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:
SCDOR vs. William N. Massalon, d/b/a Bill's ABC

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
William N. Massalon, d/b/a Bill's ABC
 
DOCKET NUMBER:
95-ALJ-17-0160-CC

APPEARANCES:
For the Petitioner: Nicholas P. Sipe, Esquire

For the Respondent: James H. Harrison, Esquire
 

ORDERS:

ORDER AND DECISION

STATEMENT OF THE CASE


This matter comes before me pursuant to a request for a hearing by the Respondent after being cited for administrative violations against his retail liquor license and off-premise beer and wine permit. The South Carolina Department of Revenue and Taxation (DOR) seeks a thirty suspension of the Respondent's retail liquor license for the Respondent violating 23 S.C. Code Ann. Regs. 7-35 and 40 (1976). The Department also seeks a thirty suspension of the Respondent's license for violating S.C. Code Ann. § 61-3-920 (Supp. 1994). Additionally, the Respondent seeks a thirty day suspension of the Respondent's beer and wine permit for violating 23 S.C. Code Ann. Regs. 7-40 (1976). A hearing was held in this matter before the Administrative Law Judge Division in Columbia, South Carolina on May 3, 1995. I find the Respondent guilty of violating Regulation ** and suspend his** for ** days from the service of this Order. I further order that the Respondent pay a $** fine.



FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, taking into consideration the burden of persuasion by the Parties or Protestants, I make the following Findings of Fact by a preponderance of evidence:

General Facts


1. Notice of the time, date, place and subject matter of the Hearing was given to the Petitioner and the Respondent.

2. The Respondent holds an off-premise beer and wine permit for the Bill's Liquor Stores at U.S. 21, Island Square Shopping Center, Beaufort, South Carolina. The Respondent also holds a retail liquor license for Bill's Liquor Stores at that same location.

Improper transfer/delivery of liquor

3. SLED agent Brunson Asbill, observed the Petitioner's employee, Cecelia Strom, driving the Petitioner's cargo van on January 26, 1995. He followed the van to a Summerville liquor store named Miller Enterprises. There he discovered the employee was transferring liquor from the Petitioner's retail liquor store on Ladys Island in Charleston County to Miller Enterprises. See Petitioner's Exhibit No.1.

4. The retail liquor license for Miller Enterprises is not held by the Petitioner. Furthermore, the Petitioner did not obtain written permission or authorization to conduct the transfer from his location on Lady Island to the Miller Enterprises store.

5. The Department grants permission to transfer alcoholic liquors between retail liquor locations whenever a proper request is made. There are no known instances where the Department has denied permission for a transfer of liquor between stores. In fact, the Department has no criteria for determining whether or not to deny a transfer. All that is necessary is for the holder of a retail liquor license is that licensee submit in writing a request for permission to transfer alcoholic liquor to another store.

6. Though the Petitioner in this case may have sought informal permission for the transfer, the Petitioner did not obtain specific authorization as required by the Department. See, S.C. Code Ann. Regs. § 7-35 (A) (1976). Furthermore, the transfer made by the Petitioner was not conducted in accordance to S.C. Code Ann. Regs. § 7-35 (B) (1976). Specifically, a copy of the invoice was not mailed to the Department. Furthermore, the Petitioner's vehicle was not registered with the Department indicating a description of the vehicle and the route that the vehicle would make in transferring the alcoholic beverages. Therefore, the Petitioner violated Regulation 7-35. However, there is insufficeint evidence to find that the Respondent violated S.C. Code Ann. Regs. § 7-40 (1976).

Sell of liquor on credit


7. The Department alleges that the Respondent sold liquor on credit from January 6, 1994 to August 1, 1994. the Petitioner admitted to making sales to Bad Bobs and the Steamer Restaurant without requiring cash payment. However, Respondent sets forth that those sales were made solely pursuant to an escrow account that had been established in the name of both businesses.

8. The Respondent held $500.00 in escrow for Bad Bobs and $1,000.00 in escrow for Steamers Restaurant during the period he allegedly made credit sales. However, the Respondent did not debit each escrow account when a sale was made upon these accounts for either of these businesses. Rather, the Respondent maintained a "stick pin" upon which he placed the outstanding invoices. He contends he monitored the "stick pin" on a daily basis and therefore informally insured that neither business went beyond their credit limit.

9. The Respondent also admitted he sold alcohol to Wilkops without requiring an immediate cash payment. The Respondent contends that he executed a credit card sale without actually processing the paper work indicting the sale. He sold the liquor in this manner because Wilkops was buying alcohol for a "large bottle party." The Respondent contends that they often did not use the alcohol that they acquired and therefore would return the merchandise. At that time Wilkops would fully pay for the merchandise. If they failed to do so, he would process the credit card paperwork to ensure full payment. Therefore, the Petitioner contends that since he had the insurance of a payment through the credit card, the sale was not made on credit.

10. The maintenance of escrow accounts are common in the retail liquor business. However, the Respondent is certainly lax in the way that he keeps his records. There are no books or records for the Department to check to ensure the accounts are maintained accurately. In other words, he maintains no evidence to justify that the sales were indeed within the established credit limits of the escrow accounts.

Sell of beer and wine for resale


11. Jennie's Place purchased beer and wine from the Respondent on thirty-three (33) ocassions between January 18, 1994 and March 14, 1994. The bvast majhority of these purchaeses were for numerous cases of beer and made in conjunction with the purchase of mini-bottle liquor for the sale at Jennie's Place. For instance, on February 25, 1995, Jennie's purchased twenty-three (23) cases of beer. Furthermore, most of the purchases were drfted on the busienss checking account of Jennie's with the few remaining purchases paid for in cash in the name of Jennie's.

