Sunday, October 26, 2014

SC Administrative Law Court Decisions

CAPTION:
Cynthia T. McDonald, d/b/a Little Vegas vs. SCDOR

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
Cynthia T. McDonald, d/b/a Little Vegas

Respondents:
South Carolina Department of Revenue
 
DOCKET NUMBER:
95-ALJ-17-0323-CC

APPEARANCES:
Timothy F. Rogers and Dick Harpootlian, Attorneys for Petitioner

John Meadors, Attorney for Protestant Stephen McCaskill, Kershaw County Sheriff.
 

ORDERS:

ORDER AND DECISION

These matters come before me pursuant to S.C. Code Ann. § 61-1-55 (Supp. 1994) and S.C. Code Ann. §§ 1-23-310, et seq. (1986 & Supp. 1994) upon three applications for on-premises beer and wine permits and one application for a club sale and consumption license filed by Cynthia T. McDonald (hereinafter referred to as "Petitioner" or "Applicant") with the South Carolina Department of Revenue and Taxation (hereinafter referred to as "DOR") for three locations in Kershaw County. The three above-captioned cases were consolidated by consent for hearing purposes. The hearing was held on June 28, 1995. Upon Petitioner's motion, administrative notice was taken of all other DOR files for which Petitioner is or was an applicant or licensee, specifically including a 1992 ABC violation by Petitioner. Review of the DOR files revealed that in previous application hearings before the Administrative Law Judge Division, Petitioner testified under oath that she had never been cited for any ABC violation. The applications for the beer and wine permits and club sale and consumption license are hereby denied.

DISCUSSION

Petitioner seeks the issuance of three on-premises beer and wine permits and one club sale and consumption license for three locations in Kershaw County. Kershaw County Sheriff Stephen McCaskill opposes the issuance of the license/permits on the grounds that Petitioner's husband, James R. McDonald is involved with the ownership and/or operation of the proposed locations in violation of a Consent Order dated December 1, 1991, signed by South Carolina Alcoholic Beverage Control Commissioner C. Wilbur Hodge and James R. McDonald, and Voluntary Restriction/Agreement signed by Cynthia McDonald, dated September 28, 1992. The restrictions were agreed upon after James R. McDonald was convicted of tax evasion. The terms of the December 1, 1991 Consent Order are as follows :

(1) all licenses and permits for the five licensed locations

were transferred from James R. McDonald to Cynthia McDonald;

(2) any and all interest in the five licensed locations was

transferred from James R. McDonald to Cynthia McDonald;

(3) James R. McDonald is prohibited from being involved in

an ownership, management, or employment capacity with any

licensed location in the state;

(4) James R. McDonald is prohibited from applying for any

permit/license prior to January 1, 1997.

Further, Sheriff McCaskill asserts that no additional retail outlets for beer are needed in Kershaw County. Sheriff McCaskill failed to prove those allegations, however, relying upon speculation and innuendo.

Rev. Donny Dixon, Pastor of Fellowship Baptist Church, Rev. Earl Brazell, Sr., Minister of Victory Baptist Church, and Rev. Bruce Watford, a Baptist minister from Lugoff, also testified in protest to the license/permits, voicing concerns relating to the detrimental effects of gambling and the consumption of alcohol. Their testimony was not relevant to the issues before this Court.

Petitioner moved for the Court to take administrative notice of all DOR files for which she is or was an applicant or licensee/permittee in an attempt to establish that she has a substantial record of compliance with ABC laws and to prove that the issues raised by Protestant Sheriff Steve McCaskill have been previously litigated and monitored. Petitioner did not present any testimony at the hearing, relying upon exhibits introduced without objection and the information contained in all other DOR files relating to Petitioner's permits and licenses. Petitioner and Sheriff McCaskill both submitted as evidence a copy of a May 14, 1992 ABC Violation Report #14052, with attached memoranda and violation disposition record (Petitioner's Exhibit #2 and Respondent's Exhibit #1), admitting an ABC violation of an August 24, 1992 Voluntary Restriction/Condition Agreement (Petitioner's Exhibit #1 and Respondent's Exhibit #2). Petitioner paid a fine for the offense.

