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:
SCDOR vs. Mid-South, Inc., d/b/a Unit A, et al

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
Mid-South, Inc., d/b/a Unit A, Mid-South, Inc., d/b/a Unit C, Mid-South, Inc., d/b/a Unit D, Mid-South, Inc., d/b/a Unit E, Mid-South, Inc., d/b/a Unit F, Sand Dollars Saloon, Inc., and Coastal Coin, Inc.
 
DOCKET NUMBER:
99-ALJ-17-0149-CC

APPEARANCES:
Jeffrey M. Nelson
Attorney for Petitioner

H. Buck Cutts
Attorney for Respondents
 

ORDERS:

FINAL ORDER AND DECISION

STATEMENT OF THE CASE

This matter is before this tribunal for a contested case hearing pursuant to S.C. Code Ann. §§ 1-23-310 et seq. (Supp. 1998) and S.C. Code Ann. § 12-4-30(D) (Supp. 1998) on alleged administrative violations. The South Carolina Department of Revenue (Department) alleges that Respondents (except Sand Dollars Saloon, Inc.) violated S.C. Code Ann. § 12-21-2804(A) (Supp. 1998) by applying for, receiving, maintaining, or permitting to be used permits for the operation of more than five machines authorized under S.C. Code Ann. § 12-21-2720(A)(3) (Supp. 1998) at a single place or premises. Specifically, the Department alleges violations of the "one separate employee" requirement of 27 S.C. Code Ann. Regs. 117-190 (Supp. 1998) in each of the five game rooms at issue in this case (Units A, C, D, E, F). The Department charged Coastal Coin, Inc. (as the license holder of the Class III machines) with five counts and each of the Mid-South, Inc. businesses (as the operators of the game rooms) with one count of violating the single place or premises provision of § 12-21-2804(A).

Additionally, the Department alleges that Mid-South, Inc. and Sand Dollars Saloon, Inc. violated S.C. Code Ann. § 12-21-2804(B) (Supp. 1998) and 27 S.C. Code Ann. Regs. 117-190.2 (Supp. 1998) by improperly advertising for the playing of these machines with the words "Las Vegas style atmosphere." Finally, Coastal Coin, Inc. was charged with one count of failing to identify the owner of a Class III machine under S.C. Code Ann. § 12-21-2748; however, the Department did not proffer any evidence at the hearing to support this charge.

Based on the aforementioned charges, the Department seeks (1) revocation of the 19 Class III machine licenses in the five cited game rooms; (2) a $5,000 fine against each of the five Mid-South businesses for violating the single place or premises statute; (3) a $25,000 fine against Coastal Coin, Inc. as the owner of the Class III machines in the five cited game rooms for violating the single place or premises statute; (4) an $8,000 fine ($5,000 against Mid-South, Inc., d/b/a Unit A and $3,000 against Sand Dollars Saloon, Inc.) for advertising violations; (5) revocation of the business license of Mid-South, d/b/a Unit A; (6) revocation of 27 retail licenses held by Mid-South, Inc. in South Carolina, pursuant to S.C. Code Ann. § 12-54-90(A) (Supp. 1998); and (7) a moratorium on operating Class III machines in the five game rooms for a period of six months from the date of revocation of the licenses at issue.

Based upon the following Findings of Fact and Conclusions of Law, this tribunal concludes that Respondent Mid-South, Inc.violated S.C. Code Ann. § 12-21-2804(A) by permitting the use of video game machine licenses in contravention of this statute. Consequently, the Department shall revoke licenses of the 19 Class III machines located in the five game rooms at issue, and the Department shall impose a $5,000 fine against Mid-South, Inc. Furthermore, no video game machine licenses shall be utilized in Units A, C, D, E or F at 2000 Highway 17 North, Surfside Beach, South Carolina for a period of six months from the date of revocation of the licenses at issue. Finally, this tribunal concludes that Mid-South, Inc. violated § 12-21-2804(B) and Reg. 117-190.2, and the Department shall impose a fine of $5,000 against Mid-South, Inc. for such violation.

