South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
SCDOR vs. Mickey Stacks, d/b/a Red Dot Amusements, et al

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
Mickey Stacks, d/b/a Red Dot Amusements and M.H.S. Enterprises, d/b/a Treasures,
 
DOCKET NUMBER:
95-ALJ-17-0742-CC

APPEARANCES:
Nicholas P. Sipe, Attorney for the Petitioner

David E. Belding, Attorney for the Respondents
 

ORDERS:

ORDER AND DECISION

This matter comes before me pursuant to S.C. Code Ann. § 12-4-30(D) and §1-23-310 etseq. (Supp. 1995), upon a request for a hearing by Respondents (hereinafter referred to as "Stacks") upon being cited for administrative violations of the "single place or premises" provisions of the Video Game Machines Act by Petitioner (hereinafter referred to as "DOR"), allegedly occurring at 8850-B Rivers Avenue, North Charleston, South Carolina, on or about June 23, 1995. A contested case hearing was held on February 12, 1995, and counsel submitted post-hearing memoranda. DOR seeks revocation of video gaming licenses for seventy-five (75) machines located at 8850-B Rivers Avenue, North Charleston, South Carolina, and the imposition of fines totalling $10,000.00. Of the sixteen (16) game rooms located at 8850-B Rivers Avenue, North Charleston, six were not in compliance with S.C. Code Ann. § 12-21-280(A) on June 23, 1995. Stacks is fined $10,5000.00 and the licenses of the thirty (30) video game machines in those six game rooms are revoked.

FINDINGS OF FACT

By a preponderance of the evidence and by clear and convincing evidence, I find:

  1. Stacks owns and operates sixteen video game rooms in a mall setting at 8850-B Rivers Avenue, North Charleston, South Carolina.
  2. The mall, known as Treasures, is managed for Stacks by Steve and Patricia Hemric, who maintain an office at the mall and are responsible for hiring and supervising employees that work in the various game rooms and the common area of Treasures.
  3. The sixteen game rooms are known and operated as Flags; Parrot's Cage; Captain Kidd; Peg's Place; Gators; Blackbeards; Diamonds; Pearls; Ruby's; Stogies; Thee Walk Plank Cafe; Gems; Emerald's; Sapphire's; and The Cage.
  4. Each of the sixteen game rooms is surrounded by exterior walls or fire walls without doors or openings leading to another area where video game machines are located.
  5. Each of the sixteen game rooms contains five video game machines.
  6. Each of the video game machines located in the sixteen game rooms at 8850-B Rivers Avenue, North Charleston, South Carolina, a total of eighty (80) machines, are owned by Stacks and licensed in his name.
  7. Each of the sixteen game rooms has a separate electric meter.
  8. Each of the sixteen game rooms has a separate business license.
  9. Each of the sixteen game rooms has a separate State sales tax license.
  10. Stacks, through his co-managers, Steve and Patricia Hemric, generally employs and supervises separate employees for each of the sixteen game rooms.
  11. On June 23, 1995, at approximately 10:30 a.m., Revenue Officer Larry Mixon entered the location at 8850-B Rivers Avenue, North Charleston, South Carolina, and observed sixteen operational game rooms and ten total employees.
  12. As a result of his inspection, Revenue Officer Larry Mixon issued six Violation Report citations to Stacks, one each for "No employee on premises" for Pearls, Diamonds, Blackbeards, Gators, Pegs Place, and Captain Kidd, with a $500 fine assessed for each violation (Respondents' Ex. #5).
  13. Video game machines, with the following license numbers were located in the following game rooms:

Pearl's:

034211

039192

039193

039191

49235

Diamonds:

039206

039215

039214

039213

039212

Blackbeards:

039229

039210

039209

039208

039207

Gators:

039121

039135

039138

039139

039109

Peg's Place:

039111

039226

039180

039179

49271

Captain Kidd:

49237

039225

039221

039201

039223

  1. The game rooms cited by Officer Mixon were selected because they were the first six game rooms Mixon observed operating without an employee on the premises.
  2. Officer Mixon subsequently issued another Violation Report citation to replace the previous six Violation Reports referenced above. The substitute Violation Report cited Stacks, d/b/a Treasures, with an "Employee Requirements Violation (10 employees on duty for 16 distinct places/premises)" and assessed a fine of $5,000.
  3. On June 23, 1995, at approximately 10:00 p.m., Revenue Officer Bernard Kelly entered the location at 8850-B Rivers Avenue, North Charleston, South Carolina, and observed sixteen operational game rooms and seven total employees, but was told eleven total employees were on duty in the mall.
  4. As a result of his inspection, Revenue Officer Bernard Kelly issued five Violation Report citations to Stacks, one each for "No employee on premises" for Thee Walk Plank Cafe, Gems, Emeralds, Sapphires, and Cage, with a $500 fine assessed for each violation (Respondents' Ex. #7).
  5. The game rooms cited by Officer Kelly were apparently selected arbitrarily from the mall's total. Officer Kelly merely counted the total number of game rooms, subtracted the total number of employees in the mall, cited the appropriate number of game rooms as the offending businesses, but did not determine whether the specific game rooms cited were the actual game rooms without an employee on the premises.
  6. Officer Kelly subsequently issued another Violation Report citation to replace the previous five Violation Reports referenced above. The substitute Violation Report cited Stacks, d/b/a Treasures, with an "Employee Requirements Violation (10 employees on duty for 16 distinct places/premises)," assessing a fine of $5,000; and an "Advertising Violation (cards placed on car windshields)," assessing a fine of $500 for that offense.
  7. By letter dated October 18, 1995, DOR informed Stacks' counsel that DOR's final determination in the present matter was to revoke all eighty (80) video game machine licenses for machines at Treasures; assess a $10,000 fine for two violations of failing to have a separate employee working at each business at Treasures; and assess a $500 fine for the advertising charge (Petitioner's Ex. #2).
  8. The parties stipulate that subsequent to October 18, 1995, but prior to November 3, 1995, Stacks requested a contested case hearing in this matter.
  9. On November 3, 1995, Stacks, through his co-managers, issued a check for $10,500.00 to DOR, which was received by Revenue Officer Bill Amos and deposited by DOR in the State's general account on November 8, 1995.
  10. By Agency Transmittal Form dated November 22, 1995, DOR transmitted this contested case to the ALJD for adjudication.
  11. No settlement agreement or proposed consent order was drafted or submitted to this Court for consideration.
  12. At the hearing, DOR withdrew the advertising violation charge.