The Court instructed Petitioner's counsel to procure certified copies of those files and to submit the copies for inclusion into the record of this proceeding. The following files were submitted to the Court:

(A) In the Matter of James R. McDonald as licensee for the following:

(1) Crossroads Texaco

101 (will be 101A) Memorial Park Road

Lancaster, SC 29720 (BW-24836; AI #44611)

(2) Crossroads Package Store

101A (will be 101) Memorial Park Road

Lancaster, SC 29720 (RL-235866; AI #39273)

(3) Brooklyn Bar & Grill

334 (will be 332) Brooklyn Avenue

Lancaster, SC 29720 (BW-259696; AI #65358)

(4) Grace Avenue Shopping Center

100 E. Grace Avenue

Lancaster, SC 29720 (BW-200033; AI #3072)

(5) South 200 ABC

Route 7 (will be South 200) Great Falls Highway

Lancaster, SC 29720 (RL-279640; AI #85888)

(B) Cynthia Dawn McDonald

Golden Nugget

1669 Memorial Park Road

Lancaster, SC 29270 (BW-626316; AI #94016)





(C) Cynthia T. McDonald

Panther's Den

274C Carowinds Blvd.

Fort Mill, SC 29715 (BW-635562; AI #97690)

(D) Cynthia T. McDonald, J & C Inc.

Horseshoe Bar.

731 Gillsbrook Road

Lancaster, SC 29720 (BW-637820; AI #99187)

(E) Cynthia T. McDonald

Crossroads Snack Shop

1425 Rocky River Road

Lancaster, SC 29720 (BG-639326; AI #99188)

ALJD Docket No. 94-ALJ-17-0225-CC.

(F) Cynthia T. McDonald

Gangsters

3415 Highway 51

Fort Mill, SC 29715 (BW-638696; AI #99315)

(G) Cynthia T. McDonald

Midway Bar & Grill

1016 Old Landsford Road

Lancaster, SC 29720 (BW-640921; AI #100661)

As requested, this Court takes administrative notice of the DOR files. Administrative notice of all records in the custody of the Administrative Law Judge Division relating to

Cynthia T. McDonald, as alcoholic beverage applicant/licensee, is also taken. "A court can take judicial notice of its own records, files, and proceedings for all proper purposes including facts established in its records." Freeman v. McBee, 280 S.C. 490, 313 S.E.2d 325 (Ct.App. 1984). During the review of the files a disturbing fact was discovered. Petitioner willfully gave false testimony under oath before this Court on a previous occasion during an application hearing for another location.

On September 20, 1994, a hearing was held by this Court regarding Petitioner's beer and wine permit application for Crossroads Snack Shop, 1425 Rocky River Road, Lancaster, SC, 29720 (BG-639326; AI #99188); ALJD Docket No. 94-ALJ-17-0225-CC. At that hearing, Petitioner was asked on direct examination whether she had ever been cited for an ABC violation. Each time, she answered in the negative. No mention was made of the May 14, 1992 violation at the September 20, 1994 hearing:(1)

Q: "IN ALL THOSE YEARS, IN ALL THOSE LOCATIONS, HAVE YOU EVER HAD AN ABC VIOLATION?"

A: "NO, SIR."

Direct examination of Cynthia T. McDonald, on September 20, 1994; ALJD

Docket No. 94-ALJ-17-0225-CC; Transcript page 10, lines 2-4.

Q: "HAVE YOU HAD OTHER BEER-TO-GO LICENSES IN YOUR NAME?"

A: "YES, I HAVE."

Q: "AGAIN, ANY PROBLEM WITH ANY OF THOSE OVER THE YEARS?"

A: "NO, SIR. I'VE NEVER HAD ANY LICENSE REVOKED OR ANYTHING."

Direct examination of Cynthia T. McDonald, on September 20, 1994;

ALJD Docket No. 94-ALJ-17-0225-CC; Transcript page 10, lines 12-15.

In a subsequent contested case hearing for an on-premises beer and wine permit before Administrative Law Judge Marvin F. Kittrell on November 22, 1994,(2) Petitioner again testified on direct examination that she had never had any ABC violations:

Q: "LET ME STOP TALKING ABOUT THIS PLACE JUST A MINUTE AND LET'S TALK ABOUT YOU AND YOUR HISTORY JUST A BIT. DO YOU HAVE OTHER ABC LICENSES?"

A: "YES, SIR, I DO."

Q: "AND HOW LONG HAVE YOU HAD ABC LICENSES IN YOUR NAME?"

A: "SINCE 1977 OR `78, I THINK."

Q: "ROUGHLY 15 YEARS?"

A: "YES."

Q: "AND HOW MANY LICENSES DID YOU SAY?"