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 November 12, 1997, Special Agent Pam Williamson of the South Carolina Law Enforcement Division viewed a television advertisement for the Sand Dollars Casino on Jones Intercable Channel 18 in the Myrtle Beach area of South Carolina. The advertisement contained the words "Las Vegas style atmosphere." Agent Williamson obtained a copy of the advertisement by subpoena. On November 24, 1997, she visited the premises to serve a citation for illegal advertising, and she conducted an inspection of the video gaming businesses located at 2000 Highway 17 North, Surfside Beach, South Carolina. She discovered that five of twelve rooms (Units A, C, D, E and F) were open for business; there were open doorways to each of the rooms, and each of the rooms contained machines that were turned "on." Consequently, Agent Williamson also issued citations against Respondents for violating the "single place or premises" requirement of S.C. Code Ann. § 12-21-2804(A) (Supp. 1998) and 27 S.C. Code Ann. Regs. 117-190 (Supp. 1998).
  2. At the time of the inspection, the facts relating to the "single place or premises" requirement of § 12-21-2804(A) and Regs. 117-190 were as follows:
  3. The location at 2000 Highway 17 North, Surfside Beach, South Carolina was a mall-type structure consisting of a common area with a bar and twelve separate rooms, including the five rooms cited herein (Unit A, Unit C, Unit D, Unit E and Unit F). Each of the rooms contained video gaming machines.
  4. The main entrance into the structure opened into a common area.
  5. Units A, C, D, E and F were open and contained operational Class III video game machines which were available for play, and no employee was present in any of the game rooms.
  6. On November 24, 1997, the following Class III licenses were affixed to the machines in the five rooms, and held by Coastal Coin, Inc.


Unit A Unit C Unit D Unit E Unit F
3806583 3930203 3930246 3930250 3806576
3806582 3806560 3930247 3930249 3806550
38065811 3806559 3930248 3806549 3930237
3806554 3806548 3930236
3930238


  1. At the hearing, Respondents conceded that the game rooms were being operated without an employee on the premises during business hours, as specified by Reg. 117-190.
  1. At the time of the inspection, Respondent Mid-South, Inc. held the retail licenses for the above-referenced game rooms.
  2. The Department seeks (1) revocation of the 19 Class III machine licenses in the five cited Units; (2) a $5,000 fine against each of the five cited businesses for violating the single place or premises statute; (3) a $25,000 fine against Coastal Coin, Inc. as the owner of the Class III machines in the five cited Units for violating the single place or premises statute; (4) an $8,000 fine ($5,000 against Mid-South, Inc. d/b/a Unit A and $3,000 against Sand Dollars Saloon, Inc.) for advertising violations; (5) revocation of the business license of Mid-South, d/b/a Unit A; (6) revocation of 27 retail licenses held by Mid-South, Inc. in South Carolina; and (7) a moratorium on operating Class III machines at these game rooms for a period of six months from the date of revocation of the licenses at issue.
  3. Dean Vinovich is the sole officer of Mid-South and Coastal Coin. He also has sole ownership interest in Coastal Coin. Mr. Vinovich signed a contract with Jones Intercable to broadcast the advertisement that contained the words "Las Vegas style atmosphere." At the hearing, he claimed that the contract did not encompass the language "Las Vegas style atmosphere" and that Jones Intercable inserted such language without his knowledge.
  4. Mid-South, Inc. leased the building in which the game rooms were located and hired the attendants for the game rooms in the building.
  5. Coastal Coin, Inc. supplied the Class III machines at issue and held the licenses for such machines.
  6. Sand Dollars Saloon, Inc. is the corporation that operates the bar in the common area and owns the liquor, glasses and equipment at the bar.
  7. This is the first violation of the Video Game Machines Act charged to Sand Dollars Saloon, Inc.

