ORDERS:
FINAL ORDER AND DECISION
STATEMENT
OF THE CASE
The
above-captioned matter is 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. In this
matter, Petitioner South Carolina Department of Revenue (Department) seeks to
revoke the on-premises beer and wine permit and restaurant license to sell
liquor by the drink held by Respondent The Side Pocket, Inc., for its
restaurant and bar, The Side Pocket, located at 4514 Ladson Road in
Summerville, South Carolina. The Department seeks the revocation because it
contends that Respondent’s business has not been primarily and substantially
engaged in the preparation and serving of meals and thus has failed to meet the
requirements for a restaurant license to sell liquor by the drink. After
timely notice to the parties, a hearing of this case was held on October 19,
2006, at the South Carolina Administrative Law Court in Columbia, South
Carolina. Based upon the evidence presented at the hearing and the applicable
law, I find that, at the time the Department issued the citation in question to
Respondent, it was not in compliance with the requirements for its restaurant
liquor-by-the-drink license. However, I further find that, as Respondent has
since brought its establishment within the requirements of the statutes and
regulations governing its liquor license, the appropriate penalty for Respondent’s
violation is a seven-day suspension of its license and the imposition of a
$1500 fine upon Respondent.
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. Respondent
The Side Pocket, Inc., holds an on-premises beer and wine permit and a
restaurant license to sell liquor by the drink for its restaurant and bar, The Side
Pocket, located at 4514 Ladson Road in Summerville, South Carolina. The Side
Pocket, Inc., is a South Carolina corporation owned by Jeri McDonald and her
brother, who have operated their restaurant and bar at the location in question
since 1989. During its seventeen-year history, The Side Pocket has operated
without incident and has received only one prior citation from the Department,
a June 17, 2005 violation for permitting games of chance on the licensed
premises.
2. On
March 29, 2005, Agent Tina Bailey, a vice agent with the South Carolina Law
Enforcement Division (SLED), conducted an inspection of The Side Pocket. During
the inspection, Agent Bailey found that The Side Pocket did not have a
restaurant kitchen and did not have seating for forty persons for the service
of meals. For its purported food service, the restaurant only had a limited
selection of frozen food items in a small refrigerator, and the manager on duty
was unable to produce any receipts for food sales. As a result of the
inspection, Agent Bailey notified Respondent that it was not in compliance with
the requirements for a restaurant license to sell liquor by the drink and
issued a warning to Respondent for failing to maintain the restaurant
requirements of its license.
3. On
September 7, 2005, Agent Bailey conducted a follow-up inspection of The Side
Pocket. During the follow-up inspection, Agent Bailey found that the
restaurant was in essentially the same state as it was at the time of her prior
inspection. The establishment still did not have a kitchen or food preparation
area, did not have seating for forty persons at tables for the service of meals,
and could not produce any receipts for food sales. Rather, as before, its food
service was limited to a modest selection of frozen foods stored in a small
refrigerator. Based upon this follow-up inspection, Agent Bailey issued a
violation to Respondent for failing to maintain a bona fide restaurant
primarily and substantially engaged in the preparation and serving of meals.
4. As
a result of Agent Bailey’s inspections, the Department issued a Final Agency
Determination on April 19, 2006, in which it concluded that Respondent failed
to maintain a restaurant bona fide engaged primarily and substantially in the
preparation and serving of meals as required by its restaurant license to sell
liquor by the drink. In particular, the Department found that Respondent
failed to maintain an adequate kitchen and failed to provide seating for forty
persons at tables for the service of meals, as required by statute and
regulation. Accordingly, the Department concluded that Respondent’s restaurant
liquor-by-the-drink license, as well as its on-premises beer and wine permit
for the same premises, should be revoked.
5. In
recent months, Respondent has made extensive changes to its food preparation
and food service capabilities at The Side Pocket. Specifically, Respondent has
increased its seating at the restaurant and has added a full kitchen to the
business. With these renovations, The Side Pocket now has seating for
approximately sixty persons at tables for the service of meals and has a full
kitchen with a grill, deep fryer, double sink, full-size refrigerator, and
shelving for the storage of food and supplies. The Side Pocket will now offer
a menu featuring a range of typical American bar food, including french fries,
nachos, hamburgers, hot dogs, and chicken wings. At the time of the hearing in
this matter, The Side Pocket had received DHEC approval to operate the new
kitchen and was merely awaiting a county fire inspection to begin using the
kitchen.
CONCLUSIONS
OF LAW
Based
upon the foregoing Findings of Fact, I conclude the following as a matter of
law:
1. The
Department is charged with the responsibility of administering the laws and
regulations governing the manufacture, distribution, and sale of alcoholic
beverages in South Carolina. See S.C. Code Ann. §§ 61-2-20, 61-2-80
(Supp. 2005). The Department’s responsibilities include the prosecution of
administrative violations against alcoholic beverage licensees. See, e.g.,
S.C. Code Ann. § 61-6-1830 (Supp. 2005) (authorizing the Department to suspend,
revoke, or refuse to renew a minibottle license where the licensee has violated
any provision of the Alcoholic Beverage Control Act or any regulation
promulgated thereto).
