South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
SCDOR vs. Sutherlin Amusement Co., Inc.

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
Sutherlin Amusement Co., Inc.
 
DOCKET NUMBER:
98-ALJ-17-0310-CC

APPEARANCES:
Nicholas P. Sipe, Esquire
For Petitioner

Richard A. Harpootlian, Esquire
For Respondent
 

ORDERS:

FINAL ORDER AND DECISION

This matter comes before this tribunal for a contested case hearing pursuant to S.C. Code Ann. §§ 1-23-310 et seq. (Supp. 1997) and § 12-4-30(D) (Supp. 1997) on alleged administrative violations. The South Carolina Department of Revenue alleged that on August 27, 1997, Respondent violated S.C. Code Ann. § 12-21-2720(A)(3) by failing to procure licenses for four Class III machines which it maintained for use at its bingo hall. The Department seeks a $2,500 fine for each alleged violation for a total fine of $10,000. After notice to the parties, a hearing was conducted on August 5, 1998.

The issues before this tribunal are (1) whether Respondent violated S.C. Code Ann. § 12-21-2720(A)(3) (Supp. 1997) and (2) if so, what is the proper penalty for such violations. Based upon the following Findings of Fact and Conclusions of Law, this tribunal concludes that Petitioner did not present sufficient evidence to support a finding that Respondent violated § 12-21-2720(A)(3).

FINDINGS OF FACT

Having carefully considered all testimony 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:

On August 27, 1997, South Carolina Law Enforcement Division agents Ashley Asbil and Bobbie Jones conducted an inspection of Respondent's bingo hall at 36 Liberty Lane, Greenville, South Carolina. Upon their arrival on the date of inspection, Agents Asbil and Jones introduced themselves as SLED agents to the sole clerk on duty. Five Class III machines, licensed pursuant to S.C. Code Ann. § 12-21-2720(A)(3), were located in the hall immediately to the left of the entrance. After inspecting these machines, the agents asked the clerk whether there were any other machines on the premises. The clerk indicated that there were additional machines in a room at the back of the hall.

The agents found a small room with two doors, one of which was open and had a sign on it which said, "Video Game Room." The lights were on in the room and it contained five additional Class III machines. Of the five machines, two had self-generated electronic messages displayed on the screens which said, "Temporarily Out of Service." Two more of the machines had handwritten paper signs affixed which said, "Out of Order," and the money door of the fifth machine was open. With the exception of the fifth machine, all of the other machines had stools in front of them. Respondent's employee told the agents that "the room" was used on the weekends when bingo games were held at the location. None of the machines had a license affixed. The agents inserted money and played two of the machines.

Prior to leaving the premises, the agents talked to Mr. Chapman, the Chief Executive Officer of the business, who informed them that he was trying to wait until November before getting new licenses. The agents issued Respondent a citation for violating § 12-21-2720(A)(3) by failing to procure licenses for four Class III machines maintained for use. The agents did not issue a citation for the fifth machine, as they believed this machine to be in disrepair.

CONCLUSIONS OF LAW AND ANALYSIS

Pursuant to S.C. Code Ann. § 12-4-30(D) (Supp. 1997) and S.C. Code Ann. § 1-23-320 (Supp. 1997), the Administrative Law Judge Division has jurisdiction to hear this case.

S.C. Code Ann. § 12-21-2720(A)(3) provides:

(A) Every person who maintains for use or permits the use of, on a place or premises occupied by him, one or more of the following machines or devices shall apply for and procure from the South Carolina Department of Revenue a license effective for two years for the privilege of making use of the machine in South Carolina and shall pay for the license a tax of fifty dollars for each machine in item (1), two hundred dollars for each machine in item (2), and four thousand dollars for each machine in item (3):

. . .

(3) a machine of the non-payout type, in-line pin game, or video game with free play feature operated by a slot in which is deposited a coin or thing of value except machines of the non-payout pin table type with levers or "flippers" operated by the player by which the course of the balls may be altered or changed.

