Opinion
22-ALJ-17-0183-CC
09-06-2022
Varner Brothers, LLC, d/b/a Varner's Wine Cellar, Petitioner, v. South Carolina Department of Revenue,
For the Petitioner: Joenathan S. Chaplin, Esquire. For the Respondent: Marcus D. Antley, III, Esquire. For the Protestants: pro se.
For the Petitioner: Joenathan S. Chaplin, Esquire.
For the Respondent: Marcus D. Antley, III, Esquire.
For the Protestants: pro se.
FINAL ORDER
DEBORAH BROOKS DURDEN, JUDGE.
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. sections 1-23-310 (2009 and Supp. 2021), section 1-23-600 (Supp. 2021), and section 61-2-260 (2022). The Petitioner, Varner Brothers, LLC, d/b/a Varner's Wine Cellar (Petitioner), applied for a retail liquor license pursuant to S.C. Code Ann. section 61-6-100 (2022) for the location at 484 North Highway 52, Unit 111, Moncks Corner, Berkeley County, South Carolina (proposed location). Marvin Achterhof and Robin Oliver (Protestants) filed written protests to Petitioner's application. Respondent South Carolina Department of Revenue (Department) denied the application pursuant to S.C. Code Ann. section 61-6-185 (2022) due to the receipt of Protestants' valid public protests as well as concerns regarding whether Petitioner provided all required information and whether Petitioner owed any delinquent taxes, penalties, or interest.
The Court held a hearing on this matter on August 9, 2022. Both parties and the Protestants appeared at the hearing. Petitioner and the Department announced they resolved all issues prior to the hearing other than the Department's receipt of the Protestants' valid public protests. Evidence was introduced and testimony presented.
After carefully weighing the evidence, the Court finds the Petitioner's application for this location should be denied.
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.
Notice of the time, date, place, and subject matter of the hearing was given to all parties and the Protestants. Notice of the application was lawfully posted at the location and published in a newspaper of general circulation. The Department determined Petitioner met all the statutory requirements for a retail liquor license. At issue in this case is whether the proposed location is suitable for the sale of liquor and whether Petitioner's owner, Wendell A. Varner (Varner) is of good repute.
Varner is the sole owner of Petitioner. Petitioner is seeking a retail liquor license for Varner's Wine Cellar at the proposed location. The location is within the municipal limits of Moncks Corner. The proposed location is a unit in a strip shopping center. Varner is the only principal disclosed in the application.
On November 24, 2021, South Carolina State Law Enforcement Division (SLED) conducted an investigation of Varner and the proposed location. During an interview conducted as a part of the investigation, Varner answered the question "Do you or any principals hold any other alcohol licenses/permits in the state?" by saying he owned the beer and wine permit and liquor license for Atlantis Restaurant and Lounge (Atlantis). Atlantis is part of the same strip shopping center as the proposed location and is in a unit directly adjacent to the proposed location.
Atlantis and the parking lot serving it have been the location of multiple incident reports recorded by the Moncks Corner Police Department (MCPD) from November 6, 2019, to November 28, 2021. Protestants provided seventeen MCPD incident reports. All but one of the reported incidents occurred before Varner's November 24 interview with SLED. All but one of the reported incidents occurred after 9 P.M., with ten occurring after midnight. Four of the incidents involved individuals police suspected were intoxicated. One incident on November 30, 2019 involved two Atlantis customers being assaulted in the parking lot and robbed as they left the business at 2 a.m. Five of the incidents involved altercations among multiple individuals. One of these altercations on September 19, 2021 involved MCPD ordering all Atlantis customers to leave the location. The MCPD stood by as the crowd dispersed and followed a large contingent of the crowd that migrated to a nearby Waffle House restaurant. Five incidents involved reports of a firearm. One incident on December 22, 2019 was an incident reported by an Atlantis security guard describing a person attempting to enter Atlantis with a firearm tucked in his waistband. The security guard reported the incident approximately eighteen hours after the incident occurred, prompting police to question the guard as to why he did not contact law enforcement at the time of the incident. Three of these reported incidents involved the discharge of a firearm, two of which resulted in individuals being shot. On January 16, 2021, MCPD responded to a report of a woman shot in the parking lot outside Atlantis. Police found a woman with injuries to her hand and 9mm shell casings nearby. On November 21, 2021, two men exchanged gunfire at each other in the parking lot outside Atlantis. Both suffered injuries and one died as a result.
