Contested Case Hearing Decision (00038803.DOC;1)



STATE OF NORTH CAROLINA IN THE OFFICE OF

ADMINISTRATIVE HEARINGS

COUNTY OF CUMBERLAND 03 ABC 1037

C & C ENTERTAINMENT, INC., )

d/b/a CAROLINA LIVE )

Petitioner, )

)

vs. ) DECISION

)

NORTH CAROLINA ALCOHOLIC )

CONTROL COMMISSION )

Respondent )

On July 31, 2003, Administrative Law Judge Melissa Owens Lassiter heard this contested case in Fayetteville, North Carolina. On September 3, 2003, Petitioner submitted a proposed Decision pursuant to the undersigned’s verbal ruling for the Petitioner during a telephone conference between the parties. The undersigned closed the official record on September 3, 2003.

APPEARANCES

Petitioner: David T. Courie, Esq.

Beaver Holt Sternlicht Glazier Britton & Courie

230 Green Street

Post Office Box 2275

Fayetteville, North Carolina 28302-2275

Respondent: LoRita K. Pinnix

Assistant Counsel

N.C. ABC Commission

4307 Mail Service Center

Raleigh, North Carolina 27699-4307

STATUTES AT ISSUE

N. C. Gen. Stat. §18B-901(c)(7) & (8)

4 NCAC 2S.0107

ISSUES

1. Whether Respondent properly denied Petitioner’s application for on-premise malt beverage, on-premise unfortified wine, and mixed beverages private club permits pursuant to N.C.Gen. Stat. 18B-901(c)(7) based upon the local governing body’s recommendation that the location is not a suitable location to hold ABC permits?

2. Whether Respondent properly denied Petitioner’s application for on-premise malt beverage, on-premise unfortified wine, and mixed beverages private club permits pursuant to N.C.Gen. Stat. 18B-901(c)(8) on the grounds that the operation of the Petitioner’s business would be detrimental to the neighborhood?

FINDINGS OF FACT

Based upon the exhibits and testimony admitted at the hearing and the documents on file, the undersigned makes the following findings:

A. PROCEDURAL BACKGROUND

1. On May 30, 2002, Respondent issued temporary on-premise malt beverage, on-premise unfortified wine, and mixed beverages private club permits to Petitioner for the business located at 6323 Raeford Road, Fayetteville, North Carolina. Mr. Fred Clark is the owner of Petitioner corporation. Respondent issued these temporary permits over the objections of the local government, and some immediate neighbors of Petitioner.

2. Petitioner’s temporary permits were originally scheduled to expire on August 27, 2002. However, Respondent reissued Petitioner’s temporary ABC permits three subsequent times until May 2003.

3. On May 30, 2003, shortly after the issuance of the fourth temporary permit, Respondent rejected Petitioner’s application for permanent ABC permits, and revoked Petitioner’s fourth temporary ABC permits. In the Notice of Rejection, Respondent noted the reasons for disapproving Petitioner’s permanent applied-for ABC permits as follows:

I. The recommendations of the local governing body which are that the operation of the business at this location is detrimental to the neighborhood, as provided by G.S. § 18B-901(c)(7).

II. Any other evidence that would tend to show whether the applicant would comply with the ABC laws and whether the operation of the business at that location would be detrimental to the neighborhood, as provided by G.S. 18B-901(c)(8) to wit:

A) On or about March 5, 2003, at 3:15 pm, permittee’s employee and corporate officer, Kenneth Anthony Clark, refused to permit ALE Agent, D.J. Hales, to enter the licensed premises to make a lawful inspection, in violation of G.S. § 18B-502(a)(b).

B) On or about March 5, 2003, at 3:15 pm, permittee’s employee and corporate officer, Kenneth Anthony Clark, interfered with or failed to cooperate with ALE Agent D.J. Hales, a law enforcement officer engaged in the performance of this duties, in violation of 4 NCAC 2S.0213.

C) On or about April 13, 2003, at 10:45 pm, the applicant’s employee allowed the establishment to be open to the general public by failing to limit use of the facilities of this private club to members and guests, in violation of 4 NCAC 2S.0107(a).

D) On or about April 13, 2003, at 10:45 pm, the applicant’s employee granted membership to Investigator Michael Torres, sooner than three days after the receipt of an application, in violation of 4 NCAC 2S. 0107(c)(5).

E) On or about April 19, 2003, at 11:45 pm, the applicant’s employee allowed the establishment to be open to the general public by failing to limit use of the facilities of this private club to members and their guests, in violation of 4 NCAC 2S .0107(a).

F) On or about May 10, 2003, at 11:00 pm, the applicant’s employee allowed the establishment to be open to the general public by failing to limit use of the facilities of this private club to members and their guests, in violation of 4 NCAC 2S .0107(a).

G) On or about March 5, 2003, April 13, 2003, April 19, 2003, and May 10, 2003, the applicant failed to superintend in person or through a manager the business for which a permit was issued, in violation of G.S. § 18B-1005(b).

4. On June 11, 2003, Petitioner filed a petition for a contested case hearing with the Office of Administrative Hearings appealing Respondent’s May 30, 2003 decision. Petitioner moved for an expedited hearing.

