STATE OF NORTH CAROLINA_



STATE OF NORTH CAROLINA | IN THE OFFICE OF | |

| | ADMINISTRATIVE HEARINGS |

|COUNTY OF MACON | 02 ABC 0909 |

|SCOTT PATRICK WINDSOR | |)))| |

|T/A DEPOT | |)))| |

|Petitioner, | |)))| |

| | |) | |

|v. | | | |

| | | |DECISION |

|N.C. ALCOHOLIC BEVERAGE CONTROL COMMISSION | | | |

|Respondent. | | | |

This contested case was heard and being heard before John C. Hunter, Temporary Administrative Law Judge, on January 9, 2003 in Asheville, North Carolina in accordance with N.C.G.S. Chapter 150B and the Rules of Contested Case Hearings in the Office of Administrative Hearings.

APPEARANCES

For Petitioner: Scott Patrick Windsor, pro se

For Respondent: LoRita K. Pinnix, Assistant Counsel

North Carolina Alcoholic Beverage

Control Commission, Raleigh, North

Carolina

ISSUES

1. Whether Petitioner’s establishment has failed to qualify as a sports club because it does not derive at least 15 percent (15%) of its required club activity fees from sources other than receipts for food?

2. Whether Petitioner has failed to maintain full and accurate monthly reports of amounts collected from the sale of spirituous liquor, malt beverages, unfortified wine, fortified wine, club activity fees and food, as required by 4 N.C.A.C. 2S.0616(a)?

FINDINGS OF FACT

From official documents in the file, sworn testimony of the witnesses, and other competent and admissible evidence, it is found as a fact that:

1. The parties received notices of hearing more than fifteen (15) days before the hearing.

2. Scott Patrick Windsor T/A Depot is a business located at 577 Depot Street in Franklin, North Carolina. There are two tennis courts located behind the business.

3. Petitioner, submitted application to Respondent for Malt Beverage on premise and Mixed Beverage sports club ABC permits in July 2001.

4. Petitioner currently holds temporary Malt Beverage on premise and Mixed Beverage sports club permits and has held these temporary permits for an almost uninterrupted period since submitting its initial application in July 2001.

5. Carolyn Paysour, auditor for the North Carolina Alcoholic Beverage Control Commission, conducted an audit of Petitioner’s business in November 2001. The only money collected for club activity fees, other than food, was money paid for tennis membership, no equipment rental or court rental fees were collected. Prior to this audit, Ms. Paysour had informed Petitioner that it was necessary to have a paper trail for the money received for tennis memberships. No records for deposits of tennis memberships were produced during the audit. Mr. Windsor stated that all tennis memberships were paid in cash and that this cash was kept at the business for petty cash. Memberships at the Depot cost up to $5,000.00 and Petitioner’s records of memberships totaled $31,000.00 in membership fees.

6. During the November 2001 audit, Respondent’s auditor found that Windsor was ringing beer and liquor on the same cash register key until October 2001. The amount of beer and wine sold at the business was being determined by counting empty bottles.

7. On May 22, 2002, an Official Notice of Rejection was sent by Respondent to Petitioner disapproving Respondent’s application for Malt Beverage on premise and Mixed Beverages sports club permits. The reasons for the disapproval were:

A. The establishment failed to qualify as a sports club because it did not derive at least 15 percent (15%) of its required club activity fees from sources other than receipts for food. As the business is ineligible to hold a Mixed Beverage Sports Club permit, it is likewise ineligible to hold Malt Beverage on premise, as required by 4 N.C.A.C. 02S .0614(1) and N.C.G.S. 18B-603(d)(2).

B. Any other evidence which would tend to show whether the applicant, Scott Patrick Windsor, would abide by the ABC laws, as provided by G.S. 18B-901(c)(8), to wit: On or about the 28th day of November 2001, Windsor failed to maintain full and accurate monthly reports of amounts collected from the sale of spirituous liquor, malt beverages, unfortified wine, fortified wine, club activity fees and food, as required by 4 N.C.A.C. 2S.0616(a).

8. In June 2002, Ms. Paysour performed another audit at Petitioner’s business. The only club activity fees other than food was the money paid for tennis membership, no tennis equipment was rented, there was no charge for hourly play and the tennis courts had no lights for nighttime play. Petitioner stated that the one $3,000 and two $5,000 memberships were paid in cash and he had no records of deposits into a bank account. Petitioner did not provide receipts of cash payments despite the fact that Ms. Paysour had informed Windsor at the November 2001 audit that receipts of money paid for memberships were necessary.

9. Most of the people who completed applications for membership of the Depot were family members or employees of Mr. Windsor. Several lived in Raleigh, North Carolina, Florida or Georgia.

Based on the foregoing Findings of Fact, the undersigned Administrative Law Judge makes the following:

CONCLUSIONS OF LAW

1. The Office of Administrative Hearing has jurisdiction in this matter.

2. North Carolina General Statute Section 18B-1000(8) provides in pertinent part that a sports club is an establishment substantially engaged in the business of providing two or more tennis courts. To qualify as a sports club, an establishment’s gross receipts for club activities shall be greater than its gross receipts for alcoholic beverages.

3. North Carolina Administrative Code 2S.0614 provides in pertinent part that to be eligible to receive and to hold ABC permits as a sports club, an establishment shall derive at least 15% of its club activity fees from sources other than receipts for food.

4. North Carolina Administrative Code 2S.0616(a)(5) provides in pertinent part that a sports club holding ABC permits issued by the Commission shall maintain full and accurate monthly reports of amounts collected from club activity fees, excluding receipts for food.

5. The records produced by Petitioner were not full and complete enough to carry his burden and to comply with the reporting requirement of the North Carolina Administrative Code. Petitioner has failed to show that he has derived the necessary 15% of club activity fees from receipts other than food.

6. Petitioner has failed to maintain full and accurate monthly reports of amounts collected from the sale of spirituous liquor, malt beverages, unfortified wine, fortified wine, club activity fees and food, as required by 4 N.C.A.C. 2S.0616(a).

DECISION

Based upon the foregoing Findings of Fact and Conclusions of Law, the undersigned Administrative Law Judge recommends that the Notice of Rejection by Respondent be upheld and Petitioner’s application for ABC permits should be denied and that the temporary permit current held by Respondent be revoked.

ORDER

It is hereby ordered that the agency serve a copy of the final decision on the Office of Administrative Hearings, 6714 Mail Service Center, Raleigh, NC 27699-6714, in accordance with North Carolina General Statute 150B-36(b).

NOTICE

The agency making the final decision in this contested case is required to give each party an opportunity to file exceptions to this recommended decision and the present written arguments to those in the agency who will make the final decision. G.S. 150B-36(a).

The agency is required by G.S. 150B-36b to serve a copy of the final agency decision on all parties and to furnish a copy to the parties’ attorney on record and to the Office of Administrative Hearings.

The agency that will make the final decision in this contested case is the N.C. Alcoholic Beverage Control Commission.

This is the 26th day of February, 2003.

________________________________

John C. Hunter

Temporary Administrative Law Judge

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