South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
SCDOR vs. William N. Massalon, d/b/a Bill's ABC Store (Highway 21)

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
William N. Massalon, d/b/a Bill's ABC Store (Highway 21)
 
DOCKET NUMBER:
95-ALJ-17-0592-CC

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

For the Respondent: James H. Moss, Esquire
 

ORDERS:

ORDER AND DECISION

STATEMENT OF THE CASE

This matter comes before the Administrative Law Judge Division pursuant to an administrative violation issued by the South Carolina Department of Revenue and Taxation (Department) against the retail liquor license of William N. Massalon (Respondent), d/b/a Bill's ABC Store, located on Highway 21, in the Island Square Shopping Center, Ladys Island, Beaufort County, South Carolina (location). The citation was issued to the Respondent on July 5, 1995, for a violation of S.C. Code Ann. § 61-3-1000 (Supp. 1994)(section 61-3-1000) for failing to maintain not more than two means of public ingress and egress. The Department seeks a suspension of the retail liquor license for fifteen days.

The Respondent made a timely request for a contested case hearing on this charge and a contested case hearing was held at the Administrative Law Judge Division offices, 1205 Pendleton Street, Columbia, South Carolina, on November 21, 1995.

EXHIBITS

The parties stipulated to the following being placed into the record:

1. Sketch of the interior of the location (Petitioner's Exhibit #1);

2. Violation report dated July 5, 1995 (Respondent's Exhibit #1); and

3. Photographs of the interior and exterior of the location (Respondent's Exhibits #'s 11-17).

Respondent also placed into the record as evidence the following exhibits:

1. Letter from Respondent to the South Carolina ABC Commission dated October 12, 1990 (Respondent's Exhibit #2);

2. Letter from Respondent to the South Carolina ABC Commission dated December 6, 1990 (Respondent's Exhibit #4);

3. Invoice from Unique Welding dated June 7, 1991, for a frame (Respondent's Exhibit #7);

4. Retail licenses to Petitioner for the location and check dated June 7, 1991, made payable by Bill's Liquor Store, Inc., to Unique Welding (Respondent's Exhibit #8).





SUMMARY OF THE EVIDENCE

Ryan Anthony Neill, a special agent with the Alcohol Enforcement section of the Department since March 3, 1995, testified that he is familiar with the interior and exterior of the location. Further, after he received a complaint about the interior design at Respondent's location from a competitor of the Respondent, he contacted his superiors and subsequently wrote the violation report. He acknowledged that before an applicant can obtain a license for a retail liquor store, the location must be inspected by a State Law Enforcement Division (SLED) officer assigned to the Department for licensing purposes. He further acknowledged that he was not aware of the gate as shown in Respondent's Exhibit #13 (between the wine cellar and party shop). He stated that the Respondent had been cooperative in the investigation.

Ms. Jody Plyler, now employed with the Alcoholic Beverage Control section of the Department as secretary to Patricia Stites, and formerly employed in the same capacity with the South Carolina Alcoholic Beverage Control Commission (Commission), acknowledged that when the licenses were granted to Respondent in early 1991, proposed locations had to be inspected prior to licensing. She further testified that there were approximately 50 agents assigned for licensing and enforcement at the time Respondent's licenses were granted.

Respondent testified that he started construction at the location in July 1990 and filed the application, including plans of the building, with the Commission. He stated the notice of the application for the store was posted on a tree at the location by a South Carolina Law Enforcement Division (SLED) agent. The SLED agent, Gene Collins, made several trips to the location during the store's construction, as did another SLED agent. Respondent testified that he received letters of approval from the Commission for the location and the building structure. Respondent further testified that the store opened in February 1991 after the granting of both licenses (Respondent's Exhibit #8). He stated the store was designed by an architect.

