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HomeMy WebLinkAbout2017-09-21 Liquor Adjudication Board MinutesCOUNTY OF HAWAII DEPARTMENT OF LIQUOR CONTROL LIQUOR ADJUDICATION BOARD SEPTEMBER 21, 2017 WEST HAWAII CIVIC CENTER, 74-5044 ANE KEOHOKALOLE HIGHWAY, BUILDING B, 2ND FLOOR, KAILUA-KONA, HAWAII I. Call to Order The meeting was called to order by Chair Bryan Lindsey at 10:08 A.M., in the Meeting Room, Department of Liquor Control, West Hawai'i Civic Center, 74-5044 Ane Keohokalole Highway, Building B, 2nd Floor, Kailua-Kona, Hawaii. The following were present and constituted a quorum: Adjudication Board: Absent and Excused: Others Present: Bryan Lindsey, Chair Sidney Fuke, Vice Chair Geraldine Giffin, Board Member Andi Pawasarat-Losalio, Board Member Riley Smith, Board Member None Gerald Takase, Director Brandon Gonzalez, Administrative Officer Renee Schoen, Assistant Corporation Counsel (Department/Prosecutor) Craig Masuda, Deputy Corporation Counsel (Board) Stacie Waltjen, Licensing Tech Nyssa Aoki, T/A Secretary to the Board & Commission Lindsey: Good morning and welcome everyone to this morning's meeting. I'd like to ask everyone to silence their mobile devices. We will now begin with introductions of the Board Members and staff, starting immediately to my left. Fuke: Good morning. My name is Sidney Fuke, Board Member. Pawasarat-Losalio: Good morning, Andi Pawasarat, Board Member. Takase: Gerald Takase, Director. Waltjen: Good morning, Stacie Waltjen, Licensing Tech. Aoki: Nyssa Aoki, T/A Secretary. Gonzalez: Good morning, Brandon Gonzalez, Administrative Officer. SEPTEMBER 21, 2017- LIQUOR ADJUDICATION BOARD MINUTES 1 Schoen: Renee Schoen, Assistant Corporation Counsel on behalf of the Department of Liquor Control. Masuda: Craig Masuda, Board Counsel. Smith: Riley Smith, Board Member. Giffin: I'm Geri Giffin, Board Member. Lindsey: Bryan Lindsey, Chair. II. Approval of Minutes Lindsey: We will go directly into Hearings and come back to the approval of minutes. III. Hearings Lindsey: We will begin with Case No. 2017-011. Counsel, if you could please read the charges? 1. CASE NO. 2017-011 (10:00 A.M.) In the Matter of the Accusation Against Tropics Ale House LLC, dba Tropics Ale House, located at Kailua-Kona, Hawaii. COUNT I Formal Hearing (Alternative III) on violation of Rule 1-8 of the Rules and Regulations of the Liquor Adjudication Board; Rule 1-15 of the Rules and Regulations of the Liquor Commission of the Department of Liquor Control of the County of Hawaii; State of Hawaii; and Hawaii Revised Statutes Section 281-91, as amended, for failure to pay the remaining percentage fee and fine in the amount of $3,720.00. COUNT II Formal Hearing (Alternative III) on violation of Rule 1-8 of the Rules and Regulations of the Liquor Adjudication Board; Rule 1-15 of the Rules and Regulations of the Liquor Commission of the Department of Liquor Control of the County of Hawaii; State of Hawaii; and Hawaii Revised Statutes Section 281-91, as amended, for failure to pay the fine in the amount of $100.00. William "Billy" Bal, Controller, was present. Schoen: Good morning Mr. Chair and members of the Board. Renee Schoen on behalf of the Department of Liquor Control. At this time, I am going to read the Complaint. It states that on or about the 31st day of July, 2017, in the County and State SEPTEMBER 21, 2017 - LIQUOR ADJUDICATION BOARD MINUTES 2 of Hawaii, the Licensee, Tropics Ale House LLC, dba Tropics Ale House, did fail to comply with (COUNT I) the Decision and Order of the Liquor Adjudication Board in Case No. 2017-005, dated April 28, 2017 and served on April 30, 2017, by the extended deadline of July 28, 2017, by failing to pay the remaining percentage fee and fine in the amount of $3,720.00, in violation of Rule 1-8 of the Rules and Regulations of the Liquor Adjudication Board; Rule 1-15 of the Rules and Regulations of the Liquor Commission of the Department of Liquor Control of the County of Hawaii, State of Hawaii; and Hawaii Revised Statutes Section 281-91, as amended. For Count II, they also failed to comply with the Decision and Order of the Liquor Adjudication Board in Case No. 2017-006, dated April 28, 2017 and served on April 30, 2017, by the extended deadline of July 28, 2017, and by failing to pay the $100.00 fine, in violation of Rule 1-8 of the Rules and Regulations of the Liquor Adjudication Board; Rule 1-15 of the Rules and Regulations of the Liquor Commission of the Department of Liquor Control of the County