12. T. B. Rocs ("Rocs") made five purchases of beer fromn the Respondent in February, 1994. These purchaess included fifteen (15) cases of beer on February 25, 1994 and twenty-two (22) cases of beer and one keg on February 26, 1994. Three of the four purchases were made in conjunction with the purchase of mini bottle liquor.

13. Linda's Bar and Grill, d/b/a Bill and Mary's, in Port Royal, South Carolina, made ten (10) purchases of beer or wine in April and May, 1994 (April 12, 14, 15, 16, 20, 22,23, and 30; May 11 and 13). Most of these purchases were for multiple cases of beer. For instance, one purchaeson April 15, 1994, was for fifteen (15) cases of beer. Furthermore, the purchases were paid for with the busienss checks of Linda's Bar and Grill and most of the purchases were made in conjunction with the purchae of mini bottle alcohol for Bill and Mary's.

14. Jennie's Place, T. B. Rocs and Linda's Bar and Grill, are in the busienss of selling beer and wine to the public. The Respondent wold beer and wine to these businesses for the purpurposes of re-selling their beer and wine to the public. Knowledge of the Responent, that the purchaes wee made for re-sale, is evidenced by the fact that thepurchases are made by the business checks of the businesses themselves or made in the name of the busienseds. Additionally, the number of purchaes made by these busienses, the quantity of bee4r and wine purchased on those soccassions and the fact that these purchaes were often made in conjunction with the purchase of mini bottle alcohol for the businesseds also indicates the knowledgeof the Respoonent. In fact, most of the purchaseds for beeer or wine were made for the same check used to pay for the mini bottle liquor

DISSCUSION AND CONCLUSIONS OF LAW


Based upon the above Findings of Fact, I conclude as a matter of law, the following:

1. S.C. Code Ann. § 61-1-55 (Supp. 1994) grants the Administrative Law Judge Division the powers, duties and responsibilities as Hearing Officer in contested matters governing alcohol beverages, beer and wine.

2. The Department must grant specific authorization before a retail liquor dealer may transfer alcoholic liquor to another store that the dealer does not own. Futhermore, S.C. Code Ann. Regs. § 7-35 (B)(1976) requires the following additional information when the transfer is made in a vehicle "owned and operated" by the retail dealer:

(1) The vehicle must have been registered and acknowledged previously with the Alcoholic Beverage Control Commission by license number, make, model, color. and serial number. The invoice must show in addition to the above the exact Route to be covered by the truck in making the transfer and the most direct route must be selected,

(2) A copy of the invoice must, prior to the transfer, be mailed to the Alcoholic Beverage Control Commission. A copy of the invoice must be in the possession of the truck driver until delivery is complete, and then retained by the store to which transfer is made. A third copy of the invoice must be retained by the store from which the transfer is made.

3. S.C. Code Ann. Regs. § 7-40 (1976)



**. Permits and licenses issued by this state for the sale of liquor, beer and wine are not property rights. They are, rather, privileges granted in the exercise of the state's police power to be used and enjoyed only so long as the holder complies with the restrictions and conditions governing them. The Administrative Law Judge Division, being the tribunal authorized to grant the issuance of a license, is likewise authorized for cause to revoke or suspend the license. See Feldman v. S.C. Tax Commission, 203 S. C. 49, 26 S. E. 2d, 22 (1943)

**. Permits and licenses issued by this state for the sale of liquor, beer and wine are not property rights. They are, rather, privileges granted in the exercise of the state's police power to be used and enjoyed only so long as the holder complies with the restrictions and conditions governing them. The Administrative Law Judge Division, being the tribunal authorized to grant the issuance of a license, is likewise authorized to place restictions on or for cause to revoke or suspend the license. See, Feldman v. S.C. Tax Commission, 203 S. C. 49, 26 S. E. 2d, 22 (1943). Furthermore, 23 S.C. Code Ann. Regs. 7-88 (1976) authorizing the imposition of restrictions to permits, provides:

Any stipulation and/or agreement which is voluntarily entered into by an applicant in writing for a beer and wine permit between the applicant and the South Carolina Alcoholic Beverage Control Commission, if accepted by the Commission, will be incorporated into the basic requirements for the enjoyment and privilege of obtaining and retaining the beer and wine permit and which shall have the same effect as any and all laws and any and all other regulations pertaining to the effective administration of beer and wine permittees.

In the event that evidence is presented to this Commission that any part of the stipulation or agreement is or has been knowingly broken by the permittee will be a violation against the permit and shall constitute sufficient grounds to suspend or revoke said beer and wine permit.



ORDER


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

ORDERED that the beer and wine permit held by William N. Massalon for ** be suspended for a period of fifteen (15) days. Furthermore, that William N. Massalon pay a $250.00 fine for violating Regulation 7-35 and a $250.00 fine for violating Section 61-3-920. The $500.00 shall be paid to the South Carolina Department of Revenue and Taxation within sixty (60) days of the service of this Order. Sled agents shall serve a copy of this Order on the Respondent and take possession of his permit. Upon the service of the fifteen-day suspension, the permit shall be returned to the Respondent. The Respondent and his employees are to cease and desist all sales of beer and wine43 during this suspension.

IT IS FURTHER ORDERED that the Respondent shall sign an Agreement within sixty (60) days of the receipt of this Order that shall bind him to the following restrictions and conditions:

4. That the Respondent prepare and maintain at the location a written training policy for all staff on the ABC Rules and Regulations and provide a copy of that training policy to the Department within sixty (60) days of the service of this Order.

IT IS FURTHER ORDERED that a violation of any one of the above conditions is considered a violation against the license and may result in a fine, suspension or a revocation.

IT IS SO ORDERED.



__________________________________

Ralph King Anderson, III

Administrative Law Judge

September 27, 1995

Columbia, South Carolina


Brown Bldg.

 

 

 

 

 

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