South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
SCDOR vs. David S. Evans, Pres., Save More, Inc.

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
David S. Evans, Pres., Save More, Inc.
 
DOCKET NUMBER:
96-ALJ-17-0527-CC

APPEARANCES:
Carol I. McMahan
Attorney for Petitioner

Clinch H. Belser, Jr.
Attorney for Respondent
 

ORDERS:

ORDER AND DECISION

I. STATEMENT OF THE CASE


This matter comes before me pursuant to S.C. Code Ann. § 61-1-55 (Supp. 1995) and S.C. Code Ann. §§ 1-23-310, et seq. (Supp. 1995). The South Carolina Department of Revenue ("Department") contends that David S. Evans permitted or knowingly allowed a minor to purchase a wine cooler from Respondent's licensed establishment, Save More, Inc., located at 439 North Duncan By-Pass, Union, South Carolina. Accordingly, the Department seeks to impose an $800 fine against Respondent for a violation of 23 S.C. Code Regs. 7-9(B) (Supp. 1995).

After timely notice to the parties, a hearing was conducted on March 18, 1997 at the Administrative Law Judge Division, Columbia, South Carolina. Based upon testimony and the evidence presented, the Department's request that Respondent be fined $800 for violating 23 S.C. Code Regs. 7-9(B) is granted.

II. 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 David Evans, president of Save More, Inc., holds an off-premises beer and wine permit (BG-824891) for Save More, Inc., a convenience store located at 439 North Duncan By-Pass, Union, South Carolina.

2. On May 16, 1996, State Law Enforcement Division ("SLED") Agent Brunson Asbill, with the assistance of Underage Cooperating Individual ("UCI"), Kristen E. Arms, conducted a routine sting operation at the licensed premises.

3. Prior to the UCI entering Save More, Inc., Agent Asbill searched the UCI and determined that she had only a valid South Carolina Beginner's Permit and $5.00 in cash on her person. Shortly thereafter, Agent Asbill observed the UCI enter Save More, Inc.

4. The UCI entered Save More, Inc. at approximately 8:30 p.m. and walked back to the beer/wine cooler. She took a tropical flavored Bartles and James wine cooler from the cooler. The UCI proceeded to purchase the wine cooler from Janice Hughes, who was employed by Respondent as a sales clerk on May 16, 1996. Ms. Hughes collected the UCI's money for the wine cooler, then asked the UCI if she was "twenty-one." The UCI did not indicate that she was twenty-one. The UCI merely handed Ms. Hughes identification, making no verbal or physical assertion that she was twenty-one. The identification presented was the UCI's South Carolina Beginner's Permit which indicated that her birth date is "11/18/1979" and she was under the age of twenty-one. The permit conspicuously indicated in bold letters that it was a "Beginner Permit." After looking at the UCI's identification, Ms. Hughes passed the wine cooler to the UCI. The UCI exited the store and took the wine cooler over to the undercover agent who was outside the premises. The UCI was sixteen years old at the time of the purchase.

5. Agent Asbill and the UCI reentered the location and approached Ms. Hughes and introduced themselves as a SLED agent and UCI.

6. On May 16, 1996, Respondent David Evans, d/b/a Save More, Inc., was issued a citation for violating 23 S.C. Code Regs. § 7-9(B).

7. On June 18, 1996, the South Carolina Department of Revenue issued a notice to Respondent sustaining the violation and imposing an $800 penalty. Respondent has been cited for a violation of this nature within the last three years. On October 20, 1995, Respondent was charged with permitting the purchase of beer/wine by a person under the age of twenty-one. Respondent paid a $400 monetary penalty for that violation.

8. For the events occurring on May 16, 1996, Ms. Hughes was charged with a criminal violation of S.C. Code Ann. § 61-13-287 (Supp. 1995), transfer of wine to a person under the age of twenty-one. In a hearing before a magistrate, Ms. Hughes was found not guilty.