The Protestants are the owners of two separate businesses that sell alcoholic beverages in Moncks Corner. Protestants argue the area is oversaturated with liquor stores, noting there are already seven liquor stores within a two-mile radius of the proposed location. The Protestants stated Moncks Corner's population is approximately 14,000 based on the latest census. The Protestants admit their primary concern with Petitioner's application for a retail liquor license is the fact his business will be a direct competitor to them. However, the Protestants also noted the reputation for criminal incidents Atlantis had under Varner's ownership. Both Protestants heard about the fatal shooting outside Atlantis on November 21 through the local news and neighbors. Achterhof personally heard the communications of police and emergency medical services personnel responding to the shooting on his police radio.
Oliver testified she observed recent Facebook posts attributed to Varner advertising Atlantis. Varner testified that he sold Atlantis, but there is no evidence in the record as to when, or if, Varner sold the business. I find that Varner continues to have some pecuniary interest in Atlantis in contravention to the testimony he gave in the hearing. I find that the Atlantis, under Varner's ownership was a magnet for violent criminal behavior. As the owner of Atlantis, Varner established a reputation for allowing, or failing to control, such criminal activity at his business.
CONCLUSIONS OF LAW
Based upon the foregoing Findings of Fact, the Court concludes the following as a matter of law.
Jurisdiction
Jurisdiction over this case is vested with the South Carolina Administrative Law Court pursuant to sections 1-23-310, 1-23-600, 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).
Suitability of Location
Section 61-6-100(3) states:
Except as otherwise provided, the department has sole and exclusive power to suspend and revoke all licenses provided for in the ABC Act. The department may issue, subject to revocation, the following licenses under this article: . . . retail dealers' licenses which authorize the licensees to purchase alcoholic liquors from wholesalers having licenses issued under this article, and to store, keep, possess, and sell alcoholic liquors at retail for consumption in compliance with the provisions of the ABC Act and regulations not in conflict herewith.S.C. Code Ann. Section 61-6-100(3) (2022). "The department must refuse to issue any license under this article or Article 7 of this chapter if the department is of the opinion that: . . . the store or place of business to be occupied by the applicant is not a suitable place[.]" S.C. Code Ann. § 61-6-910(2) (2022); Schudel v. S.C. Alcoholic Beverage Control Comm'n, 276 S.C. 138, 276 S.E.2d 308 (1981).
"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, 595, 281 S.E.2d 118, 120 (1981). In determining whether a proposed location is suitable, it is proper for this tribunal to consider any evidence that shows adverse circumstances of the 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. 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 § 168 at 366 (2013). Evidence of circumstances at a location that create a strain on local law enforcement's ability to adequately protect the community may be considered evidence showing the location of the proposed location would adversely affect the public interest. See Moore v. S.C. Alcoholic Beverage Control Comm'n, 308 S.C. 160, 162, 417 S.E.2d 555, 557 (1992).
Without sufficient evidence of an adverse impact on the community, a license application must not be denied if the statutory criteria are satisfied. The fact that the issuance of a license is protested is not a sufficient reason, by itself, to deny the application. See 48 C.J.S. Intoxicating Liquors § 166 (2013). Moreover, the denial of a 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 v. Lewis, 261 S.C. 168, 171, 198 S.E.2d 801, 802 (1973).
The Court concludes that the Protestants' concern regarding oversaturation of beer, wine and liquor stores in the area is not a ground for denying Petitioner's license. S.C. Code Ann. section 61-6-170 (2022) states:
The department may, in its discretion, limit the further issuance of retail dealer licenses in a political subdivision if it determines that the citizens who desire to purchase alcoholic liquors therein are more than adequately served because of (1) the number of existing retail stores, (2) the location of the stores within the subdivision, or (3) other reasons.S.C. Code Ann.section 61-6-170 (2022).
