ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
The above-captioned matter is before this tribunal pursuant to S.C. Code Ann. § 61-2-260
(Supp. 2003) and S.C. Code Ann. §§ 1-23-310 et seq. (1986 & Supp. 2003) upon the application of
Petitioner BECA Social Club for an on-premises beer and wine permit and a nonprofit private club
minibottle license for the premises located at 1206 Bush River Road in Columbia, South Carolina.
Respondent South Carolina Department of Revenue (Department) denied Petitioner’s application
because of several protests filed regarding the suitability of the proposed location and because of its
own concerns with the suitability of the location. After timely notice to the parties and the protestants,
a contested case hearing in this matter was held on April 7, 2004, at the Administrative Law Judge
Division in Columbia, South Carolina. Based upon the evidence presented at the hearing and upon
the applicable law, I find that Petitioner’s application for an on-premises beer and wine permit and a
nonprofit private club minibottle license must be denied because of Petitioner’s failure to establish that
the individuals responsible for the club’s operations meet the licensure qualifications set out in the
relevant statutes.
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:
On September 15, 2003, Petitioner BECA Social Club filed an application with the Department
for an on-premises beer and wine permit and a nonprofit private club minibottle license for its private,
after-hours club, Third Shift, located at 1206 Bush River Road in Columbia, South Carolina.
The
application was signed and filed by Mr. Trani M. Price, who is also listed in the application as the
designated agent for the club. The application only identified two individuals, Mr. Trani M. Price and
Ms. Terrica A. Mason, as principals in the BECA Social Club, both of whom are described as officers
of the club. Under the bylaws of the BECA Social Club, which were submitted to the Department with
the application, the club is governed by a three-member board of directors, which, in turn, selects a
president, vice-president, and secretary-treasurer as the club’s officers.
The bylaws also authorize the
board of directors to hire, and set the salaries of, such personnel necessary for the proper functioning
of the club, including a club manager. In reviewing and investigating Petitioner’s application, the
Department determined that the two listed officers of the club, Trani Price and Terrica Mason, did not
have any outstanding state or federal tax liabilities, and the South Carolina Law Enforcement Division
(SLED) certified that neither Mr. Price nor Ms. Mason had a record of any criminal arrests or
convictions in South Carolina. However, on December 18, 2003, the Department denied Petitioner’s
application because of protests filed by a local resident, two nearby property owners, and the Richland
County Sheriff’s Department concerning the suitability of the club’s location, and because the
Department found the location of the club unsuitable given the prior history of law enforcement
problems at the location.
Petitioner sought review of that denial before this tribunal, and, by an Order dated January 29,
2004, a contested case hearing in this matter was scheduled for April 7, 2004, at the Administrative
Law Judge Division in Columbia, South Carolina. Approximately one week before the scheduled
hearing, Petitioner informed the Department and this tribunal that the club’s president, Mr. Ronald
Price, was mistakenly omitted from the club’s initial application. To remedy this omission, Petitioner
supplemented its application with a “Consent and Waiver” listing Mr. Price as an officer of the club
and provided the Department and this tribunal with a copy of Mr. Price’s criminal record, which
includes a 1992 conviction on ten counts of embezzlement and two counts of filing false tax
documents. However, at the start of the hearing of this matter, Petitioner further informed this tribunal
that both Ronald Price and his brother, Trani Price, had resigned their positions with the club and
stipulated that neither Ronald Price nor Trani Price would have any further involvement in the
ownership or operation of the night club. At the hearing, Ms. Cynthia Waymyers, the information
director and manager for the club, testified regarding the operations of the club. In her testimony, Ms.
Waymyers identified Pamela Parks, a resident of Georgia, as the club’s current president, and another
individual as the club’s vice-president. Other than this testimony no other evidence was presented at
the hearing regarding the identities and backgrounds of the directors, officers, and management-level
employees of the club.
Because of this failure by Petitioner to provide sufficient information regarding the identities,
ages, characters, and tax liabilities of the directors, officers, and other principals of the BECA Social
Club, I find that Petitioner’s application for an on-premises beer and wine permit and a nonprofit
private club minibottle license must be denied.
CONCLUSIONS OF LAW
Based upon the foregoing Findings of Fact, I conclude the following as a matter of law:
S.C. Code Ann. § 61-2-100 (Supp. 2003) sets forth the basic requirements that all applicants
for alcoholic beverage licenses and permits must satisfy in order to be issued the requested license or
permit. Under those requirements, when an entity other than an individual applies for a permit or
license, the permit or license may not be issued unless the Department determines, among other things,
that all principals of the entity are of good moral character, are over twenty-one years of age, and do
not have delinquent state or federal taxes. See S.C. Code Ann. § 61-2-100(D) (good moral character);
S.C. Code Ann. § 61-2-100(E) (Supp. 2003) (over the age of twenty-one); S.C. Code Ann. §§ 61-2-100(C) and 61-2-160 (Supp. 2003) (no delinquent taxes). Further, the statutes governing the issuance
of beer and wine permits and minibottle licenses contain additional requirements that must be met by
applicants before those permits and licenses can be granted. See S.C. Code Ann. §§ 61-4-520 (Supp.
2003) (beer and wine permits); S.C. Code Ann. § 61-6-1820 (Supp. 2003) (minibottle licenses).
