ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This matter comes before me upon a request by John D. Talley, d/b/a Jerico, Inc.
("Respondent") for a hearing pursuant to administrative violations written against the on-premise
sales and consumption ("minibottle") license for the premises located at 1623 Highway 501, Myrtle
Beach, South Carolina ("location"). A citation/violation report was issued at the location for a
violation of S.C. Code Regs. 7-9 (A) (1976) for allegedly permitting a person under the age of
twenty-one (21) years to possess liquor, and for a violation of S. C. Code Ann. § 61-6-1820 (Supp.
1996) for not being primarily and substantially engaged in the service of food. The South Carolina
Department of Revenue ("Department") seeks a $400.00 fine and revocation of the on-premise sales
and consumption license.
A hearing was held at the Administrative Law Judge Division ("Division"), 1205 Pendleton
Street, Columbia, South Carolina, on Thursday, March 12, 1998, pursuant to notice to the parties.
After a thorough review of the file and the evidence presented at the hearing, I find and
conclude that the charges and violations should be dismissed.
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).ISSUES
1. Did the Respondent or his agent violate the provisions of 23 S.C. Code Regs. 7-9(A)
(1976) on May 8, 1997, by permitting or knowingly allowing a person under twenty-one (21) years
of age to possess liquor at the location?
2. Was the Respondent primarily and substantially engaged in preparing and serving
meals on May 8, 1997?
3. If there are violations, what are the appropriate penalties?
FINDINGS OF FACT
After consideration and review of all the evidence and testimony and having judged the
credibility of the witnesses, by a preponderance of the evidence, I make the following findings:
1. Notice of the date, time, place and nature of the hearing was timely given to all
parties.
2. Respondent holds an on-premise sales and consumption license as the owner of
Jerico, Inc., for a club/restaurant known as Bahama Beach Club located at 1623 Highway 501,
Myrtle Beach, South Carolina.
3. On May 8, 1997, at approximately 11:30 p.m., State Law Enforcement Division
("SLED") agents Ryan Anthony Neill, Pamela Ann Williamson and Stacey Snow, who are with the
Alcohol Enforcement Unit, acting in an undercover capacity and pursuant to a complaint, went to
the location. Agent Ryan Neill testified that upon entering the location, his age was checked by the
doorman and a wristband was placed on his arm attesting that he was twenty-one (21) years of age
and authorized to purchase alcoholic beverages. He testified that he went to the bar, ordered a mixed
drink and some chips. He stated that the bartender told him he had none.
4. Agent Neill testified that he walked around inside the location and observed a young
lady sitting at a table who appeared to him to be under twenty-one (21) years of age. He stated that
he observed her purchase a mixed drink and thereafter, he saw agent Williamson approach the lady
and engage her in conversation.
5. Agent Williamson stated that the young lady told her that her name was Chanda
Johnson and that she was eighteen (18) years of age. The young lady had a wrist band on her wrist
denoting that she was of the age of twenty-one (21) years. When the young lady was unable to
provide proof of her age, Agent Williamson proceeded to search her and was unable to find any
identification on Ms. Johnson to determine her exact age.
6. A violation report was written against the location and the licensee for violating S.
C. Code Regs. § 7-9 (A).
7. Agent Williamson testified that she has been in the location many times before May
8, 1997 and many times since, has conducted several inspections and on several occasions has not
found food in the kitchen. She also testified that on occasion she has been unable to purchase food
at the location.
8. The testimony of agent Williamson is that there is a fryer, microwave oven and a
large dry store area in the kitchen area at the location.
9. Agent Stacey Snow testified that he went to the location on March 30, 1997 at
approximately 10:30 to 11:00 p.m., ordered a beer and a hamburger or hot dog. He stated that no
food was available for him to purchase. Agent Snow also stated that he did not inquire about the
kitchen or the menu, nor does he know if food was available for purchase earlier in the evening.