Under the standard set forth in section 61-6-170 a license could be denied if a community is more than adequately served by liquor stores, however, this factor must relate to the effect of overconcentration of retail liquor stores on the public welfare or the surrounding community. See John D. Geathers &Justin R. Werner, The Regulation of Alcoholic Beverages in South Carolina 196 (S.C. Bar 2007). "[A]ny claims that an area is adequately served by other licensed outlets must be based upon concrete evidence of adverse consequences of oversaturation, and not solely upon a mere aversion to the sale of alcoholic beverages." Id. (citations omitted). While the Court agrees the one to 2,000 ratio of liquor stores to Moncks Corner residents is high, there is no evidence informing the Court whether this ratio amounts to oversaturation. Because no evidence was presented demonstrating that the area at issue in this case is oversaturated with liquor stores such that the citizens are "more than adequately served," the Court finds no basis to deny the license for this reason. Similarly, the Protestants' concerns regarding the increased competition resulting from Petitioner's licensure amount to opinions, generalities, and conclusions not supported by facts. Therefore, the Court finds no basis to deny the license for this reason.
However, the Court finds the evidence of numerous incident reports produced by MCPD show the shopping center housing the proposed location is unsuitable for the issuance of a retail liquor license. The incident reports show MCPD has had to divert officers to the area near the proposed location multiple times, either to break up fights or to respond to violence. There is evidence of fights originating from Atlantis and migrating to surrounding locations. There is also evidence the area has a problem with firearms. The Court notes most of the incident reports occurred after midnight, corresponding with the late hours Atlantis remained open. Atlantis remained open until at least 2 a.m. Intoxication was suspected by MCPD in multiple incident reports. The Court finds there is a correlation between the availability of alcohol at Atlantis and the incidence of criminal activity around Atlantis late at night. The Court concludes this criminal activity will likely be exacerbated by having a retail liquor store next door to Atlantis. Therefore, the Court finds the proposed location is unsuitable for the sale of alcohol on this ground.
Reputation in the Community
Section 61-6-110(3) of the South Carolina Code (2022) states:
Unless the department in its discretion otherwise orders, no person is eligible for a license under this article or Article 7 of this chapter if he or the person who will have actual control and management of the business proposed to be operated: . . . is not of good repute[.]S.C. Code Ann. Section 61-6-110(3) (2022). S.C. Code Ann. section 61-4-580(5) (2022) prohibits a permittee from knowingly allowing "any act, the commission of which tends to create a public nuisance or which constitutes a crime under the laws of this State" to occur on the licensed premises. "Unless otherwise limited by statute or regulation, as used in Title 61, 'premises' means all of the buildings and grounds that are both (1) subject to the direct control of the license holder and (2) used by the license holder to conduct its business." S.C. Code Ann. Regs. 7-202.1(A) (Supp. 2021). A liquor licensee "assumes an obligation to supervise the conduct of its clientele so as to preclude the creation of conditions within the surrounding neighborhood which would amount to a nuisance to those who reside in the area." A.J.C. Enters., Inc. v. Pastore, 473 A.2d 269, 275 (R.I. 1984). A nuisance is a substantial and unreasonable interference with another individual's use and enjoyment of his property. Where a business is operated in an unlawful or unreasonable manner so as to produce material injury or great annoyance to others or unreasonably interferes with lawful use and enjoyment of their property, it will constitute nuisance. O'Cain v. O'Cain, 322 S.C. 551, 560-61, 473 S.E.2d 460, 466 (Ct. App. 1996).
In this case, there is evidence Petitioner held the alcohol permits and licenses for Atlantis during a large number of incidents reported from its premises involving intoxication, theft, violence, and death. Additionally, the fact an Atlantis security guard failed to contemporaneously report an incident to MCPD is evidence that Varner's management of Atlantis contributed to strain on local law enforcement. Multiple reported incidents involved civil disturbances in the parking lot outside Atlantis. One of these incidents migrated to a nearby restaurant. Multiple incidents involved the violent discharge of firearms on the premises. By its nature, the discharge of a firearm in an act of violence represents an unreasonable interference with the ability of people in the area to enjoy the use of their property. Finally, the November 21 fatal shooting outside Atlantis was a notorious event reported in the news and known to members of the community. It is clear Varner was unable to prevent Atlantis from becoming a public nuisance and he was unable to prevent criminal activity on his premises, earning him a poor reputation in the community. Therefore, the Court finds Varner is not of good repute and should not be granted a retail liquor license.
ORDER
IT IS THEREFORE ORDERED that the Department shall DENY Petitioner's application for a retail liquor license, for the premises located at 484 North Highway 52, Unit 111, Moncks Corner, Berkeley County, South Carolina.
IT IS SO ORDERED.