5. On July 18, 2003, the undersigned granted Petitioner’s Motion for an Expedited Hearing.

B. THE COMMUNITY AND SURROUNDING NEIGHBORHOOD

6. Petitioner’s business is located within the Falcon Village shopping center at 6323 Raeford Road, Fayetteville, North Carolina. Falcon Village shopping center is a predominately retail oriented shopping center, that includes Skibo Barber Shop and Royal Cleaners. Petitioner leases space of a former grocery store in the shopping center. There are approximately 126 spaces located directly in front of the shopping center. None of the parking spaces are specifically assigned to particular tenants of the shopping center.

7. Raeford Road is a seven to nine lane highway passing through the middle of Fayetteville, North Carolina. Within one eighth of a mile of Petitioner’s place of business is the intersection of Raeford Road and 401 Bypass, a seven to nine lane highway that connects north Fayetteville and southwest Fayetteville. Both roads are unquestionably dominated by commercial businesses and properties as well as commercially and professional classified plots of land.

8. Immediately adjacent to Falcon Village shopping center are the Falcon Village apartments. This apartment complex consists of 6 buildings of approximately one hundred and eighteen (118) single bedroom apartments. A majority of the tenants are enlisted in the military. According to the apartment’s management company, these apartments usually hold a 98% occupancy rating.

9. Bingham Drive is located immediately east of Falcon Village shopping center. Bingham Drive is a three lane road which intersects with Raeford Road at a stop light intersection, and connects traffic from Raeford Road to the Hope Mills city limits south of Fayetteville.

10. A residential area is located between Falcon Village shopping center and Bingham Road. Approximately 10 residences are located immediately adjacent to the Falcon Village shopping center. West Darrow Drive is a 2 lane road that runs through this residential area, and connects Bingham Drive directly to the Falcon Village shopping center parking lot. Other homes are located farther down Bingham Drive, and behind Falcon Village apartments. Another residential area is located directly across Bingham Drive from the 10 residences adjacent to Falcon Village shopping center. (Resp Exh 1)

11. A recently built Eckerd drug store, a branch of BB&T Bank, and Classic Car Wash are located in separate outparcels or buildings adjoining and/or adjacent to Falcon Village shopping center’s parking lot. A number of strip shopping centers are located just east of the Falcon Village shopping center on Raeford Road. (Resp Exh 1)

12. There are other ABC permitted dance clubs located in the area of Petitioner’s business. Odyssey 2000 is an ABC permitted establishment located approximately 2½ miles down Raeford Road from Carolina Live near the intersection of Raeford Road and Skibo Road. Mojo’s and Players’ Billiards are also ABC permitted establishments located approximately 2½ miles from Carolina Live.

13. 6323 Raeford Road is the physical address for all tenants of the Falcon Village shopping center. Falcon Village shopping center and Petitioner’s business, Carolina Live, are located within the Fayetteville city limits. The Fayetteville city limits ends behind the shopping center and the Falcon Village apartments. There are no curfews for the City of Fayetteville or Cumberland County that affect patrons who are age eligible for admittance at Carolina Live.

14. Fayetteville, North Carolina is a densely populated metropolitan community with substantial retail and commercial businesses, both preexisting and in development. Over the past several years, the area immediately surrounding Falcon Village shopping center has seen further commercial growth, and increased commercial and professional property valuations.

C. N.C. GEN. STAT. 18B-901(c)(7) LOCAL GOVERNMENT OBJECTION, N.C. GEN. STAT. 18B-901(c)(8) DETRIMENTAL TO THE NEIGHBORHOOD, AND N.C. GEN. STAT. § 1005(b)

15. Prior to the opening of Carolina Live, Mr. Fred Clark approached neighboring merchants and residents, introduced himself and his business, and asked for suggestions, complaints, or compliments in an effort to open the lines of communication with these neighbors.

16. Petitioner made a substantial investment in the leased space, focusing on aesthetics and fire safety. Despite averaging between five hundred and eight hundred (500 – 800) patrons a night, Petitioner invested the amounts necessary to obtain a fire occupancy approval for an excess of two thousand people (2000).

17. Mr. Clark met with Bob Stocks, Fayetteville ALE Supervisor, prior to opening the business, and discussed what Petitioner needed to do to obtain his ABC permits. Mr. Stocks walked the shopping center’s parking lot area and suggested Petitioner obtain additional parking. Mr. Clark then talked with Fayetteville Police Officer Pratt regarding his suggestions. Officer Pratt suggested Petitioner provide security in the adjacent bank parking lot.

After receiving these suggestions, Petitioner immediately obtained a lease from the owners of an adjacent vacant commercial land for additional parking for his customers. Petitioner also obtained permission from owners of the adjacent BB&T, and the car wash for usage by his patrons during Carolina Live’s business hours. Petitioner’s security supervised these additional lots for overflow parking. (See Off-duty Police Officer testimony; Pet Exh 1).