Respondent further stated that since the opening of the location, SLED agents attached to the Commission and the Department have visited the location dozens of times. Some of those agents included Chief Dorton, Golie Augustus, Terry Lee and Wally Scott. Further, Respondent stated that no agent has ever suggested or told him that the interior walls and doorways were in violation of any law in South Carolina. He stated he put up the bars or gates on the two interior doors into the wine cellar when told to do so in June 1991 by agent Golie Augustus.

FINDINGS OF FACT

After consideration and review of all the testimony and the evidence submitted at the hearing, by a preponderance of the evidence, I make following findings:

1. This Division has personal and subject matter jurisdiction.

2. Notice of the date, time, place and nature of the hearing was timely given to all parties.

3. The Respondent, William N. Massalon, owns a party shop and a retail liquor store located at Highway 21, Island Square Shopping Center, Beaufort County, South Carolina. The location was designed by an architect and constructed between July 1990 and February 1991.

4. A permit and license were issued to the party shop and the retail liquor store by the Commission, effective February 15, 1991.

5. The Commission and SLED agents who inspected the location during its construction were aware of the interior configuration prior to the issuance of the permit and license. A sketch with plans showing the layout of the interior was provided to the Commission along with the applications.

6. The permit at the party shop allows for the sale of beer and wine for off-premise consumption. The license at the retail liquor store permits the retail sale of liquor and wine.

7. The photographs (Respondent's Exhibits #11-17) clearly depict the interior of the location. There are two glass doors opening from the front sidewalk to an entrance foyer. One may then proceed to the right into the party shop, or to the left through a door into the liquor store.

8. Both the liquor store and the party shop have a door opening into the wine cellar location for ingress and egress. In the liquor store, the wall containing the wine cellar door is adjacent to the wall containing the door into the entrance foyer. Each door opening has a gate which can be closed to prevent access.

9. Since the opening of the party shop and the retail liquor store, SLED agents attached to the Commission and now to the Department, inspected the location eight to ten (8-10) times yearly. No objection was ever made by any of those agents as to any violation of an ABC law or regulation based upon the location's interior configuration until the violation report dated July 5, 1995.

ANALYSIS AND DISCUSSION

I. Separate Store or Place of Business

The Department seeks a suspension of Respondent's retail liquor license at the Island Square Shopping Center on Lady's Island, South Carolina. The Department's contention is that Respondent has failed to comply with the requirements of Section 61-3-1000, which mandates that the means of ingress and egress for the public must be on the front or adjacent sides at the place of business.

The statute requires that a retail liquor store must be located in "a separate store or place of business." The use of the words "separate store" would indicate that the Legislature intended two (2) separate locations or two (2) separate buildings. However, the statute refers not only to a separate "store," but also to a "place of business." This wording would indicate that the location need not be housed in a free-standing building. I take judicial notice that there are many retail liquor stores located in strip shopping centers in South Carolina, each having been authorized by the Department and its predecessor, the Commission, prior to the issuance of each license. Furthermore, paragraph four of Section 61-3-1000 authorizes the placement of signs advertising an "ABC Package Store" in shopping center directories. The statute clearly contemplates that retail liquor stores may be located either in a free-standing building or in a structure such as a shopping center where other businesses are located, all under the same roof.

With regard to the configuration of Petitioner's business, it is clear that the liquor store is a separate "place of business" within the meaning of Section 61-3-1000. Petitioner's retail liquor store is located in a shopping center, as is the party shop. The two businesses are operated as separate entities, with separate counters, cash registers and accounting systems. There is a wine cellar located between the two businesses; it is connected to each business by a door opening. At each of these door openings is a gate which can be closed and locked. When the law requires the liquor store to be closed [i.e., July 4th], a store selling only beer and wine may remain open. On such days, Petitioner closes the liquor store by locking the gate at the wine cellar entrance and by locking the front door leading into the liquor store.

Section 61-3-1000 provides in pertinent part:

Every retail dealer shall maintain a separate store or place of business with not more than two (2) means of public ingress or egress which must be on the front or the same side of the building, except that the doors may be located at the corner of two (2) adjacent sides of the building. One additional door, not in the front, is allowed to be used solely for the receipt of commercial deliveries and as an emergency exit.