of Hawaii, State of Hawaii; and Hawaii Revised Statutes Section 281-91, as amended. To my left, Mr. Billy Bal is present, on behalf of Tropics Ale House. He has informed me that on behalf of the Licensee they are admitting to the allegations. They are waiving their right to a hearing and appeal but requesting an informal hearing to present the circumstances surrounding the violation. At this time, I ask the Chair and Board Members to entertain a motion to find the Licensee in violation of the charge. Gonzalez: The Department is in agreement in allowing the amendment of the Answer from an Alternative III to an Alternative II. Lindsey: May we have a motion from the Board to find the Licensee in violation of the charge? Fuke: So moved. Smith: Second. Mr. Fuke moved that the Licensee in Case No. 2017-011, be found in violation of Rule 1-8 of the Rules and Regulations of the Liquor Adjudication Board; Rule 1-15 of the Rules and Regulations of the Liquor Commission of the Department of Liquor Control of the County of Hawaii, State of Hawaii; and Hawaii Revised Statutes Section 281-91, as amended; seconded by Mr. Smith. Lindsey: It has been moved and seconded. Is there any discussion? Fuke: Just to clarify, this would be for the two counts, correct? Lindsey: Correct. Is there any further discussion from members of the Board or any questions for the Counsel? Fuke: I have one question. Can you refresh our memory in the nature of the violation? SEPTEMBER 21, 2017 - LIQUOR ADJUDICATION BOARD MINUTES 3 Schoen: First, Nyssa, would you please pass out the exhibits so the Board Members can follow along with me. I've prepared a timeline for the Board which is Exhibit 1. It sets out what happened in this case. A Decision and Order dated April 28, 2017, involved Case No. 2017-005 and 2017-006. In those cases, this Board ordered a total payment of $7,820.00. The Decision and Order was served on the Licensee on April 30, 2017, therefore, payment was due on May 30, 2017. No payment was received by the Department. The Department did contact the Licensee on June 26, 2017, and told them they have to pay at least $7,000.00 by June 29, 2017. Payment was received on June 29, in the amount of $4,000.00 but there was $3,820.00 outstanding. We again extended the deadline to pay until July 28, 2017. When no payment was received, this Complaint was filed to pay that outstanding amount of $3,820.00. Payment was subsequently received by the Licensee for the remainder. We do have payment received and you will find that in Exhibit 6, for $1,910.00, on August 9, 2017, and another payment on the August 29. Fuke: I understand the nature of them being delinquent, but what I was getting at is what led up to the nature of the fine? Gonzalez: We are focusing on Case No. 2017-011. The basis for this new charge are two underlying cases. I am going to call it "005" and "006." In April of this year, for Case 005, the violation was a failure to pay the percentage fees under Rule 3-6-C. The Licensee was assessed a $2,000.00 fine and ordered to pay a total of $7,720.00. Fuke: The percentage fee is the annual fee that all licensees have to pay? Gonzalez: Yes, and for Case 006, it was a $100.00 fine because they failed to file their report of sales. Those are the underlying cases that led to the fines. Fuke: The infraction wasn't serving an underage minor or something like that? Gonzalez: No. Fuke: It was just for failing to pay a fee. Gonzalez: Correct, failing to pay the fee that feeds our budget which makes sure we can fund our operations and maintain enforcement. Fuke: Thank you. Giffin: Mr. Chair? Is this the part where we are able to ask questions to speak to the Licensee? Lindsey: It is my understanding that we are going to let the Licensee introduce himself and present his case. Lindsey: Anything further? If none, all those in favor of the motion please say "Aye." SEPTEMBER 21, 2017 - LIQUOR ADJUDICATION BOARD MINUTES 4 The Board Members voted "Aye." Lindsey: Those opposed say "Nay." There was no opposition by the Board Members. Lindsey: Chair votes "Aye." The motion was carried unanimously. Lindsey: At this time we would like to ask the Licensee to introduce himself and give us an explanation on the current situation. Bal: My name is Billy Bal. I am the Controller of the company; recently back from a two-year hiatus. We would like to say no contest to the charges. We are aware at this point to what happened and hope to reach an agreement. We hope to move forward and do better