18. From 10:00 p.m. until approximately 2:30 a.m. on Saturday nights, Carolina Live was open for business. Each night, Petitioner employed an average of eight to twelve off-duty officers as security for the business to work immediately before, during, and after Carolina Live’s hours of operation. Security consisted of Fayetteville Police off-duty officers and private security. Before opening for business each night, Mr. Clark held a meeting with all security. Mr. Clark opened each meetings with a prayer, and addressed any particulars for that evening if a live group, performer, or other special activity was occurring that night. Clark then reviewed each security guard’s responsibilities for the evening.

19. Security was divided into teams, depending on each security officer’s location and duties for the night. Each security officer was assigned a specific area of the parking lot or inside the premises, such as front, back or adjacent parking lots, front door entrance, or inside the business itself. Private security wore t-shirts with “Carolina Live, Staff” printed on their shirts. Off duty Fayetteville police officers wore their uniforms. Each security guard located outside the business was required to direct vehicular traffic of patrons in their designated areas, and monitor foot traffic of patrons in their areas.

20. Mr. Clark operated Carolina Live using a “hands-on” approach. That is, during each night of operation, Clark circulated throughout the business, and actively oversaw each aspect of operating the business. The off-duty officers and staff confirmed how Petitioner applied this “hands-on” approach in running Carolina Live.

21. Petitioner’s outside security directed traffic from Carolina Live onto Raeford Road, and away from nearby residences. Security and staff usually cleared the parking areas within ten to twenty minutes after the business closed. All staff collected trash in the parking lots and surrounding adjacent property before being dismissed from employment for the night.

22. When Carolina Live closed for the night, some patrons would often play loud music in their cars while leaving the parking lot, some would litter, and some would talk loudly and/or yell. Once patrons left the Petitioner’s parking areas, many patrons of Carolina Live frequently drove approximately 1-1½ miles away from Petitioner’s business, congregated in the parking lot of other businesses that were open, and played loud music. These businesses included the 24-hour Waffle House, the 24-hour Kangaroo convenient store, and Wendy’s.

23. Occasionally fights occurred both inside and outside Carolina Live during Carolina Live’s hours of operation. However, a preponderance of the evidence proved that Petitioner’s security efficiently addressed any disruptive patrons located inside the business, and removed those patrons from the business. Once security removed these patrons from the club, outside security handled the disruptive patrons until they left the premises on their own accord or with assistance from security or off-duty Fayetteville Police. There was no other evidence establishing that any crimes occurred inside Carolina Live or in the parking lot areas controlled by Petitioner’s security during Carolina Live’s hours of operation.

24. Fayetteville Police Sergeant George Urian supervised 10 police officers in the Cross Creek district encompassing the western section of Fayetteville, including Falcon Village shopping center. Sergeant Urian worked the midnight shift, or from 10:00 p.m. until 8 a.m. Tuesday through Friday. Sergeant Urian responded to one fight taking place in the parking lot beside Eckerd’s Drug adjacent to Falcon Village shopping center. He observed approximately 50 people in the parking lot, at least 5 off-duty Fayetteville Police, and persons preventing other persons from fighting. However, Sergeant Urian could not connect this particular fight with the operation of Petitioner’s business at that location on Raeford Road. Urian admitted that neither he nor his squad had responded to calls at the Petitioner’s business itself.

25. Fayetteville Police Sergeant Michael Petti was also assigned to the Cross Creek district. He responded to 3 dispatch calls to 6323 Raeford Road. On August 26, 2002 around 1:30 a.m., Sgt. Petti arrived at Carolina Live and saw several county units and 7-8 city police officers in the parking lot of the Falcon Village shopping center. Fire department personnel were clearing the parking lot, along with Petitioner’s security. Fayetteville Police had one person in handcuffs, and in his opinion, the situation appeared to be under control.

26. In either April or May 2003, Sgt. Petti observed a vehicle without a license plate, parked on the side of Falcon Village shopping center near the car wash. Sgt. Petti stopped the vehicle, and after the individual argued with another officer, Sgt. Petti issued the individual a citation. The individual was “pretty irate.” Sgt. Petti could not connect that individual with Carolina Live, as a patron, or employee, or its operation.

27. On Saturday night, July 26, 2003, Sgt. Petti responded to a dispatch call for “shots fired” at 6323 Raeford Road. Sgt. Petti was the first officer on the scene. He met with a security guard of Carolina Live who advised him that a firecracker was lit inside the club. Sgt. Petti’s chief complaint was that every Saturday night around 2:30 a.m., within the last year, he had to increase patrol in this area of town to handle the “large crowds coming from 3-4 clubs closing” who drive to open businesses, and loiter and play loud music. Specifically, Fayetteville Police usually increased its patrol to this area of town to handle the increased traffic on Raeford Road, West Darrow Drive, Bingham Drive, and Raeford Road/Skibo Road intersection. Fayetteville Police complained that Petitioner’s patrons significantly caused this traffic increase due to the large number of patrons at Carolina Live.

However, a preponderance of the evidence proved that other nightclubs also closed at the same time as Carolina Live, and also contributed to an increase in highway traffic during this time. Sgt. Petti admitted that any increase in traffic usually lasted for approximately “15-20 minutes” or a “short spurt of time,” and that the traffic at these times was still lighter than highway traffic during lunchtime on a weekday. In addition, the dance club Odyssey 2000 also has a large number of patrons attend its business.

