S.C. Dep't of Revenue v. Kings Disc. Liquor

• Docket Number: 22-ALJ-17-0052-CC
• Decision Date: 26 August 2022
• Citation: S.C. Dep't of Revenue v. Kings Disc. Liquor, 22-ALJ-17-0052-CC (Aug 26, 2022)
• Parties: South Carolina Department of Revenue Petitioner, v. Kings Discount Liquor, Inc., d/b/a One Stop Liquor,Respondent.
• Court: South Carolina Administrative Law Court Decisions

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South Carolina Department of Revenue Petitioner, v. Kings Discount Liquor, Inc., d/b/a One Stop Liquor,Respondent.

No. 22-ALJ-17-0052-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 February 17, 2022 request for a contested case hearing pursuant to S.C. Code Ann §§ 1-23-310 et seq. (2005 & Supp 2021), SC Code Ann. § 1-23-600 (Supp. 2021), SC 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 Discount Liquor, Inc., d/b/a One Stop Liquor (Respondent or Kings Liquor) knowingly and intentionally violated the terms of a voluntary agreement as to restrictions (the Restriction Agreement) upon its retail liquor license and seven-day off-premises beer and wine permit for an adjacent convenience store, Kings Food &amp Fuel, Inc., d/b/a One Stop (Kings Food &amp Fuel).^[1] On February 24, 2022, this matter was assigned to the undersigned. On March 7, 2022, the Department submitted its agency information sheet and notices of appearance. On April 20, 2022, the Court noticed a hearing in this matter to occur at the ALC on July 21, 2022.

On June 1, 2022, the Department filed a motion to compel, requesting the Court order Respondent to (1) more sufficiently answer the Department's requests to admit; (2) answer the Department's interrogatories; and (3) respond to the Department's requests for production of documents. The Department's discovery request included ten requests for admissions, nine of which related to compliance with a prior consent order between the Department and Respondent, and one of which related to admissibility of certain documents at the hearing on the merits. Respondent answered each request with the word "[d]enied." Respondent's answers to the requests concluded with the sentence "[c]ounsel for . . . Respondent cannot admit the truth of these [r]equets and reserves the right to amend theses [r]esponses." Subsequently, the Department informed the Court that it received responses to its interrogatories and request for production from Respondent and that the portion of its motion to compel which related to the absence of responses to these discovery requests was therefore resolved. By order dated June 6, 2022, the Court denied the Department's motion to compel but reminded the parties of Rule 37, SCRCP. A hearing was held before the Court on July 21, 2022.

FINDINGS OF FACT

Having observed the witness(es) and reviewed the exhibit(s) presented at the hearing and taking into consideration the burden of persuasion and the credibility of the witness(es), 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 United States of America, he was not added as a principal.

10.On December 20, 2018, the Department granted Respondent a retail liquor license subject to a voluntary agreement as to restrictions-the Restriction Agreement- including the following terms: (1) Harpreet Singh shall under no circumstances be permitted to be on the premises^[2]; (2) Harpreet Singh shall under no circumstances be permitted to be a manager of, officer of, board member of, shareholder of, employee of, consultant to, or otherwise be employed by Respondent in any capacity-with or without compensation-or have a direct or indirect financial interest in the businesses; and (3) the agreement shall be posted with the liquor license at the premises. The Department also granted a seven-day off-premises beer and wine permit to Kings Food & Fuel subject to the same conditions. The Restriction Agreement was executed between the parties to embody the various conditions placed upon the liquor license and beer and wine permit.

11.Respondent is, therefore, currently the holder of a retail liquor license for its business located at 8901-A Two Notch Road, Columbia, South Carolina.

12.On December 9, 2020, SLED conducted an alcohol compliance check at both Kings Liquor and Kings Food & Fuel. SLED issued Respondent an administrative violation for permitting the purchase of liquor by a person under the age of twenty-one. During the compliance check, Harpreet Singh entered the premises and identified himself as the manager and signed the administrative violation. The Restriction Agreement was not posted in accordance with its terms.

13.After the citations were issued, the clerk working at the premises called Harpreet Singh about the incident, and Mr. Singh attempted to comfort the clerk.

14.On March 26, 2021, SLED conducted another check of the premises. Upon arrival, the SLED agents introduced themselves to the clerk and asked to speak with the manager. The store clerk identified Harpreet Singh as the manager. Mr. Singh was on the premises breaking down boxes and again identified himself as the manager. He provided SLED with a New York driver's license confirming he was the same Harpreet Singh listed on the Restriction Agreement. Mr. Singh stated he was unaware of the Restriction Agreement. The Restriction Agreement was not posted in accordance with its terms. SLED issued Respondent administrative violations pursuant to S.C. Code Ann. Regs. 7-200(1)(I) (2012) for violating a stipulation and failing to post the Restriction Agreement.

15.On May 18, 2021, the Department issued a notice of intent to revoke Respondent's retail liquor store license. Respondent protested this notice via letter received by the Department on June 8, 2021.

16.On May 31, 2022, SLED conducted a compliance check. Harpreet Singh was photographed leaving the premises as the investigating officer arrived. A clerk for Kings Food & Fuel testified that the convenience store had run out of change and that he had called Harpreet Singh about the issue. Mr. Singh then came to the store and placed the additional change on the counter for use by the business.

17.Another employee of Kings Liquor also testified she had seen Harpreet Singh come to the premises on one occasion to pick up another person and presumably take him home.

18.Respondent did not receive a copy of the Restriction Agreement from the Department after its execution.

19.The Restriction Agreement was never posted at either Kings Liquor nor Kings Food & Fuel up to and including the date of the hearing in this matter, July 21, 2022.

20.Harpreet Singh was not an employee of record of Respondent, was not on company payroll, and had no authority to sign company checks.

21.Notice of the time, date, place, and subject matter of the hearing was given to Petitioner and Respondent.

CONCLUSIONS OF LAW

Based upon the above findings of fact, the Court makes the following conclusions of law:

1. Section 1-23-600 grants jurisdiction to the Court to hear contested cases under the Administrative Procedures Act. Specifically, section 61-2-260 grants the ALC the authority to hold contested case hearings in matters governing alcoholic beverages, beer, and wine.

2. A contested case hearing is a trial de novo in which "the whole case is tried as if no trial whatsoever had been had in the first instance" and the Administrative Law Judge conducting the hearing is the sole finder of fact. Marlboro Park Hosp. v. S.C. Dep't of Health &amp Env't Control, 358 S.C. 573, 579, 595 S.E.2d 851 854 (Ct. App. 2004) (quoting Blizzard

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