9. On the date of the hearing before this tribunal, the UCI's physical appearance accurately reflected her physical appearance on the night in question. The UCI was not wearing any make-up on the night in question. The UCI appeared sufficiently youthful so as to merit an inquiry as to her correct age before allowing her to purchase alcohol. Based on this tribunal's observation of the UCI at the hearing, a reasonable person would conclude that the UCI was under the age of twenty-one.

10. At the hearing, the UCI's new Beginner's Permit was submitted into evidence, as the Beginner's Permit shown to Ms. Hughes on May 16, 1996 expired and has been replaced by the new Beginner's Permit. The new permit is virtually identical to the permit shown to Ms. Hughes.

11. At the hearing, Ms. Hughes testified that the UCI presented identification which indicated the UCI was born in 1974, as opposed to 1979. She further testified that once the UCI reentered the store with Agent Asbill, an identification was presented to her which indicated the UCI was born in 1977. Ms. Hughes also stated that at the magistrate court hearing, Agent Asbill presented identification indicating that the UCI was born in 1979. This statement contradicts the testimony of Agent Asbill, who testified that no identification was presented in magistrate's court. This tribunal finds the testimony of Ms. Hughes to be less credible than that of other witnesses she contradicted.

III. CONCLUSIONS OF LAW AND DISCUSSION

A. Violation of Regulation 7-9(B)

The 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. 1995). The Department alleges Respondent David Evans, d/b/a Save More, Inc., violated 23 S.C. Code Regs. § 7-9(B) by permitting or knowingly allowing a minor to purchase a wine cooler from Respondent's licensed establishment. Regulation 7-9(B) 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. Such violation shall be sufficient cause to suspend or revoke the license or permit by the Alcoholic Beverage Control Commission.

(emphasis added).To warrant a violation of 23 S.C. Code Regs. 7-9(B), the Department must establish that either Respondent or Respondent's servant, agent or employee permitted or knowingly allowed a person under twenty-one years of age to purchase a wine cooler from Respondent's licensed establishment. 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, 311 S.C. 555, 430 S.E.2d 511 (1993). When the meaning of the language, the subject matter, and the purpose of the regulation are considered together, it becomes apparent that the drafters of 23 S.C. Code Regs. 7-9(B) intended for beer and wine permit holders to be responsible for the actions and conduct of their agents or employees. See S.C. Code Ann. § 61-9-410; 48 C.J.S. Intoxicating Liquors, § 168 (1981). Thus, the sale of beer or wine to a minor is forbidden irrespective of whether the sale is made by the permit holder or by an employee of the permit holder. 48 C.J.S. Intoxicating Liquors, § 259 (1981). Such an interpretation is consonant with the public policy of preventing underage drinking. Ms. Hughes was employed by Respondent at the time the sale was made, therefore, Respondent is liable for the actions of Ms. Hughes.

In civil cases, generally, the burden of proof rests upon the party who asserts the affirmative of an issue. 29 Am. Jur. 2d, Evidence § 127 (2d ed. 1994); Alex Sanders, et al. South Carolina Trial Handbook, § 9:3 Party With Burden, Civil Cases (1994). The Department is the party asserting the affirmative in this case, therefore, the Department must prove by a preponderance of the evidence that Respondent or Respondent's agent, servant, or employee permitted or knowingly allowed the UCI to purchase a wine cooler from the licensed establishment in violation of 23 S.C. Code Regs. 7-9(B) (Supp. 1995). The preponderance of the evidence "is evidence which is of the greater weight or more convincing than the evidence which is offered in opposition to it . . . ." Black's Law Dictionary 1182 (6th ed. 1990). "The preponderance of the evidence means such evidence as, when considered and compared with that opposed to it, has more convincing force and produces in the mind the belief that what is sought to be proved is more likely true than not true." Alex Sanders, et al. South Carolina Trial Handbook, § 9:5 Quantum of Evidence in Civil Cases (1994), (citing Frazier v. Frazier, 228 S.C. 149, 89 S.E.2d 225 (1955)).

