S.C. Dep't of Revenue v. Kings Food & Fuel, Inc.

• Docket Number: 22-ALJ-17-0074-CC
• Decision Date: 26 August 2022
• Citation: S.C. Dep't of Revenue v. Kings Food & Fuel, Inc., 22-ALJ-17-0074-CC (Aug 26, 2022)
• Parties: South Carolina Department of Revenue Petitioner, v. Kings Food & Fuel, Inc., d/b/a One Stop, Respondent.
• Court: South Carolina Administrative Law Court Decisions

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South Carolina Department of Revenue Petitioner, v. Kings Food & Fuel, Inc., d/b/a One Stop, Respondent.

No. 22-ALJ-17-0074-CC

South Carolina Administrative Law Court Decisions

August 26, 2022

For Petitioner: Marcus Dawson Antley, III, Esquire

Adam J. Neil, Esquire Jason Phillip Luther, Esquire

For Respondent: S. Jahue Moore, Esquire

FINAL ORDER

Robert L. Reibold Administrative Law Judge

STATEMENT OF THE CASE

This matter comes before the Administrative Law Court (the ALC or the Court) following a request for a contested case hearing pursuant to S. C. Code Ann. §§ 1-23-310 et seq. (2005 & Supp. 2021), S. C. Code Ann. § 1-23-600 (Supp. 2021), S. C. Code Ann. § 61-2-260 (2022), and S. C. Code Ann. §§ 12-60-10 et seq. (2014 & Supp. 2021). The South Carolina Department of Revenue (Petitioner or the Department) contends Kings Food & Fuel, Inc., d/b/a One Stop (Respondent or Kings Food & Fuel) knowingly and intentionally violated the terms of a voluntary agreement as to restrictions (the Restriction Agreement) upon its seven-day off-premises beer and wine permit and retail liquor license for an adjacent liquor store, Kings Discount Liquor, Inc., d/b/a One Stop Liquor (Kings Liquor). ^[1] On January 25, 2022, the Department issued its determinations that Respondent violated the terms of the Restriction Agreement, warranting revocation of the liquor license and beer and wine permit. According to Respondent's request for a contested case hearing Respondent "received" the January 25, 2022 determination on February 28, 2022; served the Department with the request for a contested case hearing on March 2 2022, by depositing the request in the United States mail; and sent the necessary documents and fee to file this matter with the Court on March 2, 2022. Thus, this Court deemed the request filed on March 2, 2022. See Rule 4(B) SCALC ("The date of the filing is the date of delivery or the date of mailing "). On March 10, 2022, this matter was assigned to the undersigned. Thereafter, the Department submitted its agency information sheet and notices of appearance.

On March 16, 2022, the Department filed a motion to dismiss, arguing the Court lacked jurisdiction because Respondent failed to properly request a contested case within the required timeframe from when it delivered its determination by first class mail and email on January 25, 2022. To support its position, the Department provided the Court copies of the January 25, 2022 cover letters that were included with the Department's determinations and an email chain between the Department's counsel and Respondent's counsel that included attachments that purport to be the Department's determinations in this matter and the liquor-store matter. The email chain also noted the Department placed the determinations in the mail on January 25, 2022. Another email chain between the Department's counsel and staff for Respondent's counsel that was filed with the Department's motion stated Respondent's counsel received the Department's determination on February 28, 2022.

On April 7, 2022, the undersigned noticed a hearing on the motion to dismiss for May 24, 2022, providing a May 19, 2022 deadline for filing any affidavits in opposition to the motion and a May 23, 2022 deadline for any reply affidavits. Subsequently, Respondent moved for a continuance for the scheduled motion's hearing based on a family matter. The Court granted the motion and rescheduled the hearing on the motion to dismiss for June 7, 2022, at the ALC but otherwise maintained the filing deadlines set forth in the April 7, 2022 notice.

On June 6, 2022, Respondent filed an affidavit in opposition to the Department's motion to dismiss. Specifically, Diane M. L. Corley, a legal assistant for Respondent's counsel, averred the following: she was responsible for stamping incoming mail with the date the mail arrived at counsel's office; she sent an email to Respondent's counsel that listed what was received in the mail from February 28, 2022, through March 2, 2022; she received the Department's determination in this matter on February 28, 2022; and the request for contested case hearing was timely filed on March 2, 2022. Exhibits to the affidavit included the above-referenced email between Ms. Corley and Respondent's counsel and the cover letter from the Department's determination in this matter.

The back of the cover letter bore a date stamp indicating that the letter was received on February 28, 2022.