28. Staff Sergeant Edward C. Welch, Jr., an Army military police investigator, investigates facilities to determine if sites should be sanctioned by the military as off-limits area for its soldiers. Investigator Welch investigated Carolina Live to determine if the military should sanction Carolina Live off-limits for its soldiers. Starting on Saturday March 3, 2003, Investigator observed the parking lots around Falcon Village shopping center from 10:00 p.m. until 2:00 a.m. while Carolina Live was open for business. Investigator Welch observed these areas for 11 out of 14 consecutive Saturday nights.

During that time, Welch saw numerous people urinating behind and beside the shopping center, and saw a couple having sex in a vehicle that was parked in the grassy parking lot behind the shopping center. During those 11 Saturday nights, Welch witnessed only 4 fights. The 4 fights resolved themselves and moved on. Welch never saw any patrons possessing weapons, and did not witness any stabbings, gunfights, or ambulances come to the business.

29. Off-duty Fayetteville police officers who worked as Petitioner’s security saw little difference in the actions of the patrons of Carolina Live, than they saw in patrons of other ABC permit holders in Fayetteville.

30. Local Alcohol Law Enforcement Agents admitted that Mr. Clark/Petitioner ran Carolina Live for approximately nine months without a single reported ABC violation.

31. Many residents living on Bingham Drive, West Darrow Drive, and Aberdale Drive, are older people who have lived in their home since the 1960’s or 1970’s. Four residents living on Bingham Drive, and whose homes are adjacent to the subject shopping center, complained of loud music, traffic, trash, crime, and hearing gunshots during Saturday nights when Carolina Live opened for business. These residents claimed that they no longer feel safe outside their homes at night.

32. However, on cross-examination, these neighbors acknowledged that concerns about such activities could come from the Falcon Village apartment tenants, that tenants of the apartments have to either use West Darrow Drive or the shopping center’s parking lot to access the apartments, and that the music they thought was coming from the club, could come from gatherings at the apartments. Resident Louise Chabot admitted that morning and afternoon rush hour traffic on Bingham Drive is heavy, it is difficult to cross Bingham Drive to turn into her driveway during those times of the day, and there are a lot of accidents on Bingham in front of her home.

Resident Glenn Stockwell acknowledged the increased commercial growth at the Raeford Road/Bingham Drive intersection during the last 3-4 years, and that NCDOT widened Bingham Drove in the mid-1990’s to accommodate continuous residential and commercial growth in the immediate area. Mitch Ladwig, the Falcon Village apartment management, confirmed tenants had complained about other tenants’ noise, and crime that had increased in the apartment complex before Petitioner’s club opened, was subsequently controlled during Petitioner’s period of operation. Ladwig indicated that he could not produce a single complaint, or name of a tenant complaining about the operation of the club or its sale of alcohol.

33. These residents acknowledged that the real reason they no longer feel safe in their neighborhood at night is because Erika and Glenn Stockwell were assaulted in their front yard on August 17, 2002 at approximately 10:00 p.m. There was absolutely no evidence that, that assault was connected with Carolina Live, its staff, operation of its business, or with any of its patrons.

34. There was no evidence produced that any tenants of the Falcon Village apartments objected to the issuance of ABC permits to Carolina Live for any reason.

35. There was no evidence presented at hearing establishing that the commercial businesses in the Falcon Village shopping center objected to Petitioner’s operation of his business at the 6323 Raeford Road location. In fact, the owner of the barbershop located in the Falcon Village shopping center supports Petitioner’s business. Petitioner’s business has increased the barbershop’s business, and Petitioner’s employees always clean the shopping center’s parking lot, even when Petitioner’s business was not open.

36. Respondent failed to prove by a preponderance of the evidence that the operation of Carolina Live increased crime in the residential areas immediately adjacent to the Falcon Village shopping center. While there was some evidence that traffic increased when Carolina Live was open for business, a preponderance of the evidence showed that Carolina Live’s security effectively and efficiently handled the traffic in the parking lot areas surrounding the Petitioner’s business. The increase in traffic on Raeford Road, West Darrow Drive, and Bingham Drive after Carolina Live closed at 2:30 a.m. was temporary, lasting approximately 15 minutes. This traffic was no heavier than rush hour traffic on Bingham Drive,.

D. ANALYSIS OF EVIDENCE OF N.C. GEN. STAT. 18B-901(c)(7) LOCAL GOVERNMENT OBJECTION, N.C. GEN. STAT. 18B-901(c)(8) DETRIMENTAL TO THE NEIGHBORHOOD, and N.C. GEN. STAT. § 18B-1005(b)

37. At the administrative hearing, Respondent failed to produce any person designated pursuant to N.C. Gen. Stat. § 18B-904(f) as the local governing body of Fayetteville or Cumberland County. As a result, Respondent failed to prove that the local governing body of Fayetteville or Cumberland County objected to the operation of Carolina Live at 6323 Raeford Road, Fayetteville location, and to show why it felt the operation of Carolina Live at this location was detrimental to the neighborhood, as provided by N.C. Gen. Stat. § 18B-901(c)(7).