S.C. Code Ann. § 12-21-2720(A)(3) (Supp. 1997) (emphasis added).

Whether this tribunal finds Respondent in violation of the law in this case hinges on whether it determines that Respondent "maintained for use" the Class III machines in question. The definition of "maintain" is "to keep up or carry on; continue; to keep in an existing state." American Heritage College Dictionary 817 (3rd. ed. 1993). "Use" is defined as "the act of using; the application or employment of something for a purpose; the condition or fact of being used." Id. at 1487.

As the moving party, Petitioner Department of Revenue bears the burden of proving by a preponderance of the evidence that Respondent violated § 12-21-2720(A) by failing to procure licenses for four Class III machines maintained for use at its bingo hall.

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)).

In the instant case, this tribunal does not find that the evidence has convincing force to establish that what is sought to be proved is more likely true than not true. That is, the evidence does not indicate that Respondent more than likely maintained the machines for use. The mere presence of the machines without licenses affixed is not necessarily violative of the statute.

In this case there are unanswered questions that would call for speculation, thus precluding this tribunal from finding a violation. Petitioner established that at least two of the machines accepted money and were played by SLED agents. However, when this tribunal considers that the machines had "Out of Order" signs posted and money falling out of one of the machines, it appears less likely that the public had access to these machines. Even though the agents played two of the machines, it is not evident that the machines were accessible to the general public, as the agents gained access after they had identified themselves as SLED agents and inquired whether there were any other machines on the premises. Additionally, while the clerk stated that "the room" was used on the weekends when bingo games were held, it is not clear from her statement that the machines were used. Further, the fact that management intended to license the machines in November could easily be construed to mean that this is when the machines would actually be used, as opposed to meaning that the machines were being currently maintained and used without licenses.

Certainly, "[a]ny fact in issue may be established by circumstantial evidence,(1)

if the circumstances, which must themselves be proved, lead to the conclusion with reasonable certainty." McCready v. Atlantic Coast Line R. Co., 212 S.C. 449, 455, 48 S.E.2d 193, 196 (1948) (emphasis added). However, under these circumstances, without more concrete and convincing evidence, this tribunal cannot conclude that these machines were maintained for use, as such a finding would rest on conjecture, suspicion, or supposition.(2)



ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law, IT IS HEREBY ORDERED that the citation the Department issued to Respondent for violation of § 12-21-2720(A)(3) is dismissed.

AND IT IS SO ORDERED.

______________________________

JOHN D. GEATHERS

Administrative Law Judge

November 5, 1998

Columbia, South Carolina

1. Circumstantial evidence means:

. . . proof that does not actually assert or represent the proposition in question, but that asserts or describes something else, from which the trier of fact may either (1) reasonably infer the truth of the proposition, in which case the evidence is not only relevant under [the rules of evidence] but is sufficient as well, or (2) at least reasonably infer an increase in the probability that the proposition is in fact true, in which case the evidence is relevant under [the rules of evidence] (assuming that the proposition is of consequence to the determination of the action) but may not be sufficient by itself to create a question for the trier of fact to decide.

(footnotes omitted). Gastineau v. Murphy, 323 S.C. 168, 178-179, 473 S.E.2d 819, 826 (Ct. App. 1996) (quoting 29 Am. Jur. 2d Evidence § 313 (1994)).

2. The test for the sufficiency of a proffer of circumstantial evidence to warrant a finding is as follows:

. . . the circumstances must lead to the conclusion with reasonable certainty, and must have sufficient probative value to constitute the basis for a legal inference, and not for mere speculation. The facts and circumstances shown should be reckoned with in the light of ordinary experience, and such conclusions deduced therefrom as common sense dictates. The existence of a fact or facts cannot rest in speculation, surmise or conjecture.

Gastineau v. Murphy, 323 S.C. 168, 179, 473 S.E.2d 819, 826 (Ct. App. 1996) (quoting Leek v. New South Express Lines, 192 S.C. 527, 7 S.E.2d 459 (1940)).


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