CONCLUSIONS OF LAW

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

  1. Pursuant to S.C. Code Ann. § 12-4-30 (D) (Supp. 1995) and Chapter 23 of Title I of the 1976 Code, as amended, the South Carolina Administrative Law Judge Division has jurisdiction in this matter.
  2. Stacks is the licensee of eighty (80) video gaming machines, licensed under S.C. Code Ann. § 12-21-2720(A)(3) (Supp. 1995).
  3. S.C. Code Ann. § 12-21-2804(A) (Supp. 1995) prohibits the operation of more than five video game machines at a single place or premises.
  4. Pursuant to S.C. Code Ann. § 12-21-2798 (Supp. 1995), DOR is authorized to promulgate regulations to assist in the administration and enforcement of the Video Game Machines Act.
  5. 27 S.C. Code Ann. Regs. 117-190 (Supp. 1995) defines "single place or premises" for purposes of interpreting the Video Game Machines Act, and S.C. Code Ann. §12-21-2804(A) (Supp. 1995) in particular. It is uncontroverted that each of the sixteen game rooms located at 8850 Rivers Avenue, North Charleston, South Carolina, meets all of the criteria to be considered a single place or premises, excepting the requirement that each entity or business have at least one separate employee on the premises during business hours.
  6. In a mall-type setting, each individual game room must have a separate employee working within its confines at all times during business hours. If an employee is not present in a game room while the game room is accessible to customers to play video machines, no matter the reason, the game room is being operated in violation of S.C. Code Ann. § 12-21-2804(A) (Supp. 1995), as not meeting the single place or premises definition. An employee working in the mall's common area or anywhere else outside of one of the game rooms is not considered "on the premises" of a game room. To prevent a violation from occurring, if an employee leaves a game room during business hours, the licensee must immediately either replace the employee with another, close the game room from public access, or render the video game machines in that room inoperable.
  7. Each of the game rooms which customers were able to enter and operate machines, but lacked a separate employee working within its confines at the time of the DOR inspections of the mall on June 23, 1995, was not operating as a single place or premises in compliance with the requirements of S.C. Code Ann. § 12-21-2804(A) (Supp. 1995).
  8. Each of the game rooms which had a separate employee working within its confines at the time DOR inspections of the mall on June 23, 1995, is considered a single place or premises in compliance with the requirements of S.C. Code Ann. § 12-21-2804(A) (Supp. 1995).
  9. A Violation Report must be written for each specific game room lacking a separate employee working within its confines for which customers were able to enter and operate machines. An officer must determine the specific game rooms in violation and identify those with particularity in the citation, rather than merely subtracting the total number of employees in the mall from the total number of game rooms and then citing the appropriate number of game rooms on an arbitrary basis. S.C. Code Ann. § 12-21-2804(A) (Supp. 1995).
  10. A person found to have violated S.C. Code Ann. § 12-21-2804(A) (Supp. 1995) is subject to a fine of up to five thousand dollars and automatic revocation of the licenses of machines located in the establishment in noncompliance. Additionally, no license may be issued for a machine in an establishment in which a license has been revoked for a period of six months from the date of revocation.
  11. Acting as fact-finder, it is the administrative law judge's prerogative "to impose the appropriate penalty based on the facts presented." Walker v. South Carolina ABC Comm'n, 305 S.C. 209, 407 S.E.2d 633, 634 (1991). In the present case, the administrative law judge has the authority to establish the monetary fine within the allowable range provided for by S.C. Code Ann. § 12-21-2804(A) (Supp. 1995). S.C. Code Ann. § 12-4-30(D) (Supp. 1995).
  12. A compromise and settlement is contractual in nature, with a definite meeting of the minds essential for a valid and binding agreement. Reality of assent to a settlement offer is a fundamental requirement. 15 C.J.S. Compromise and Settlement §§ 7 and 14 (1967).
      A claim is not discharged by the creditor's retention of a check unless it unequivocally appears that it was offered on condition that it be accepted in full satisfaction, and the creditor knew of such condition. Thus, where a check is sent for a claim or portion of a claim which is admittedly due, its retention will not operate as a settlement, notwithstanding a condition is attached to it that it settles other disputed claims. 15 C.J.S. Compromise and Settlement § 7(4).
  13. Stacks' payment of the $10,500 fine assessed was not a compromise and settlement of the administrative action against him, as it was not accompanied by any indication that its acceptance would be considered a full and complete settlement of all action against him. DOR's letter to Stacks dated October 18, 1995, clearly states that DOR's final determination in the matter was to assess a total fine of $10,500 and to revoke all eighty (80) video machine licenses for machines located at Treasures. The payment and acceptance of the $10,500 check is merely partial satisfaction of the penalty sought by DOR.








ORDER

IT IS THEREFORE ORDERED that Respondent is subject to fines for six (6) violations of S.C. Code Ann. § 12-21-2804(A) (Supp. 1995), with a fine of $1,750 imposed for each offense, for a total fine of $10,500; said fine being satisfied and paid in full by Respondent's check for that amount, dated November 3, 1995, and received and deposited by DOR.

IT IS FURTHER ORDERED that the licenses for the video game machines, a total of thirty (30) machines, located in the following game rooms at 8850-B Rivers Avenue, North Charleston, South Carolina, known as Pearls, Diamonds, Blackbeards, Gators, Pegs Place, and Captain Kidd, are hereby revoked:

Pearl's:

034211

039192

039193

039191

49235

Diamonds:

039206

039215

039214

039213

039212

Blackbeards:

039229

039210

039209

039208

039207

Gators:

039121

039135

039138

039139

039109

Peg's Place:

039111

039226

039180

039179

49271

Captain Kidd:

49237

039225

039221

039201

039223

IT IS FURTHER ORDERED that no licenses shall be issued for any machine to be operated in any of the above-listed game rooms for a period of six (6) months from the date of this Order.

___________________________

STEPHEN P. BATES

Administrative Law Judge

March 8, 1996

Columbia, South Carolina


Brown Bldg.

 

 

 

 

 

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