38. Fayetteville has seen commercial and professional growth in its western quadrant over the past several years, which includes Petitioner’s business. This growth has resulted in the widening of roads, addition of stoplights at intersections, and planned bypasses in the immediate area of Petitioner’s business. In considering what is “detrimental to the neighborhood”, the Court must consider the size of Fayetteville, as well as the diversity of land uses in the area immediately surrounding the shopping center location of Petitioner’s business. Petitioner’s business is not in the heart of a residential area, but instead abuts one of Fayetteville’s busier commercial and professional arteries. The existence of substantial, older commercial properties, in addition to more recent non-residential developments in that particular region, must be considered when defining the neighborhood.

39. A preponderance of the evidence failed to show the complaints made by residential neighbors relating to loud music, increased traffic, and crime, were related to the operation of Carolina Live, or the sale and consumption of alcohol at its 6323 Raeford Road, Fayetteville, North Carolina address. There was substantial evidence of other potential contributors such as nearby commercial and general development, nearby single room apartments operating at almost one hundred percent occupancy, and use of Raeford Road as a primary route to neighboring Hope Mills, North Carolina, operation of other clubs in close proximity.

40. Additionally, evidence presented at hearing failed to show beyond a preponderance that Petitioner’s business, or the sale and consumption of alcohol at Petitioner’s location, placed a detrimental strain on local law enforcement. Evidence tended to show that Petitioner employed between eight and twelve off-duty Fayetteville Police officers who worked during all hours of operation. Each officer confirmed Petitioner’s pre-operation procedures, during hours procedures, and closing procedures.

Each officer confirmed the absence of violence and the absence of any “out of control” incidents they alone could not handle. Any fights or incidents that occurred inside the business during hours of operation were incidents that occur in any establishment in which a group of people congregate. The inside security effectively handled these incidents and removed any disruptive patrons from the business. The outside off-duty officers proficiently escorted or insured that any disruptive patrons left the parking lot areas. Any late night traffic strains on on-duty officers was not shown to be caused solely by Petitioner’s patrons, as opposed to other similar ABC permittees on that side of Fayetteville.

41. Today, it is common knowledge to the general population that there are certain “societal ills” or detrimental effects associated with the sale and consumption of alcoholic beverages. However, to make the operation of a ABC-permitted business detrimental to the neighborhood, one must show that (1) the neighborhood problems must be more than just the ordinary detrimental problems occurring with the sale of alcoholic beverages, and (2) they are associated with the sale of alcohol at a specific location and by a specific operation.

42. It is unreasonable to place all the blame for the neighborhood’s problems on one business that desires to sell alcoholic beverages. Petitioner, as an alcohol permittee, can not legally be held responsible for problems occurring on areas that are not within his control, such as public streets or vacant lots, unless one can show that the permittee’s actions has caused those problems.

43. In this case, Respondent failed to prove by a preponderance of evidence that the problems complained of, were more than the ordinary detrimental effects associated with the general sale of alcohol, or that they were related to the sale of alcohol specifically at Carolina Live.

44. A preponderance of the evidence proved that Mr. Fred Clark competently and effectively supervised each and every aspect of the operation of Carolina Live during all hours of operation. He hired security to address the operation of the business inside Carolina Live. Clark also addressed concerns of both residential and commercial neighbors, and local and ABC law enforcement by obtaining additional parking for patrons, hiring security for all parking areas, and by picking up trash in the immediate neighborhood, regardless of the source of such litter.

E. MARCH 5, 2003 ALLEGED VIOLATION

45. At approximately 3:15 p.m. on March 5, 2003, ALE Agent D.J. Hales observed cars parked in the parking lot in front of Petitioner’s business, and stopped to conduct a routine inspection of the business. When Agent Hales knocked on the front door, Petitioner’s 19 year old nephew, Kenneth Anthony Clark, opened the front door of Carolina Live. Hales identified himself to Kenneth Clark, and told Clark he was there to conduct an inspection. Kenneth Clark informed Hales that he knew who Hales was, but “you are not coming.” K. Clark placed his hand on the door so Hales could not enter the business. Hales explained that he was allowed into the business to conduct an inspection, but Kenneth Clark told Hales he was cleaning up, and “you are not coming in.” Hales asked K. Clark to call the permittee, and left. This conversation lasted approximately 1½ - 2 minutes. Kenneth Clark called Mr. Fred Clark, who was already in route to Carolina Live. Fred Clark arrived at Carolina Live about 5 minutes later.

46. Kenneth Clark was not a corporate officer of Petitioner’s business at any time.

47. Agent Hales returned to his car, and observed Kenneth Clark allow the Coca-Cola deliveryman into the establishment for a delivery. When Hales returned to the ALE office in Fayetteville, Hales called Carolina Live, and spoke with Fred Clark. Fred Clark advised Hales that he was willing to meet with Agent Hales that afternoon, but Hales instead, scheduled the meeting for the next morning.

