stock or offer Zima for sale. Brandi Felder did not purchase the Zima from the permitted location, but obtained it outside of the location and hid or concealed the Zima as she entered the location. She concealed the Zima from the bartender's view while inside. Moreover, Brandi Felder purposely stood behind two patrons near the picnic table to block the bartender's view of her possession of the Zima.

5. Brandi Felder was inside the licensed location for approximately five (5) minutes and had only taken "one sip" from the Zima beverage prior to her arrest.

6. The Department cited Gwendolyn C. Evans, d/b/a Campbell's Country Corner for violating 23 S.C. Code Ann. Reg. 7-9(B) (Supp. 1994), permitting the consumption of beer by a person under twenty-one (21) years of age.

7. At the time of the alleged violation, Brandi Felder was seventeen (17) years of age. Agent Stokes issued her a ticket (ABC # 40452) for possession of beer by a person under twenty-one (21) years of age. Also, Brandi Felder was the only patron near the picnic table that night identified by the SLED Agents to be under twenty-one (21) years of age.

8. On February 21, 1995, Brandi Felder was found guilty of violating S.C. Code Ann. § 20-7-370 (Supp. 1994) before the Honorable W. H. Womble, Jr., for the possession of beer, ale, porter, wine, or any similar malt or fermented beverage by a person under the age of twenty-one (21) years of age.

9. The Department alleges that respondent "permitted" the possession of the Zima by Brandi Felder.

CONCLUSIONS OF LAW

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

A. ANALYSIS

The South Carolina Department of Revenue and Taxation ("Department") is charged with the responsibility of administering and enforcing the laws and regulations governing alcoholic beverages, including beer and wine. S.C. Code Ann. § 61-1-60 (Supp. 1994). Furthermore, the Department is authorized to revoke or suspend the beer and wine permit of any licensee for a violation of the law pertaining to alcoholic beverages or any regulation it has promulgated. See S.C. Code Ann. § 61-9-410 (Supp. 1994).

Respondent, Gwendolyn Evans, d/b/a Campbell's Country Corner, is charged with violating 23 S. C. Code Ann. Regs. 7-9(B) (Supp. 1994), which provides:

To permit or knowingly allow a person under twenty-one years of age to purchase or possess or consume beer and wine in or on a licensed establishment which holds a license or permit issued by the South Carolina Alcoholic Beverage Control Commission is prohibited and constitutes a violation against the license or permit. (emphasis added). Such violation shall be sufficient cause to suspend or revoke the license or permit by the Alcoholic Beverage Control Commission.

In the instant case, the Department is seeking to suspend respondent's permit because its employee allegedly "permitted" the consumption of a Zima by a person under twenty-one (21) years of age on the licensed premises of Campbell's Country Corner. The Department did not charge respondent with "knowingly allowing" the possession, but did charge respondent with "permitting" the possession of a Zima by a minor. The Department contends the mere fact that the minor possessed the beverage on the licensed premises is tantamount to respondent permitting it.

The only issue before this tribunal is whether respondent or her agent "permitted" a minor to possess and consume a Zima, therefore, violating 23 S.C. Code Ann. Reg. 7-9(B) (Supp. 1994). The facts clearly indicate that: (1) the respondent did not sell the Zima to the minor nor had knowledge that the minor possessed it; (2) the minor concealed the beverage as she entered the licensed premises, and all the while therein; and (3) the minor was only in the licensed premises approximately five (5) minutes and was not engaged in continuous drinking from the Zima, but had only taken "one sip."

It is well established that, in interpreting a regulation, the sole function of this tribunal is to determine and give effect to the intention of the drafter, with reference to the meaning of the language used and the subject matter and purpose of the regulation. See State v. Ramsey, ___ S.C. ___, 430 S.E.2d 511 (1993). However, words must be given their plain and ordinary meaning without resort to subtle or forced construction to limit or expand the regulation's operation. See State v. Blackmon, 304 S.C. 270, 403 S.E.2d 660 (1991); Higgins v. State, 307 S.C. 446, 415 S.E.2d 799 (1992 ). No evidence was presented to this tribunal to show that the Department had established a longstanding interpretation of 23 S.C. Code Ann. Reg. 7-9(B) (Supp. 1994).

There is no South Carolina statutory or case law definition of "to permit," therefore, this tribunal consulted other authorities for a definition. "Permit" is defined as: "(1) [t]o allow the doing of (something); consent to (2) to grant leave or consent to (someone); authorize (3) to afford opportunity or possibility for." The American Heritage College Dictionary 1018 (3rd ed. 1993). The preface to this dictionary states that ". . . the most frequently sought [or common] meanings are placed first so that the basic meanings of a word are grasped quickly." The American Heritage College Dictionary vii (3rd ed. 1993). Further, Black's Law Dictionary defines "permit" as: "(1) To suffer, allow, consent, let; (2) to give leave or license; (3) to acquiesce, by failure to prevent, or to expressly assent or agree to the doing of an act." Black's Law Dictionary 1140 (6th ed. 1990). This tribunal concludes that "to permit," according to its most common meaning, clearly requires knowledge. The Department would have this tribunal believe that to prove knowledge is an impossible burden. It is well settled that a person's knowledge can be proven through circumstantial evidence or manifestations of the individual. See Eason v. United States, 281 F.2d. 818 (9th Cir. 1960); State v. Attardo, 263 S.C. 546, 211 S.E.2d 868 (1975).