A: "I HAVE HAD AS MANY AS 14 IN MY NAME AT ONE TIME."

Q: "SO THAT'S QUITE A LOT OF LICENSES FOR QUITE A NUMBER OF YEARS?"

A: "YES, SIR."

Q: "IN ALL THOSE YEARS, ANY ABC VIOLATIONS?"

A: "NONE."

Q: "ANY WARNINGS?"

A: "NO."

Direct examination of Cynthia T. McDonald, on November 22, 1994; ALJD

Docket No. 94-ALJ-17-0202-CC; Transcript page 15, lines 8-23.

The cumulative record speaks for itself. Cynthia McDonald repeatedly stated in sworn testimony in 1994, that she had never been cited for an ABC violation when she had, in fact, been cited and paid the assessed fine for a violation in 1992. The existence of a past ABC violation is material and relevant in a proceeding to determine issuance or denial of an alcoholic beverage license. The willful and blatant nondisclosure of the 1992 violation in response to specific questions during an application hearing may be even more significant than the past violation itself. The intentional assertion of a false statement of fact by a witness testifying under oath in a proceeding before an administrative law judge will not be tolerated.

S.C. Code Ann. §§ 61-3-730 and 61-9-320(1) (Supp. 1994) provide that an applicant found to be lacking good moral character or to be otherwise unsuitable to hold a beer and wine permit or liquor license shall be denied such a permit or license. While a criminal conviction against an applicant particularly for a crime of moral turpitude or violation of alcoholic beverage laws is generally recognized as a legitimate basis for denial on the ground of applicant unsuitability, mere misstatement under oath or concealment of a fact is adequate reason for denial of the permit or license sought. Wall v. S.C. ABC Commission, 269 S.C. 13, 235 S.E.2d 806 (1977). Additionally, S.C. Code Ann. § 61-9-320 (Supp. 1994) provides that "[a]ny misstatement or concealment of fact in an application shall be a sufficient ground for the revocation of the permit issued by reason of such application."

In Wall, supra, a beer and wine permit applicant answered in the negative to a question on a sworn application as to whether he had a criminal record. At the contested case hearing, however, he admitted having a criminal record. The ABC Commission denied his application, finding the applicant an unsuitable person to hold the permit based on: (1) his past record; and (2) his misrepresentation. The Supreme Court held that either reason justified denial.

Petitioner lied to this Court in prior proceedings involving other permits. By way of administrative notice, however, Petitioner requested this Court to incorporate and consider all files of her past applications and licenses in the record of the present case. I find that Cynthia T. McDonald knowingly misstated facts to this Court. Deliberate misrepresentation of fact by a witness is evidence of the declarant's lack of credibility and moral character. Accordingly, I conclude that Petitioner is an unsuitable person, lacking good moral character, to hold the license and permits sought.

FINDINGS OF FACT

By a preponderance of the evidence, I find:

(1) Petitioner seeks an on-premises beer and wine permit and club sale and consumption license for a location at 3482 John G. Richards Highway, Liberty Hill, South Carolina, having filed an application with the South Carolina Department of Revenue and Taxation (hereinafter referred to as "DOR"), AI #101961 and AI #101962.

(2) Petitioner seeks an on-premises beer and wine permit for a location at 3482A John G. Richards Highway, Liberty Hill, South Carolina, having filed an application with the South Carolina Department of Revenue and Taxation, AI #101959.

(3) Petitioner seeks an on-premises beer and wine permit for a location at 1534 Jefferson Davis Highway, Camden, South Carolina, having filed an application with the South Carolina Department of Revenue and Taxation, AI #102356.

(4) Notice of the time, date, place, and subject matter of the hearing was given to the Petitioner, protestants, and DOR.

(5) Cynthia T. McDonald currently holds permits/licenses for six locations.

(6) The DOR files of the above-referenced applications were made a part of the hearing record and incorporated therein.

(7) Administrative notice is taken of the following DOR files:

(A) In the Matter of James R. McDonald as licensee for the following:

(1) Crossroads Texaco

101 (will be 101A) Memorial Park Road

Lancaster, SC 29720 (BW-24836; AI #44611)

(2) Crossroads Package Store

101A (will be 101) Memorial Park Road

Lancaster, SC 29720 (RL-235866; AI #39273)

(3) Brooklyn Bar & Grill

334 (will be 332) Brooklyn Avenue

Lancaster, SC 29720 (BW-259696; AI #65358)

(4) Grace Avenue Shopping Center

100 E. Grace Avenue

Lancaster, SC 29720 (BW-200033; AI #3072)

(5) South 200 ABC

Route 7 (will be South 200) Great Falls Highway

Lancaster, SC 29720 (RL-279640; AI #85888)

(B) Cynthia Dawn McDonald

Golden Nugget

1669 Memorial Park Road

Lancaster, SC 29270 (BW-626316; AI #94016)

(C) Cynthia T. McDonald

Panther's Den

274C Carowinds Blvd.

