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:
Diane’s Stable Steak House, LLC vs. SCDOR

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
Diane’s Stable Steak House, LLC, d/b/a Diane’s Stable Steak House

Respondents:
South Carolina Department of Revenue
 
DOCKET NUMBER:
06-ALJ-17-0666-CC

APPEARANCES:
For the Petitioner: Eugene C. Griffith, Jr., Esquire

For the Respondent: Lynn M. Baker, Esquire

For the Protestants: Pro Se
 

ORDERS:

FINAL ORDER AND DECISION

STATEMENT OF THE CASE

This matter is before the Administrative Law Court (“ALC”) for a final order and decision following a contested case hearing pursuant to S.C. Code Ann. §§ 1-23-310 et seq. (2005), S.C. Code Ann. § 1-23-600(B) (Supp. 2005), and S.C. Code Ann. § 61-2-260 (Supp. 2005). The petitioner, Diane’s Stable Steak House, LLC, d/b/a Diane’s Stable Steak House (“Petitioner”), applied for an on-premises beer and wine permit pursuant to §§ 61-4-500 et seq. and for a liquor by the drink license pursuant to §§ 61-6-1600 et seq. for the location at 111 Grace Street, Prosperity, South Carolina 29127. Ms. Deborah Cook and Mr. James H. Counts, Jr. (“Protestants”) filed written protests to the Petitioner’s application. Respondent South Carolina Department of Revenue (“Department”) denied the application pursuant to § 61-4-525 and § 64-6-1825 due to the receipt of the Protestants’ valid public protests. The Department represented that it would have granted the permit but for the receipt of the public protests.

After notice to the parties and the Protestants, the court held a hearing on this matter on October 6, 2006. Both parties and the two Protestants, Ms. Deborah Cook and Mr. James H. Counts, Jr., appeared at the hearing. Evidence was introduced and testimony presented. After carefully weighing all of the evidence, the court finds that the Petitioner’s application for this location should be granted subject to the restriction detailed below.


ISSUE

The only issue in dispute is the suitability of the location. §§ 61-4-520(5)-(6); Schudel v. S.C. Alcoholic Beverage Control Comm’n, 276 S.C. 138, 276 S.E.2d 308 (1981).

FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, and taking into consideration the burden of persuasion by the parties, the court makes the following Findings of Fact by a preponderance of the evidence.

Evidence was presented regarding all of the relevant statutory criteria. Notice of the time, date, place, and subject matter of the hearing was given to all parties and the Protestants.

The Petitioner seeks a permit for the retail sale of beer and wine for on-premises consumption and a license to sell liquor by the drink for the location at 111 Grace Street, Prosperity, South Carolina 29127. The proposed location is inside the municipal limits of Prosperity. Notice of the application was lawfully posted at the location and published in a newspaper of general circulation.

Ms. Diane Folden is sole owner of the business seeking the requested permit and license. Folden is over the age of twenty-one. She is of good moral character and has never had a permit or license to sell beer, wine, or liquor revoked. She has no criminal record and does not owe the state or federal government any delinquent taxes, penalties, or interest.

The Petitioner seeks an on-premises beer and wine permit and a license to sell liquor by the drink for a restaurant, Diane’s Stable Steak House, which it has operated since June of 2006. The restaurant operated as Stable Steak House at the proposed location for approximately five years under two previous owners before the Petitioner took over the business. Under the previous owners the restaurant was permitted to sell beer, wine, and liquor. The evidence reveals no problems related to the sale of beer, wine, or liquor since the restaurant’s inception. Additionally, upon taking over the restaurant, the Petitioner obtained a temporary license to sell beer, wine, and liquor which she held for the 120 days permitted by the applicable statute without any citations for violations of the alcoholic beverage control statutes or incidents necessitating police involvement.

The proposed location is on Grace Street in the town square of Prosperity, South Carolina. The area immediately surrounding the proposed location is typical of a downtown area of a small municipality, with mixed commercial and residential use. In the vicinity of the proposed location are other businesses such as a real estate office, an insurance company, a seed company, an automobile parts store, a law office, a dry cleaner’s, a bank, an antique shop, and other similar establishments. Residential apartments are also near the proposed location, some of which are located above the stores and offices. Parking at the proposed location is adequate.