The North Carolina Supreme Court held that "[t]he mere fact that two boys violated the law on petitioner's premises on a single night and within a period of thirty-five (35) minutes [by drinking from a bottle of whiskey in the parking lot] does not constitute substantial evidence that petitioner knowingly permitted the consumption of alcoholic liquors on his premises." Underwood v. State Board of Alcoholic Control, 181 S.E.2d 1 (N.C. 1971). The North Carolina Supreme Court enunciated the following definitions on which it based its decision: "To permit means to acquiesce with knowledge, to knowingly consent." Id at 6. " 'Permit' has been construed to mean in effect [sic] 'knowingly permit . . . .' " Id. The Court further stated that "[t]he mere fact that an affray took place on the premises is no violation of the regulation and affords no basis for suspension or revocation of license." Id. In Collins v. State Liquor Authority, the New York Supreme Court found that the licensee's presence was an insufficient basis upon which he could be held to have "suffered or permitted" the act. Collins v. State Liquor Authority, 48 A.D.2d 848, 368 N.Y.S.2d 859 (1975).

To meet the test of 23 S.C. Code Ann. Reg. 7-9(B) (Supp. 1994) and warrant a violation, the Department must establish that respondent had knowledge of the illegal activity occurring on the licensed premises.⁽¹⁾ "Knowledge," on the other hand, is defined as an "acquaintance with fact or truth." Black's Law Dictionary 872 (6th ed. 1990). "Actual notice is synonymous with knowledge." Hannah v. United Refrigerated Services, __ S.C.__, 430 S.E.2d 539, 542 (Ct. App. 1993); quoting Jefferson County Bank v. Erickson, 247 N.W. 245, 247 (Minn. 1933) (citation omitted). Actual notice [or knowledge] is generally regarded as such "when the person sought to be affected by it knows of the existence of the particular fact in question, or is conscious of having the means of knowing it." 66 C.J.S. Notice § 3 at 637 (1950). In regard to the definition of knowledge [notice], it has been held that "if there are circumstances sufficient to put the party upon inquiry, he is held to have notice of everything which that inquiry properly conducted, would certainly disclose." City of Greenville v. Washington American League Baseball Club et al., 205 S.C. 495, 32 S.E.2d 777 (1945) (emphasis added).

In the definition of "constructive knowledge," Black's Law Dictionary provides "if one by exercise of reasonable course would have known a fact, he is deemed to have had constructive knowledge of such fact." Black's Law Dictionary 314 (6th ed. 1990). In William v. Jefferson Standard Life Insurance Co., the court stated that "it seems plain that one cannot be held to have constructive notice [knowledge] of facts from which the presumption of notice arises, who is wholly ignorant of those facts, and a knowledge of which is necessary in influence of his conduct . . . ." William v. Jefferson Standard Life Insurance Co., 187 S.C. 103, 196 S.E. 519, 524 (1938). The Court further stated that "constructive notice, strictly speaking, is ineffective unless there is a statute providing therefor." Id. at 524.

Regardless of the legal definition of "knowledge" (i.e., actual or constructive) applied in the instant case, based on the facts, I conclude that neither Ms. Evans nor her agent had knowledge or sufficient opportunity to acquire knowledge of the possession and consumption of beer by the minor. Brandi Felder did not purchase the Zima from the permitted location, but obtained it outside of the location and hid or concealed the Zima as she entered the location. She continued to attempt to conceal the Zima from the bartender's view while inside. Further, she purposefully hid behind other patrons standing in the view of the bartender to block the view of her possession of the Zima. Brandi Felder was only in the licensed location for approximately five (5) minutes and had only taken "one sip" from the Zima beverage prior to her arrest. Thus, it is evident that the respondent did not suffer or tolerate the minor's conduct nor had sufficient opportunity to discover it. "No set rule can very well be established to determine what constitutes a sufficiency of facts to excite inquiry, and each case depends on its own facts and circumstances." 66 C.J.S. Notice §11 at 645 (1950). The circumstances of this case were insufficient to "put the party upon inquiry."

Petitioner cited Norton v. Opening Break of Aiken, __ S.C. __, 443 S.E.2d 406 (Ct. App. 1994) as being dispositive of the issue in the instant case. In Norton, the South Carolina Court of Appeals held a licensee liable for allowing or permitting the consumption of alcohol on its premises at a private party by a person under twenty-one (21) years of age. __ S.C. __, 443 S.E.2d 406 (Ct. App. 1994). The defendants neither sold nor furnished the alcohol to the underage person. The court reasoned that those defendants provided a "safe haven" for drinking. Id. On careful reading of the opinion, and upon an examination of briefs and records of appeal to the South Carolina Supreme Court, it becomes evident that those defendants "knowingly" allowed the underage person to consume alcoholic beverages. Hence, the Norton decision is not inconsistent with this tribunal's conclusion that respondent, in the instant case, is not in violation of Reg. 7-9(B) (Supp. 1994).

