SC Administrative Law Court Decisions

The South Carolina Department of Revenue and Taxation (DOR) received notice that the State Law Enforcement Division (SLED) asserted a violation of Regulation 7-9(B) had been committed by Walter B. Todd, Jr, (Todd) a permit holder, or his agent, Arlene R. Kohler (Kohler) as an employee on the permitted premises located at 3305 N. King's Highway in Myrtle Beach, South Carolina. Based upon the asserted violation, DOR seeks to suspend for thirty days Todd's beer and wine permit. The matter is now before me since Todd has challenged DOR's action by seeking a contested case hearing. Jurisdiction is vested in the Administrative Law Judge Division pursuant to S. C. Code Ann. §61-1-55 (Supp. 1994) with the hearing held under S. C. Code Ann. §§1-23-600(B) and 1-23-310 (Supp. 1994).

Any issues raised in the proceedings or hearing of this case but not addressed in this Order are deemed denied. ALJD Rule 29(B). Further, the filing of a motion for reconsideration is not a prerequisite to any party filing a notice of appeal of this Order. ALJD Rule 29(C).

1. Did Todd or his agent violate 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 1994) on or about April 15, 1995, by permitting or knowingly allowing a person under twenty-one years of age to purchase beer?

2. If there is a violation, what is the appropriate penalty?

A. Sale of Beer To A Minor

1. Positions of Parties

DOR asserts Todd by way of Kohler, an employee at the licensed premises of The Pantry, Inc., knowingly sold or allowed the possession of beer by a person eighteen years of age, on or about April 15, 1995. Todd asserts Kohler did not knowingly sell beer or wine to an underage person since she checked the driver's license and simply misread the birth date and mistakenly concluded the individual was twenty-one years of age.

2. Findings of Fact:

I find, by a preponderance of the evidence, the following facts:

1. On April 15, 1995, Leonard Marshall Weiss, III, (Weiss) an individual operating as an undercover agent for SLED, entered Pantry #273 at 3305 N. Kings Highway in Myrtle Beach, SC.

2. Weiss held a valid South Carolina driver's license showing his birth date and showing in red a statement that the party was under twenty-one years of age.

3. Weiss was born on September 27, 1976, and on April 15, 1995, was eighteen years old.

4. Weiss' appearance is not that of someone who would obviously be assumed to be twenty-one years of age or older, but rather has a youthful looking appearance.

5. Weiss entered the permitted premises with a valid South Carolina driver's license, twenty dollars in cash and with no beer on his person.

6. Kohler, the only employee on duty, was working at the sales counter.

7. The store was busy due to the day being part of the Easter weekend.

8. After entering the premises, Weiss picked up a six-pack of Bud Light he intended to purchase.

9. He proceeded to the sales counter where he entered a line with two customers ahead of him. By the time he reached the counter there were also two customers behind him.

10. Kohler asked for, received, reviewed, and returned Weiss' driver's license and then allowed Weiss to purchase the six-pack of Bud Light beer.

11. After the purchase of the beer, Weiss left the premises and presented the beer to SLED Agent C. N. Clarke who was waiting in the parking lot.

3. Discussion

Beer and wine permit holders are responsible for the actions and conduct of their agents or employees operating under the permit. 48 C.J.S. Intoxicating Liquors §168 (1981). Further, an employee operating under the permit who knowingly sells beer to a person under twenty-one years of age creates a ground for the suspension of the holder's permit. S.C. Code Ann. § 61-9-410 (Supp. 1994). Here, it is established that Weiss presented to Kohler a valid driver's license with Weiss' picture, correct date of birth, and a statement on the license advising that Weiss was not twenty-one. Thus, Kohler, and Todd, through the acts of Kohler, had clear evidence that Weiss was under twenty-one years of age.

Given the facts in the instant case, the sale of beer to Weiss, an underage party, was made knowingly. A person has no right to shut his eyes to avoid information clearly before him. 58 Am.Jur.2d Notice § 13. A party manifests consent and knowledge to allowing a person under twenty-one years of age to purchase beer if, from the appearance of the person or from other submission of evidence of age, the party had sufficient information that would lead a prudent person to believe the purchaser was under twenty-one years of age. Feldman v. S.C. Tax Comm'n, 203 S.C. 49, 26 S.E. 2d 22 (1943). After receiving information that would put a reasonable person on notice that the individual is underage, the knowledge of such underage is imputed to the seller, especially where there is a failure to inquire further into the age of the individual before making the sale. 58 Am.Jur.2d Notice §14.