The proposed location is a family restaurant with a separate bar area. Ms. Jenny Bedenbaugh, the prior operator of the restaurant, testified regarding the nature of the business under her management. Ms. Bedenbaugh described the restaurant as a family-style steakhouse where patrons could bring their children. She described a “kids’ room” in the front of the restaurant where children can play while their parents enjoy their meal. Additionally, she testified that there is a television in the bar area where children frequently watch cartoons when their parents eat in the bar area. Ms. Folden testified that she did not intend to make substantial changes to the operation of the restaurant from that of Ms. Bedenbaugh.

The evidence shows that the restaurant is not currently the type of establishment that people typically patronize simply to drink alcohol, but rather is a place where patrons can have a beer, glass of wine, or a cocktail with their dinner. The restaurant is open for breakfast, lunch, and dinner. Beer, wine, and liquor are sold only during the hours when dinner is being served. The restaurant is open Tuesdays through Thursdays from 7:00 a.m. to 2:00 p.m. and from 5:00-9:00 p.m., on Fridays and Saturdays from 7:00 a.m. to 2:00 p.m. and 5:00-10:00 p.m., and on Sundays for a lunch buffet from 10:30 a.m. to 2:00 p.m. The restaurant occasionally offers live entertainment in the form of an acoustic guitarist on Thursday evenings. The acoustic guitar is not audible outside the restaurant.

The Protestants testified as to various concerns with the proposed location. Ms. Deborah Cook, who operates a nearby business and resides above her store, expressed “fears” that Ms. Folden intends to change the nature of the business on the weekends. She stated that she was afraid that Ms. Folden would promote nightlife in Prosperity by bringing in live bands and constructing a deck outside the restaurant, creating noise problems for nearby residents. She testified that under Ms. Folden’s management, the restaurant had been open later on weekends, sometimes until 11:00 p.m. She also stated that Ms. Folden had physically expanded the square footage of the bar area. Furthermore, Ms. Cook expressed concerns about the propriety of allowing children to play without supervision in the “kids’ room” in a restaurant where beer, wine, and liquor are served. However, Ms. Cook also testified that she had no problem with the restaurant as long as it continued to be operated in the same manner that it had been under Ms. Bedenbaugh’s management. The record shows that Ms. Cook is the ex-wife of the acoustic guitarist who plays on Thursday evenings in the restaurant.[1]

Mr. James Counts also testified in opposition to the application. He stated that under Ms. Bedenbaugh’s ownership, the Stable Steak House was his favorite restaurant. He testified that Ms. Bedenbaugh had handled the distribution of alcohol tastefully, but that he became concerned when Ms. Folden began promoting the sale of “buckets of beer” that Ms. Folden would encourage more alcohol consumption that Ms. Bedenbaugh had. He also expressed concerns about the allowance of children in the bar area. He further expressed concerns about the proximity of children attending the daycare and after school program offered by a nearby church. Finally, he voiced objection to Ms. Folden’s rumored plans for extended night hours, an outdoor deck, and live bands, although he had no objection to the acoustic guitarist. Like Ms. Cook, Mr. Counts testified that he had no problem with the restaurant if Ms. Folden continues to operate it as Ms. Bedenbaugh did.

In rebuttal, the Petitioner offered the testimony of Mr. David E. Bedenbaugh in support of its application. Mr. Bedenbaugh resides in an apartment immediately adjacent to the restaurant and owns several of the nearby apartments. He has no complaints about the restaurant and is a frequent patron. He expressed enthusiastic support.

Ms. Folden testified that while she had originally considered expanded night hours, she abandoned this plan when she realized that customers would not stay late enough to justify a later closing time. She did not, however, address the construction of an outdoor deck or the expansion of the bar area.

LAW

Based upon the foregoing Findings of Fact, the court concludes the following as a matter of law.

1. Jurisdiction

Jurisdiction over this case is vested with the South Carolina Administrative Law Court pursuant to §§ 1-23-310 et seq., § 1-23-600(B), and § 61-2-260. “[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). 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. S. Bell Tel. & Tel. Co., 308 S.C. 216, 222, 417 S.E.2d 586, 589 (1992). Furthermore, a trial judge who observes a witness is in the best position to judge the witness’s demeanor and veracity and to evaluate the credibility of his testimony. See, e.g., Woodall v. Woodall, 322 S.C. 7, 10, 471 S.E.2d 154, 157 (1996); Wallace v. Milliken & Co., 300 S.C. 553, 556, 389 S.E.2d 448, 450 (Ct. App. 1990).