Ms. Hughes permitted or knowingly allowed the UCI to purchase a wine cooler from the licensed establishment. "To permit" means to allow, consent, let; 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. A party manifests consent and knowledge to allowing a person under twenty-one years of age to purchase alcohol if, from the appearance of the person or otherwise, the party had sufficient information that would lead a prudent person to believe the person was under twenty-one, especially when a simple inquiry would have confirmed such fact. Feldman v. S.C. Tax Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943). The Feldman case delineated a two-part test(1) for determining whether the required degree of knowledge is present:

1. Whether the Respondent knew that the UCI was under 21 years of age through independent knowledge, or

2. Had such information from the UCI's appearance or from other information

a. which would cause a prudent person to believe

the UCI was under 21 years of age, and

b. would cause the same prudent person to conduct an inquiry to ascertain the correct age.

In the case at hand, the Department offered testimony establishing that Ms. Hughes had knowledge that the UCI was under the age of twenty-one through the UCI's youthful appearance and Ms. Hughes' inspection of the UCI's Beginner's Permit. The UCI's appearance would cause a prudent person to believe the UCI was under twenty-one years of age, and would cause the same prudent person to conduct an inquiry to ascertain her correct age. The UCI testified that her physical appearance at the hearing was the same as the night in question, and that she had made no attempt to alter her appearance to look older on the night she visited Save More, Inc. The UCI's appearance at the trial was sufficiently youthful so as to merit an inquiry to ascertain her correct age before selling her beer or wine. Ms. Hughes had actual knowledge of the UCI's age once the UCI gave her Beginner's Permit to Ms. Hughes. The Beginner's Permit clearly indicated that the UCI was born November 18, 1979 and was under the age of twenty-one. Even though Ms. Hughes inquired, she apparently misread the UCI's identification, and acquiesced by failing to prevent a person under twenty-one years of age from purchasing wine at the licensed premises of Respondent. Additionally, because Ms. Hughes was an employee of Respondent at the time of the sale, Respondent is liable for a violation of 23 S.C. Code Regs. 7-9(B).

This tribunal finds the testimony of the UCI to be more credible than the testimony presented by Ms. Hughes. The weight and credibility assigned to evidence presented at the hearing of a matter is within the province of the trier of fact. See S.C. Cable Tel. Assn. v. Southern Bell Tel. and Tel. Co., 308 S.C. 216, 417 S.E.2d 586 (1992). Furthermore, a trial judge, who observes a witness, is in the better position to judge the witness's demeanor and veracity and evaluate their testimony. See Mann v. Walker, 285 S.C. 194, 328 S.E.2d (Ct. App. 1985); Marshall v. Marshall, 282 S.C. 534, 320 S.E.2d 44 (Ct. App. 1984); McAlister v. Patterson, 278 S.C. 481, 299 S.E.2d 322 (1982); Peay v. Peay, 260 S.C. 108, 194 S.E.2d 392 (1973). At the hearing of this matter, Ms. Hughes's testimony appeared less credible than other witnesses she contradicted.

B. Entrapment


Respondent asserts that Ms. Hughes was entrapped into selling the beer to the UCI. The burden is upon the party claiming the defense of entrapment to prove he was induced, tricked, or incited to commit a crime which he would otherwise not have committed. State v. Johnson, 295 S.C. 215, 367 S.E.2d 700 (1988). "Inducement" may be defined as government conduct which creates a substantial risk that an undisposed person or otherwise law-abiding citizen would commit the offense. U.S. v. Ortiz, 804 F.2d 1161 (10th Cir. 1986). However, proof of government inducement requires more than mere solicitation. U.S. v. Prytz, 822 F.Supp. 311 (D.S.C. 1993), aff'd, 35 F.3d 557 (4th Cir. 1994). Further, inducement also will not be shown by evidence that the government agent initiated the contact with the Defendant or proposed the crime. Ortiz, 804 F.2d at 1165 (citing U.S. v. Andrews, 765 F.2d 1491, 1499 (11th Cir. 1985), cert. denied, U.S. , 106 S. Ct. 815, 88 L.Ed.2d 789 (1986). Rather, more is needed to show inducement, such as trickery by disguise. See U.S. v. Healy, 202 F. 349 (D. Mont. 1913), Voves v. U.S., 249 F. 191 (7th Cir. 1918).

