, Corbin, KY

October 5, 2012

Are Corbin liquor licenses valid?

Losing applicant asks ABC to hold hearing

The Times-Tribune

CORBIN — By Jeff Noble, Staff Writer

Were there problems with the applications for the three package liquor licenses granted for Corbin? One of those who applied and lost thinks there may be, and that’s why he’s asking the state Alcoholic Beverage Control Board to hold a hearing about it.

That request was made last Friday by Wesley Morgan of Richmond, who owns Liquor World stores in both Richmond and Manchester, and is applying for a package liquor license in Somerset.

In a letter sent to the ABC from Morgan’s attorney, Daniel Redding of Louisville, Morgan’s requesting an evidentiary hearing regarding issuing liquor licenses to Liquor Mart of Corbin (formerly Tri County Liquor of Corbin), Ernie’s Spirits, and Liquor King. The letter also requests the ABC not issue liquor licenses to the three stores based on grounds presented in Morgan’s affidavit on September 27.

“The question is ‘Why?’ Out of 12 applicants, you had two that had numerous violations. Something’s not correct. There’s too many errors that have been overlooked. … We’ve lost 3 million dollars in business since Corbin went wet. This personally affects us. So what do you do, just walk away?” Morgan said in a telephone interview Wednesday.

Of the three stores in question, Liquor Mart of Corbin was the first to open. Located on Cumberland Gap Parkway (U.S. 25E) in the Trademart Shopping Center, Liquor Mart opened for business last Friday, September 28. Originally Tri County Liquor of Corbin, the store notified the ABC in July that it would change it’s name to Liquor Mart of Corbin, and filed the name with the Kentucky Secretary of State’s Office in Frankfort.

Liquor King is located on 1601 Cumberland Falls Highway (U.S. 25W), and is expected to open the first week of November.

Ernie’s Spirits will be located at 25 RJV Drive, near the Falls Highway behind Applebee’s. The store is expected to break ground in the next two weeks and be open in early December.

Had Liquor World been granted a license, their store would have been on property currently occupied by S & H Towing and Repair, off the Cumberland Falls Highway near Exit 29 of I-75.

The four stores were among 12 that submitted package liquor license applications to the ABC this spring. Corbin was allocated three package liquor licenses by the ABC, according to the city’s population. Those three licenses were decided by the ABC in July. Voters approved the sale of alcoholic beverages by the package in the city of Corbin on February 14 of this year.

The letter cited Kentucky Revised Statute (KRS) 243.450(1), which said, “A license to be issued ‘shall be refused’ if the applicant or the premises for which the license is sought does not comply fully with all alcoholic beverage control statutes and the regulations of the board, if the applicant or the premises for which the license is sought does not comply with all regulations of a city administrator or county administrator, if the applicant has done any act for which a revocation of license would be determined, or, if the applicant has made any false material statement in his application.”

Morgan’s affidavit stated the ABC shouldn’t issue liquor licenses to Liquor Mart, Ernie’s Spirits or Liquor King based on six reasons.

In one reason, the letter cited Ernie’s Spirits and Tri County Liquor’s owners failed to fully disclose other entities in which the owners have an interest in, in violation of statutory requirements.

It said in Ernie’s Spirits’ application that the owners, Kevin Durham and his father, Ernie Durham, had interests in Liquor Mart’s two stores in Richmond, as well as Liquor Mart stores in Lancaster and Danville.

It also said in Tri County’s application that the owners, Jack Taylor, Frank Shoop and Derrick Sears had interests in both Liquor Mart stores in Richmond, as well as Liquor Mart stores in Lancaster, Danville and Manchester. In addition, the affidavit said Taylor as Organizer and Registered Agent for Tri County, and having an address that was listed for Liquor Mart on the date of their organization.

In addition, the letter listed that in Liquor Mart of Corbin’s owners were Jack Taylor’s brother, Paul Taylor, along with Karl Kraus and Teresa Carpenter. The application listed Paul Taylor having interests in Liquor Mart stores in Richmond, Danville, Manchester and Lancaster.

The second reason listed in the letter questioned the legitimacy of the lease submitted by Ernie’s Spirits in violation of statutory requirements. It listed the lease submitted with their application for the property at 25 RJV Drive as “questionable legitimacy,” saying it was executed prior to Ernie’s Spirits’ existence, that the landlord listed on the lease is Matuse Property Holdings, LLC and is the same principal office address as Kevin Durham’s. It also said the company was not in existence, saying Matuse Property’s articles of organization weren’t filed with Secretary of State’s Office until August of this year, that the lease at issue didn’t have a commencement date, that it reverts to a month-to-month tenancy after it expires, failing to cover a full licensing period as required by law. Also listed was that rent was payable to the landlord’s address in Lexington, which is Kevin Durham’s address, which the letter claims is the address of both the landlord, Matuse Property, and the tenant, Ernie’s Spirits.

According to the letter, the third reason was Ernie’s Spirits’ failed to advertise its intent to submit an application for a liquor license, in violation of statutory requirements. It said Ernie’s Spirits did not run a legal advertisement in the Corbin News-Journal until May 16 of this year, which the letter stated was “well after the deadline for such advertisement.”

The letter stated the fourth reason was the failure of Tri County Liquor to submit a property lease with its application that complies with statutory requirements, including a requirement that all individuals and entities identified on its application be parties to any such lease. It added the lease submitted with Tri County’s application had listed only Jack and Jill Taylor as tenants, and contained no mention of Tri County as an entity, or Shoop and Sears, despite ABC requirements that the lessee must be the same party or parties listed on the application.

For the fifth reason, the letter referred to Tri County Liquor and Ernie’s Spirits’ operations whose principals are business partners and operate other liquor stores across the state. The sixth and final reason listed Tri County Liquor, Ernie’s Spirits and Liquor King’s failure to meet several other licensing and application requirements. In Morgan’s affidavit, William Smith, one of Liquor King’s owners, submitted an application to Corbin’s ABC Administrator Bruce Rains with a personal check for $1,000, despite the fact that personal checks were not acceptable methods of payment under state and local regulations.

“Bill Smith did not submit a cashier’s check. He paid with a personal check. Minor violation, but a violation, still,” Morgan noted.

Dick Brown, the Communications Director of the state Public Protection Cabinet, acknowledged Thursday that the ABC did receive Morgan’s letter. Brown also said the ABC’s legal staff has examined all the package liquor applications in Corbin and are unaware of any irregularities in those applications.

On the hearing, Brown said Thursday in a phone interview from Frankfort, “It’s kind of a gray area. Having an actual hearing is something the legal department is looking at, to see what is and what can be done. Liquor World can file a protest with the department.”

Brown later said in an email Thursday, “In this case, Mr. Morgan has no recourse to appeal or protest that he did not receive one of the three licenses. He was not denied a license, he simply did not receive one of the three available.”

Morgan said if the ABC doesn’t grant a hearing, he plans to file suit in Franklin Circuit Court.

“This ain’t going away. I will not stop until this is proven,” he added.