2. Suitability of Location

a. Generally

Section 61-4-520 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 §§ 61-4-520(5)-(6). Additionally, § 61-6-1820 sets forth the basic criteria for the issuance of a liquor license. However, a liquor license may be denied if the proposed location is not suitable. See Schudel v. S.C. Alcoholic Beverage Control Comm’n, 276 S.C. 138, 276 S.E.2d 308 (1981). Therefore, either a permit or license may be denied if the location of the business is not a proper one.

b. Factors in Determining Proper Location

“Proper location” is not statutorily defined, but broad discretion is vested in the trier of fact to determine the fitness or 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). In determining whether a proposed location is suitable, it is proper for this tribunal to consider any evidence that shows adverse circumstances of location. Kearney v. Allen, 287 S.C. 324, 326, 338 S.E.2d 335, 337 (1985); Palmer, 282 S.C. at 249, 317 S.E.2d at 478 (citing Smith v. Pratt, 258 S.C. 504, 189 S.E.2d 301 (1972)). The determination of suitability of location is not necessarily solely a function 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, 287 S.C. at 326-27, 338 S.E.2d at 337; Schudel, 276 S.C. at 138, 276 S.E.2d at 308. Further,

a liquor license or permit may be properly refused on the ground that the location of the establishment would adversely affect the public interest, that the nature of the neighborhood and of the premises is such that the establishment would be detrimental to the welfare . . . of the inhabitants, or that the manner of conducting the establishment would not be conducive to the general welfare of the community.

48 C.J.S. Intoxicating Liquors § 121 at 501 (1981).

Other factors may be considered when determining whether a location is proper. For example, a liquor license shall not be granted if the place of business is within 300 feet (if within a municipality) or within 500 feet (if outside a municipality) of any church, school, or playground. § 61-6-1820(3); § 61-6-120. Although the General Assembly did not provide absolute statutory distance requirements for beer and wine permits as it did for liquor licenses, the proximity to residences, churches, schools, and playgrounds may be considered for beer and wine permits as well. § 61-4-520(6); Smith, 258 S.C. at 504, 189 S.E.2d at 301. Therefore, the decision as to whether the proximity is improper for a beer and wine permit must be made on a case-by-case basis resting upon the peculiar facts of each permit request.

Additionally, consideration can be given to the impact the issuance of the permit or license will have on law enforcement. Fowler v. Lewis, 260 S.C. 54, 194 S.E.2d 191 (1973); Roche v. S.C. Alcoholic Beverage Control Comm'n, 263 S.C. 451, 211 S.E.2d 243 (1975). Evidence that the granting of a permit will place a strain upon police to adequately protect the community must be weighed. Moore v. S.C. Alcoholic Beverage Control Comm’n, 308 S.C. 160, 162, 417 S.E.2d 555, 557 (1992). Denial is appropriate where the public areas surrounding the proposed location have been the source of constant law enforcement problems or significant problems with public intoxication. Roche, 263 S.C. at 451, 211 S.E.2d at 243. Another pertinent factor is whether police have been summoned to the scene on prior occasions when licensed to another party. Schudel, 276 S.C. at 141-42, 276 S.E.2d at 309-10. It is relevant whether the location is near other locations that have either been a constant source of law enforcement problems or are locations where young people congregate and loiter. Palmer, 282 S.C. at 250, 317 S.E.2d at 478.

Similarly, consideration can be given to whether the location is heavily traveled or creates a traffic danger. Id. Furthermore, whether the location has in the recent past been permitted and whether the location is now more or less suitable than it was in the past is a relevant factor. Taylor v. Lewis, 261 S.C. 168, 198 S.E.2d 801 (1973). Finally, a valid consideration is whether the surrounding area is substantially commercial. Id.; Byers v. S.C. Alcoholic Beverage Control Comm'n, 281 S.C. 566, 316 S.E.2d 705 (Ct. App. 1984).

Without sufficient evidence of an adverse impact on the community, a permit or license 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). Moreover, the denial of a permit or license 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, 261 S.C. at 171, 198 S.E.2d at 802.

c.                   Conclusions

After carefully weighing the evidence and applying the law as discussed above, the court finds the proposed location to be suitable as long as music is not audible outside the restaurant during late evening hours.

More than one witness testified that the restaurant was an asset to the town of Prosperity with a positive impact on the community. Both of the Protestants testified that they had no objection to the restaurant as long as it was run in a similar manner as in the past. The court finds that the Protestants’ objections to the Petitioner’s application, while not entirely without foundation, were largely speculative and conjectural, generally born out of “fears” that the operation of the restaurant would change as well as various rumors, several of which were refuted by Ms. Folden. Ms. Folden specifically stated under oath that she intended to operate the restaurant along the same lines as Ms. Bedenbaugh, and she contradicted the speculation that closing time would be extended, expressing her intent to continue to close the restaurant at 10:00 p.m. on weekends. She did not, however, refute Ms. Cook’s assertion that she had expanded the bar area or deny that she planned to construct an outdoor deck.