CONCLUSIONS OF LAW AND ANALYSIS

  1. Jurisdiction
  2. Pursuant to S.C. Code Ann. § 12-4-30(D) (Supp. 1998) and S.C. Code Ann. § 1-23-320 (Supp. 1998), the Administrative Law Judge Division has jurisdiction to hear this matter.
  3. Burden of Proof
  4. 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 Respondents violated § 12-21-2804(A) and Reg. 117-190, by failing to have a separate employee in the game rooms which are the subject of this case, and § 12-21-2804(B), by advertising for the playing of video poker machines. 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 the preponderance of the evidence).(1)
  5. 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).
  6. Single Place or Premises Violation
  7. The Video Game Machines Act, which regulates video game machine activity in South Carolina, was enacted in 1993 and became effective on July 1, 1993. This Act is codified at S.C. Code Ann. §§ 12-21-2770, et seq. (Supp. 1998). The purpose of the Act is to regulate the video game machines industry and to prevent large-scale casino-type gambling operations in South Carolina. See Reyelt v. S.C. Tax Comm'n, Nos. 6:93-1491-3 and 6:93-1493-3 (D.S.C. Nov. 15, 1993); see also Op. Att'y Gen. 94-21 at 51 (1994).
  8. South Carolina Code Ann. § 12-21-2804(A) (Supp. 1997) provides:

No person shall apply for, receive, maintain, or permit to be used, and the commission shall not allow to be maintained, permits or licenses for the operation of more than eight machines authorized under Section 12-21-2720(A)(3) at a single place or premises for the period beginning July 1, 1993, and ending July 1, 1994. After July 1, 1994, the commission may not issue nor authorize to be maintained any licenses or permits for more than five machines authorized under Section 12-21-2720(A)(3) at a single place or premises. . . .



S.C. Code Ann. § 12-21-2804(A) (emphasis added).

  1. On June 23, 1995, regulations were promulgated which further clarified the provisions of the Video Game Machines Act, and, as such, these regulations have the force and effect of law. See Young v. S.C. Dep't of Highways and Pub. Trans., 287 S.C. 108, 336 S.E.2d 879 (1985); Faile v. S.C. Employment Sec. Comm'n, 267 S.C. 536, 230 S.E.2d 219 (1976). Specifically, Regulation 117-190 was promulgated to clarify the meaning of the phrase "single place or premises," as set forth in § 12-21-2804(A). This regulation, effective June 23, 1995, provides, in relevant part:

A "single place" or "premises" means a structure surrounded by exterior walls or firewalls consistent with the requirements of the applicable building code (or where no building code is applicable, a one hour rated firewall), provided such exterior walls and firewalls may not have any windows, doors or other openings leading to another area where video game machines are located.



If a structure surrounded by exterior walls has two or more areas where video game machines are located, each surrounded by exterior walls or firewalls as defined and required above, the Department must review all the facts and circumstances to determine if each area in reality constitutes a single place or premise for video game machines. In determining whether each entity is in fact a single place or premises, the Department of Revenue will consider the following factors:



(1) Does each entity or business have a separate electric utility meter?

(2) Does each entity or business have at least one separate employee on the premises during business hours?

(3) Does each entity or business have a separate local business license where required?

(4) Does each entity or business have a separate state sales tax license?



A positive answer to these four questions is required for each area to be considered a "single place or premise" for purposes of the Video Game Machines Act.

27 S.C. Code Ann. Regs. 117-190 (Supp. 1998) (emphasis added). The Supreme Court of South Carolina held this regulation to be a valid and natural amplification of § 12-21-2804. McNickel's, Inc. v. S.C. Dep't of Revenue, 331 S.C. 629, 503 S.E.2d 723 (1998).

