South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
Marlin Cafes, Inc., d/b/a River City Café vs. SCDOR

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
Marlin Cafes, Inc., d/b/a River City Café
9550 Shore Drive, Suite A, Myrtle Beach, South Carolina

Respondents:
South Carolina Department of Revenue

Intervenor:
Sands Ocean Club Homeowners’ Association, Inc.
 
DOCKET NUMBER:
06-ALJ-17-0625-CC

APPEARANCES:
Stephen P. Bates, Esquire
For Petitioner

Dana R. Krajack, Esquire
For Respondent

Kenneth E. Allen, Esquire
For Intervenor
 

ORDERS:

FINAL ORDER AND DECISION

STATEMENT OF THE CASE

This matter comes before this Court pursuant to S.C. Code Ann. § 61-2-260 (Supp. 2005), S.C. Code Ann. § 1-23-600(B) (Supp. 2005), and S.C. Code Ann. § 1-23-310 et seq. (2005) for a contested case hearing. Petitioner Marlin Cafes, Inc., seeks an on-premises beer and wine permit and a restaurant liquor-by-the-drink license for its River City Cafe restaurant located in the Sands Ocean Club Resort at 9550 Shore Drive, Suite A, in Myrtle Beach, South Carolina. Respondent South Carolina Department of Revenue (Department) denied Petitioner’s application for the permit and license because of a protest filed by the Sands Ocean Club Homeowners’ Association (Homeowners’ Association) regarding the suitability of Petitioner’s restaurant for the requested permit and license and because of the Department’s own concerns regarding the precise boundaries of the premises to be licensed. On August 3, 2006, the Homeowners’ Association moved for leave to intervene in this matter in opposition to Petitioner’s application, and a hearing on the Association’s motion to intervene was conducted before the Court on August 24, 2006. At the close of that hearing, the Court granted the Association leave to intervene in this matter, as reflected in the amended caption above. After timely notice to the parties, the contested case hearing was held on September 13, 2006, at the South Carolina Administrative Law Court in Columbia, South Carolina. Based upon the evidence presented regarding the suitability of the location and upon the applicable law, I find that Petitioner’s application for an on-premises beer and wine permit and a restaurant license to sell liquor by the drink should be granted.

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. On or about April 6, 2006, John S. Divine, IV, submitted an application on behalf of Petitioner Marlin Cafes, Inc., to the Department for an on-premises beer and wine permit and a license to sell liquor by the drink for its River City Cafe restaurant located in the Sands Ocean Club Resort at 9550 Shore Drive, Suite A, in Myrtle Beach, South Carolina. This application and the Department’s file on the application are hereby incorporated into the record by reference.

2. Notice of Petitioner’s application was published once a week for three consecutive weeks in The Myrtle Beach Herald, a newspaper published and circulated in Myrtle Beach, South Carolina, and proper notice of the application was posted at the proposed location for fifteen days.

3. Petitioner Marlin Cafes, Inc., is a South Carolina statutory close corporation, incorporated in 1990 and currently in good standing with the South Carolina Secretary of State. John S. Divine, IV, is the president and sole owner of Marlin Cafes, Inc., which, in turn, owns and operates a number of restaurants in the Myrtle Beach area, including six River City Cafes. There is no evidence in the record suggesting that Marlin Cafes, Inc., does not have a reputation for peace and good order in the surrounding community.

4. Mr. Divine is over twenty-one years of age and does not have any delinquent state taxes. Further, the South Carolina Law Enforcement Division (SLED) conducted a criminal background investigation of Mr. Divine that did not reveal any criminal arrests or convictions, and the record does not indicate that Mr. Divine has engaged in any acts or conduct implying the absence of good moral character.

5. The premises to be licensed consist of a restaurant facility located within the Sands Ocean Club Resort, an oceanfront condominium development in Myrtle Beach, South Carolina.[1] Petitioner leases the restaurant facility from the resort, under a twenty-year lease signed in 2001. The premises to be licensed are fully equipped for restaurant operations, have seating for over eighty persons for the service of meals, and have received a Grade A restaurant license from the South Carolina Department of Health and Environmental Control. There are no churches, schools, or playgrounds within five hundred feet of the location. There are currently three other establishments licensed to sell alcoholic beverages on the grounds of the Sands Ocean Club Resort, namely, Sandals Lounge, Windows Restaurant, and Ocean Annie’s Beach Bar.

6. Petitioner has operated its River City Cafe at the location since 2001. The restaurant serves casual American cuisine, such as sandwiches, hamburgers, and the like, and derives over eighty percent of its revenue from food sales. Initially, the restaurant sold beer, wine, and liquor under an “umbrella” permit and license held by the resort for all of the dining facilities on the property. However, after a change of the resort’s ownership in 2005, the location was no longer covered under the umbrella permit and license, and the restaurant has not sold alcoholic beverages since that time.

7. At the hearing, a representative of the Sands Ocean Club Homeowners’ Association testified regarding the Association’s opposition to Petitioner’s permit and license application. Specifically, he explained that the Association had concerns with the cleanliness of the restaurant’s operations, as evidenced by a grease spill in the hallway behind the restaurant, a roach infestation at the location, and a torn awning outside the establishment, and that the Association was concerned with not being able to control alcohol sales on its property if Petitioner’s restaurant were to be licensed for the sale of alcoholic beverages.

CONCLUSIONS OF LAW

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

1. Jurisdiction over this case is vested with the South Carolina Administrative Law Court pursuant to S.C. Code Ann. § 61-2-260 (Supp. 2005), S.C. Code Ann. § 1-23-600(B) (Supp. 2005), and S.C. Code Ann. §§ 1-23-310 et seq. (2005).