In the instant case, Kohler failed to question Weiss about his age after receiving the driver's license. A simple calculation would have shown Kohler that Weiss was not twenty-one years of age on April 15, 1995. Further, the statement in red on the driver's license also told Kohler that Weiss was not twenty-one years of age. Accordingly, armed with such information, Kohler is deemed to have known Weiss was not twenty-one years of age.

4. Conclusions of Law

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

1. A permit holder is subject to revocation or suspension if the holder or an employee on the licensed premises sells beer or wine to any person under twenty-one years of age. S.C. Code Ann. § 61-9-410(1) (Supp. 1994).

2. All regulations promulgated by the Commission (DOR), effective on the date of the Government Restructuring Act of 1993, remain in force until modified or rescinded by the Department or the State Law Enforcement Division. 1993 S.C. Acts 181, §1604.

3. Applicable regulations in effect on the effective date of the Government Restructuring Act of 1993 provide that a party holding a beer and wine permit commits a violation if the holder permits or knowingly allows a person under twenty-one years of age to purchase beer in or on a licensed establishment. S.C. Code Ann. Regs. 7-9(B) (Supp. 1994).

4. A party manifests consent and knowledge to allowing a person under twenty-one years of age to purchase beer if, from the appearance of the person or otherwise, the party had sufficient information that would lead a prudent man to believe the person was under twenty-one especially where simple inquiry would have confirmed such fact. Feldman v. S.C. Tax Comm'n, 203 S.C. 49, 26 S.E. 2d 22 (1943); see 58 Am.Jur.2d Notice §14.

5. A person has no right to shut his eyes to avoid information clearly before him. 58 Am.Jur.2d Notice § 13.

6. The license holder is responsible for the actions and conduct of employees utilizing the permit upon the permitted premises. 48 C.J.S. Intoxicating Liquors §168 (1981).

7. A sale of beer to a minor is forbidden irrespective of whether the sale is made by the permit holder or by an employee. 48 C.J.S. Intoxicating Liquors § 259 (1981).

8. A violation of S.C. Code Ann. § 61-9-410(1) and S.C. Code Ann. Regs. 7-9(B) (Supp. 1994) occurred by Kohler's sale of beer to Weiss.

1. Positions of Parties:

DOR asserts the current violation is a repetition of the same violation over the last several years at this location. Prior violations have been handled by fines and DOR asserts the stronger penalty of a suspension is needed to deter the sale to underage individuals at this location.

Todd asserts the training of the employees is extensive and is designed to ensure that no sales to an underage party will be made. Todd argues the current violation is simply an error in misreading a license by a single employee which does not warrant a suspension. Further, Todd asserts the suspension will have a financial impact which far exceeds an appropriate penalty in this case.

2. Findings of Fact:

I find, by a preponderance of the evidence, the following facts:

1. Kohler was first employed by The Pantry, Inc. in May of 1987.

2. Kohler received training provided by The Pantry, Inc. with such training designed to prevent the sale of beer to underage persons.

3. Employees, including Kohler, are required to sign weekly a statement acknowledging that the employee is required to check for proper identification before selling beer or wine to a customer.

4. On April 8, 1993, Kohler signed a statement acknowledging that she knew it was unlawful to sell beer to anyone under twenty-one years of age.

5. Prior to the instant citation from DOR, Kohler had not committed any prior action resulting in a DOR citation.

6. The Pantry, Inc. has an extensive program designed to prevent the sale of beer and wine to minors.

7. Despite the program, this location has made sales to minors on several occasions.

8. On June 4, 1994, Walter B. Todd, Jr., as the permit holder for the premises of 3305 N. Kings Highway, was charged with permitting the purchase of beer/wine by a person under twenty-one years of age, resulting in a fine of $1000 being paid.

9. On April 9, 1993, James R. Barber, III, as the permit holder for the premises of 3305 N. Kings Highway, was charged with permitting the purchase of beer/wine by a person under twenty-one years of age, resulting in a fine of $400 being paid.

10. On May 30, 1987, Walter B. Todd, as the permit holder for the premises of 3305 N. Kings Highway, was charged with the sale of beer to a person under twenty-one years of age, resulting in a fine of $400 being paid.