The use of UCIs in such sting operations is permissible. In 1993, the Attorney General reasoned that because the language of S.C. Code Ann. § 61-13-287 does not specifically or in effect preclude the use of minors in sting operations, "it appears that law enforcement officers could utilize underage individuals to cause 'transfers' prohibited by S.C. Code Ann. § 61-13-287." 1993 Op. Att'y Gen. No. 93-94. In the case at hand, the SLED agent did nothing more than employ a person under the age of twenty-one to purchase a bottle of wine. The UCI did not induce, trick or incite Ms. Hughes to sell her the wine cooler. When asked if she was twenty-one, the UCI handed Ms. Hughes her Beginner's Permit which indicated that she was under the age of twenty-one and her birth date is November 18, 1979. Furthermore, the UCI did not alter her appearance to appear older than her true age. For these reasons, Respondent has failed to prove the defense of entrapment.

C. Res Judicata, Collateral Estoppel, Issue Preclusion

Additionally, Respondent contends that the Department is precluded by the doctrines of res judicata, collateral estoppel, and issue preclusion from bringing this action against him.

The doctrine of res judicata may not be used to preclude the litigation of an administrative violation of 23 S.C. Code Regs. 7-9(B), where an employee of the licensed establishment was previously acquitted on criminal charges for an unlawful transfer of wine to a minor in violation of S.C. Code Ann. § 61-13-287 (Supp. 1995). Under the doctrine of res judicata, a final judgement on the merits in a prior action will preclude the parties from relitigating any issues actually litigated or those that might have been litigated in the first action. Foran v. USAA Casualty Ins. Co., 311 S.C. 189, 427 S.E.2d 918 (Ct. App. 1993). The defense of res judicata requires a showing of three essential elements: (1) the prior judgement must be final, valid and on the merits; (2) the parties in the subsequent action must be identical to those in the first; and (3) the second action must involve matters properly included in the first action. Owenby v. Owens Corning Fiberglass, 313 S.C. 181, 437 S.E.2d 130 (Ct. App. 1993). Here, the parties are not identical and this case does not involve a matter which was included in the first action. Ms. Hughes was charged with the criminal violation of S.C. Code Ann. § 61-13-287 (Supp. 1995), transfer of wine to a person under the age of twenty-one. In a hearing before a magistrate court judge, Ms. Hughes was found not guilty. The parties to the action in magistrate's court were the State of South Carolina and Ms. Hughes. In the case at hand, the parties are the South Carolina Department of Revenue and David Evans, d/b/a Save More, Inc. Therefore, the parties are not identical. Furthermore, the matter before this tribunal is an administrative violation against the licensee of the establishment where the UCI purchased the wine cooler. The matter before the magistrate court involved a criminal charge against the sales clerk of the convenience store. For the foregoing reasons, this tribunal concludes that res judicata is not applicable to the case at hand.

As stated above, Respondent further alleges that the Department should be prevented from bringing this action because of the doctrines of collateral estoppel and issue preclusion. The modern trend is to refer to collateral estoppel as issue preclusion. See Town of Sullivan's Island v. Felger, 318 S.C. 340, 457 S.E.2d 626 (Ct. App. 1995); Peoples Federal Savings & Loan Ass'n v. Myrtle Beach Golf & Yacht Club, 310 S.C. 132, 425 S.E.2d 764 (Ct. App. 1992); Price v. City of Georgetown, 297 S.C. 185, 375 S.E.2d 335 (Ct. App. 1988). The doctrine of collateral estoppel occurs when a party in a second action seeks to preclude a party from relitigating an issue which was decided in a previous action. S.C. Property and Cas. Ins. Guar. Ass'n v. Wal-Mart Stores, Inc., 304 S.C. 210, 403 S.E.2d 625 (1991). "In order to successfully assert collateral estoppel, the party seeking issue preclusion must show that the issue was actually litigated and directly determined in the prior action, and that the matter or fact directly in issue was necessary to support the first judgement." Town of Sullivan's Island v. Felger, 318 S.C. 340, 457 S.E.2d 626 (Ct. App. 1995); Richburg v. Baughman, 290 S.C. 431, 351 S.E.2d 164 (1986); Beal v. Doe, 281 S.C. 363, 315 S.E.2d 186 (Ct. App. 1984).