than we did last year and earlier this year, as well. Getting to and through the new year, this new license took a lot of financial need. The reason we couldn't pay is because our available funds to operate the business was focused to pay the back -taxes and these fines. It was almost impossible to do. We did have a plan and thankfully, we were able to pay it before this hearing. I hope we can move forward with the confidence that we aren't going to do this again. Part of my job coming back is to ensure a thing like this doesn't happen anymore. We are going to do our best to make sure that happens. Lindsey: Thank you. At this time, I'd to open up a discussion for the Board Members. Do you have any questions for Mr. Bal? Giffin: I appreciate what you just said and the key thing to me is that the company now has a plan. All good intentions are always well received, however, without a plan those things are empty words. I do appreciate that. Thank you. Lindsey: Thank you. Mr. Fuke? Fuke: What is your payment plan to write down for the roughly $7,720.00 debt? Takase: They've paid that already. Fuke: Okay, moving forward. What is your plan? Bal: We have the percentage fees coming up and we are going to make sure we get that paid in a timely manner. We plan to set up an organized office and have somebody in charge. That makes a big difference. We are in that place at this point. Fuke: So Gerald, is that payment annually, monthly or quarterly? SEPTEMBER 21, 2017- LIQUOR ADJUDICATION BOARD MINUTES 5 Takase: We bill them on November 15, for the entire year and even then, we are willing to work with the Licensees on a payment plan. We can spread it out over two or three payments. For a lot of restaurants and dispensers, the holidays is where they make a lot of their money. We will defer our payments until after that. This is what we did, but they never followed through after that. Mr. Bal is aware of it. We have talked and he has assured us that he will be on top of it this time around. They have been running as a "headless" organization for a while and I think that contributed to their problems. Fuke: Thank you. Lindsey: Are there any other questions? Smith: I have a question. When I was looking at this timeline, it seemed like the Department made continual efforts to communicate with your organization for payments due. Did you folks respond to these or was there silence? Bal: I believe there was a response. A couple responses were through phone calls and me coming down to the office. I had a conversation with Gerald. 1 think and I'm not exactly sure, in the Complaint itself if were supposed to get back to you folks in writing. I'm sure we did not do that. This sort of thing was supposed to be for ownership. The information was sent off to him and I can almost guarantee it did not happen. Takase: I think most of it precedes his coming back to the company. We gave them many opportunities to pay. We didn't have many direct conversations with the owner but we did send notices to them. The messages we got back from them was, "ok, I'II be in on Friday", and he never showed. That's our correspondence with the owner in the past. They made partial payment but told me they couldn't pay it all right now. I had given them until the end of July to make the final payment and sure enough they didn't pay. 1 thought we had done more than our share to be reasonable and that's why these charges came up. Smith: The Board needs to support the staff and the investigators. If there are deadlines that are given to you that are not met, there needs to be a paper trail response to see that you are trying. I couldn't see if you folks were making an effort and based on your comments, you said they probably did not. From the Boards perspective, we don't know if you're trying to communicate with us. At some point it will come to terminating the license and that may be something you want to convey to your owner. This is serious and the consequences are, you may not be in business. Hopefully bringing you on board brings structure and organization. The Board has different alternatives and at some point, it comes to termination. You don't want to get to that point. We want you to be successful, but you have to work with us and follow the rules. SEPTEMBER 21, 2017- LIQUOR ADJUDICATION BOARD MINUTES 6 Bal: Thank you, I agree. With me coming back, it's a reminder to the owner he's not doing something right. We are planning on moving forward. The fees are not for nothing. We need