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Kan Enterprises, Inc. v. South Carolina Department of Revenue

Court of Appeals of South Carolina

July 12, 2017

Kan Enterprises, Inc., d/b/a A1 Food Stores, Appellant,
South Carolina Department of Revenue, Ellen Fishburne Triplett, Keith McIver, Samuel L. Munson, Jocelyn Munson, and Michael Hill, Respondents. Appellate Case No. 2015-000733

          Submitted June 1, 2017

         Appeal From The Administrative Law Court Ralph King Anderson, III, Administrative Law Judge

          S. Jahue Moore and John C. Bradley, Jr., both of Moore Taylor Law Firm, P.A., of West Columbia; Kenneth E. Allen, of Columbia, for Appellant.

          Milton G. Kimpson and Sean G. Ryan, both of Columbia, for Respondent South Carolina Department of Revenue.

          Kathleen M. McDaniel, of Callison Tighe & Robinson, LLC, of Columbia, for Respondents Ellen Fishburne Triplett, Keith McIver, Samuel L. Munson, Jocelyn Munson, and Michael Hill.

          WILLIAMS, J.

         Kan Enterprises, Inc. (Kan), d/b/a A1 Food Stores (A1), appeals the administrative law court's (ALC) denial of its application to renew a permit to sell beer and wine for off-premises consumption. Kan.argues the ALC erred in (1) misapplying the law, relying upon unsubstantiated opinion testimony, and failing to support its decision with the evidence; (2) depriving it of a vested interest; and (3) violating its constitutional rights. We affirm.


         Kan[1] owns A1, a convenience store located at 4101 Monticello Road in the Hyatt Park/Keenan Terrace neighborhood of Columbia, South Carolina. A1 sold beer and wine pursuant to a seven day off-premises beer and wine permit issued by the South Carolina Department of Revenue (DOR) in 2012. On July 31, 2014, Kan.filed an application with the DOR to renew the permit.[2] Although Kan.met all of the statutory requirements for renewal, the DOR denied its application based upon timely filed public protests. The written protests included allegations that A1 promoted littering, panhandling, loitering, public drunkenness, and other criminal activity in its vicinity and nearby community.

         Kan requested a contested case hearing with the ALC.[3] At the hearing, A1's manager, Vinno "Vinny" Sehgal, testified he had been employed at the store for two years and had about seven years of experience managing convenience stores. Sehgal stated he works at A1 for six to eight hours daily and was also available by phone "24/7." According to Sehgal, A1's employees neither sold alcohol to intoxicated customers nor allowed individuals to drink alcohol in the building or parking lot. However, Seghal admitted Kan.paid a fine after the South Carolina Law Enforcement Division cited one of its cashiers for selling alcohol to a minor.

         In terms of security, Sehgal testified A1 maintains an interior and exterior camera system and employs a security guard during nighttime hours. A large sign is posted at the store's main entrance, which states the consumption of alcohol, narcotics, panhandling, and loitering are prohibited on the premises. Seghal noted A1's employees check the parking lot and areas around the store three times a day for litter, which he believed could come from customers of other nearby businesses. Two local residents and A1's security guard then testified that A1's condition has improved since Seghal took over as manager.

         Columbia Police Department (CPD) Deputy Chief Melron Kelly testified he was previously assigned in 2012 as regional commander of the city's northern region in which A1 is located. During his time in this role, Kelly reported CPD had some issues of loitering, vagrancy, panhandling, and acts of violence in and around A1. In his experience, Kelly thought A1's practice of selling single cans of beer promoted panhandling and loitering.

         Additionally, Kelly reported A1 posed a safety issue to CPD officers due to shootings and injuries to officers during attempted arrests at the store. Kelly thought A1 put a strain on law enforcement because CPD is often forced to "pull extra resources" at the store to ensure the safety of its officers and others. While the management of the nearby convenience stores worked with CPD to deter criminal activity, Kelly believed A1's problems did not improve during the year he spent as regional commander, and the store remained a burden on law enforcement.