48. The next morning, Agent Hales and another ALE Agent met with Fred Clark and Kenneth Clark. Agent Hales advised the Clarks that he could have arrested Kenneth Clark for refusing to allow Hales entrance into to the business. Fred Clark told the Agents that Kenneth Clark was his nephew who was cleaning Carolina Live as payment to his uncle for a car his uncle had given him. Hales further advised the Clarks that he would be submitting a notice of violation for the incident to the ABC Commission. At the administrative hearing, Agent Hales acknowledged that Kenneth Clark was not rude or disrespectful to him during the March 5, 2003, and that while Kenneth Clark did not allow him into the business, Kenneth Clark remained polite to Agent Hales. Agent Hales did not arrest Kenneth Clark because of his age. Kenneth Clark was approximately 19 years old on March 5, 2003.

F. APRIL 13, APRIL 19, MAY 10, 2003 ALLEGED VIOLATIONS

49. On April 13, 2003, pursuant to ALE Agent Brian Lovin’s request, Staff Sgt. Welch served as a cover agent for Military Investigator Michael Torres. Welch collected Torres wallet and badge, gave Torres his wallet, money, driver’s license and registration, and instructed Torres to attempt to enter Carolina Live, and observe activity inside the business. According to Welch, Torres was not a member of Carolina Live on that date. After conducting the undercover operation that night, Torres provided Sgt. Welch with a statement of what occurred during his undercover operation. Sgt. Welch in-turn submitted Torres’ statement to ALE.

As a result of that statement, ALE submitted a violation report to Respondent for Petitioner’s “employee allowed allowing the establishment to be open to the general public by failing to limit use of the facilities of this private club to members and their guests, in violation of 4 NCAC 02S.107(a)” and Petitioner’s “employee granted membership to Investigator Michael Torres, sooner than three days after the receipt of an application, in violation of 4 NCAC 2S .107(c)(5).“

50. Investigator Torres failed to testify at the administrative hearing, because he was involved in an undercover operation at the time, and testifying would reveal his identity. The only evidence as to Torres’ actions during his undercover operation in Carolina Live was ALE Agent Lovin’s hearsay statements that Torres gained admission into the business, and was provided a membership card on the spot. Yet, Lovin did not have first hand knowledge of these facts, because he was not present at Petitioner’s business on April 13, 2003. Lovin’s statements were based his reading the ALE violation report, which was based solely on Torres’ statement to Staff Sgt. Welch.

At the administrative hearing, neither Lovin nor Respondent, through another witness, produced either the membership card Torres allegedly received on April 13, 2003, or the membership application Torres allegedly completed on that date. Thus, Respondent failed to show that Torres applied for and received a membership at Carolina Live on April 13, 2003. Respondent also failed to produce Torres’ written statement at the administrative hearing. Respondent failed to produce any competent, credible, or admissible evidence proving that Petitioner’s employees: (1) allowed Torres into Carolina Live on April 13, 2003, when Torres was not a bona fide guest of a member of Carolina Live and (2) granted Torres a membership sooner than 3 days after Carolina Live received a membership application from Torres.

51. On April 19, 2003, ALE Agent Corey Bullock was not a member of Carolina Live. Bullock waited in line outside and inside the entrance to Carolina Live. Petitioner’s employees checked identification of patrons, including Bullock’s. Once at the front of the line, an employee of Petitioner directed Agent Bullock to sign his name under the guest column, next to a name signed under the member column. Bullock paid a cover charge fee. Bullock alleged that the register he signed look like a photocopy of a sheet with members’ signatures on the left side of the sheet. Agent Bullock was not a guest of any member of Carolina Live. Before entering the club, another employee patted down Bullock and all other patrons. While inside the club, Agent Bullock witnessed a bartender refuse to sell alcohol to a female less than twenty-one years of age to purchase alcohol. Bullock never witnessed a violent act while in the club.

52. On May 10, 2002, Agent Bullock was not a member of Carolina Live. He stood in line to enter Carolina Live. Petitioner’s employees used the same procedures to check identification, and pat down patrons. An employee of Petitioner asked Bullock if he was a member and explained that he would pay a certain entrance fee if he was a member of the club, and another amount if he was not a member. Bullock signed the register as a guest and paid the appropriate cover charge. Bullock was not a guest of a member.

53. On April 19, 2003 and May 10, 2003 respectively, Agent Bullock’s objective during his undercover operation at Petitioner’s business was to “gain entrance” into Petitioner’s business.

54. The undersigned takes note that Respondent uses its “General Guidelines for Offers in Compromise Negotiation” to determine the appropriate fine to assess ABC permittees for violations of the ABC laws and regulations. Respondent usually assesses a $200.00 fine/penalty or 2 days of active suspension for “open to the public” violations, regardless of the number of time a violator has committed such violation. Other than a Written Warning, this penalty is the least severe penalty referenced in these guidelines.

CONCLUSIONS OF LAW

1. The Office of Administrative Hearings has personal and subject matter jurisdiction over this contested case.

2. N.C. Gen. Stat. 18B-901 (c) is entitled “Factors in Issuing Permit” and provides in pertinent part:

Before issuing a permit, the Commission shall be satisfied that the applicant is a suitable person to hold an ABC permit and that the location is a suitable place to hold the permit for which he has applied. To be a suitable place, the establishment shall comply with all applicable building and fire codes. Other factors the Commission shall consider in determining whether the applicant and the business location are suitable are:

. . .