2. This
Court has jurisdiction over this contested case matter 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).
3. 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); see also Doe v. Doe, 324 S.C. 492, 502,
478 S.E.2d 854, 859 (Ct. App. 1996) (holding that a trial judge, when acting as
finder of fact, “has the authority to determine the weight and credibility of
the evidence before him”). 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).
4. A
restaurant license to sell liquor by the drink allows a business to sell
alcoholic liquors to its patrons for consumption on the licensed premises so
long as “the business is bona fide engaged substantially and primarily in the
preparation and serving of meals.” S.C. Code Ann. §§ 61-6-1610(A)(1),
61-6-1820(1) (Supp. 2005); see also S.C. Const. art. VIII-A, § 1. Among
the statutory and regulatory requirements for a business to be considered
primarily and substantially engaged in the preparation and serving of meals are
the requirements that the restaurant provide “facilities for seating not less
than forty persons simultaneously at tables for the service of meals,” see
S.C. Code Ann. § 61-6-20(2) (Supp. 2005), and “be equipped with a kitchen that
is utilized for the cooking, preparation, and serving of meals,” see 23
S.C. Code Ann. Regs. 7-401.3(A)(1) (Supp. 2005). This kitchen must be a
“separate and distinct area of the business establishment that is used solely
for the preparation, serving and disposal of solid foods that make up meals”
and must be “adequately equipped for the cooking and serving of solid foods,
and for the storage of same,” including at least twenty-one cubic feet of
refrigerated space and a stove. 23 S.C. Code Ann. Regs. 7-401.3(B)(2) (Supp.
2005).
5. At
the time of Agent Bailey’s inspections of The Side Pocket in March and
September 2005, Respondent was not in compliance with the basic requirements of
its restaurant license to sell liquor by the drink. The restaurant did not
have the facilities to provide seating for forty persons simultaneously at
tables for the service of meals and did not have a true kitchen adequately
equipped for the preparation and serving of meals on the premises. However, as
a result of its recent improvements, The Side Pocket now clearly has the
kitchen facilities and available seating at tables to satisfy the statutory and
regulatory requirements for a restaurant license to sell liquor by the drink,
as confirmed by another inspection of the premises by Agent Bailey on September
6, 2006.
6. Therefore,
the facts in this case warrant a lesser penalty than that sought to be imposed
by the Department. It is a generally recognized principle of administrative
law that the fact finder has the authority to determine an appropriate
administrative penalty, within the statutory limits established by the
legislature, after the parties have had an opportunity for a hearing on the
issues. See, e.g., Walker v. S.C. Alcoholic Beverage Control Comm’n,
305 S.C. 209, 407 S.E.2d 633 (1991). Further, in assessing a penalty, the
finder of fact “should give effect to the major purpose of a civil
penalty–deterrence.” Midlands Utility, Inc. v. S.C. Dep’t of Health &
Envtl. Control, 313 S.C. 210, 212, 437 S.E.2d 120, 121 (Ct. App. 1993).
7. In
this matter, I find that, because Respondent has significantly expanded its
food preparation and food service facilities at The Side Pocket, such that the
establishment’s facilities plainly meet the requirements for a restaurant
license to sell liquor by the drink and the establishment’s food sales will
most probably develop into a robust portion of its business, the revocation of Respondent’s
restaurant license to sell liquor by the drink is not appropriate. However, as
Respondent’s prior failure to comply with the requirements of its liquor
license cannot be excused, particularly in light of its failure to promptly
address its noncompliance when warned by Agent Bailey in March 2005, I find
that Respondent must face an administrative penalty of some consequence.
ORDER
Based
upon the Findings of Fact and Conclusions of Law stated above,
IT
IS HEREBY ORDERED that the Department shall SUSPEND Respondent’s
restaurant license to sell liquor by the drink for the premises located at 4514
Ladson Road in Summerville, South Carolina, for a period of seven (7) days. This
suspension will only apply to Respondent’s restaurant liquor license, and will
not affect its on-premises beer and wine permit or its ability to sell beer and
wine at the licensed establishment.
IT
IS FURTHER ORDERED that the Department shall impose a fine of one thousand five
hundred dollars ($1500) upon Respondent to be collected in the same manner in
which the Department normally collects the monetary penalties it imposes.
AND
IT IS SO ORDERED.
______________________________
JOHN D.
GEATHERS
Administrative
Law Judge
1205 Pendleton
Street, Suite 224
Columbia, South
Carolina 29201-3731
November 22, 2006
Columbia, South Carolina
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