2. “[T]he issuance or granting of a license to sell beer or alcoholic beverages rests in the sound discretion of the body or official to whom the duty of issuing it is committed[.]” Palmer v. S.C. Alcoholic Beverage Control Comm’n, 282 S.C. 246, 248, 317 S.E.2d 476, 477 (Ct. App. 1984); see also Wall v. S.C. Alcoholic Beverage Control Comm’n, 269 S.C. 13, 235 S.E.2d 806 (1977).

3. S.C. Code Ann. §§ 61-4-500 through 61-4-620 (Supp. 2005) govern applications for retail beer and wine permits and establish the criteria for determining eligibility for those permits. The basic requirements for licenses to sell liquor by the drink as a restaurant are found in S.C. Code Ann. §§ 61-6-1610 and 61-6-1820 (Supp. 2005) as well as in 23 S.C. Code Ann. Regs. 7-401.3 (Supp. 2005). Further, S.C. Code Ann. § 61-2-100 (Supp. 2005) lays out the general requirements that all applicants for permits and licenses to sell alcoholic beverages must satisfy.

4. S.C. Code Ann. § 61-4-520 (Supp. 2005) establishes the criteria for the issuance of a beer and wine permit. Included in the criteria is the requirement that the proposed location be a proper and suitable one. See id. § 61-4-520(6)-(7). S.C. Code Ann. § 61-6-1820 (Supp. 2005) sets forth the basic criteria for the issuance of a license to sell liquor by the drink. Although the suitability of the proposed location is not listed in Section 61-6-1820 as a condition of licensing, such a consideration is proper. See Schudel v. S.C. Alcoholic Beverage Control Comm’n, 276 S.C. 138, 276 S.E.2d 308 (1981).

5. Although “proper location” is not statutorily defined, broad discretion is vested in the trier of fact to determine the fitness and suitability of a particular location for the requested permit. See Fast Stops, Inc. v. Ingram, 276 S.C. 593, 281 S.E.2d 118 (1981).

6. The determination of suitability of location is not necessarily a function solely of geography. Rather, it involves an infinite variety of considerations related to the nature and operation of the proposed business and its impact on the community within which it is to be located. Kearney v. Allen, 287 S.C. 324, 338 S.E.2d 335 (1985); Schudel v. S.C. Alcoholic Beverage Control Comm’n, 276 S.C. 138, 276 S.E.2d 308 (1981).

7. However, without sufficient evidence of an adverse impact on the community, a permit application must not be denied if the statutory criteria are satisfied. The fact that the issuance of a permit or license is protested is not a sufficient reason, by itself, to deny the application. See 48 C.J.S. Intoxicating Liquors § 119 (1981).

8. Further, the denial of a license or permit to an applicant on the ground of unsuitability of location is without evidentiary support when relevant testimony of those opposing the requested license or permit consists entirely of opinions, generalities, and conclusions not supported by the facts. Taylor v. Lewis, 261 S.C. 168, 198 S.E.2d 801 (1973); Smith v. Pratt, 258 S.C. 504, 189 S.E.2d 301 (1972).

9. In making a decision in this matter, this Court is constrained by the record before it and the applicable statutory and case law. Here, Petitioner meets all of the statutory criteria enacted by the South Carolina General Assembly for the issuance of a beer and wine permit and a license to sell liquor by the drink, and there has not been a sufficient evidentiary showing that the proposed location is unsuitable for Petitioner’s restaurant or that the issuance of the permit and license in question would create problems in or have an adverse impact upon the surrounding community. Petitioner’s restaurant is located in a facility that was designed for, and has been used as, a restaurant, on the grounds of an oceanfront resort in Myrtle Beach that has three other locations on the property that are licensed for the sale of alcoholic beverages. Further, there was no evidence in the record to suggest that Petitioner’s sale of alcoholic beverage under a prior permit and license at the restaurant for approximately four years presented any problems for the resort’s management, residents, or guests. In short, nothing in the record suggests that, given the nature of Petitioner’s business at the location and its operations of other licensed establishments in the area, the sale of beer and wine and liquor drinks at Petitioner’s restaurant will have an adverse impact upon the surrounding community or will otherwise be out-of-keeping with the character of that community. Moreover, it should be noted that the Homeowners’ Association’s opposition to Petitioner’s application is largely unfounded, based upon concerns that are either unrelated to Petitioner’s sale of alcoholic beverages, such as the concern with the cleanliness of its storage facilities, or entirely speculative, such as the concern that the Association will not have adequate control over the sale of alcoholic beverages on the resort property if Petitioner’s application is granted. Rather, it appears that this opposition is largely motivated by an underlying property and business dispute between Petitioner and the resort’s new ownership. Therefore, this Court finds that Petitioner’s restaurant is a suitable location for the sale and on-premises consumption of beer, wine, and liquor.

ORDER

Based upon the Findings of Fact and Conclusions of Law stated above,

IT IS HEREBY ORDERED that the Department shall GRANT Petitioner’s application for an on-premises beer and wine permit and a license to sell liquor by the drink for the premises located at 9550 Shore Drive, Suite A, in Myrtle Beach, South Carolina.

AND IT IS SO ORDERED.

______________________________

JOHN D. GEATHERS

Administrative Law Judge

1205 Pendleton Street, Suite 224

Columbia, South Carolina 29201-3731

October 5, 2006

Columbia, South Carolina



[1] By a letter to the Department dated September 12, 2006, Petitioner more precisely described the premises for which it seeks the permit and license in question, and, in particular, specified that alcoholic beverages would only be served within the interior restaurant space of the establishment. Based upon this clarification, the Department withdrew its objection to the description of the premises in Petitioner’s application.


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