South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
SCDOR vs. Tail Race Canal Sports Bar, Inc., d/b/a Studio 52 and Holliday Amusement Company, Inc.

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
Tail Race Canal Sports Bar, Inc., d/b/a Studio 52 and Holliday Amusement Company, Inc.
 
DOCKET NUMBER:
00-ALJ-17-0083-CC

APPEARANCES:
Michael K. Kendree, Esquire, for the Petitioner

James H. Harrison, Esquire, for the Respondent
 

ORDERS:

AMENDED FINAL ORDER AND DECISION

STATEMENT OF THE CASE

This matter comes before the Administrative Law Judge Division for a contested case hearing. The Respondent challenges the issuance of the South Carolina Department of Revenue's Final Determination dated January 14, 2000. Prior to the hearing, counsel for the Petition moved, without objection, to dismiss the Respondent, Tail Race Sports Bar, Inc., d/b/a Studio 52 for failure to timely appeal. I granted the Petitioner's Motion.



STIPULATIONS OF FACT

Prior to the hearing in this matter, counsel for both parties submitted the following stipulations of fact:

1. Tail Race Canal Sports Bar, Inc., d/b/a Studio 52 is located at 108 Highway 52 in Moncks Corner, South Carolina.

2. Studio 52 operates under retail sales tax license #008-15098-4.

3. Studio 52 operates under video games licensed establishment #85508962-6.

4. Holliday Amusement Company, Inc., owns the Type III coin-operated devices in issue in the above-captioned case with Type III coin-operated device licenses #0631241 (exp. 1999); #3001929 (exp. 2000); #3001933 (exp. 2000); #3002553 (exp. 2000); and #3002560 (exp. 2000).

5. Holliday Amusement Company, Inc., has no involvement in the ownership or management of Studio 52 other than the ownership of the Type III coin-operated devices listed in Stipulation of Fact #4.

6. On September 29, 1999, the Type III coin-operated devices in issue in the above-captioned case with Type III coin-operated device licenses #0631241 (exp. 1999); #3001929 (exp. 2000); #3001933 (exp. 2000); #3002553 (exp. 2000); and #3002560 (exp. 2000) were available for use at Studio 52 located at 108 South Highway 52 in Moncks Corner, South Carolina.

7. On September 29, 1999, Misty Lou Lott was an employee of Tail Race Canal Sports Bar, Inc., working at Studio 52.

8. On September 29, 1999, at approximately 10:30 p.m., an underage cooperating individual (UCI) named Kristi Rogers, working in conjunction with the North Charleston Police Department played one of the aforementioned Type III coin-operated devices at Studion 52.

9. On September 29, 1999, UCI Rogers was nineteen (19) years old.

10. On September 29, 1999, UCI tendered a payout ticket to the bartender working at Studio 52.

11. The ticket was generated from the video poker machine which the UCI was playing.

12. In exchange for the ticket, Misty Lou Lott, the bartender working at Studio 52, provided UCI Rogers the cash payout represented on the ticket in the amount of $20.00.

13. After the UCI exited Studio 52, South Carolina Law Enforcement Division (SLED) Agent J. Ramey entered Studio 52 with members from the North Charleston Police Department and issued a Preliminary Findings Report for violation of S.C. Code Ann. § 12-21-2804(C).

14. The payout ticket in issue was retained as evidence by law enforcement.

15. An Agency Initial Citation was issued to Respondents on November 3, 1999.

16. Respondent Tail Race Canal Inc., transmitted a protest of the Agency Initial Citation to the Petitioner on November 24, 1999.

17. Respondent Holliday Amusement Company, Inc., transmitted a protest of the Agency Initial Citation on November 29, 1999.

18. Petitioner issued an Agency Final Determination on January 14, 2000.

19. The Respondents requested a hearing before the Administrative Law Judge Division on February 14, 2000.





FINDINGS OF FACT

Taking into account the stipulations between the parties, having carefully considered the testimony and the arguments of counsel, and taking into account the credibility of the evidence and witnesses, I find by a preponderance of the evidence:

1. Notice of the time, date, place, and subject matter of the hearing was given to all parties in a timely manner.



CONCLUSIONS OF LAW

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

1. S.C. Code Ann. § 1-23-600 (Supp. 1999) grants jurisdiction to the Administrative Law Judge Division to hear contested cases under the Administrative Procedures Act.