11. On January 30, 1981, Walter B. Todd, Jr., as the permit holder for the premises of 3305 N. Kings Highway (then identified as 34th Ave. & Hwy 17), was charged with delivery of beer to a minor resulting in a fine of $200 being paid.

12. On March 14, 1980, Walter B. Todd, Jr., as the permit holder for the premises of 3305 N. Kings Highway (then identified as N. W. Corner 34th Ave.), was charged with sale of beer to a minor under the eighteen years of age resulting in a fine of $300 being paid.

13. A suspension of 30 days will have a financial impact upon the earnings of The Pantry, Inc. of approximately $5,500.

14. DOR seeks a thirty day suspension of Todd's beer and wine permit at the permitted premises of 3305 N. Kings Highway, Myrtle Beach, South Carolina.

3. Discussion

In addition to prior violations during the 1980's, the location here under review has had three violations in three years for the same offense of selling to a minor. Prior monetary penalties have not halted the sale to minors. In addition, the company's current training practice has not produced the desired results. In fact, on April 8, 1993, Kohler signed a statement acknowledging that she knew it was unlawful to sell beer to anyone under twenty-one years of age. Yet, when given a valid driver's license with a statement in red expressly declaring the party was not twenty-one years of age, the sale was still made on the basis that the license was misread. What is more disturbing is that the testimony reflects that Kohler is one of the company's best and most dedicated employees. Having observed her demeanor and candid responses, I do not doubt her employer's evaluation.

If even the best employees are unable to adequately control sales to minors despite a dedicated training program, perhaps a different methodology of consummating sales of beer is appropriate. I do not intend, nor is it is within my province, to suggest how the permit holder can arrange its business affairs to comply with the law. I can only determine whether the law is being complied with and, where it is not complied with, impose penalties suitable to the violation. In the instant matter, repeated violations are occurring due to sales of beer to minors. Prior monetary penalties have not been successful in halting the practice, and I find a suspension of thirty days is warranted here.

4. Conclusions of Law

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

1. The sale of beer or wine to any person under twenty-one years of age subjects the permit holder to revocation or suspension. S.C. Code Ann. § 61-9-410 (Supp. 1994); S.C. Code Ann. Regs. 7-9(B) (Supp. 1994).

2. DOR may impose a monetary penalty as an alternative to revocation or suspension in all cases where the department has the authority to suspend or revoke a license or permit, and DOR, in its discretion, may also suspend payment of a monetary penalty. S.C. Code Ann. §61-1-80 (Supp. 1994).

3. For all violations of Chapter 9 of Title 61 and for a violation of any regulation pertaining to beer, DOR in its discretion may impose a monetary penalty upon the holder of a beer and wine permit in lieu of a suspension. S.C. Code Ann. § 61-13-510 (Supp. 1994).

4. The discretion of an administrative agency is at its greatest when such discretion is granted by statute and relates to establishing sanctions for violations of law. 73 C.J.S. Public Administrative Law and Procedure §60 (1983).

5. The exercise of discretion by an agency will not be interfered with where there is no abuse of that discretion. S.C. Elec. & Gas Co. v. S.C. Public Service Authority, 215 S.C. 193, 54 S.E. 2d 777 (1949).

6. DOR did not abuse its discretionary authority by not imposing a monetary penalty in lieu of suspension and by further imposing a suspension for thirty days.

7. The discretionary authority of DOR to impose a monetary penalty as an alternative to revocation and to suspend payment of a monetary penalty is granted to an Administrative Law Judge. S.C. Code Ann. §61-1-55 (Supp. 1993) [current version at S.C. Code Ann. §61-1-55 (Supp. 1994)].

8. A suspension, rather than a monetary penalty, and a thirty day period rather than a shorter or longer time period is appropriate in the instant case.

Based upon the foregoing Findings of Fact and Conclusions of Law, the following ORDER is issued:

DOR is ordered to suspend Todd's beer and wine permit for 3305 North Kings Highway, Pantry #237, in Myrtle Beach, South Carolina with such suspension to be imposed for thirty days beginning on October 16, 1995, and concluding November 14, 1995, so that the permit will be reinstated on November 15, 1995.

IT IS SO ORDERED.

____________________________

RAY N. STEVENS

Administrative Law Judge

This 6th day of October, 1995