  1. It is well established that in interpreting a statute, the court's primary function is to ascertain the legislative intent. State v. Blackmon, 304 S.C. 270, 403 S.E.2d 660 (1991); First South Savings Bank, Inc. v. Gold Coast Ass'n., 301 S.C. 158, 390 S.E.2d 486 (Ct. App. 1990); State v. Harris, 268 S.C. 117, 232 S.E.2d 231 (1977). In ascertaining the intent of the legislature, a court should not focus on any single section or provision, but should consider the language of the statute as a whole. Creech v. S.C. Pub. Service Authority, 200 S.C. 127, 20 S.E.2d 645 (1942). Furthermore, in construing statutes, the language used should be given its plain and ordinary meaning without resort to subtle or forced construction to limit or expand the statute's operation. Home Health Service, Inc. v. S.C. Tax Comm'n, 312 S.C. 324, 440 S.E.2d 375 (1994); Bryant v. City of Charleston, 295 S.C. 408, 368 S.E.2d 899 (1988). Where terms of a statute are clear and unambiguous, they must be applied according to their literal meaning. Medlock v. 1985 Ford F-150 Pick Up, 308 S.C. 68, 417 S.E.2d 85 (1992); Green v. Zimmerman, 269 S.C. 535, 238 S.E.2d 323 (1977). "[A] statute should be so construed that no word, clause, sentence, provision or part shall be rendered surplusage, or superfluous. . . ." 82 C.J.S. Statutes § 346 (1953); see also Savannah Bank & Trust Co. of Savannah v. Shuman, 250 S.C. 344, 157 S.E.2d 864 (1967). This tribunal has no legislative powers, and the justice or wisdom of statutes rests exclusively with the General Assembly. See Smith v. Wallace, 295 S.C. 448, 369 S.E.2d 657 (Ct. App. 1988).
  2. Whether an establishment is being operated as a "single place or premises" is determined by evaluating the facts against the standard set forth in Regulation 117-190. With respect to the "employee" requirement, Regulation 117-190 requires that each entity or business have at least one separate employee on the premises of that respective entity or business during business hours to meet the definition of "single place or premises" as used in § 12-21-2804(A). If a game room containing operational Class III video game machines is accessible to customers and no employee is present in that room, the room does not meet the regulatory definition of "single place or premises." An employee working in a common area or anywhere else outside the game room is not considered to be "on the premises" of the game room. See S.C. Dep't of Revenue and Taxation v. Stacks, 95-ALJ-17-0742-CC (Mar. 8, 1996). This application is consistent with the intent of the General Assembly to prevent large-scale casino type gambling. See Singletary v. S.C. Dep't of Education, 316 S.C. 153, 447 S.E.2d 231 (Ct. App. 1994), citing State v. Thrift, 312 S.C. 282, 440 S.E.2d 341 (1994) (legislative intent must prevail if it can be reasonably discovered and language of a statute must be construed in the light of the intended purpose of the statute).
  3. As conceded by Respondents, the game rooms identified as Unit A, Unit C, Unit D, Unit E, and Unit F failed to meet the "one separate employee" standard set forth in Regulation 117-190 by failing to have an employee on the premises of each of the game rooms.
  4. Because Unit A, Unit C, Unit D, Unit E and Unit F failed to meet the regulatory definition of "single place or premises," the total number of machines in the five cited game rooms, 19 machines, exceeded the five machine limit of § 12-21-2804(A). Under § 12-21-2804(A), a license on a video game machine must be revoked by virtue of its misuse under the Act, whether the actual violator is the licensee, machine owner, or lessee. Consequently, the 19 Class III video game machine licenses designated herein are subject to revocation.
  5. Furthermore, S.C. Code Ann. § 12-21-2804(F) (Supp. 1998) provides that a person who violates S.C. Code Ann. § 12-21-2804(A) is subject to a fine of up to $5,000. In this case, the Department seeks a $5,000 fine against each of the Mid-South game rooms at issue and a $25,000 fine against Coastal Coin as the owner and license-holder of the Class III machines in the five game rooms.
  6. It is a generally recognized principle of administrative law that the fact-finder has the authority to determine an appropriate administrative penalty, as established by the legislature, after the parties have had an opportunity for a hearing on the issues. See, e.g., Walker v. South Carolina ABC Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991). A monetary fine, however, under § 12-21-2804(F) may be imposed only on the person(2) who violates § 12-21-2804(A). It should be emphasized that S.C. Code Ann. § 12-21-2804(A) (Supp. 1998) clearly precludes any person, not just the licensees, from applying for, receiving, maintaining, or permitting to be used permits for the operation of more than five Class III video game machines in a single place or premises.
  7. In the instant case, the Department has established that Respondent Mid-South held the retail licenses for the five game rooms at issue at 2000 Highway 17 North, Surfside Beach, South Carolina. Mid-South also leased the building in which the game rooms were located and hired the attendants for the game rooms in the building. Based on the facts of this case, the Department may impose a fine of $5,000 against Mid-South for allowing more than five of the Class III machines to be used at a single place or premises.
  8. In the instant case, the Department has not established that Respondent Coastal Coin violated the statute. Coastal Coin supplied the Class III machines at issue and held the machine licenses for such machines. Coastal Coin did not manage or maintain any video game room business. There is also no evidence that while Coastal Coin applied for the licenses, it knowingly allowed more than five of its machines to be used at a single place or premises. Therefore, the Department cannot impose a fine of $25,000 against Coastal Coin for violating § 12-21-2804(A) or Reg. 117-190. (3)
  9. The Department, however, may not impose multiple fines against Mid-South or Coastal Coin for the several game rooms that did not meet the definition of "single place or premises." See S.C. Code Ann. § 12-21-2804(A) & 27 S.C. Code Ann. Regs. 117-190. The Department seeks, in essence, a $25,000 fine against both Mid-South and Coastal Coin for five violations of the single place or premises requirement of § 12-21-2804(A). The Department's reasoning seems to be that the failure to have an employee in five different game rooms constitutes five separate acts of having more than five machines in a single place or premises, although none of the individual game rooms cited for these violations have more than five machines therein. I find that there is only one violation of the five machine limit of § 12-21-2804(A) for the 19 Class III machines in the five game rooms that did not meet the regulatory definition of "single place or premises." The Department may only impose a fine of $5,000 against Mid-South for violating § 12-21-2804(A).
  10. Advertising
  11. Section 12-21-2804(B) provides:

No person who maintains a place or premises for the operation of machines licensed under Section 12-21-2720(A)(3) may advertise in any manner for the playing of the machines nor may a person offer or allow to be offered any special inducement to a person for the playing of machines permitted under Section 12-21-2720(A)(3).



S.C. Code Ann. § 12-21-2804(B) (Supp. 1998) (emphasis added).

  1. To clarify and simplify the provisions of this statute, the Department promulgated Regulation 117-190.2 which defines the word "advertise." As it relates to advertising, the regulation provides that ". . . any attempt to call attention to, or make known, to the general public that video game machines as defined in Code Section 12-21-2772(5) are available for play is advertising and is strictly prohibited by the statute."
  2. Section 12-21-2804(B) clearly provides that a person who maintains a place or premises for the operation of Class III video machines may not advertise for the playing of the machines. In the instant case, the advertisement at issue was for Sand Dollars Saloon and appeared on television with the words "Las Vegas style atmosphere." To most observers, the words "Las Vegas" would connote gambling and the playing of the Class III machines, and, accordingly, the phrase "Las Vegas style atmosphere" constitutes the type of advertising that the General Assembly intended to prohibit.
  3. As stated above, the Department charged Mid-South and Sand Dollars Saloon with violating § 12-21-2804(B) and Reg. 117-190.2 by running the advertisement on television. The evidence supports that Mid-South leased the building in which the game rooms were located, hired the game room attendants, and maintained the retail licenses for the game rooms. Consequently, Mid-South clearly maintained, at least in part, a business for the operation of Class III machines. Furthermore, Mid-South also advertised for that business; the sole officer of Mid-South, Dean Vinovich, signed the contract with Jones Intercable for the television advertisement at issue. I find that Mid-South advertised for video poker machines, despite the fact that the advertisement was, on its face, for Sand Dollars Saloon instead of Mid-South. Regardless of whether Mr. Vinovich placed the name Sand Dollars Saloon or Mid-South in the advertisement, Vinovich's advertisement was for the benefit of both businesses. The advertisement indirectly, if not primarily, was for the benefit of the business of Mid-South. Consequently, Mid-South, through its sole officer Mr. Vinovich, advertised the playing of its Class III machines, thereby violating § 12-21-2804(B) and Reg. 117-190.2.
  4. Sand Dollars Saloon, however, did not advertise the playing of Class III machines in violation of § 12-21-2804(B) and Reg. 117-190.2. Sand Dollars Saloon merely maintained the bar in the common area. Most likely, Sand Dollars Saloon knew of the advertisement and desired the anticipated benefits to its bar business from the advertisement. Nevertheless, Sand Dollars Saloon did not "maintain[] a place or premises for the operation of machines licensed under Section 12-21-2720(A)(3)," as required by § 12-21-2804(B) for a violation thereunder. Accordingly, the Department may not impose the $3,000 fine for the advertisement against Sand Dollars Saloon.
  5. Therefore, the fine for violating § 12-21-2804(B) and Reg. 117-190.2 is proper against only Mid-South. The Department shall impose a fine of $5,000 against Mid-South for the advertisement at issue.