(7) The recommendations of the local governing body; and

(8) Any other evidence that would tend to show whether the applicant would comply with ABC laws and whether operation of his business at that location would be detrimental to the neighborhood.

(Emphasis added)

3. Neither Chapter 18B of the North Carolina General Statutes nor the Respondent by rule, has defined the terms “location,” “suitable,” “neighborhood,” or “detrimental.”

4. If the language of the statute is clear, the court must implement the statute according to the plain meaning of its terms. Robert v. Young, 120 N.C. App. 720, 724, 464 S.E.2d 78, 82 (1995)

5. “Location” is defined as a “site or place where something is or may be located.” Black’s Law Dictionary, Fifth Edition (1979) The plain or ordinary meaning of the word “location” used in the context of N.C. Gen. Stat. § 18B-901(c) also reflects that “location” means a site or place where something is located.

6. “Neighborhood” is defined as a place near, an adjoining or surrounding district, a more immediate vicinity and is “not synonymous with territory or district.” Black’s Law Dictionary, Fifth Edition (1979)

7. “Immediate” is defined as “Next in line or relations; directly connected; not secondary or remote. Not separated in respect to place.” Black’s Law Dictionary, Fifth Edition (1979)

8. Applying the common, ordinary meaning of the word “neighborhood” to this case, the neighborhood includes the residential and commercial areas immediately adjacent to, and surrounding, the 6323 Raeford Road location. In defining the neighborhood, one must consider the diversity of land uses in the area immediately surrounding the shopping center location of Petitioner’s business, and the fact that Petitioner’s business abuts one of Fayetteville’s busier commercial and professional arteries.

N.C. GEN. STAT. § 18B-901(c)(7) - LOCAL GOVERNING BODY RECOMMENDATIONS THAT THE OPERATION OF PETITIONER’S BUSINESS AT THIS LOCATION IS DETRIMENTAL TO NEIGHBORHOOD

9. Respondent failed to sufficiently prove what were the recommendations of the local governing body of Fayetteville, or Cumberland County, North Carolina and how the local governing body thought the operation of Petitioner’s business at 6323 Raeford Road was detrimental to the neighborhood immediately adjacent to such location. As a result, the undersigned determines that this ground for rejection of Petitioner’s ABC permit application was without merit.

04 NCAC 02S .0107(a) & (c)(5) Private club alleged violations

10. 04 NCAC 02S .0107 Special Requirements For Private Clubs states in pertinent part that:

(a) Definition. A private club is a private facility organized and operated by a person, association or corporation solely for a social, recreational, patriotic or fraternal purpose. Use of the facility shall not be open to the general public but shall be limited to members of the private club and their guests.

. . .

(c) Mandatory Requirements. To qualify as a private club, a facility shall meet the following requirements concerning membership: . . .

(5) grant no membership sooner than three days after receipt of application; . . .

11. The preponderance of the evidence based on the hearsay statements of Investigator Torres alone, is insufficient to support a conclusion that on April 13, 2003, Petitioner’s employee allowed Carolina Live to be open to the general public by failing to limit the use of this private club to members and their guests, in violation of 4 NCAC 2S.0107(a).

12. The preponderance of the evidence based on the hearsay statements of Investigator Michael Torres alone, is insufficient to support a conclusion that on April 13, 2003, Petitioner’s employee granted membership to Investigator Michael Torres sooner than 3 days after Petitioner’s business received Torres’ application in violation of 4 NCAC 2S.0107(c)(5).

13. On April 19, 2003 and May 10, 2003 respectively, Petitioner’s employee allowed Carolina Live to be open to the general public by failing to limit the use of this private club to members and their guests in violation of 4 NCAC 2S .0107(a).

N.C. GEN. STAT. § 18B-502(a & b) INTERFERENCE WITH INSPECTION ALLEGED VIOLATION

(b) Interference with Inspection. - Refusal by a permittee or by any employee of a permittee to permit officers to enter the premises to make an inspection authorized by subsection (a) shall be cause for revocation, suspension or other action against the permit of the permittee as provided in G.S. 18B-104. It shall be a Class 2 misdemeanor for any person to resist or obstruct an officer attempting to make a lawful inspection under this section.

14. 04 NCAC 2S .0213 Cooperation With Law Enforcement Officers provides that:

No permittee or his employee shall interfere with or fail to cooperate with an ALE agent or any other law enforcement officer in the performance of his duties.

15. The preponderance of the evidence proved that Kenneth Anthony Clark was not, and had not been at any time, a corporate officer of Petitioner’s business.

16. The preponderance of the evidence proved that Kenneth Anthony Clark was Petitioner’s employee on March 5, 2003 as he was performing services for Petitioner on that date. The evidence showed that on that date, Kenneth Anthony Clark refused to permit ALE Agent D.J. Hales to enter the licensed premises of Carolina Live to make a lawful inspection, in violation of N.C. Gen. Stat. § 18B-502(b). The evidence also showed that on March 5, 2003, Kenneth Anthony Clark interfered with or failed to cooperate with ALE Agent D.J. Hales, a law enforcement officer engaged in the performance of his duties in violation of 4 NCAC 2S .0213.