Included among these provisions is the requirement that all principals of an applicant entity be of good
moral character. See S.C. Code Ann. § 61-4-520(1) (stating that no beer and wine permit may be
granted unless “[t]he applicant . . . and each agent, employee, and servant of the applicant to be
employed on the licensed premises are of good moral character”); S.C. Code Ann. § 61-6-1820(2)
(stating that the Department may grant a minibottle license to a corporate applicant upon finding that
the applicant entity “has a reputation for peace and good order in its community and its principals are
of good moral character”). Clearly, under these statutes, when a corporate entity, like the BECA Social
Club, applies for a beer and wine permit or minibottle license, the Department must scrutinize the
qualifications not only of the corporate entity, but also of each of the principals of that entity,
particularly with regard to good moral character, age, and tax delinquency.
S.C. Code Ann. § 61-2-100(H)(2) (Supp. 2003) defines the individuals associated with an
entity that are deemed “principals” of that entity and are subject to the scrutiny described above. This
section provides:
“Principal” of a business or entity means a person who is described in any one or more
of the following terms:
(a) an officer of the business or entity which owns the business;
(b) a partner other than a limited partner who cannot exercise any management control;
(c) a manager of the limited liability company which is managed by managers;
(d) a member of the limited liability company which is not managed by managers;
(e) a fiduciary, including personal representatives, trustees, guardians, committees, and receivers, who manage, hold, or control title to or who is otherwise in direct or indirect control of the business;
(f) a person who owns twenty-five percent or more of the combined voting power of the business or entity;
(g) a person who owns twenty-five percent or more of the value of the business entity; or
(h) an employee who has day-to-day operational management responsibilities for the business or entity.
Id. (emphasis added). Under this definition, the principals of BECA Social Club would include the
three members of the club’s board of directors; the officers of the club, including the president, vice-president, and secretary-treasurer; and any employees of the club who have “day-to-day operational
management responsibilities” for the club, such as the club manager referenced in the bylaws.
However, in the case at hand, many of the club’s principals have not been identified, and those
that have been identified have not been subjected to the investigations required by the alcoholic
beverage licensing statutes. The only individuals that have been certified to be over the age of twenty-one, to have no delinquent taxes, and to have no criminal record are the two individuals listed in the
application, Mr. Trani Price and Ms. Terrica Mason. However, at the hearing, Petitioner stipulated
that Trani Price had resigned his position with the club and would no longer have any involvement
with the organization. And, no mention of Ms. Mason was made at the hearing by either Petitioner’s
counsel or its witness. Further, Petitioner also stipulated at the hearing that the individual who had,
one week earlier, been identified as the president of the club, Ronald Price, had resigned his position
and would not have any involvement in the ownership or operations of the club.
Therefore, of the
three individuals identified as principals of the club prior to the hearing, two are, by stipulation, no
longer associated with the club and it is unclear whether the third has any continuing involvement with
the club. As such, no permit or license may be issued to Petitioner based upon the qualifications of
these individuals.
Nor may a permit or license be issued to Petitioner based upon the individuals identified as
principals at the hearing of this matter, in lieu of the persons mentioned above. At the hearing, Cynthia
Waymyers identified herself as the information director and manager of the club, and provided the
names of the new president and vice-president of the club. However, there was no evidence produced
at the hearing with regard to the moral character, age, and tax liability of these individuals. In
particular, SLED has not conducted a criminal background check on these individuals, and the
Department has not determined whether these individuals have any delinquent state or federal taxes.
At best, this tribunal can conclude from the testimony presented that Ms. Waymyers appears to be a
person of good moral character and appears to be over the age of twenty-one. But, no conclusions can
be reached regarding her tax liability or regarding the character, age, or tax liability of the other
principals identified.
Further, these identified principals may not be the only principals associated with the club.
While the identified officers may also serve on the club’s board of directors, there was no documentary
or testimonial evidence presented regarding the membership of the board of directors, which may be
composed of individuals other than the named officers. It is also unclear as to whether these named
officers are the only officers of the club. Specifically, it does not appear that the current secretary-treasurer of the club has been identified. Finally, it is not clear from the evidence presented that Ms.
Waymyers is the only club employee with day-to-day operational management responsibilities over
the club. In short, the individuals currently identified as the principals of Petitioner’s club have not
established their qualifications for the requested permit and license, and it is likely that other current
principals of the club have not been identified at all. Accordingly, this tribunal cannot grant Petitioner
the permit and license it seeks.
An alcoholic beverage licensing matter is essentially a two-fold inquiry into whether the
location to be licensed is suitable for the activities authorized by the requested license and whether the
applicant is a suitable person to hold that license. That is, in such matters, this tribunal must examine
not only where the proposed establishment is to be located, but also who is to operate the proposed
establishment. In the instant case, the latter question has gone unanswered; it is not clear who will
operate and be responsible for Petitioner’s club. The individuals identified as the club’s principals
prior to the hearing are no longer affiliated with the club, and the club’s current principals have not
established their qualifications to hold the requested permit and license–and, in some cases, may not
have even been identified to this tribunal. Because this tribunal cannot certify that the current
principals of Petitioner’s club are persons of good moral character, over twenty-one years of age, and
without delinquent state and federal taxes, it cannot issue the requested permit and license to Petitioner.
See S.C. Code Ann. §§ 61-2-100(C), (D), (E), 61-2-160, 61-4-520(1), 61-6-1820(2).
ORDER
For the reasons set forth above,
IT IS HEREBY ORDERED that Petitioner’s application for an on-premises beer and wine
permit and a nonprofit private club minibottle license for the premises located at 1206 Bush River
Road, Columbia, South Carolina, is DENIED. This denial shall not, however, prohibit Petitioner from
re-filing its application, with proper information regarding its principals, with the Department and
again seeking the permit and license in question.
AND IT IS SO ORDERED.
______________________________
JOHN D. GEATHERS
Administrative Law Judge
April 27, 2004
Columbia, South Carolina |