Fort Mill, SC 29715 (BW-635562; AI #97690)







(D) Cynthia T. McDonald, J & C Inc.

Horseshoe Bar.

731 Gillsbrook Road

Lancaster, SC 29720 (BW-637820; AI #99187)

(E) Cynthia T. McDonald

Crossroads Snack Shop

1425 Rocky River Road

Lancaster, SC 29720 (BG-639326; AI #99188)

ALJD Docket No. 94-ALJ-17-0225-CC.

(F) Cynthia T. McDonald

Gangsters

3415 Highway 51

Fort Mill, SC 29715 (BW-638696; AI #99315)

(G) Cynthia T. McDonald

Midway Bar & Grill

1016 Old Landsford Road

Lancaster, SC 29720 (BW-640921; AI #100661)

(8) Administrative notice is taken of the following Administrative Law Judge Division files:

(A) Cynthia T. McDonald, d/b/a Crossroads Snack Shop v. South Carolina Department of Revenue and Taxation, Docket No. 94-ALJ-17-0225-CC, regarding 1425 Rocky River Road, Lancaster, SC 29720 (BG-639326; AI

#99188), including the transcript of the September 20, 1994 hearing.

(B) Cynthia T. McDonald v. South Carolina Department of Revenue and Taxation and William Howze, Docket No. 94-ALJ-17-0202-CC (appeal pending), regarding Crossroads Billiards, 1423 Rocky River Road, Lancaster, SC 29720 (AI #99449), including the transcript of the November 22, 1994 hearing.

(9) Petitioner's husband is James R. McDonald.

(10) Prior to December 1, 1991, James R. McDonald was the licensee/permittee for five licensed locations in Lancaster County.

(11) James R. McDonald was indicted on October 4, 1990, and pled nolo contendere on April 24, 1991, to five counts of tax evasion.

(12) By Consent Order dated December 1, 1991, signed by South Carolina Alcoholic Beverage Control Commissioner C. Wilbur Hodge and James R. McDonald, and Voluntary Restriction/Agreement signed by Cynthia McDonald, dated September 28, 1992: (1) all licenses and permits for the five licensed locations were transferred from James R. McDonald to Cynthia McDonald; (2) any and all interest in the five licensed locations was transferred from James R. McDonald to Cynthia McDonald; (3) Mr. McDonald is prohibited from being involved in an ownership, management, or employment capacity with any licensed location in the state; and (4) Mr. McDonald is prohibited from applying for any permit/license prior to January 1, 1997.

(13) On May 14, 1992, Cynthia T. McDonald was cited for violation of the December 1, 1991 Consent Order in that all interest in a licensed location was found not to have been transferred as required. Cynthia T. McDonald was assessed and paid a two hundred dollar fine.

(14) During a hearing before this Court on September 20, 1994, regarding Petitioner's beer and wine permit application for Crossroads Snack Shop, 1425 Rocky River Road, Lancaster, SC, 29720, (BG-639326; AI #99188); ALJD Docket No. 94-ALJ-17-0225-CC, Petitioner was asked on direct examination whether she had ever been cited for an ABC violation. Each time, she answered in the negative. No mention was made of the May 14, 1992 violation at the September 20, 1994 hearing.

(15) In a subsequent contested case hearing for an on-premises beer and wine permit for Crossroads Billiards, 1423 Rocky River Road, Lancaster, SC, 29720 (AI# 99449); ALJD Docket No. 94-ALJ-17-0202-CC, before Administrative Law Judge Marvin F. Kittrell on November 22, 1994, Petitioner again testified on direct examination that she had never committed any ABC violations.

(16) DOR did not appear at the hearing and did not indicate any opposition to the issuance of the license/permits.

(17) Applicant is over twenty-one years of age, is a citizen of the State of South Carolina, and has maintained her principal residence in South Carolina for more than thirty days.

(18) Applicant has not had a permit/license revoked in the last five years.