The court observes that the proposed location has been licensed without incident for five years and that the Petitioner has operated the restaurant with a temporary license for 120 days with no problems that would contraindicate licensure. No evidence was offered that the proposed location has been a source of problems for law enforcement, either under the Petitioner’s management or that of prior licensees. Ms. Cook testified that Prosperity has a “skeleton” police force, but the court notes that the local police department did not protest the application and there was no evidence that licensure of the requested location would place a strain on existing law enforcement resources. Additionally, although Ms. Cook asserted that she had observed Ms. Folden providing transportation to patrons of the restaurant at night, there was no indication that Ms. Folden’s measures to ensure that her patrons did not drive while impaired were associated with any significant problems with public intoxication at the location. Finally, at least two other restaurants in the immediate surrounding area are licensed to sell beer, wine, or liquor and there is no evidence in the record of any problems associated with these locations. Moreover, neither of the Protestants filed written protests to the applications of those other locations.

The court concludes that the Protestants’ objections related to children were secondary to their objections regarding the potential for live music, extended nighttime hours, and the promotion of additional alcohol sales. Neither of the Protestants ever protested the license applications or renewals of the previous operators of the restaurant despite Ms. Bedenbaugh’s preexisting practice of allowing children to watch cartoons in the bar area and play in the “kids’ room,” and despite the proximity of the church. Additionally, both of the Protestants expressed their support and satisfaction with the manner in which Ms. Bedenbaugh operated the restaurant, which would have included her arrangements for children, and stated that they had no problem with the Petitioner’s application as long as Ms. Folden continued to run the restaurant in the same manner as Ms. Bedenbaugh. Finally, the court notes that no alcohol is served at the restaurant during the hours when children are present for daycare or after-school care at the church.

The proposed location is not within 300 feet of any church, school, or playground and thus does not violate the statutory prohibition for the sale of liquor by the drink. Nonetheless, the court finds that its proximity to occupied residential apartments makes it unsuitable for the performance of live music that is audible by neighboring residents. See S.C. Code Ann. § 61-4-520(6) (Supp. 2005); Smith v. Pratt, 258 S.C. 504, 189 S.E.2d 301 (1972); Byers v. S.C. Alcoholic Beverage Control Comm'n, 305 S.C. 243, 246, 407 S.E.2d 653, 655 (1991) (holding that proximity to a residence is by itself sufficient to support a finding of unsuitability and denial of a permit). Although Ms. Folden asserted that she has not engaged live entertainment beyond the acoustic guitarist and that she intends to adhere to a 10:00 p.m. closing time on weekends, the court is mindful that circumstances and plans can change.[2] The evidence presented does not warrant a restriction as to square footage or hours of operation; however, because of the proximity of the proposed location to residences, the


permit and license sought should be restricted so as not to allow music that is audible outside the restaurant past 9:00 p.m. on weeknights and 10:00 p.m. on weekends. See § 61-2-80. With this restriction, the location is suitable for the permit and license sought.

ORDER

Based upon the Findings of Fact and Conclusions of Law stated above, the court finds that, with the above-noted restriction, the Petitioner meets all of the statutory requirements for the issuance of an on-premises beer and wine permit and liquor by the drink license. It is therefore

ORDERED that the Department shall GRANT Petitioner’s application for an on-premises beer and wine permit and liquor by the drink license for the premises located at 111 Grace Street, Prosperity, South Carolina 29127 in accordance with § 61-2-80, § 61-4-540, and § 61-6-1820, subject to the Petitioner’s entering a written agreement with the Department not to allow music that is audible outside the restaurant after 9:00 p.m. Sunday through Thursday and 10:00 p.m. on Friday and Saturday.

IT IS SO ORDERED.

______________________________

PAIGE J. GOSSETT

Administrative Law Judge

October 11, 2006

Columbia, South Carolina



[1] On cross-examination, Ms. Cook rejected the suggestion that her protest of the instant application was motivated by ill feelings toward her former husband. However, the court observed that when counsel attempted to impeach her with this fact, Ms. Cook’s tone of voice and demeanor changed in a manner that undermined her credibility on this point.

[2] Furthermore, during her rebuttal testimony Ms. Folden made reference to a “band” being present in the restaurant in addition to the acoustic guitarist.


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