17. While Kenneth Clark refused to allow Agent Hales into Carolina Live on March 5, 2003, Kenneth Clark was not disrespectful or rude to Agent Hales, but politely advised Hales that he was not allowing Hales to enter the premises. Not only did this conversation between K. Clark and Agent Hales last only 1-2 minutes, but Agent Hales left Carolina Live, and advised Fred Clark they could wait until the next morning to discuss the incident. Agent Hales did not criminally charge Kenneth Clark. Given the circumstances surrounding this incident, this technical violation of 4 NCAC 2S .0213 and N.C. Gen. Stat. § 18B-502(b) warrants a written warning be given to Petitioner for this ABC violation.

N.C. GEN. STAT. § 18B-901(C)(8) – ANY OTHER EVIDENCE THAT APPLICANT WOULD NOT COMPLY WITH ABC LAWS AND OPERATION OF PETITIONER’S BUSINESS AT 6323 RAEFORD ROAD WOULD BE DETRIMENTAL TO THE NEIGHBORHOOD

18. A preponderance of the evidence proved that Petitioner’s right to sell alcoholic beverages, a legal product, outweighed any general problems created by the sale of that product at 6323 Raeford Road, and any contribution of Petitioner’s sale of alcohol might make to those problems.

19. Petitioner, as an alcohol permittee, can not legally be held responsible for problems occurring on areas that are not within his control, such as public streets or vacant lots, unless one can show that the Permittee’s actions has caused those problems.

20. A preponderance of the evidence showed that any problems immediately around 6323 Raeford Road were not substantially related to the Petitioner’s operation of his business in selling alcohol at 6323 Raeford Road.

21. A preponderance of the evidence showed that the operation of Petitioner’s business in selling alcohol at 6323 Raeford Road would not be detrimental to the neighborhood.

N.C. GEN. STAT. § 18B-1005(b) FAILURE TO SUPERINTEND ALLEGED VIOLATION

22. N.C. Gen. Stat. § 18B-1005(b) provides:

Supervision – It shall be unlawful for a permittee to fail to superintend in person or through a manager the business for which a permit is issued.

23. “Superintend” is defined as “to have charge and direction of, to direct the course and oversee the details; to regulate with authority; manage; to oversee with the power of direction; to take care of with authority.” Black’s Law Dictionary, Fifth Edition (1979).

24. A preponderance of the evidence established that Petitioner, through Mr. Fred Clark, personally superintended the premises of Carolina Live on March 5, 2003, April 13, 2003, and April 19, 2003, and did not violate N.C. Gen. Stat. § 18B-1005(b).

25. A preponderance of the evidence substantially proved that Petitioner operated with temporary ABC permits for 9 months without being cited for any ABC violations. From March 5, 2003 until May 10, 2003, Petitioner was cited for 2 “open to the public” violations, and 1 violation for refusing to allow an inspection/interference with ALE Agent’s performance of his duties. The refusal to allow/interference violation was nonviolent and relatively minor in severity.

Respondent’s “General Guidelines for Offers in Compromise Negotiation” imposes a minimal $200.00 penalty or 2 days of active suspension for an “open to the public” violation, regardless of the number of times an ABC permittee commits a violation of that type. The suggested penalty for that violation is one of the least severe penalties on Respondent’s guidelines. The minimal degree of gravity and circumstances of these 3 violations (March 5, 2003, April 19, 2003, and May 10, 2003), do not rise to a sufficient level of noncompliance by Petitioner to warrant rejection of the applied-for ABC permits.

DECISION

Based on the foregoing Findings of Fact and Conclusions of Law, the undersigned determines that Respondent’s initial rejection of Petitioner’s ABC application for ABC permits should be REVERSED. The foregoing Findings of Fact and Conclusions of Law warrant that Respondent impose a $200.00 fine for each April 19, 2003 and May 10, 2003 open to the public violation, issue a written warning to Petitioner for the March 5, 2003 refusal to allow an inspection and interference with duties’ violations, and thereafter, issue Petitioner the applied-for ABC permits upon payment of such fines.

ORDER AND NOTICE

The North Carolina Alcoholic Beverage Commission will make the Final Decision in this contested case. N.C. Gen. Stat. § 150B-36(b), (b1), (b2), and (b3) enumerate the standard of review and procedures the agency must follow in making its Final Decision, and adopting and/or not adopting the Findings of Fact and Decision of the Administrative Law Judge.

Pursuant to N.C. Gen. Stat. § 150B-36(a), before the agency makes a Final Decision in this case, it is required to give each party an opportunity to file exceptions to this decision, and to present written arguments to those in the agency who will make the Final Decision. N.C. Gen. Stat. 150B-36(b)(3) requires the agency to serve a copy of its Final Decision on each party, and furnish a copy of its Final Decision to each party’s attorney of record and to the Office of Administrative Hearings, 6714 Mail Service Center, Raleigh, NC 27699-6714.

This the 30th day of September, 2003.

________________________________

Melissa Owens. Lassiter

Administrative Law Judge

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