Our Supreme Court and Court of Appeals have adopted the general rule and exceptions as set forth in the Restatement (Second) of Judgements, §§ 27, 28, 29 (1982). See S.C. Property and Cas. Ins. Guar. Ass'n v. Wal-Mart Stores, Inc., 304 S.C. 210, 403 S.E.2d 625 (1991). Restatement (Second) § 27 provides:

When an issue of fact or law is actually litigated and determined by a valid and final judgement, and the determination is essential to the judgement, the determination is conclusive in a subsequent action between parties, whether on the same or different claim.

As previously enunciated, the present case and the criminal case involving Ms. Hughes are not between the same parties. Therefore, the determination of the issue of fact in the criminal proceeding is not conclusive in the present case. This is consistent with Restatement (Second) § 27.

Additionally, there are five exceptions to the general rule which are stated in Restatement (Second) § 28. This tribunal finds the fourth exception applicable to this matter. This exception applies when "the party against whom preclusion is sought had a significantly heavier burden of persuasion with respect to the issue in the initial action than in the subsequent action . . . ." Restatement (Second) § 28 (1982). It may be argued that the issues are similar, however, the burden of proof in magistrate's court was a higher burden than the preponderance of the evidence, which is the applicable burden of proof in this matter. For these reasons, I conclude that the issue before this tribunal is not precluded by the doctrine(s) of collateral estoppel (issue preclusion).

D. Conclusion

In conclusion, the holder of a beer and wine permit maintains liability for the actions of his employees who sell alcohol to underage persons. Respondent's employee, Ms. Hughes, permitted or knowingly allowed the purchase of wine by a person under the age of twenty-one in violation of 23 S.C. Code Regs. 7-9(B) (Supp. 1995). Additionally, the defense of entrapment has not been proven and SLED agents may lawfully employ UCIs to regulate licensees for compliance with 23 S.C. Code Regs. 7-9(B). Furthermore, the doctrines of res judicata, collateral estoppel, and issue preclusion do not prevent the adjudication of the administrative violation by this tribunal.

The Department is authorized to revoke or suspend the beer and wine permit of any licensee for committing a violation of the laws pertaining to alcoholic beverages or any regulation promulgated by the Department. See S.C. Code Ann. § 61-9-410 (Supp. 1995). Further, the Department may impose a monetary penalty as an alternative to revocation or suspension. S.C. Code Ann. § 61-1-80 (Supp. 1995). For the reasons stated above, a fine of $800 against David Evans, d/b/a Save More, Inc., is appropriate.



IV. ORDER

IT THEREFORE ORDERED that Petitioner's request that Respondent be fined $800 for violating 23 S.C. Code Regs. 7-9(B) is granted and Respondent shall remit $800 to the Petitioner within thirty (30) days to satisfy the fine.

AND IT IS SO ORDERED.

_________________________________

JOHN D. GEATHERS

Administrative Law Judge

Post Office Box 11667

Columbia, South Carolina 29211-1667

April 25, 1997

Columbia, South Carolina

1. The Administrative Law Judge Division has applied the Feldman analysis in at least two other cases: S.C. Dep't of Revenue and Taxation v. Linda E. Sellers, d/b/a The Other Store, Docket No. 95-ALJ-17-0535-CC (filed Feb. 13, 1996); S.C. Dep't of Revenue and Taxation v. Idell B. Harriott, d/b/a Harriott's Grocery, Docket No. 95-ALJ-17-0595-CC (filed Mar. 6, 1996).


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