to do our part and that requires payments to be done on time. Smith: If we don't enforce the rules consistently with everybody, it penalizes the people who are following the rules and paying their bills. Everything has to be transparent and equal. Bal: Agreed. Smith: Thank you. Pawasarat-Losalio: When did you return to the organization? Bal: May 1, of this year. Pawasarat-Losalio: Gerald, were none of the responses directed to him or were they all they directed to the owner? Takase: We will correspond with the managers at the premises. The first time I talked to Billy was in July or August. He called me to see if they could extend. I told him I couldn't extend them anymore. He asked, "what about the payments now? Should pay it now or later?" I said, "well, it will always look better if you pay it before you come before the Board." To his credit, he did and I give him that. I told him, "I can't stop the cases that are moving already but if you pay it, it will put you in a much better light when you do come before the Board." Gonzalez: To follow up on the Director's comments and to answer similar questions, notification to the Licensee was done in various forms; telephonic, in person, e-mail and hard -copy U.S. mail. The communication the Director is speaking of is when we received a payment $7,000.00 and gave an extension to July 28, by an e-mail sent to the owner, Pat. Mr. Bal and the attorneys were also included in the email. It was sent to multiple people in writing. Pawasarat-Losalio: You also mention that the organization is back in taxes? Bal: Were. We took care of the things that were required for us to be here. It took a lot and again, we were a "headless organization" for a long time. Pawasarat-Losalio: Are you the one in charge and be the main point person? Bal: The main point person, probably not; that is 100% the owner. However, when the yellow slip comes to the restaurant and I see it, it will become my responsibility to communicate directly with the owner to be sure he is aware. I will do my part to make sure payments are being paid and the infraction is addressed. SEPTEMBER 21, 2017 - LIQUOR ADJUDICATION BOARD MINUTES 7 Lindsey: So Brandon, when the notices are given out, who is the contact that it's given to? Gonzalez: Mr. Chair, are you talking about the Complaint and Accusation? Lindsey: Yes. Gonzalez: We have our investigators go to the licensed establishment and have a Person in Active Charge; a person designated by ownership who can sign for legal documents. They will sign a Certificate of Service to acknowledge they have been given a copy of the charges and report. We verify that the person signing is on their owners list of responsible people. Lindsey: Thank you. Mr. Bal, what is your capacity there? Bal: Controller. I overlook the financial side. I don't work in the restaurant. I take care of the administration, "HR" and also the money. Fuke: I have a question. You mentioned your view of the situation that the delinquent non-payment is somewhat attributable to financial reasons and negligence of the Licensee. As a controller and looking forward, do you believe the company you work for is financially stable to own up to the things that are becoming due in the future? Bal: Yes. Fuke: With you being there, can you say that these things won't fall through the cracks? Bal: Correct. I don't like sitting in here like this. I'm going to make sure this doesn't happen again. Lindsey: Do we have any more questions? There were no further questions from the Board Members. Lindsey: If none, we'd like to move onto Counsel's recommendation of the penalty. Schoen: Mr. Chair, there were previous violations in this case that we talked about earlier in Case No. 2017-005, for failure to pay percentage fees and also in Case No. 2017-006, for failure to submit Initial Report of Gross Liquor Sales. There was also a previous violation, 2015-008, a violation of Rule 3-6-C for failure to submit payment of percentage fees. With that, the Department is recommending a $2,000.00 fine for this case. Fuke: I move that we accept the Departments recommendation to pay the remaining the percentage fee and fine, so total would amount to $5,720.00. SEPTEMBER 21, 2017 - LIQUOR ADJUDICATION BOARD MINUTES 8 Schoen: No, the outstanding amounts were already paid. We are asking for a $2,000.00 fine and that it is paid immediately or in a short time period. Fuke: They paid the $3,720.00? Schoen: Yes. Pawasarat-Losalio: And they paid the previous $2,000.00 