10. Respondent testified that he has been operating a club at the location since 1990
except for a short period in 1996 when he sold the operation. He introduced into the record at the
hearing a menu and food purchase slips, and testified that he sells pizzas, t-bone steak and baked
potato dinners and has had that or some similar menu available for serving to the club's customers
since its opening.
11. Mr. Talley also testified that the waitress or bartender prepares the food; however,
orders from customers for pizzas are usually placed with an outside source and delivered to the
location.
12. Mr. Talley further testified that the doorman checks all customers for their age when
they enter the location.
13. No evidence was placed into the record that the Respondent does not have a class "A"
restaurant rating from the Department of Health and Environmental Control.
14. No citation was made for a violation at the location for a failure to have proper
kitchen equipment on the premises.
15. No citation was made for a violation at the location for a failure to have menus
available on the premises.
16. No evidence was placed into the record that SLED agents ever gave either verbal or
written warnings to the Respondent about a failure to serve food at the location.
17. No evidence was placed into the record about the percentage of gross revenues
attributable to food sales at the location.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. 1997) grants jurisdiction to the Administrative
Law Judge Division to hear contested cases under the Administrative Procedures Act.
2. S. C. Code Ann. § 61-2-260 (Supp. 1997) provides that contested case hearings
arising under the provisions of Title 61 must be heard by an Administrative Law Judge with the
Division.
3. 23 S.C. Code Ann. Regs. 7-9(A) (1976) prohibits a licensee from permitting or
knowingly allowing a person under twenty-one (21) years of age to purchase or possess or consume
alcoholic beverages in or upon a licensed establishment for the sale and consumption of alcoholic
beverages in sealed containers of two ounces or less. Such an act is a violation against the license
and constitutes grounds for its suspension or revocation.
4. To be issued a business sale and consumption license, an applicant must conduct a
business bona fide engaged primarily and substantially in the preparation and serving of meals or
furnishing of lodging, as described in S. C. Code Ann. §§ 61-6-20 and 61-6-1820 (Supp. 1997).
5. As used in § 61-6-20 and elsewhere in Article 1 of Chapter 6 , Title 61, "Bona fide
engaged primarily and substantially in the preparation and serving of meals" refers only to a business
which has been issued a Class A restaurant license prior to the issuance of minibottle license and,
in addition, provides facilities for seating not less than forty persons simultaneously at tables for the
service of meals.
6. The holder of a business sale and consumption minibottle license must be "bona fide
engaged primarily and substantially in the preparation and serving of meals or furnishing of
lodging...." S. C. Code Ann. § 61-6-1610 (A)(1) (Supp. 1997).
7. In the South Carolina Supreme Court case of Brunswick Capitol Lanes v. South
Carolina Alcoholic Beverage Control Commission, 273 S.C. 782, 260 S.E.2d 452 (1979), the court
was faced with interpreting S.C. Code Ann. §§ 61-5-20(4)(a) and 61-5-10(1), to determine if a
minibottle license applicant which estimated that ten per cent of its gross revenues was derived from
the preparation and sale of food, and eighty per cent from its bowling operations, was eligible for
a minibottle license. The Court held:
The word "primarily" means "of first importance" or
"principally." Malat v. Riddell, 383 U.S. 569, 572, 86 S.Ct. 1030,
1032, 16 L.Ed.2d 102 (1966); Webster's Third New International
Dictionary 1800 (1965); 33A Words and Phrases, 209-215.
Respondent contends the fact he possesses a Class A restaurant
license and seating capacity for fifty-two qualifies it for a mini-bottle
license. This is not the determinative factor; rather, the legislature
has stated the critical test is whether the business is engaged
"primarily and substantially in the preparation and serving of meals."
We conclude a business which attributes only ten per cent of its gross
revenues to food preparation and sale does not fulfill the "primary"
and "substantial" requirement of the statute. Accordingly, respondent
should not be granted a mini-bottle license.
8. 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 (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 violated § 12-21-2804(A) and R. 117-190.