F. Six-Month Suspension in Units A, C, D, E and F

  1. Section 12-21-2804(A) expressly authorizes the Department to enforce the provisions of this section and to revoke licenses utilized in a fashion that fails to comply with the provisions of this section. Section 12-21-2804(A) further provides: "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."
  2. The clear meaning of this language precludes the utilization of new licenses for machines to be placed in an establishment for a six month period after that establishment has had a machine license revoked. Hence, as the current machines in Units A, C, D, E and F have been rendered inoperative by their respective license revocations, and no new machine licenses may be utilized at these locations for six months, the five game rooms must cease operations for six months. The Department does not issue machine licenses for use at specified locations, but rather to individuals who may utilize them at any qualified location in the State. Consequently, section 12-21-2804(A) would be rendered meaningless if it were read not to require an establishment whose licenses have been revoked to cease operations for six months. See Singletary v. S.C. Dep't of Education, 316 S.C. 153, 447 S.E.2d 231 (Ct. App. 1994) (citing State v. Thrift, 312 S.C. 282, 440 S.E.2d 341 (1994) (legislative intent must prevail if it can be reasonably discovered and language of a statute must be construed in the light of the intended purpose of the statute)).

G. Revocation of Business License of Mid-South and Other Retail Licenses

  1. S.C. Code Ann. § 12-54-90(A) states that:

When a person fails, neglects, violates, or refuses to comply with a provision of law or regulation administered by the department, the department, in its discretion, may revoke one or more licenses held by the taxpayer within ten days of notification in writing of the taxpayer's failure to comply.

S.C. Code Ann. § 12-54-90(A) (Supp. 1998). Under this statute, the Department has the discretion to revoke the business and retail license of certain violators of laws or regulations administered by the Department. In the present case, however, the Department failed to present evidence of the nature or quantity of the underlying violations to support the revocation of any of the business or retail licenses of Mid-South.

  1. Pursuant to ALJD Rule 29(C), issues raised in the proceedings but not addressed in this Order are deemed denied.

ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law, IT IS HEREBY ORDERED that, as mandated by S.C. Code Ann. § 12-21-2804(A) (Supp. 1998), the Department shall revoke the licenses for the 19 machines which were located in Units A, C, D, E and F at 2000 Highway 17 North, Surfside Beach, South Carolina on November 24, 1997.

IT IS FURTHER ORDERED that no Class III video game machine licenses shall be utilized in these five game rooms for a period of six months from the date of revocation of the licenses.

IT IS FURTHER ORDERED that the Department shall impose a fine of $5,000 against Respondent Mid-South, Inc. for its violation of S.C. Code Ann. § 12-21-2804(A) (Supp. 1998) and an additional $5,000 fine against Mid-South, Inc. for its violation of S.C. Code Ann. § 12-21-2804(B) (Supp. 1998).

AND IT IS SO ORDERED.



______________________________

JOHN D. GEATHERS

Administrative Law Judge

March 8, 2000

Columbia, South Carolina

1. The preponderance of the evidence is "[t]he greater weight of the evidence" or "superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other." BLACK'S LAW DICTIONARY 1201 (7th ed. 1999). "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)).

2. The term "person" is not defined in the Act, but its common and ordinary meaning clearly encompasses any individual or entity (such as a corporation) that is recognized by law as having the rights and duties of a human being, including the licensee or machine owner. See Black's Law Dictionary 1162 (7th ed. 1999).

3. Although Dean Vinovich was an officer of both Mid-South and Coastal Coin, the Department did not argue or present evidence to support that the corporate separateness of Coastal Coin should be disregarded to impose liability on Coastal Coin as an "instrumentality" of Mid-South. " It is a well-settled principle of corporate law that, absent a finding of fraud or bad faith, a corporation is entitled to a presumption of separateness from a sister corporation, even though both may be owned and controlled by the same entity. . . . [A]ctual domination, rather than simply the opportunity to exercise control, must be shown." Banegas v. United Brands Co., 663 F. Supp. 198, 201 (D.S.C. 1986); see Brown v. Moorhead Oil Co., 239 S.C. 604, 124 S.E.2d 47 (1962) (finding insufficient evidence to support "instrumentality" or other theory where the entire stock of two companies was owned by the same person). In this case, there is no evidence of such domination, fraud, or bad faith.


Brown Bldg.

 

 

 

 

 

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