fine? Schoen: Yes. They are current. Fuke: I move that we accept the Departments recommendation. Giffin: Second. Mr. Fuke moved that the Licensee in Case No. 2017-011, be assessed a penalty in the amount of $2,000.00 and that $2,000.00 is to be paid within thirty (30) days upon receipt of the written Decision and Order; seconded by Ms. Giffin. Lindsey: It has been moved and seconded. At this time, the Chair will open it up for discussion. Smith: Just wanted to clarify. When is the due date so the Licensee is clear when the $2,000.00 needs to be paid? Gonzalez: According to the rules, the Licensee has 30 days from the receipt of the Decision and Order to make payment. It will usually take us about one week to prepare the Decision and Order and have it signed by the Chair, so about 5 weeks' time. However, there is nothing preventing the Licensee from writing a check today before they leave. We have done that before. Smith: I just want to be clear. Gonzalez: Yes, thank you. Pawasarat-Losalio: I have a question. Are you folks in a position to pay the $2,000.00 fine? Bal: Yeah. Lindsey: Is there any further discussion? There was no further discussion from the Board Members. SEPTEMBER 21, 2017 - LIQUOR ADJUDICATION BOARD MINUTES 9 Lindsey: If none, it has been moved and seconded to accept Counsel's recommendation of the $2,000.00 fine. At this time, I will call for a vote. All those in favor of the motion say "Aye." The Board Members voted "Aye." Lindsey: Those opposed, "Nay." There was no opposition by the Board Members. Lindsey: Chair votes "Aye." Motion carried. The motion was carried unanimously. Fuke: Excuse me, does that include Count II as well? Schoen: Yes. Fuke: So the $2,000.00 is for two counts? Schoen: Yes. Fuke: And did they pay the $100.00 fine for that? Schoen: Yes, everything is paid up. Lindsey: Moving on to Case No. 2017-012, In the Matter of the Accusation Against Tropics Tap House Kona, LLC, dba Tropics Tap House Kona, located at Kailua-Kona, Hawaii. Counsel, would you please read the Complaint? 2. CASE NO. 2017-012 (10:00 A.M.) In the Matter of the Accusation Against Tropics Tap house Kona, LLC, dba Tropics Tap House Kona, located at Kailua-Kona, Hawaii. Formal Hearing (Alternative III) on violation of Rule 1-8 of the Rules and Regulations of the Liquor Adjudication Board; Rule 1-15 of the Rules and Regulations of the Department of Liquor Control of the County of Hawaii, State of Hawaii; and Hawaii Revised Statutes Section 281-91, as amended, for failure to pay the remaining fine in the amount of $1,960.00. William "Billy" Bal, Controller, was present. Schoen: Good morning Mr. Chair and members of the Board. Renee Schoen, Assistant Corporation Counsel on behalf of the Department of Liquor Control. At this time, I will read the Complaint. On or about the 31st day of July, 2017, in the County SEPTEMBER 21, 2017- LIQUOR ADJUDICATION BOARD MINUTES 10 and State of Hawaii, the Licensee, Tropics Tap House Kona LLC, dba Tropics Tap House Kona, did fail to comply with the Decision and Order of the Liquor Adjudication Board in Case No. 2017-004, dated April 28, 2017 and served on April 29, 2017, by the extended deadline of July 28, 2017, by failing to pay the remaining fine of $1,960.00, in violation of Rule 1-8 of the Rules and Regulations of the Liquor Adjudication Board; Rule 1-15 of the Rules and Regulations of the Liquor Commission of the Department of Liquor Control of the County of Hawaii, State of Hawaii; and Hawaii Revised Statutes Section 281-91, as amended. Mr. Chair, to my left is Billy Bal, Controller for Tropics Tap House. Although we were prepared for an Alternative III, Formal Hearing, he tells me the Licensee is prepared to admit to the allegations and waive their right to a hearing and appeal but they are requesting an informal hearing to present the circumstances surrounding the violation. Lindsey: Thank you. May we have a motion to find the Licensee in violation? Giffin: So moved. Fuke: Second. Ms. Giffin moved that the Licensee in Case No. 2017-012, be found in violation of Rule 1-8 of the Rules and Regulations of the Liquor Adjudication Board; Rule 1-15 of the Rules and Regulations of the Liquor Commission of the Department of Liquor Control of the County of Hawaii, State of Hawaii; and Hawaii Revised Statutes Section 281-91, as amended. Lindsey: It has been moved and seconded. Is there any discussion? Fuke: Has the remaining fine been paid? Takase: Yes. Fuke: Thank you. Lindsey: Any further discussion? There