9. 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." Sanders, supra, § 9:5 Quantum
of Evidence in Civil Cases (1994), [citing Frazier v. Frazier, 228 S.C. 149, 89 S.E.2d 225 (1955)].
10. The trier of fact must weigh and pass upon the credibility of evidence presented. See
S.C. Cable Television Ass'n v. Southern Bell Tel. and Tel. Co., 308 S.C. 216, 417 S.E.2d 586
(1992). The trial judge who observes a witness is in the best position to judge the witness's
demeanor and veracity and evaluate their testimony. See McAlister v. Patterson, 278 S.C. 481, 299
S.E.2d 322 (1982); Mann v. Walker, 285 S.C. 194, 328 S.E.2d (Ct. App. 1985).
11. Without any extrinsic evidence or corroboration to the testimony of agent Williamson
about the age of Ms. Chanda Johnson, this court is unable to find that the Department has met its
burden of proof by a preponderance of the evidence in showing that she was under twenty-one (21)
years of age. Accordingly, the citation written against the licensee for a violation of S. C. Code
Regs. 7-9 (A) is dismissed for lack of proof. The Department failed to make a prima facie case and
failed to carry its burden.
12. With regard to the location being "primarily and substantially" engaged in the
preparation of and service of meals, this court is quite concerned with the evidence placed into the
record by the SLED agents about the failure by the location to provide food upon request. Numerous
visits have been made to the location by SLED agents.
On the other hand, I note that there was no testimony or evidence placed into the record that
warnings had been given to management by these same SLED agents. Further, there is no evidence
that the Department of Health and Environmental Control has taken from the location the class "A"
restaurant rating. Also, the location does have a menu, has some kitchen equipment and does serve
some solid food and meals. Further, there is no proof that the gross receipts from the sales of food
and meals do not constitute a regular and substantial source of the business income at the location.
Without sufficient proof that the Respondent does not serve food during mealtimes, it is
impossible for this court to find that the Department has met its burden of proof in establishing that
this Respondent is not engaged primarily and substantially in the preparation of food. The burden
of proof is on the Department and does not shift to the Respondent just because SLED agents testify
that they were denied food and they saw none in the kitchen when they visited the location during
the late evening hours, long after the dinner meal hour was over.
Notwithstanding the conclusion I have reached, I caution the Respondent that the ordering
of food from other restaurants for serving at the location does not satisfy the requirements to retain
the license. To comply with the statutes and regulations authorizing the issuance of a license for the
sale and consumption of liquor, the kitchen must be utilized for the cooking, preparation and serving
of meals and hot meals (not sandwiches or pizzas prepared off location), which must be served at
least once a day during the normal mealtimes. Further, meals must be served upon demand of guests
during these normal mealtimes when the location is open to the public. For example, if the location
is open between the hours of 5:00 p.m. to 8:00 p.m. daily or other hours during the evening meal,
then it needs to have hot meals which are available for the public.
13. I find and conclude that Respondent continues to meet the requirements for holding
a business sale and consumption license for the licensed location as set forth in S. C. Code Ann. §
61-6-20 and 61-6-1820 (1) (Supp. 1997).
14. All regulations promulgated by the Commission (now Department), 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.
15. The Administrative Law Judge Division, as the tribunal authorized to grant the
issuance of a permit, is likewise authorized for cause to revoke or suspend the permit. See Feldman
v. S.C. Tax Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943).
16. Based upon the evidence, I conclude that the Respondent did not knowingly permit
a person under the age of twenty-one (21) years to possess liquor. Further, I conclude that the
Respondent is primarily and substantially engaged in the service of food, therefore complies with
S.C. Code Ann. § 61-6-1820 (Supp. 1996).
ORDER
After considering the positions of the parties, the Findings of Fact and the Conclusions of
Law, it is hereby:
ORDERED that the administrative violations against the Respondent are dismissed.
IT IS SO ORDERED.
_____________________________________
Marvin F. Kittrell
Chief Judge
Columbia, South Carolina
April 8, 1998 |