The statute clearly indicates that either a "separate store" in a free-standing building or a "place of business" located under the same roof and sharing a common wall with other businesses may have a front door and a side door for public ingress and egress. In the latter instance, a retail liquor store could have one door at the front and another door on the wall adjacent to the front door, which would by necessity open into an adjoining store. In this case, Petitioner operates two separate businesses, the retail liquor store and the party shop, adjacent to each other. The retail liquor store has a front door (into the entrance foyer) and a door on the wall adjacent to the front door (the door opening into the wine cellar). I find nothing in the statute which prohibits this configuration. Furthermore, where an administrative agency has consistently applied a statute in a particular manner, its construction should not be overturned absent cogent reasons. Gilstrap v. S.C. Budget and Control Board, 423 S.E.2d 101 (S.C. 1992). The Commission, which was the public body responsible for interpreting the laws relating to ABC applications at the time of Petitioner's application, issued a license to Petitioner after reviewing the plans for the building. Obviously the Commission interpreted the statute to permit the configuration of doors used in Petitioner's business. Subsequent to the issuance of the license, the location has been inspected numerous times by Commission and Department agents, none of whom expressed any concern about the doors until this citation was issued. These facts are also indicative of the Commission's and the Department's consistent interpretation of the statute. The Department has failed to advance any rational reason for changing this interpretation.

II. Estoppel

The essential elements of an equitable estoppel as related to the party claiming the estoppel are: (1) lack of knowledge and of the means of knowledge of the truth as to the facts in question; (2) reliance upon the conduct of the party estopped; and (3) the action based thereon was of such a character as to change prejudicially the position of the party claiming the estoppel. Murphy v. Hagan, 275 S.C. 334, 271 S.E. 2d 311, 313 (1980).

It appears from the record that the Respondent forwarded the sketch or plans for the location to the Commission, the public body which at that time interpreted the laws relative to ABC applications. Its agents visited the location on numerous occasions, inspected the premises, and subsequently issued the liquor license and beer and wine permit. Petitioner justifiably relied upon the Commission's interpretation of the statute and approval of the plans and designs for the building. He went to considerable expense to have the building constructed in its present configuration. If the plans had not been approved, obviously the Petitioner would have constructed the building differently. To hold, as the Department contends, that the building is suddenly not in compliance with the statute, after five years of acquiescence, would prejudicially alter the financial position of the Petitioner. He would be forced to incur additional expense to bring the building into compliance with the Department's new requirements.

The general rule that the doctrine of estoppel is not to be applied to deny a governmental agency the due exercise of its police power, South Carolina Department of Social Services v. Parker, 275 S.C. 176, 268 S.E.2d 282 (1980), does not control in this case. "Estoppel is an equitable doctrine, essentially flexible, and therefore to be applied or denied as equities between the parties may be preponderate." Pitts v. New York Life Insurance Co., 247 S.C. 545, 148 S.E.2d 369, 371-72 (1966). Government agents, acting within the proper scope of their authority, can by their acts give rise to estoppel against a municipality. Abbeville Arms v. City of Abbeville, 273 S.C. 491, 257 S.E. 2d 716, 718 (1979). To allow the Department to repudiate its former interpretation of this statute, based upon a recent reassessment of its meaning, would be unconscionable. Kerr v. City of Columbia, 232 S.C. 405, 102 S.E.2d 364 (1958).

It is clear that the government may be bound by an equitable estoppel in the same manner as a private party when the elements requisite to such an estoppel against a private party are present and, in the considered view of a court of equity, the injustice which would result from a failure to uphold an estoppel is of sufficient dimension to justify any effect upon public interest or policy which would result from the raising of the estoppel. Chaplis v. Monterey County, 97 Cal. App. 3d 249, 158 Cal. Rptr. 395 (1979).