(19) Notice of the applications appeared in a newspaper of general circulation in the area of the proposed locations for three consecutive weeks and were posted at the proposed locations for fifteen days.

(20) Applicant is not of good moral character.

(21) Applicant is not a suitable person to be issued a beer and wine permit or liquor license.

CONCLUSIONS OF LAW

Based upon the foregoing Findings of Fact, I conclude as a matter of law the following:

(1) S.C. Code Ann. § 61-1-55 (Supp. 1994) provides that the South Carolina Administrative Law Judge Division is empowered to hear this case pursuant to Chapter 23 of Title I of the 1976 Code, as amended.

(2) "A court can take judicial notice of its own records, files, and proceedings for all proper purposes including facts established in its records." Freeman v. McBee, 280 S.C. 490, 313 S.E.2d 325 (Ct.App. 1984).

(3) S.C. Code Ann. § 61-9-320 (Supp. 1994) provides the criteria to be met by an applicant for a beer and wine permit in South Carolina.

(4) S.C. Code Ann. § 61-3-420 (Supp. 1994) provides criteria to be met by an applicant for a liquor license.

(5) A permit or license must not be issued if an applicant does not meet the standards of S.C. Code Ann. § 61-3-730 (Supp. 1994).

(6) S.C. Code Ann. §§ 61-3-730 and 61-9-320(1) (Supp. 1994) provide that an applicant found to be lacking good moral character or to be otherwise unsuitable to hold a beer and wine permit or liquor license shall be denied such a permit or license.

(7) The issuance of a liquor license ordinarily rests within the sound discretion of the body or official to whom the duty of issuing it is committed; moreover, the power to issue such a license also involves the power to refuse it. Terry v. Pratt, 258 S.C. 177, 187 S.E.2d 884 (1972).

(8) "[A] misstatement under oath or concealment of a fact may provide a basis for denial, as well as revocation, of any type of permit sought by the [applicant]." Wall v. S.C. ABC Commission, 269 S.C.13, 235 S.E.2d 806 (1977).

(9) S.C. Code Ann. § 61-9-320 (Supp. 1994) provides that "[a]ny misstatement or concealment of fact in an application shall be a sufficient ground for the revocation of the permit issued by reason of such application."

(10) Applicant fails to meet the statutory requirements for issuance of a beer and wine permit and/or club sale and consumption license.

ORDER

IT IS THEREFORE ORDERED that DOR deny Applicant the on-premises beer and wine permits and club sale and consumption license sought.





______________________________________

STEPHEN P. BATES

ADMINISTRATIVE LAW JUDGE

August 1, 1995

Columbia, South Carolina

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1. The DOR records relating to the Crossroads Snack Shop application (AI# 99188) transmitted to the Administrative Law Judge Division were incorporated into the record of the September 20, 1994 hearing in Cynthia T. McDonald, d/b/a Crossroads Snack Shop v. South Carolina Department of Revenue and Taxation, Docket No. 94-ALJ-17-0225-CC and considered in the granting of that permit. The DOR file materials transmitted to the Administrative Law Judge Division for the Crossroads Snack Shop application hearing contained a criminal history report for James R. McDonald (as the spouse of the applicant); however, it did not contain any mention of the December 20, 1991 Consent Order requiring Mr. McDonald to divest himself of all interest and involvement in licensed locations, and it did not contain the May 14, 1992 ABC violation report against Cynthia McDonald. DOR did not appear at the September 20, 1994 hearing, and DOR did not indicate any opposition to the issuance of the Crossroads Snack Shop permit. The only evidence in the record relating to Cynthia McDonald's past ABC history was in the form of Ms. McDonald's application and her direct testimony.

2. Cynthia T. McDonald v. South Carolina Department of Revenue and Taxation and William Howze, Docket No.

94-ALJ-17-0202-CC (appeal pending); application for an on-premises beer and wine permit (AI# 99449) for Crossroads Billiards, 1423 Rocky River Road, Lancaster, SC 29720. Petitioner requested this Court to take notice of all files relating to her past applications, but did not submit copies of all of the files. Even though this case file was not included in those certified copies which Petitioner submitted to this Court, the case file of Docket No. 94-ALJ-17-0202-CC, including the transcript of the November 22, 1994 hearing, is part of the official records of the Administrative Law Judge Division. "A court can take judicial notice of its own records, files, and proceedings for all proper purposes including facts established in its records." Freeman v. McBee, 280 S.C. 490, 313 S.E.2d 325 (Ct.App. 1984).