2. The The Video Games Machine Act, which regulates video game activity in South Carolina, was enacted in 1993 and became effective July 1, 1993. The Act is codified at S.C. Code Ann. § 12-21-2770, et seq. (Supp. 1999). The express purpose of the Video Games Machine Act is to regulate the video games machine industry in South Carolina.

3. In civil cases, generally, the burden of proof rests upon the party who asserts the affirmative of an issue. 2 Am. Jur. 2d Administrative Law § 360 (1994); Alex Sanders, et al., South Carolina Trial Handbook § 9:3 Party With Burden, Civil Cases (1999). 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(C), by tendering a payout to someone under the age of twenty-one. See Anonymous v. State Bd. of Medical Examiners, 329 S.C. 371, 496 S.E.2d 17 (1998) (standard of proof in an administrative proceeding is preponderance of the evidence).

4. 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 Television Ass'n v. Southern Bell Telephone and Telegraph 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 his testimony. See 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); Mann v. Walker, 285 S.C. 194, 328 S.E.2d 659 (Ct. App. 1985); Marshall v. Marshall, 282 S.C. 534, 320 S.E.2d 44 (Ct. App. 1984).

5. The Department contends the Respondents violated S.C. Code Ann. § 12-21-2804(C) which provides that "[n]o person under twenty-one years of age may receive a payout as a result of the operation of the machines licensed under Section 12-21-2720(A)(3)." Because the UCI was nineteen at the time of the payout, I find that a violation of Section 12-21-2804(C) did occur.

6. S.C. Code Ann. § 12-21-2804(F) provides that "[t]he department shall revoke the licenses of any person issued pursuant to the provisions of Article 19 of this chapter for a violation of subsection (C) of this section." Respondent argues that S.C. Code Ann. § 12-21-2804(F) (Supp. 1999) is ambiguous and, since it is penal in nature, should be construed strictly in favor of the Respondent. Respondent is correct in asserting that S.C. Code Ann. § 12-21-2804(F) (Supp. 1999) is penal in nature, and as such should be strictly construed in favor of the offender. Cf. Lund v. Gray Line Water Tours, Inc., 277 S.C. 447, 289 S.E.2d 404 (discussing penal nature of statute allowing a landlord double rent when a tenant has remained in wrongful possession two years after notice to vacate). The principle is well established that penal statutes are strictly construed, and one who seeks to recover a penalty for failure on the part of the defendant to discharge some duty imposed by law, must bring his case clearly within the language and meaning of the statute awarding the penalty. Such laws are to be expounded strictly against the offender and liberally in his favor. State ex rel. Moody v. Stem, 213 S.C. 465, 50 S.E.2d 175 (1948).

However, I find that that S.C. Code Ann. § 12-21-2804(F) does not contain any ambiguity. The relevant language of § 12-21-2804(F) states that "The department shall revoke the licenses of any person issued pursuant to the provisions of Article 19 of this chapter for a violation of subsection (C) of this section." § 12-21-2804(C) states that "No person under twenty-one years of age may receive a payout as a result of the operation of the machines licensed under Section 12-21-2720(A)(3). The parties stipulated that the Respondent was the licensed owner of a machine that had delivered a payout to an underage individual, thereby violating § 12-21-2804(C). The language in § 12-21-2804(F) is clear: should an individual violate § 12-21-2804(C), as Respondent was found to have done, that individual's licenses shall be revoked. Under the plain meaning rule, it is not the court's place to change meaning of a clear and unambiguous statute. In re. Vincent J., 333 S.C. 233, 509 S.E.2d 261 (1998). Where a statute's language is plain and unambiguous, and conveys a clear and definite meaning, the rules of statutory interpretation are not needed and the court has no right to impose another meaning. In re: Vincent J., 333 S.C. at 233, 509 S.E.2d at 262.

Respondent further asserts that under a strict interpretation as put forward by the Petitioner that the Petitioner would have been required to revoke every license held by Respondent. Respondent has overlooked the fact that § 12-212804(F) states that revocation of licenses is pursuant to the procedures set forth in S.C. Code Ann. § 12-54-90, which gives the Petitioner the discretion to revoke one or more licenses held by the taxpayer.





ORDER

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

ORDERED that the Final Determination of the South Carolina Department of Revenue in this matter is AFFIRMED;

IT IS FURTHER ORDERED that the Type III coin-operated device licenses numbered 3002809 and 3002815 are hereby REVOKED.





AND IT IS SO ORDERED.



___________________________________

CAROLYN C. MATTHEWS

Administrative Law Judge



July 27, 2000

Columbia, South Carolina


Brown Bldg.

 

 

 

 

 

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