In reliance upon representations of agents of the Commission, Petitioner went to great expense to construct a very functional building which serves the public. The Commission issued to him a license, based on their inspection and their recommendations; agents of the Commission and the Department have inspected the location on a quarterly basis since that time; and Petitioner has never been informed that there was any problem with the building. Petitioner has proved the elements of equitable estoppel in this case.









CONCLUSIONS OF LAW

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

1. S.C. Code Ann. § 1-23-600 (Supp. 1994) grants jurisdiction to the Administrative Law Judge Division to hear contested cases under the Administrative Procedures Act.

2. S.C. Code Ann. § 61-1-55 (Supp. 1994) grants to the Administrative Law Judge Division the powers, duties and responsibilities as a hearing officer in protested and contested matters governing alcoholic beverages, beer and wine.

3. Paragraph one of S.C. Code Ann. § 61-3-1000, which governs structural requirements for doors in retail liquor stores, reads as follows:

Every retail dealer shall maintain a separate store or place of business with not more than two means of public ingress or egress which must be on the front or the same side of the building except that the doors may be located at the corner of two adjacent sides of the building. One additional door, not in the front, is allowed to be used solely for the receipt of commercial deliveries and as an emergency exit.

4. The primary rule of statutory construction is to ascertain and effectuate the intent of the legislature. Words used in a statute must be given their plain and ordinary meaning without resorting to subtle or forced construction to limit or expand the statute's operation. In interpreting a statute, its terms must be construed in context and their meaning determined by looking at other terms used in the statute. Statutory provisions should be given reasonable and practical construction consistent with the purpose and policy of the entire act. Gilstrap vs. South Carolina Budget and Control Board, 310 S.C. 210, 423 S.E.2d 101 (1992); Bryant v. City of Charleston, 295 S.C. 408, 268 S.E.2d 899 (1988). When statutory terms are clear and unambiguous, there is no room for construction and courts are required to apply them according to their literal meaning. Citizens for Lee County, Inc. vs. Lee County, 308 S.C. 23, 416 S.E. 2d 641 (1992).

5. The literal wording of Section 61-3-1000 limits ingress and egress for customers to the front and adjacent side of the business. There is no limitation on entry through a side door from another place of business, nor is there any requirement that a retail liquor store must be in a free-standing building.

6. Where an administrative agency has consistently applied a statute in particular manner, its construction should not be overturned absent cogent reasons. Gilstrap vs. South Carolina Budget and Control Board, 310 S.C. 210, 423 S.E. 2d 101 (1992). The Commission authorized the configuration at Respondent's store, based on its interpretation of the applicable statutes. This interpretation by the Commission and the Department has been consistent up until the date of the citation in this case.

7. Generally, estoppel is not to be applied to deny a governmental agency due exercise of its police power; however, government agents or officers acting within the proper scope of their authority, can by their acts give rise to estoppel. S.C. Coastal Council v. Vogel,292 S.C. 449, 357 S.E. 2d 187 (Ct. App. 1987); County of Charleston v. National Advertiser, 292 S.C. 416, 359 S.E.2d 9 (1987).

The Department has failed in its burden to prove by a preponderance of the evidence that the Respondent is in violation of § 61-3-1000. Absent any cogent reason otherwise, I conclude that the citation against Respondent should be dismissed.







ORDER

Based upon the above Findings of Fact, Conclusions of Law and Analysis and Discussion, it is hereby

ORDERED that the citation dated July 5, 1995, issued by the South Carolina Department of Revenue and Taxation against William N. Massalon, d/b/a Bill's ABC Store at Lady Square Shopping

Center, Beaufort County, South Carolina, is dismissed.

AND IT IS SO ORDERED.



_____________________________________________

Marvin F. Kittrell

Chief Judge

Columbia, South Carolina

January 4, 1996


Brown Bldg.

 

 

 

 

 

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