was no further discussion from the Board Members. Lindsey: Hearing none. All those in favor say "Aye." The Board Members voted "Aye." Lindsey: Those opposed, "Nay." There was no opposition by the Board Members. SEPTEMBER 21, 2017 - LIQUOR ADJUDICATION BOARD MINUTES 11 Lindsey: Chair votes "Aye." Motion carried. The motion was carried unanimously. Lindsey: At this time, we will ask Mr. Bal to present the circumstances surrounding the violation. Bal: Billy Bal for Tropics Tap House Kona. Again, we want to say no contest to the charges as we are aware of what we've done. We would just like to move forward and get past this as well as possible. Lindsey: Thank you. At this time, we would like to ask Counsel for the Departments recommendation. Schoen: Yes, Mr. Chair. This case results from three underlying cases. The first one was for failure to comply with the conditions of the liquor license by having amplified music on the premises. Second, for failure to pay the percentage fee and third, for failing to submit a report of sales. This is the same owner, different license of Tropics Ale House, of which I spoke of in the previous case. Based upon the history, we are asking that a $2,000.00 fine be imposed for this case. Lindsey: Is there a motion on the recommendation? Fuke: I move that we accept Counsel's recommendation for the penalty. Smith: Second. Mr. Fuke moved that the Licensee in Case No. 2017-012, be assessed a penalty in the amount of $2,000.00 and that $2,000.00 is to be paid within thirty (30) days upon receipt of the Decision and Order; seconded by Mr. Smith. Lindsey: Moved and seconded. We will now open it up for a discussion. Fuke: Renee, so they paid the $1,960.00 and in addition to that the recommendation is being imposed as a separate $2,000.00 fine? Schoen: Yes. Fuke: Given the first case and if the Board accepts this recommendation and he writes a check for $4,000.00 today, then they're all clear? Schoen: Correct. Fuke: Thank you. SEPTEMBER 21, 2017- LIQUOR ADJUDICATION BOARD MINUTES 12 Lindsey: Is there any other discussion? There was no further discussion from the Board Members. Lindsey: If none, Chair will request a vote. All those in favor say "Aye." The Board Members voted "Aye." Lindsey: All those opposed say "Nay." There was no opposition by the Board Members. Lindsey: Chair votes "Aye." Motion carried. The motion was carried unanimously. Lindsey: Mr. Bal, thank you for coming in today. We appreciate it. Bal: Thank you. II. Approval of Minutes Lindsey: Let's go back to approving the minutes. I'd like to call for a motion to accept the minutes of Thursday, July 20, 2017. Smith: So moved. Fuke: Second. Mr. Smith moved to approve the July 20, 2017, Liquor Adjudication Board minutes as circulated; seconded by Mr. Fuke. Lindsey: It has been moved and seconded. Is there any discussion? There was no discussion from the Board Members. Lindsey: Hearing none. All those in favor of the motion say "Aye." The Board Members voted "Aye." Lindsey: Those opposed, "Nay." There was no opposition by the Board Members. Lindsey: Chair votes "Aye." Motion carried. SEPTEMBER 21, 2017 - LIQUOR ADJUDICATION BOARD MINUTES 13 The motion was carried unanimously. IV. Unfinished Business Lindsey: We will move on to Unfinished Business. There is none. V. New Business Lindsey: Moving on to New Business. There is none. VI. Announcements Lindsey: Moving on to Announcements. Mr. Takase, do you have anything you'd like to announce? Takase: We can cover the announcements after we adjourn. We will cancel October's meeting. We don't have any cases that are ready to go yet. Meetings of Liquor Adjudication October 19, 2017, 10:00 A.M., location TBA. November 16, 2017, 10:00 A.M., location TBA. Lindsey: Anything else? If none, we will move on to Adjournment. VII. Adjournment Lindsey: May we have a motion to adjourn? Smith: So moved. Giffin: Second. Lindsey: It has been moved and seconded. All those in favor say "Aye." The Board Members voted "Aye." Lindsey: All those opposed say "Nay." There was no opposition by the Board Members. Lindsey: Chair votes "Aye." Meeting adjourned. The motion was carried unanimously. SEPTEMBER 21, 2017 - LIQUOR ADJUDICATION BOARD MINUTES 14 Meeting adjourned at 10:45 A.M. d Takase Director The September 21, 2017, meeting minutes were approved as circulated via e-mail/mail on November 30, 2017, by the Liquor Adjudication Board of the County of Hawaii, on December 7, 2017. SEPTEMBER 21, 2017 - LIQUOR ADJUDICATION BOARD MINUTES 15