The Court heard arguments on the motion to dismiss on June 7, 2022. The Department orally moved to strike Ms. Corley's affidavit in light of the Court's April 7, 2022 and May 23, 2022 orders establishing deadlines for filing the same.

On June 13, 2022, the Court granted the Department's motion to strike Ms. Corley's affidavit because it was untimely filed and denied without prejudice the Department's motion to dismiss, leaving the record open based on a novel issue as applied to Respondent. Specifically, in its order, the Court noted that South Carolina courts had not decided the question as to whether due process rights attach to a beer and wine permit, or alternatively, whether a variety of statutory protections provide equivalent rights and remedies to Respondent prior to revocation.

On July 21, 2022, a hearing on the merits was held before the Court in the related matter of Kings Liquor. At the hearing, counsel for the Department requested that whatever penalty the Court elected to impose upon Kings Liquor also be imposed upon Kings Food & Fuel in this matter. Both Kings Liquor and Kings Food & Fuel are located in the same physical building, share the same parking lot, and have common ownership. Additionally, at the hearing on Kings Liquor, the parties presented evidence about both stores. The Court confirmed with the Department that it desired the same penalty be imposed even if that penalty was less than revocation. Counsel for Kings Liquor, Mr. Moore, who also represents Kings Food & Fuel in this matter indicated that he agreed with this proposal because the Kings Food & Fuel matter involved the same allegations and the same witnesses. The Court noted the parties' agreement on the record in the Kings Liquor matter.

Following the hearing, counsel for the Department contacted the Court, requesting that a hearing in the related matter proceed. The Court held a conference call with counsel for all parties on August 10, 2022. During the conference call, counsel for both Kings' entities asked the Court to enforce the parties' agreement pursuant to Rule 43(k), SCRCP. Counsel for the Department indicated he wanted to review the transcript of the Kings Liquor hearing to confirm the terms of the agreement. The Court allowed the Department seven days to obtain the transcript, review it, and submit its position with respect to Rule 43(k); the Court noted that if the Department needed additional time to obtain and review the hearing transcript, the Court would grant additional time. . The Department later informed the Court that it had reviewed the transcript and withdrew the request for a separate hearing in this matter. The Court issues this order pursuant to the parties' agreement.

FINDINGS OF FACT

Having observed the witness(es) and reviewed the exhibit(s) presented at the hearing for Kings Liquor, taking into consideration the burden of persuasion and the credibility of the witness(es), and in accordance with the parties' agreement on the record at the hearing, I make the following findings of fact by a preponderance of the evidence:

1. In 2015, Jaisy and Sahil VII, LLC, d/b/a One Stop Liquor Store was the holder of a retail liquor license for a business located at 8901-A Two Notch Road, Columbia, South Carolina.

2. In 2015, Jaisy and Sahil VII, LLC, d/b/a One Stop was the holder of a seven-day off-premises beer and wine permit for a business located at 8901 Two Notch Road, Columbia, South Carolina.

3. Parminder Kaur was the sole member of Jaisy and Sahil VII LLC.

4. Jaisy and Sahil VII, LLC sold its assets to R&S, Inc. in May of 2018. At that time, R&S, Inc. applied for and received a retail liquor license for a business located at 8901-A Two Notch Road, Columbia, South Carolina. It also applied for and received a seven-day off-premises beer and wine permit for a business located at 8901 Two Notch Road Columbia, South Carolina. The trade name of the business was One Stop Citgo gas station.

5. Dilraj Singh was the incorporator and President of R&S, Inc. Harpreet Singh, Dilraj Singh's brother, was employed by R&S, Inc., and had signatory authority of the company's checking account.

6. The Department cited R&S, Inc. with three separate violations for sales of alcohol to persons under twenty-one years of age. R&S paid a fine in connection with the first two violations.

7. However, on December 19, 2018, before the third citation was resolved, Dilraj Singh submitted separate applications to the Department for: (1) a seven-day off-premises beer and wine permit for Kings Food & Fuel, located at 8901 Two Notch Road, Columbia, South Carolina; and (2) a retail liquor license for Kings Liquor located at 8901-A Two Notch Road, Columbia, South Carolina. Dilraj Singh was listed as the only principal on both applications.

8. To evaluate the new applications, the Department requested that the South Carolina Law Enforcement Division (SLED) perform an investigation regarding true ownership of Kings Food & Fuel and Kings Liquor. The investigation indicated Harpreet Singh and Ranjit Singh were likely undisclosed principals of the Kings entities.

9. Upon notification, Respondent disclosed Ranjit Singh as a principal, but because Respondent could not provide documentation verifying Harpreet Singh's lawful presence in the

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