         Furthermore, Kelly testified A1 "overwhelmingly" had more calls for police services, [4] arrests, instances of violence, and officer-initiated activities than any of the three nearby convenience stores.[5] CPD received 304 calls for police services from A1 in 2011, 351 calls in 2012, 335 calls in 2013, and 324 calls in 2014. Between the hours of 7 P.M. and 7 A.M., the number of calls for services at A1 increased from 209 in 2012 to 252 in 2014. Kelly reported the number of calls for service at the Hess store was "drastically lower" than those at A1. Additionally, CPD made a total of eighty-three arrests at A1 from 2011 through 2014, compared with sixty arrests at Sonoco, forty-one arrests at Hess, and thirty-seven arrests at El Cheapo during the same four-year period.

         CPD Officer Tyson Hass, who had worked in the city's northern region since 2012, reiterated Kelly's concerns with A1. Hass stated A1 had "vagrant issues, alcohol type violations, trespassing, [and] a lot of things that seem[ed] to stem from some sort of alcohol violation." Although he had not performed a specific study on the issue, Hass said he did not see any improvement at A1 during his tenure with the CPD. Hass also relayed that he broke his finger during a scuffle with a suspect resisting arrest at A1. Lieutenant Chris White, CPD's executive officer/assistant commander for the northern region, testified he received more complaints concerning A1 than any other convenience store in the area.

         Concerned members of the local community also testified against renewing A1's permit. Christie Savage, president of the Eau Claire Community Council, reported she received numerous complaints from community members about loitering at A1, and she witnessed people congregating next to the store. Dolores Johnson, the director of a nearby residential facility for vulnerable adults, stated individuals frequently congregate in an alley next to one of her buildings after being run off by A1's security guard. In the last two years, Johnson witnessed individuals soliciting, "going to the bathroom, " and doing "sexual things" in the alley.

         Columbia City Councilman Sam Davis testified he received numerous complaints about A1. Councilman Davis believed A1 had a negative impact upon the area's attempted redevelopment. Davis supported his position by noting a nearby former dry cleaning business still remained vacant, despite its otherwise desirable location.

         Samuel Munson, who lives approximately 250 feet from A1, maintained the store was a "continuing sore" on the local community. Munson stated he did not allow his eight-year-old son to play in their yard because of the foot traffic caused by A1. Additionally, Munson testified he was forced to pick up litter around his home on a daily basis, and based upon his observations and experience, the litter came from A1's customers. To demonstrate the large volume of litter, Munson brought a grocery bag of trash he picked up that morning to the hearing, which contained approximately five beer cans and one beer bottle among other various food items.

         Ellen Triplett, former president of the Hyatt Park/Keenan Terrace Neighborhood Association, testified that, in all of her years with the neighborhood association, she could "count on one hand the number of meetings where someone wasn't complaining about the A1 and the crime there and the litter there." Triplett stated she witnessed loitering, panhandling, and trash around the area, and claimed it was a "hot spot" for crime based upon the monthly crime reports she received through the neighborhood association. Another former neighborhood association president, Keith McIver, also testified to observing loitering, panhandling, and vandalism at A1 as well as being personally solicited by a prostitute near the store. The neighborhood association's current president, Michael Hill, stated he witnessed two people loitering next to A1 on the morning of the hearing.

         On February 20, 2015, the ALC issued a final order denying Kan's application to renew the permit. The ALC found A1 was not a proper location for the sale of alcohol because it imposed an undue burden on law enforcement and had become a detriment to the surrounding community. Kan.filed a Rule 59(e), SCRCP, motion to alter or amend judgment, arguing the ALC failed to apply two appellate decisions[6] that articulate a different standard of review for a permit renewal as opposed to an initial issuance. Specifically, Kan.asserted the correct determination of renewal applications under Taylor and Byers is not whether a location is suitable for the sale of alcohol but whether it is "any less suitable for the sale of beer now than during the period of time that it had held a license, and during the period of time since its last renewal." Alternatively, Kan.filed a motion for a stay and supersedeas.

         On March 19, 2015, the ALC issued an order granting in part and denying in part Kan's Rule 59(e) motion as well as an amended final order clarifying its rulings. Addressing Kan's position that the supreme court created ...

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