B. ENUMERATED AUTHORITIES

1. Pursuant to S.C. Code Ann. § 61-1-55 (Supp. 1994) and Chapter 23 of Title I of the 1976 Code, as amended, the South Carolina Administrative Law Judge Division has jurisdiction over this matter.

2. Beer and wine permits and sale and consumption licenses are neither contracts nor property rights, but are mere permits issued or granted in the exercise of the State's police power, and are to be enjoyed only so long as the restrictions and conditions governing their continuance are complied with. Feldman v. South Carolina Tax Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943). The same tribunal authorized to grant the issuance of a license is likewise authorized, for cause, to revoke it. Id.

3. It is well established that, in interpreting a regulation, the sole function of this tribunal is to determine and give effect to the intention of the drafter, with reference to the meaning of the language used and the subject matter and purpose of the regulation. See State v. Ramsey, ___ S.C. ___, 430 S.E.2d 511 (1993). However, words must be given their plain and ordinary meaning without resort to subtle or forced construction to limit or expand the regulation's operation. See State v. Blackmon, 304 S.C. 270, 403 S.E.2d 660 (1991); Higgins v. State, 307 S.C. 446, 415 S.E.2d 799 (1992 ). No evidence was presented to this tribunal to show that the Department had established a longstanding interpretation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 1994).

4. 23 S. C. Code Ann. Regs. 7-9(B) (Supp. 1994) provides "[t]o permit or knowingly allow a person under twenty-one years of age to purchase or possess or consume beer and wine in or on a licensed establishment which holds a license or permit issued by the South Carolina Alcoholic Beverage Control Commission is prohibited and constitutes a violation against the license or permit." 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 1994) (emphasis added). Such violation shall be sufficient cause to suspend or revoke the license or permit by the Alcoholic Beverage Control Commission. Id.

5. "Permit" is defined as: "(1) To allow the doing of (something); consent to (2) to grant leave or consent to (someone); authorize (3) to afford opportunity or possibility for." The American Heritage College Dictionary 1018 (3rd ed. 1993). This tribunal concludes that "to permit," according to the most common meaning, clearly requires knowledge.

6. "To permit means to acquiesce with knowledge, to knowingly consent." Underwood v. State Board of Alcoholic Control, 181 S.E.2d 1, 6 (N.C. 1971). There does not exist a sufficient basis to revoke or suspend a licensee's permit upon an illegal act occurring on the licensed premises, unless the licensee knew of the condition and nevertheless tolerated it. Id.; See also Collins v. State Liquor Authority, 48 A.D.2d 848, 368 N.Y.S.2d 859 (1975).

7. To meet the test of 23 S.C. Code Ann. Reg. 7-9(B) (Supp. 1994) and warrant a violation, the Department must establish that respondent had knowledge of the illegal activity occurring on the licensed premises. "Knowledge," is defined as an "acquaintance with fact or truth." Black's Law Dictionary 872 (6th ed. 1990).

8. There has not been a sufficient evidentiary showing that the respondent or her employee had knowledge of Brandi Felder's possession or consumption of a Zima on its premises to establish a violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 1994). Further, sufficient evidence was not presented by petitioner that respondent or her employee had an opportunity to acquire knowledge.

ORDER

IT IS HEREBY ORDERED that petitioner's request that the respondent's beer and wine permit be suspended for thirty (30) days is hereby denied.

AND IT IS SO ORDERED.

______________________________

JOHN D. GEATHERS

Administrative Law Judge

Edgar A. Brown Building

1205 Pendleton Street

Columbia, South Carolina 29201

June 27, 1995

1. In its brief, petitioner states: "In interpreting the term 'knowingly' in an ABC statute, the Court held that a violation occurred if the employee knew or should have known of the violation, . . . . See Daley v. Ward, 303 S.C. 81, 85, 86, 399 S.E.2d 13, 24, 25 [sic]."

Upon reviewing Daley, it is clear that the court stated that the appellant was entitled to a charge such as that set forth in Feldman v. South Carolina Tax Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943). In Daley, the court held that Feldman provides authority for a charge which injects a "reasonable person" standard into the definition of "knowingly." The court in Daley noted that Feldman provides:

Within the meaning of the term, "knowingly", as used in this statute, if the clerk knew that the [purchaser] was a minor or had such information, from his appearance or otherwise, as would lead a prudent man to believe that he was a minor, and if followed by inquiry must bring knowledge of that fact home to him, then the sale was made knowingly. Daley at 15; quoting Feldman at 25 (emphasis added).

In Daley, the appellant requested a charge "which included the 'knew or should have known standard. However, the court held there was no error in the lower court refusing to charge the jury as requested by appellant and also noted: "[a]t no time did [appellant] point to any South Carolina authority which would require the judge to instruct the jury that a violation of the statute would occur if the respondents knew or should have known. . . ." Id. at 15. While the two standards are similar, the court distinguished the charge based on Feldman from a charge injecting the term "knew or should have known." Daley does not support the "knew or should have known" standard advanced by the petitioner in the instant case.